[Federal Register Volume 89, Number 184 (Monday, September 23, 2024)]
[Rules and Regulations]
[Pages 77586-77751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20612]



[[Page 77585]]

Vol. 89

Monday,

No. 184

September 23, 2024

Part II





Department of the Treasury





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Internal Revenue Service





Department of Labor





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Employee Benefits Security Administration





Department of Health and Human Services





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26 CFR Part 54

29 CFR Part 2590

45 CFR Parts 146 and 147





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

  Federal Register / Vol. 89 , No. 184 / Monday, September 23, 2024 / 
Rules and Regulations  

[[Page 77586]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 10006]
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-F]
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: Final rules.

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SUMMARY: This document sets forth final rules amending regulations 
implementing the Paul Wellstone and Pete Domenici Mental Health Parity 
and Addiction Equity Act of 2008 (MHPAEA) and adding 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 
final rules amend the existing NQTL standard to prohibit group health 
plans and health insurance issuers offering group or individual health 
insurance coverage from using NQTLs that place greater restrictions on 
access to mental health and substance use disorder benefits as compared 
to medical/surgical benefits. As part of these changes, these final 
rules require plans and issuers to collect and evaluate relevant data 
in a manner reasonably designed to assess the impact of NQTLs on 
relevant outcomes related to access to mental health and substance use 
disorder benefits and medical/surgical benefits and to take reasonable 
action, as necessary, to address material differences in access to 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits. These final rules also amend existing 
examples and add new examples on the application of the rules for NQTLs 
to clarify and illustrate the requirements of MHPAEA. Additionally, 
these final rules 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 to participants, beneficiaries, and 
enrollees. Finally, HHS finalizes 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: 
    Effective date: These regulations are effective on November 22, 
2024.
    Applicability date: See the SUPPLEMENTARY INFORMATION section for 
information on the applicability dates.

FOR FURTHER INFORMATION CONTACT: William Fischer, 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.

SUPPLEMENTARY INFORMATION:

I. Background

    America continues to experience a mental health and substance use 
disorder crisis affecting people across all demographics, with 
marginalized communities disproportionately impacted.\1\ The COVID-19 
pandemic exacerbated the crisis, but its effects have continued post-
pandemic.\2\ From August 19, 2020, to February 1, 2021, the percentage 
of adults exhibiting symptoms of an anxiety or a depressive disorder 
rose from 36.4 percent to 41.5 percent.\3\ In 2022, there were an 
estimated 15.4 million adults aged 18 or older in the United States 
with a serious mental illness and nearly one in four adults (59.3 
million) living with any mental illness.\4\
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    \1\ Kaiser Family Foundation (2022), Five key findings on mental 
health and substance use disorders by race/ethnicity, https://www.kff.org/mental-health/issue-brief/five-key-findings-on-mental-health-and-substance-use-disorders-by-race-ethnicity/.
    \2\ American Psychological Association (2023), Stress in 
AmericaTM 2023: A nation grappling with psychological 
impacts of collective trauma, https://www.apa.org/news/press/releases/2023/11/psychological-impacts-collective-trauma.
    \3\ 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, Aug. 2020-Feb. 2021, MMWR Morb Mortal Wkly Rep 2021;70:490-
494, https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e2.htm.
    \4\ SAMHSA (2023), Key substance use and mental health 
indicators in the United States: Results from the 2022 National 
Survey on Drug Use and Health (HHS Publication No. PEP23-07-01-006, 
NSDUH Series H-58), https://www.samhsa.gov/data/report/2022-nsduh-annual-national-report.
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    Additionally, in 2022, nearly 54.6 million people aged 12 or older 
were classified as needing treatment for substance use, but only about 
24 percent of those people received any treatment, according to the 
Substance Abuse and Mental Health Services Administration's (SAMHSA) 
National Survey on Drug Use and Health (NSDUH).\5\ The unmet need for 
treatment for substance use disorders has been even greater among 
racial minorities and other marginalized communities. Between 2019 and 
2021, median monthly overdose deaths among persons aged 10-19 years 
increased 109 percent; and deaths involving illicitly manufactured 
fentanyl increased 182 percent.\6\ In 2021, American Indian and Alaskan 
Native men aged 15-34 had an age-adjusted death rate caused by drug 
overdoses of 42 per 100,000 people, compared to 20.5 age-adjusted 
deaths per 100,000 people during the same time period in 2018.\7\ Non-
Hispanic Black or African American men aged 35-64 had an age-adjusted 
death rate caused by drug overdoses of 61.2 per 100,000 people; an 
increase from 30.6 deaths per 100,000 people during the same time 
period in 2018.\8\
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    \5\ Ibid.
    \6\ Tanz, L.J., Dinwiddie, A.T., Mattson, C.L., O'Donnell, J., 
Davis, N.L. (2022), Drug Overdose Deaths Among Persons Aged 10-19 
Years--United States, July 2019-Dec. 2021. MMWR Morb Mortal Wkly Rep 
2022;71:1576-1582, https://www.cdc.gov/mmwr/volumes/71/wr/mm7150a2.htm.
    \7\ Han, B., Einstein, E.B., Jones, C.M., Cotto, J., Compton, 
W.M., Volkow, N.D. (2022), Racial and Ethnic Disparities in Drug 
Overdose Deaths in the US During the COVID-19 Pandemic, JAMA Netw 
Open, 5(9):e2232314, DOI:10.1001/jamanetworkopen.2022.32314, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9490498/. Age-adjusted death 
rates are death rates that control for the effects of differences in 
population age distributions.
    \8\ Ibid.
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    Following the COVID-19 pandemic, employers highlighted that they 
have responded to the impact of the pandemic on the mental health and 
substance use disorder crisis by offering more comprehensive benefits, 
including

[[Page 77587]]

mental health support. According to a report published in 2021, ``about 
three in four large employers and two in four small/medium employers 
report that they offer at least one type of mental health support for 
employees.'' \9\ In a recent survey, 87 percent of large employers 
stated that access to mental health care was a top priority, and 
another survey found that ``the number of in-network behavioral health 
providers has increased by an average of 48 percent in 3 years among 
commercial health plans.'' \10\ Group health plans and health insurance 
issuers have taken steps to ensure mental health parity is reflected in 
their benefit designs and to educate participants, beneficiaries, and 
enrollees \11\ about MHPAEA's requirements, by reaching out to members, 
expanding telehealth availability, expanding behavioral health provider 
networks, integrating behavioral health with physical health care, and 
working to reduce stigmatization of seeking treatment.
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    \9\ Coe, E., Cordina, J., Enomoto, K., Mandel, A., Stueland, J. 
(2021), National Surveys Reveal Disconnect Between Employees and 
Employers Around Mental Health Need, McKinsey & Company, https://www.mckinsey.com/industries/healthcare/our-insights/national-surveys-reveal-disconnect-between-employees-and-employers-around-mental-health-need.
    \10\ America's Health Insurance Plans (AHIP), Health Insurance 
Providers Facilitate Broad Access to Mental Health Support (Aug. 
2022), https://ahiporg-production.s3.amazonaws.com/documents/Mental-Health-Survey-July-2022-FINAL.pdf.
    \11\ Consistent with the proposed rules, these final rules apply 
directly to group health plans or health insurance coverage offered 
by an issuer in connection with a group health plan, and 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 later in this preamble, HHS is finalizing an 
amendment to 45 CFR 147.160 to also include a cross-reference to 45 
CFR 146.137 to similarly extend the new 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 to 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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    Despite these efforts, disparities in coverage between mental 
health and substance use disorder benefits and medical/surgical 
benefits have grown. In the preamble to the proposed rules,\12\ the 
Departments cited a 2019 Milliman report \13\ that found a growing 
disparity in the utilization of out-of-network behavioral health care 
providers relative to out-of-network medical/surgical care providers. A 
recent study by RTI International \14\ found that out-of-network use 
was 3.5 times higher for all behavioral health clinician office visits 
than for all out-of-network medical/surgical clinician office visits; 
in addition, the study noted that these disparities in out-of-network 
use for behavioral health office visits compared to medical/surgical 
office visits have remained large and, according to the study, are not 
fully attributable to behavioral health provider shortages. The study 
concluded that these results demonstrate the need for more robust 
parity enforcement.
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    \12\ 88 FR 51552, 51554 (Aug. 3, 2023).
    \13\ Melek, S., Davenport, S., Gray, T.J. (2019), Addiction and 
mental health vs. physical health: Widening disparities in network 
use and provider reimbursement, Milliman, 6, https://assets.milliman.com/ektron/Addiction_and_mental_health_vs_physical_health_Widening_disparities_in_network_use_and_provider_reimbursement.pdf.
    \14\ Mark, T.L., Parish, W. (2024), Behavioral health parity--
Pervasive disparities in access to in-network care continue, RTI 
International, https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf.
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    RTI concluded that its analyses of the most recent, comprehensive 
private insurance claims data

reveal material differences in access to mental health and substance 
use disorder benefits as compared to medical/surgical benefits, as 
reflected in much greater use of out-of-network providers. . . . 
These disparities indicate that behavioral health networks are 
clearly inadequate and signal potential noncompliance with the NQTL 
requirements of MHPAEA.\15\
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    \15\ Id. at 46.

    These final rules aim to strengthen consumer protections consistent 
with MHPAEA's fundamental purpose--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 burdens on access to benefits for those 
conditions or disorders than they would face when seeking coverage for 
the treatment of a medical condition or a surgical procedure.\16\ As 
highlighted in the preamble to the proposed rules,\17\ such barriers 
are particularly problematic when the benefits that the plan or issuer 
purports to make available and that individuals reasonably expect to be 
covered are not in fact covered. To the extent these barriers 
disproportionately limit access to mental health or substance use 
disorder benefits, such practices contravene MHPAEA's statutory 
language, which requires that the financial requirements and treatment 
limitations applicable to mental health or substance use disorder 
benefits be ``no more restrictive'' than the predominant requirements 
and limitations applicable to substantially all medical/surgical 
benefits.\18\ The Departments' enforcement efforts have shown that such 
barriers persist more than 15 years after MHPAEA's enactment.\19\ These 
final rules are critical to addressing barriers to access to mental 
health and substance use disorder benefits.
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    \16\ 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 (Mar. 4, 2008), 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.'').
    \17\ 88 FR 51552 (Aug. 3, 2023).
    \18\ 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).
    \19\ See, e.g., 2022 MHPAEA Report to Congress (Jan. 2022), 
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 Comparative 
Analysis Report to Congress (July 2023), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
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    The problems persist notwithstanding the Departments' unprecedented 
commitment to advance parity for mental health and substance use 
disorder benefits in recent years, as reflected through increased 
enforcement efforts and the Departments' work with interested parties 
to help them understand and comply with MHPAEA's requirements.\20\ To 
promote compliance, the Departments have provided extensive guidance 
and compliance assistance materials, especially with respect to 
NQTLs,\21\ yet disparities still persist.
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    \20\ More information on the Departments' enforcement efforts 
and guidance issued under MHPAEA is available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/mental-health-and-substance-use-disorder-parity/tools-and-resources and https://www.cms.gov/marketplace/private-health-insurance/mental-health-parity-addiction-equity.
    \21\ As discussed in more detail later in this preamble, NQTLs 
are generally non-numerical limits on the scope or duration of 
treatment, such as prior authorization requirements, step therapy, 
and standards related to network composition.
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    In 1996, Congress enacted the Mental Health Parity Act of 1996 
(MHPA 1996), which required parity in aggregate

[[Page 77588]]

lifetime and annual dollar limits for mental health benefits and 
medical/surgical benefits for group health plans and health insurance 
coverage offered in connection with such plans.\22\ These mental health 
parity provisions were codified in Code section 9812, ERISA section 
712, and PHS Act section 2705.\23\ Congress expanded on these efforts 
in 2008 with the enactment of MHPAEA,\24\ which amended Code section 
9812, ERISA section 712, and PHS Act section 2705 by adding 
requirements for plans and issuers related to financial requirements 
and treatment limitations and made further amendments to the existing 
mental health parity provisions, including provisions to apply the 
mental health parity requirements to substance use disorder benefits.
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    \22\ 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).
    \23\ The Departments published interim final rules implementing 
MHPA 1996 at 62 FR 66932 (Dec. 22, 1997).
    \24\ 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 (Oct. 3, 2008)).
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    The Affordable Care Act (ACA) \25\ 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 ACA 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 included by these references are sections 2701 through 
2728. The ACA extended MHPAEA to apply to individual health insurance 
coverage and redesignated MHPAEA in the PHS Act as section 2726.\26\ 
Additionally, section 1311(j) of the ACA applies PHS Act section 2726 
to qualified health plans \27\ in the same manner and to the same 
extent as it applies to health insurance issuers and group health 
plans. The ACA also included a requirement for coverage of mental 
health and substance use disorder services, including behavioral health 
treatment, as a category of essential health benefits (EHB).\28\ HHS' 
EHB regulations 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 to 
satisfy the requirement to cover ``mental health and substance use 
disorder services, including behavioral health treatment,'' as part of 
EHB.\29\
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    \25\ References to the Affordable Care Act or ACA include the 
Patient Protection and Affordable Care Act (Pub. L. 111-148, 123 
Stat. 3028) enacted on March 23, 2010, and the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152, 124 Stat. 
1029) enacted on March 30, 2010.
    \26\ The requirements of MHPAEA generally apply to both 
grandfathered and non-grandfathered health plans. See section 1251 
of the ACA 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 
ACA, grandfathered health plans are exempted only from certain ACA 
requirements enacted in Subtitles A and C of Title I of the ACA. 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.
    \27\ A qualified health plan is a health insurance plan that is 
certified by a health insurance exchange that it meets certain 
minimum standards established under the ACA and described in subpart 
C of 45 CFR part 156. See 45 CFR 155.20.
    \28\ Section 1302 of the ACA requires non-grandfathered health 
plans in the individual and small group markets to cover 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.
    \29\ Section 1302(b)(1)(E) of the ACA; 45 CFR 156.115(a)(3).
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    The Departments published a request for information soliciting 
comments on issues under MHPAEA \30\ and subsequently issued interim 
final regulations to implement the requirements of MHPAEA.\31\ After 
considering the comments, the Departments published the 2013 final 
regulations.\32\ As detailed in the preamble to the proposed rules, in 
the years after the 2013 final regulations were published, the 
Departments 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, including the 2020 MHPAEA Self-Compliance Tool,\33\ which 
provided a basic framework for plans and issuers to assess whether 
their NQTLs satisfy MHPAEA's parity requirements.\34\
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    \30\ 74 FR 19155 (Apr. 28, 2009).
    \31\ 75 FR 5410 (Feb. 2, 2010).
    \32\ 78 FR 68240 (Nov. 13, 2013).
    \33\ See Self-Compliance Tool for the Mental Health Parity and 
Addiction Equity Act (MHPAEA) (2020), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
    \34\ 88 FR 51552, 51555-56 (Aug. 2, 2023).
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    The CAA, 2021 was enacted by Congress on December 27, 2020,\35\ and 
amended MHPAEA, in part, by expressly requiring group health plans and 
health insurance issuers that provide both medical/surgical benefits 
and mental health or substance use disorder benefits to perform and 
document comparative analyses of the design and application of NQTLs 
that apply to mental health or substance use disorder benefits. The 
statute also requires plans and issuers to make their analyses 
available to the Departments or applicable State authorities, upon 
request, effective February 10, 2021. Additionally, the CAA, 2021 sets 
forth a process by which the Departments must evaluate the requested 
NQTL comparative analyses and enforce the comparative analyses 
requirements and requires the Departments to submit annually to 
Congress and make publicly available a report summarizing the 
comparative analyses requested for review by the Departments.\36\
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    \35\ Section 203 of title II of Division BB of the CAA, 2021, 
Public Law 116-260, 134 Stat. 1182 (Dec. 27, 2020).
    \36\ The report must state, in part, whether each plan or issuer 
that submitted a comparative analysis upon request submitted 
sufficient information to permit review; whether and why the 
Departments determined 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 its comparative analysis; and, for 
each plan or issuer the Departments determined not to be in 
compliance, specifications of the actions that the plan or issuer 
must take to come into compliance. See Code section 
9812(a)(8)(B)(iv), ERISA section 712(a)(8)(B)(iv), and PHS Act 
section 2726(a)(8)(B)(iv).
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    To help plans and issuers comply with the amendments to MHPAEA made 
by the CAA, 2021, the Departments issued Frequently Asked Questions 
(FAQs) About Mental Health and Substance Use Disorder Parity 
Implementation and the Consolidated Appropriations Act, 2021 Part 45 
(FAQs Part 45).\37\ As detailed in the preamble to the proposed rules, 
these FAQs provided initial guidance to plans and issuers on these 
amendments to MHPAEA.\38\ Additionally, as required

[[Page 77589]]

by the CAA, 2021, the Departments provided reports to Congress on the 
NQTL comparative analyses reviews conducted by the Departments.\39\ 
These reports highlighted that nearly all of the comparative analyses 
reviewed by the Departments during the relevant time periods contained 
insufficient information to support a finding of compliance upon 
initial receipt and reflected common insufficiencies.
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    \37\ FAQs about Mental Health and Substance Use Disorder Parity 
Implementation and the Consolidated Appropriations Act, 2021 Part 45 
(Apr. 2, 2021), 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.
    \38\ 88 FR 51552, 51562 (Aug. 3, 2023).
    \39\ Ibid.
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    Building on the lessons learned from implementing and enforcing 
MHPAEA, as well as the guidance provided in FAQs Part 45, on August 3, 
2023, the Departments published proposed rules to amend existing MHPAEA 
regulations at 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136; 
\40\ to add a proposed new regulation at 26 CFR 54.9812-2, 29 CFR 
2590.712-1, and 45 CFR 146.137 in order to codify minimum standards for 
developing NQTL comparative analyses; and to codify HHS-only amendments 
to implement the sunset provision for self-funded non-Federal 
governmental plan elections to opt out of compliance with MHPAEA. On 
September 28, 2023, the Departments extended the comment period that 
was set to expire on October 2, 2023, by 15 days to October 17, 2023, 
to give interested parties additional time to review the proposed rules 
and submit comments.\41\
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    \40\ 88 FR 51552 (Aug. 3, 2023). On July 25, 2023, DOL, in 
collaboration with HHS and the Treasury, also issued Technical 
Release 2023-01P. The Technical Release set out principles and 
sought public comment to inform future guidance with respect to the 
application of the proposed data collection and evaluation 
requirements to NQTLs related to network composition and a potential 
time-limited enforcement safe harbor for plans and issuers that 
include data in their comparative analyses that demonstrate they 
meet or exceed all the thresholds identified in future guidance with 
respect to NQTLs related to network composition. The Departments 
encouraged interested parties to submit their comments consistent 
with the instructions contained in it separate from any comments 
they submitted in response to the proposed rules. The Departments 
are considering these comments separately and these final rules do 
not respond to those comments. Plans and issuers would be allowed 
adequate time to conform to any future guidance on the type, form, 
and manner of collection and evaluation for the relevant data 
required under the final rules.
    \41\ 88 FR 66728 (Sept. 28, 2023).
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    The Departments received 9,503 comments that were submitted during 
the comment period \42\ in response to the proposed rules from a wide 
variety of interested parties, including private citizens; consumer and 
advocacy organizations; employers, employee organizations, and other 
plan sponsors; Federal, State, and local officials; health care 
providers and facilities and health systems; health insurance issuers; 
service providers, including managed behavioral health organizations 
(MBHOs), third-party administrators (TPAs), and pharmacy benefit 
managers (PBMs); trade and professional associations; and researchers. 
Many commenters provided detailed feedback on multiple aspects of the 
proposed rules and in response to various specific comment 
solicitations included in the preamble to the proposed rules and the 
request for information.
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    \42\ The comment period for the proposed rules was extended by 
15 days to October 17, 2023.
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    In general, many commenters supported the proposed rules, because 
they would formalize and, according to these commenters, provide 
greater clarity on what health plans and issuers must do to comply with 
MHPAEA. Some commenters highlighted that the existing rules were 
insufficient and that the proposed rules were timely and necessary to 
strengthen MHPAEA and ensure fair access to mental health and substance 
use disorder care. Commenters highlighted the importance of the 
proposed rules to participants, beneficiaries, and enrollees, including 
children, teens, young adults, and others living with mental health 
conditions and substance use disorders. Several other commenters, 
however, expressed either opposition or concern regarding the proposed 
rules. Several commenters stated that the proposed rules would increase 
health plan and issuer costs and reduce treatment quality. A few 
commenters recommended the Departments withdraw the proposed rules and 
initiate a new rulemaking process after additional input from 
interested parties.
    After reviewing the comments received during the comment period, 
the Departments are finalizing the proposed rules, with some changes in 
response to comments as described in more detail later in this 
preamble, to ensure that participants, beneficiaries, and enrollees can 
access the mental health and substance use disorder care they need 
without facing greater restrictions than when accessing medical and 
surgical care, consistent with the fundamental purpose of MHPAEA. These 
final rules provide additional clarity to plans and issuers on how to 
comply with MHPAEA's requirements and, as a result, will strengthen the 
protections of MHPAEA. As highlighted earlier in this preamble, since 
the 2013 final regulations, the Departments repeatedly sought input 
from interested parties on MHPAEA's requirements; therefore, the 
Departments decline to withdraw the proposed rules or initiate a new 
rulemaking process after soliciting additional input from interested 
parties. As explained throughout this preamble, the amendments made by 
these final rules are faithful to MHPAEA's parity requirements and 
sensitive to the flexibility plans and issuers have in designing 
benefits for group health plans and health insurance coverage.\43\
---------------------------------------------------------------------------

    \43\ The Departments note that impacts on plan and issuer costs 
are discussed in more detail in the regulatory impact analysis, 
later in this preamble.
---------------------------------------------------------------------------

    Among other things, these final rules:
     Make clear that MHPAEA requires that individuals will not 
face greater restrictions on access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits.
     Reinforce that health plans and issuers cannot use NQTLs, 
such as prior authorization and other medical management techniques, 
standards related to network composition, or methodologies to determine 
out-of-network reimbursement rates, for mental health and substance use 
disorder benefits, that are more restrictive than the predominant NQTLs 
applied to substantially all medical/surgical benefits in the same 
classification.
     Require plans and issuers to collect and evaluate data and 
take reasonable action, as necessary, to address material differences 
in access to mental health and substance use disorder benefits as 
compared to medical/surgical benefits, where the relevant data suggest 
that the NQTL contributes to material differences in access.
     Codify the requirement in MHPAEA, as amended by the CAA, 
2021, that health plans and issuers conduct comparative analyses to 
measure the impact of NQTLs. This includes evaluating standards related 
to network composition, out-of-network reimbursement rates, and medical 
management and prior authorization NQTLs.
     Prohibit plans and issuers from using discriminatory 
information, evidence, sources, or standards that systematically 
disfavor or are specifically designed to disfavor access to mental 
health and substance use disorder benefits when designing NQTLs.
     Implement the sunset provision for self-funded non-Federal 
governmental plan elections to opt out of compliance with MHPAEA.
    As a result, the Departments anticipate that these final rules will 
result in changes in network composition and medical management 
techniques related to mental health and substance use disorder care, 
more robust mental health and substance use disorder provider networks, 
and fewer

[[Page 77590]]

and less restrictive prior authorization requirements for individuals 
seeking mental health and substance use disorder care, as well as 
provide additional clarity and information needed for plans and issuers 
to meet their obligations under MHPAEA and for the Departments and 
States to enforce those obligations.

II. Overview of the Final Rules--Departments of the Treasury, Labor, 
and HHS

    The Departments are issuing these final rules 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 final rules 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 the steps that plans and issuers must take 
to meet their obligations under MHPAEA. These final rules also add new 
regulations at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 
codifying minimum standards for developing NQTL comparative analyses to 
assess whether an NQTL, as written and in operation, complies with 
MHPAEA's requirements and setting forth the content elements of 
comparative analyses and the period for plans and issuers to respond to 
a request from the Departments to submit their comparative analyses. 
Additionally, in these final rules, HHS finalizes an amendment to 45 
CFR 147.160 to specify that the final regulations at 45 CFR 146.137 
apply to individual health insurance coverage offered by a health 
insurance issuer in the same manner and to the same extent that the 
regulations apply to health insurance coverage offered by a health 
insurance issuer in connection with a group health plan in the large 
group market.\44\ Consistent with the existing text at 45 CFR 
147.160(a), HHS is also extending the same requirements and framework 
outlined in the amendments to 45 CFR 146.136 in these final rules to 
individual health insurance coverage in the same manner and to the same 
extent as the amendments that apply to group health insurance coverage. 
Finally, HHS is finalizing 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).\45\
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    \44\ 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 
will also be required to comply with the comparative analysis 
requirements finalized under 45 CFR 146.137. See 45 CFR 
156.115(a)(3).
    \45\ Division FF, title I, subtitle C, chapter 3, section 1321, 
Public Law 117-328, 136 Stat. 4459 (Dec. 29. 2022).
---------------------------------------------------------------------------

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 the preamble to the proposed rules, the Departments stated that 
the fundamental purpose of the MHPAEA statute, the 2013 final 
regulations, and the 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 when seeking those benefits than when seeking medical/
surgical benefits under the terms of the plan or coverage. The 
Departments also stated that the fundamental purpose of MHPAEA should 
serve as the guiding principle for plans and issuers as they work to 
comply with the requirements of the law and its implementing 
regulations. Accordingly, the Departments proposed to add a purpose 
section to the regulations, specifying this fundamental purpose, and 
that MHPAEA and its implementing regulations should be interpreted in a 
manner that is consistent with this purpose.
    Many commenters supported the addition of the purpose section and 
the principles it addressed, including the goal of increasing access to 
mental health and substance use disorder benefits, to ensure equal 
treatment for mental health and substance use disorder benefits and 
medical/surgical benefits. A few commenters expressed opposition to the 
proposed purpose section, arguing that its language goes beyond the 
intent of MHPAEA (as Congress did not direct the Departments to provide 
a purpose in regulations, either initially or in later amendments).
    The purpose section is important to highlight the overall goals of 
MHPAEA and to emphasize that the provisions of the 2013 final 
regulations, as amended by these final rules, should be interpreted in 
light of these goals. Congress provided authority to the Departments to 
``promulgate such regulations as may be necessary or appropriate to 
carry out the provisions of'' chapter 100 of the Code, part 7 of ERISA, 
and title XXVII of the PHS Act, including MHPAEA.\46\ MHPAEA was 
enacted to address barriers to access to mental health and substance 
use disorder benefits as compared to medical/surgical benefits. These 
final rules implement MHPAEA's requirements and provide clarifying text 
to promote compliance with the law. The Departments are finalizing the 
purpose section as proposed, with minor changes in response to 
comments.
---------------------------------------------------------------------------

    \46\ See Code section 9833, ERISA section 734, and PHS Act 
section 2792.
---------------------------------------------------------------------------

    Several commenters requested that the reference to ``generally 
comparable'' medical/surgical benefits in the proposed purpose section 
be revised to refer to the classification of benefits. These commenters 
noted that, consistent with the 2013 final regulations, evaluation of a 
plan's or issuer's MHPAEA compliance is assessed within the relevant 
classification of benefits, and that use of the term ``comparable,'' 
which is used in the 2013 final regulations and amendments made to 
MHPAEA by the CAA, 2021 with respect to requirements for NQTLs, is 
confusing and should be revised.
    The Departments agree with commenters who noted that use of the 
term ``comparable'' can be confusing when used in this context, because 
compliance with the requirements for financial requirements, 
quantitative treatment limitations, and NQTLs has historically been 
determined within one of the six classifications of benefits.\47\ 
Therefore, these final rules remove the reference to ``generally 
comparable'' medical/surgical benefits and instead specify that 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 or substance use disorder 
benefits under the plan or coverage than they impose on access to 
medical/surgical benefits in the same classification of benefits. The

[[Page 77591]]

Departments are finalizing the purpose section without any other 
substantive changes, but with a few minor clarifications to ensure that 
terms are used consistently with and accurately describe other parts of 
these final rules.
---------------------------------------------------------------------------

    \47\ The six classifications of benefits listed 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) include inpatient, in-network; inpatient, out-
of-network; outpatient, in-network; outpatient, out-of-network; 
emergency care, and prescription drugs. Special rules for multi-
tiered prescription drug benefits, multiple network tiers, and 
permissible sub-classifications for office visits, separate from 
other outpatient services, are addressed at 26 CFR 54.9812-
1(c)(3)(iii), 29 CFR 2590.712(c)(3)(iii), and 45 CFR 
146.136(c)(3)(iii).
---------------------------------------------------------------------------

2. Meaning of Terms--26 CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 
45 CFR 146.136(a)(2)
a. Medical/Surgical Benefits, Mental Health Benefits, and Substance Use 
Disorder Benefits
    Under the statute and the 2013 final regulations, the term 
``medical/surgical benefits'' means benefits for medical or surgical 
services as defined under the terms of the plan or health insurance 
coverage but does not include mental health or substance use disorder 
benefits. The 2013 final regulations further provide that the term must 
be defined in accordance with applicable Federal and State law, and 
that any condition defined by the plan or coverage as being or as not 
being a medical/surgical condition must be defined to be consistent 
with generally recognized independent standards of current medical 
practice (for example, the most current version of the International 
Classification of Diseases (ICD) or State guidelines).
    The proposed rules generally retained the first sentence of the 
2013 final regulations' definition of ``medical/surgical benefits,'' 
\48\ but amended the definition to provide that, notwithstanding this 
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). Further, the proposed rules stated 
that, 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 also proposed to remove the 
reference to State guidelines in the definition of the term in the 2013 
final regulations, both to make the definitions more consistent with 
the statute, and to minimize situations where differences between 
generally recognized independent standards of current medical practice 
and State guidelines create conflicts and improperly limit protections 
under MHPAEA.
---------------------------------------------------------------------------

    \48\ Under the 2013 final regulations, the term ``medical/
surgical benefits'' means benefits with respect to items or services 
for medical conditions or surgical procedures, as defined under the 
terms of the plan or health insurance coverage and in accordance 
with applicable Federal and State law, but does not include mental 
health or substance use disorder benefits. 26 CFR 54.9812-1(a), 29 
CFR 2590.712(a), and 45 CFR 146.136(a).
---------------------------------------------------------------------------

    The Departments also proposed to make similar changes to the 
definitions of ``mental health benefits'' and ``substance use disorder 
benefits'' by amending the first sentence of each definition and 
removing the references to State guidelines, consistent with the 
changes described above for ``medical/surgical benefits.'' \49\ For 
purposes of the requirement that any condition or disorder defined by 
the plan or coverage as being or not being a mental health condition 
must be defined to be consistent with generally recognized independent 
standards of current medical practice, the proposed rules stated that 
the plan's or coverage's 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 American Psychiatric Association (APA) 
Diagnostic and Statistical Manual of Mental Disorders (DSM). Similarly, 
the proposed rules stated that the plan's or coverage's definition of 
``substance use disorder benefits'' 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. The proposed rules solicited 
comments on whether any additional clarification is needed on how State 
law may interact with the proposed amended definitions of ``medical/
surgical benefits,'' ``mental health benefits'' and ``substance use 
disorder benefits.''
---------------------------------------------------------------------------

    \49\ Consistent with the statute and the 2013 final regulations, 
the Departments note that references to ``mental health and 
substance use disorder benefits'' and ``mental health or substance 
use disorder benefits'' throughout these final rules are intended to 
have the same meaning as the terms ``mental health benefits'' and 
``substance use disorder benefits'' in combination.
---------------------------------------------------------------------------

    In general, many commenters supported modifying these key 
definitions in existing MHPAEA regulations by specifying that, to be 
consistent with generally recognized independent standards of current 
medical practice, the terms of the plan or coverage must accord with 
appropriate chapters of the ICD or DSM. Many commenters generally 
supported requiring plans and issuers to follow the ICD or DSM, 
reasoning that both are generally accepted, peer-reviewed, nonprofit 
professional standards for diagnosis and descriptions of medical 
conditions, mental health conditions, and substance use disorders, and 
that following these authoritative and comprehensive diagnostic tools 
promotes uniform and standard application of MHPAEA to mental health 
conditions and substance use disorders. Several commenters noted that 
these changes would significantly improve clarity and would increase 
access to care, especially for intellectual and neurodevelopmental 
disorders, including dementia and autism spectrum disorder (ASD). 
Another commenter recommended clarifying whether plans and issuers are 
required to consider both the ICD and the DSM in categorizing benefits 
for the purposes of the proposed rules. One commenter added that the 
Departments' proposal to align and clarify the definitions of ``mental 
health benefits'' and ``substance use disorder benefits'' would ensure 
parity between the relevant terms and protect the application of MHPAEA 
for conditions and disorders recognized under independent standards of 
current medical practice. Another commenter expressing support reasoned 
that the proposed amendments would clearly specify how mental health 
conditions and substance use disorders must be defined for MHPAEA 
compliance purposes and minimize contradictions with State guidelines 
that now limit MHPAEA protections. The commenter also remarked that 
self-insured plans frequently include language from State-level 
mandated benefit requirements prevalent in the plan's geographic area 
that may not be MHPAEA-compliant.
    Several commenters supported the removal of any reference to State 
guidelines to prevent situations in which contradictions between 
Federal and State guidelines would result in a loss of protections 
under MHPAEA. One commenter wrote that State law definitions often 
predate MHPAEA, may conflict with ICD and DSM standards, and should not 
be the operable standard, while others stated that State

[[Page 77592]]

guidelines should not be given precedence over Federal regulations to 
ensure that MHPAEA's protections are not subverted. However, one 
commenter urged that the Departments continue allowing plans and 
issuers to use State guidelines to inform the definitions of ``medical/
surgical benefits,'' ``mental health benefits,'' and ``substance use 
disorder benefits,'' regardless of whether State law is consistent with 
generally recognized independent standards of current medical practice. 
The commenter noted that independent standards of medical practice vary 
and change over time and are not established with the same intents and 
purposes as State laws. The commenter also stated that States have been 
the traditional regulators of health insurance issuers when it comes to 
interpretive and enforcement matters, even for coverage issues subject 
to Federal law (such as the ACA and MHPAEA). Another commenter 
supported the clarification that, when the DSM or ICD does not indicate 
whether a condition or disorder is a mental health condition or 
substance use disorder, plans and issuers may define the condition or 
disorder in accordance with applicable Federal and State law.
    In the proposed rules, the Departments noted that, to the extent 
applicable 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 ensuring compliance with MHPAEA. To better 
understand interested parties' concerns in implementing this 
requirement, the Departments solicited comments on potential challenges 
in applying MHPAEA to all benefits for a mental health condition or 
substance use disorder where a specific item or service can be 
furnished 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.
    In response to this comment solicitation, commenters identified 
several instances in which an individual with a mental health or 
substance use disorder diagnosis may need a particular treatment for 
that condition or disorder that may also be provided to treat a medical 
condition. For example, ASD \50\ might be treated with speech and 
occupational therapy, which is also used to treat some medical 
conditions. Additionally, an eating disorder might require medical 
nutrition therapy, which could also be used to treat a medical 
condition (such as for the treatment of obesity or diabetes). Moreover, 
with respect to benefits for prescription drugs, a commenter noted that 
claims for reimbursement generally do not include diagnosis 
information. Some commenters explained that many specific prescription 
drugs are prescribed for mental health conditions and substance use 
disorders, as well as for medical/surgical conditions, and including 
diagnosis information would require a range of different entities and 
interested parties to change their current practice. Commenters also 
recommended several methods under which the rules could allow plans and 
issuers to characterize items and services as medical/surgical 
benefits, mental health benefits, or substance use disorder benefits. 
One commenter suggested items and services be characterized as either 
mental health benefits, substance use disorder benefits, or medical/
surgical benefits based on the condition or disorder being treated. 
Similarly, another commenter suggested that items and services be 
characterized as mental health benefits or substance use disorder 
benefits when a claim's primary diagnosis is a mental health condition 
or substance use disorder, respectively, as that diagnosis is driving 
the treatment provided. Alternatively, several commenters suggested the 
rules could be aligned with existing Centers for Medicare & Medicaid 
Services (CMS) guidance on MHPAEA compliance for Medicaid and the 
Children's Health Insurance Program (CHIP) so that plans and issuers 
could use a ``reasonable method'' for defining services commonly used 
to treat both medical conditions and mental health conditions or 
substance use disorders, for example, by using the plan's or issuer's 
annual claims experience to determine its spending on the service in 
question.\51\
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    \50\ As discussed later in this preamble, the Departments stated 
in the proposed rules and reiterate in these final rules that ASD is 
a mental health condition for purposes of MHPAEA.
    \51\ CMS, Frequently Asked Questions: Mental Health and 
Substance Use Disorder Parity Final Rule for Medicaid and CHIP (Oct. 
11, 2017), Q4, https://www.medicaid.gov/federal-policy-guidance/downloads/faq101117.pdf.
---------------------------------------------------------------------------

    After reviewing comments received from interested parties, the 
Departments are finalizing the definitions of ``medical/surgical 
benefits,'' ``mental health benefits'' and ``substance use disorder 
benefits'' as proposed. 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, 
and the definitions in these final rules include sufficient safeguards 
to protect against defining a benefit in a manner that could result in 
limitations on access to mental health or substance use disorder 
benefits that are more restrictive than those applicable to medical/
surgical benefits. Further, while the Departments acknowledge the 
concern that independent standards of current medical practice change 
over time and may not have been established with the same intents and 
purposes as State law or State guidelines, such standards better ensure 
that plans and issuers define mental health conditions and substance 
use disorders in a manner consistent with the purposes of MHPAEA. The 
Departments agree with one commenter's concern that some State laws, in 
particular, might predate MHPAEA. As a result, such State laws might 
not offer the same safeguards to access to mental health or substance 
use disorder benefits as MHPAEA. The Departments also note that plans 
and issuers are required to ensure that the definitions used in the 
plan or coverage are consistent with the appropriate chapters of the 
most current version of either the ICD or the DSM.
    Additionally, while States generally are the traditional regulators 
of health insurance issuers, with respect to MHPAEA, the Departments 
are not persuaded that this necessitates permitting plans and issuers 
to use definitions of ``medical/surgical benefits,'' ``mental health 
benefits'' and ``substance use disorder benefits'' that are solely tied 
to applicable State law or guidelines. The definitions of ``medical/
surgical benefits,'' ``mental health benefits,'' and ``substance use 
disorder benefits'' in these final rules preserve the ability of plans 
and issuers to use applicable Federal and State law to inform their 
definitions, but only to the extent that those laws are consistent with 
generally recognized independent standards of current medical 
practice.\52\
---------------------------------------------------------------------------

    \52\ The final rules also permit plans and issuers to use 
applicable Federal and State law to inform their definitions to the 
extent generally recognized independent standards of current medical 
practice do not address whether a condition or disorder is a medical 
condition, surgical procedure, mental health condition, or substance 
use disorder.
---------------------------------------------------------------------------

    These final rules do not make any changes to the proposed 
definitions to specifically address how plans and

[[Page 77593]]

issuers should apply MHPAEA where a specific item or service may be 
used to treat both medical conditions or surgical procedures as well as 
mental health conditions or substance use disorders. These final rules, 
like the proposed rules and the 2013 final regulations, require plans 
and issuers to continue to characterize items and services as medical/
surgical benefits, mental health benefits, or substance use disorder 
benefits based on the condition or disorder being treated. This 
interpretation is the most appropriate reading of the definitions of 
medical/surgical benefits, mental health benefits, and substance use 
disorder benefits, consistent with the statute and the purpose of 
MHPAEA. The Departments note that the existing CMS mental health and 
substance use disorder parity guidance for Medicaid and CHIP identified 
by several commenters addresses long-term services and supports 
provided through Medicaid and CHIP, not items and services covered by 
group health plans and health insurance coverage. The Departments 
reiterate that, if a plan (or coverage) defines a condition or disorder 
as a mental health condition or substance use disorder, plans and 
issuers subject to these final rules must treat all benefits for the 
condition or disorder as mental health benefits or substance use 
disorder benefits, respectively, for purposes of compliance with 
MHPAEA. The Departments decline to adopt the alternative methods 
suggested by commenters that plans and issuers might use to 
characterize items and services as medical/surgical benefits, mental 
health benefits, or substance use disorder benefits, as they may be 
insufficient to ensure consistency with generally recognized 
independent standards of current medical practice and in accordance 
with applicable State and Federal law. Furthermore, while the 
Departments acknowledge the particular challenges with respect to 
prescription drug benefits due to the lack of diagnostic information on 
claims for reimbursement, these final rules, similar to the 2013 final 
regulations, provide plans and issuers enough flexibility to make 
decisions about how to classify items and services, including 
prescription drugs, as either mental health benefits, substance use 
disorder benefits, or medical/surgical benefits.
    To provide guidance to plans and issuers on how to ensure that they 
define benefits consistent with generally recognized independent 
standards of current medical practice, the proposed rules proposed 
separate definitions of the ICD and DSM. Specifically, the Departments 
proposed that 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 APA's Diagnostic and Statistical Manual of Mental 
Disorders. The proposed definitions also specified, for purposes of the 
definition, which version of the ICD or DSM is the most current as of a 
particular date. This was intended to provide clarity on when a plan or 
issuer would be required to begin to rely on a new version of the ICD 
or DSM after it is released and allow sufficient time after the 
adoption of an updated version of the ICD or DSM for a plan or issuer 
to update the terms of its plan or coverage to be consistent with any 
changes made from the previous version. The proposed definitions stated 
that the most current version of the ICD or DSM, respectively, would be 
the version applicable no earlier than the date that is 1 year before 
the first day of the applicable plan year; however, the proposed rules 
would permit the use of an updated version before the plan or issuer is 
required to use it. Finally, in recognition of the fact 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,'' the proposed amended definitions referred to ``equivalent 
categories'' and ``equivalent chapters.''
    The Departments received several comments on the proposed 
definitions of the terms ``ICD'' and ``DSM,'' with some commenters 
suggesting alternatives to the language identifying the most current 
versions of the DSM and ICD. One commenter suggested specifying that if 
a new version of the DSM or ICD is published in the middle of a plan 
year, then plans and issuers must use the updated version by the start 
of the next plan year. One commenter suggested that the most current 
version of an independent standard should encompass any version 
commonly in use among providers, and any version used in the most 
recent claims experience available to plans and issuers.
    The Departments are finalizing the definition of ``ICD'' as 
proposed, with clarifications with respect to the most current version 
of the ICD. Specifically, under these final rules, the most current 
version of the ICD as of November 22, 2024, the effective date of these 
final rules, is the International Classification of Diseases, 10th 
Revision, Clinical Modification adopted for the period beginning on 
October 1, 2015, through HHS regulations at 45 CFR 162.1002 (or 
successor regulations).\53\ Any subsequent version of the ICD adopted 
through 45 CFR 162.1002 (or successor regulations) after November 22, 
2024, will be considered the most current version beginning on the 
first day of the plan year that is one year after the date the 
subsequent version is adopted.
---------------------------------------------------------------------------

    \53\ These HHS regulations implement section 212 of the 
Protecting Access to Medicare Act of 2014 by setting compliance 
dates for the 10th Revision of the ICD for diagnosis and procedure 
coding.
---------------------------------------------------------------------------

    The Departments are also finalizing the definition of ``DSM'' as 
proposed, with similar clarifications, which note that the most current 
version as of November 22, 2024, the effective date of these final 
rules, is the Diagnostic and Statistical Manual of Mental Disorders, 
Fifth Edition, Text Revision published in March 2022. A subsequent 
version of the DSM published after November 22, 2024, will be 
considered the most current version beginning on the first day of the 
plan year that is one year after the date the subsequent version is 
published (as the DSM is published, rather than made applicable). 
Consistent with this clarification, if a new version of the DSM is 
published in the middle of a plan year, plans and issuers will have at 
least one full year before they are required to use the updated version 
with respect to a plan year. For example, if a new version of the DSM 
is published on August 1, 2025, for a calendar year plan, that version 
of the DSM would be the most current version with respect to the plan 
year beginning on January 1, 2027.
    It is important to provide specificity with regard to the relevant 
versions of the ICD and DSM instead of allowing the use of multiple 
versions, as suggested by commenters, to ensure that plans and issuers 
do not select a version that restricts access to mental health and 
substance use disorder benefits in a manner that is more restrictive 
than access to medical/surgical benefits. Because the Departments 
understand that the ICD and DSM are both broadly utilized by providers 
and facilities, as well as plans and issuers, and were referenced in 
the 2013 final regulations, these final rules continue to rely on such 
standards.
    Finally, the preamble to the proposed rules noted that interested 
parties requested that the Departments confirm whether specific 
conditions are mental health conditions for purposes of MHPAEA. 
Consistent with the 2013 final regulations and section 13007 of

[[Page 77594]]

the 21st Century Cures Act (Cures Act),\54\ the Departments confirmed 
in the proposed rules 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.\55\ Similarly, the proposed rules made clear that, 
for purposes of MHPAEA, ASD is a mental health condition under 
generally recognized independent standards of current medical 
practice.\56\ Therefore, benefits for these disorders are considered 
mental health benefits, and subject to the protections of MHPAEA and 
its implementing regulations, including these final rules.
---------------------------------------------------------------------------

    \54\ Public Law 114-255, 130 Stat. 1033 (Dec. 13, 2016). 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.
    \55\ See, e.g., DSM Disorders (5th ed.), Section II: Diagnostic 
Criteria and Codes, Feeding and Eating Disorders; ICD-10, Chapter V: 
Mental and behavioral disorders, Code F50: Eating disorders.
    \56\ DSM (5th ed.), Section II: Diagnostic Criteria and Codes, 
Autism Spectrum Disorder.
---------------------------------------------------------------------------

    The Departments also solicited comments on other specific mental 
health conditions or substance use disorders that may warrant 
additional clarification for purposes of analyzing parity and ensuring 
compliance with MHPAEA. The Departments received only a few comments in 
response, including a request to clarify whether gender dysphoria is a 
mental health condition. Because the most current versions of both the 
ICD and DSM include gender dysphoria as a mental health condition as of 
the time of the issuance of these final rules, benefits for this 
condition are currently subject to the protections of MHPAEA and its 
implementing regulations, consistent with the framework described 
earlier in this preamble.\57\
---------------------------------------------------------------------------

    \57\ DSM (5th ed.), Section II: Diagnostic Criteria and Codes, 
Gender Dysphoria; ICD-10, Chapter V: Mental and behavioural 
disorders, Code F64: Gender identity disorders.
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b. Processes, Strategies, Evidentiary Standards, and Factors
    The proposed rules included proposed new definitions of terms used 
in paragraph (c)(4)(i) of the 2013 final regulations, which states 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 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 
applying the limitation with respect to medical/surgical benefits in 
the same classification. These terms and the corresponding standard 
were incorporated into MHPAEA's statutory language in the amendments 
made by the CAA, 2021.\58\ Because the Departments heard from 
interested parties prior to the issuance of the proposed rules that it 
can be difficult to determine what constitute relevant processes, 
strategies, evidentiary standards, and other factors, the Departments 
proposed definitions of these terms and included an illustration of the 
interaction of the definitions of these terms in the preamble to the 
proposed rules. The illustration described how a plan might rely on 
various combinations of processes, strategies, evidentiary standards, 
and other factors in designing and applying an NQTL, and gave examples 
of each term. The Departments also solicited comments on the proposed 
definitions, including any alternate definitions or additional 
clarifications that should be considered.
---------------------------------------------------------------------------

    \58\ Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A), and 
PHS Act section 2726(a)(8)(A).
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    In general, many commenters supported the proposed definitions of 
these key terms, which they described as foundational to the 
development of sufficient comparative analyses and necessary to hold 
plans and issuers accountable for discriminatory NQTLs. Several 
commenters described widespread misinterpretation by plans and issuers 
of the meaning of these key terms. Other commenters wrote that the 
proposed definitions would help clarify the difference between 
``factors'' and ``evidentiary standards,'' and draw a clear distinction 
between ``strategies'' and ``processes,'' which relate, respectively, 
to plans' and issuers' approaches to the design of an NQTL, and to 
their application of an NQTL. Other commenters stated that the 
definitions of these terms should clearly distinguish between each 
component of a plan's or issuer's required comparative analysis and 
assign each step of the analysis to a particular component of the 
comparative analysis. Additionally, a commenter requested more specific 
examples of processes and evidentiary standards, and the differences 
between factors and evidentiary standards. One commenter stated that 
the proposed definitions are not coherent as applied to network 
contracting activities, development of reimbursement methodologies, or 
most other network composition NQTLs. This commenter claimed that there 
is no algorithmic approach to decision making that can be documented 
and requested the Departments to provide guidance on how the many 
activities involved in constructing provider networks and provider 
reimbursements across different plan types, service settings, and 
reimbursement methodologies should be categorized.
    As stated in the preamble to the proposed rules, the proposed 
definitions for the terms ``processes,'' ``strategies,'' ``evidentiary 
standards,'' and ``factors'' are intended to further clarify how to 
properly apply and distinguish between these terms, and to help 
facilitate proper comparisons between the design and application of 
NQTLs to medical/surgical benefits and mental health and substance use 
disorder benefits in the same classification, compliance with the 
requirements related to NQTLs, and the development of sufficient 
comparative analyses, as required under the CAA, 2021 and these final 
rules. The definitions in these final rules improve clarity and add 
specificity to the terms used in MHPAEA, as amended by the CAA, 2021, 
to reduce misinterpretations, and are consistent with the requirements 
in these final rules that set forth the manner in which plans and 
issuers are required to perform and document comparative analyses, 
discussed later in this preamble. The Departments also provide 
additional guidance on how plans and issuers must comply with the 
provisions of these final rules with respect to NQTLs related to 
network composition,\59\ later in this preamble.
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    \59\ The term ``NQTLs related to network composition'' generally 
refers to the NQTLs listed in 26 CFR 54.9812-1(c)(4)(ii)(D), 29 CFR 
2590.712(c)(4)(ii)(D), and 45 CFR 146.136(c)(4)(ii)(D) of these 
final rules: 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.
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    The Departments note that nothing in these final rules requires an 
``algorithmic'' decision making process; however, plans and issuers 
must perform and document their comparative analyses as required under 
26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 to show that 
the processes, strategies, evidentiary standards, and other factors 
used in designing or applying an NQTL to mental health and substance 
use

[[Page 77595]]

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 in designing or applying 
the NQTL to medical/surgical benefits in the relevant classification. 
Additionally, anything used by a plan or issuer to design or apply an 
NQTL should be considered a process, strategy, evidentiary standard, or 
factor (or information, evidence, sources, or standards on which a 
factor or evidentiary standard is based), consistent with the 
Departments' broad interpretation of these terms.
    Under the proposed rules, the Departments proposed that evidentiary 
standards generally would not be considered factors, but instead would 
be considered or relied upon in designing or applying a factor. The 
Departments noted that, although the framework established in the 2013 
final regulations treated the terms within the phrase ``processes, 
strategies, evidentiary standards, and other factors'' as having 
overlapping meanings (and the term ``other factors'' was utilized as a 
catch-all), the CAA, 2021 added to MHPAEA other references to factors 
and evidentiary standards that indicate Congress meant to distinguish 
between them.\60\ The Departments requested comments on this approach 
to defining evidentiary standards separately from factors, including 
whether there are any circumstances under which an evidentiary standard 
should also be considered a factor under the framework outlined in the 
proposed rules, but did not receive any specific comments on this 
issue. Therefore, under these final rules, consistent with the proposed 
rules, evidentiary standards are not considered to be factors.
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    \60\ The preamble to the proposed rules noted that, for example, 
Code section 9812(a)(8)(A)(iii), ERISA section 712(a)(8)(A)(iii), 
and PHS Act section 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. See 88 FR 51552, 51567 (Aug. 3, 2023).
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    The proposed rules provided that the term ``evidentiary standards'' 
would mean any evidence, sources, or standards that a plan or issuer 
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 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 also provides 
that evidentiary standards would 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.
    One commenter recommended not including specific benchmarks or 
thresholds and professional standards and protocols in the definition 
of the term ``evidentiary standards.'' The commenter noted that many 
plans and issuers do not define their evidentiary standards numerically 
and that finalizing the definition as proposed could require plans and 
issuers to do so, thereby compelling plans and issuers not to use 
relevant, critical data in the development of their NQTLs. The 
commenter also remarked that including professional standards and 
protocols in the definition would require plans and issuers to 
incorporate potentially unproven medical guidance as a standard to 
dictate mental health or substance use disorder benefits, which could 
override common medical management practices. The commenter added that, 
if the reference to professional standards and protocols is retained, 
the Departments should clarify that the definition of ``evidentiary 
standards'' does not imply that all professional standards and 
protocols must be referenced or that benchmarks or thresholds are 
required to be applied to professional standards and protocols.
    The Departments are finalizing the definition of ``evidentiary 
standards'' as proposed. The definition is consistent with the use of 
the term by Congress in the amendments made to MHPAEA by the CAA, 2021. 
The definition of the term ``evidentiary standards'' does not require 
plans and issuers to define their evidentiary standards numerically, 
nor does it imply that all professional standards and protocols must be 
referenced or that benchmarks or thresholds are required to be applied 
to professional standards and protocols (for example, where the 
standards are qualitative in nature). However, to the extent these 
types of evidentiary standards are used to design or apply an NQTL, 
they must be analyzed for compliance with MHPAEA. The list of examples 
of evidentiary standards included in the definition is not intended to 
be exhaustive, nor are any of the evidentiary standards listed required 
to be considered or relied upon in designing or applying a factor with 
respect to an NQTL.
    In the proposed rules, the Departments proposed that the definition 
of the term ``factors'' be read broadly, so that factors are all 
information, including processes and strategies (but not evidentiary 
standards), that a plan or issuer considered or relied upon to design 
an NQTL or to determine whether or how the NQTL applies to benefits 
under the plan or coverage. The Departments noted that by defining the 
term ``factor'' broadly, the Departments' intention was to capture any 
information used to design or apply an NQTL (other than evidentiary 
standards), regardless of whether a plan or issuer believes that 
information could also be characterized as a ``process'' or a 
``strategy,'' as those terms were proposed to be defined. The 
Departments proposed that the term ``factors'' includes information 
(but 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.\61\ The proposed definition also provided 
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.
---------------------------------------------------------------------------

    \61\ See FAQs About Affordable Care Act Implementation Part 31, 
Mental Health Parity Implementation, and Women's Health and Cancer 
Rights Act Implementation, Q9 (Apr. 20, 2016), 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, 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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[[Page 77596]]

    With respect to the ``broad'' reading of the term ``factor,'' a 
commenter stated that the proposed definition subsumes ``processes'' 
and ``strategies,'' and suggested eliminating or clarifying this 
distinction with additional guidance. The commenter also remarked that 
the broad definition of ``factor'' would make the multiple steps in a 
comparative analysis less distinguishable, and the requirement that 
plans identify, define, and describe the use of every factor in the 
design or application of an NQTL unworkably expansive. A few commenters 
remarked that the breadth of the definition of ``factor'' makes it 
unclear how a plan or issuer would demonstrate that a factor is 
unbiased or not discriminatory for the purposes of the comparative 
analyses and recommended narrowing the definition of ``factor'' to 
distinguish it from evidentiary standards, processes, and strategies, 
and instead use the term to describe the basis for the plan's or 
issuer's application of an NQTL. Another commenter recommended not 
including information that the plan or issuer considered but rejected 
in the definition of factors, because it is not illustrative of the 
ultimate value of the mental health or substance use disorder benefit 
or the plan's or issuer's compliance with MHPAEA's NQTL standards. The 
commenter stated that the actual design of the benefit and how it 
translates to payments, denials, and reimbursement should substantiate 
whether the benefit design complies with parity requirements, without 
examining extraneous information on considerations early in the 
benefit's development process. A commenter suggested the Departments 
include an example of what the Departments would consider a complete 
definition of a factor and information about how to specify the weight 
assigned to factors.
    The Departments are finalizing the definition of the term 
``factor'' as proposed. The definition and list of examples of factors 
in the definition contained in these final rules are sufficiently 
detailed to provide context to plans and issuers in identifying 
factors, including by distinguishing evidentiary standards from factors 
and acknowledging that factors other than processes and strategies, 
which are types of factors, may exist. Under the 2013 final 
regulations, plans and issuers were permitted to utilize a wide array 
of factors in designing and applying their NQTLs to mental health and 
substance use disorder benefits provided they were comparable to, and 
applied no more stringently than, those utilized to design and apply 
NQTLs to medical/surgical benefits. Similarly, the CAA, 2021 did not 
limit what factors plans and issuers could use to design and apply 
their NQTLs, but instead required that these factors be identified and 
analyzed in the comparative analyses.
    As noted in the preamble to the proposed rules, taking into account 
not only the factors that the plan or issuer relied upon, but also 
those that were considered but ultimately rejected in the definition of 
factors, is consistent with previous guidance on MHPAEA, namely because 
it is a factor that a plan or issuer uses in designing and applying an 
NQTL. The Departments recognize that the language used in the proposed 
rules, which included factors that were considered and rejected, rather 
than those that are relied upon and rejected, could be interpreted as 
including a broader set of information than prior guidance, which had 
interpreted ``considered'' to include ``factors that were relied upon 
and were rejected.'' The Departments did not intend to broaden the set 
of information included as a factor, and agree with the commenter who 
questioned the utility of providing information that was considered 
early in the design process but rejected. However, the Departments 
affirm that taking into account information that the plan or issuer 
relied upon and rejected in the definition of factors is necessary to 
analyze compliance with MHPAEA.
    In the proposed rules, the Departments proposed to define 
``processes'' and ``strategies'' as types of factors, and to clarify 
the differences between the two terms as they relate to the design and 
application of an NQTL. Specifically, the Departments proposed defining 
``processes'' as relating to the application of an NQTL, while 
``strategies'' would relate to the design of an NQTL. After review of 
the comments, the Departments continue to be of the view that the best 
read of the statutory text (as well as the 2013 final regulations) is 
that processes and strategies are types of factors, rather than 
components of a factor to be separately evaluated.
    The Departments proposed to define ``processes'' to mean actions, 
steps, or procedures that a plan or issuer uses to apply an NQTL, 
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. 
Under the proposed rules, processes include, but are not limited to: 
prior authorization procedures, provider referral requirements, and the 
development and approval of a treatment plan. The proposed definition 
also provided 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.
    A commenter expressed appreciation for the proposed rules' intent 
and requested the Departments to include more specific examples of 
``processes.'' Another commenter stated that the proposed definition 
for ``processes'' is too broad and focuses only on the end result of 
access to benefits, which the commenter stated is inconsistent with the 
Departments' previous guidance and regulations, and recommended 
narrowing the definition to focus on the operational application of any 
requirements.
    After reviewing comments, the Departments are finalizing the 
definition of the term ``processes,'' with minor changes so that the 
examples of processes more clearly illustrate the way the action, step, 
or procedure is used to apply an NQTL.\62\ While the Departments 
decline to add examples to the definition, these modifications will add 
clarity to the definition in these final rules.\63\ The Departments 
note that the final definition of the term does not focus only on the 
end result of access to benefits, but also includes the operational 
application of an NQTL, as evidenced by the framing of the definition 
in terms of actions, steps, or procedures used to apply an NQTL. For 
example, prior authorization processes include the procedures 
established by a plan or issuer for a review to determine how a 
specific request for prior authorization should be granted or denied. 
Concurrent review processes include the procedures established by a 
plan or issuer for a review to determine whether a specific request 
should be

[[Page 77597]]

granted or denied, such as when peer-to-peer review is required.
---------------------------------------------------------------------------

    \62\ The Departments are also finalizing a non-substantive 
modification so that the definition more closely parallels the 
definition of ``strategies.''
    \63\ For example, these final rules clarify that provider 
referral requirements are processes if they are used to determine 
when and how a participant or beneficiary may access certain 
services. Similarly, the development and approval of a treatment 
plan are processes if they are used in a concurrent review process 
to determine whether a specific request should be granted or denied.
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    The proposed rules proposed to define ``strategies'' as practices, 
methods, or internal metrics that a plan or issuer considers, reviews, 
or uses to design an NQTL, and included examples of strategies. The 
proposed definition of strategies included the following examples: 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. The 
proposed definition of strategies also specifically included: 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 or issuer's decisions related to 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.
    One commenter supported the inclusion in the definition of 
``strategies'' of practices that involve ``deviations from generally 
accepted standards of care.'' Several commenters also recommended that 
the Departments include actions to detect or prevent and prove fraud, 
waste, and abuse in the definitions of either or both ``processes'' and 
``strategies,'' rather than including those actions as a stand-alone 
exception from the NQTL requirements in the final rules. Another 
commenter appreciated the clear distinction made in the proposed 
definitions of processes and strategies and stated that they would 
appreciate if these distinctions tracked with separate steps in the 
comparative analyses.\64\
---------------------------------------------------------------------------

    \64\ The content elements of comparative analyses are addressed 
later in this preamble.
---------------------------------------------------------------------------

    The Departments are generally finalizing the definition of the term 
``strategies'' with some minor changes to the examples to add 
specificity. The definition of the term ``strategies'' in these final 
rules includes examples of strategies used to design an NQTL, such as 
the method of determining whether and how to deviate from generally 
accepted standards of care in concurrent reviews; rationales used in 
selecting and adopting certain threshold amounts to apply an NQTL; 
professional standards and protocols to determine utilization 
management standards; and fee schedules used to determine provider 
reimbursement rates, used as part of an NQTL. The Departments note 
that, once a plan or issuer uses a strategy to design an NQTL, that 
design also may result in the establishment or use of processes to 
apply the NQTL.
    While the Departments acknowledge comments suggesting that actions 
to detect or prevent and prove fraud, waste, and abuse be defined as 
either ``processes'' or ``strategies,'' and acknowledge that such 
actions certainly could constitute either processes or strategies 
(depending on whether the action is undertaken to design or apply the 
NQTL), the Departments decline to add a specific reference to actions 
to detect or prevent and prove fraud, waste, and abuse to the relevant 
definitions, as the proposed exception for standards to detect or 
prevent and prove fraud, waste, and abuse is not being finalized, as 
discussed later in this preamble.\65\ However, the Departments are 
providing additional language to explain what constitutes a standard to 
detect or prevent and prove fraud and abuse (also referred to as 
``fraud and abuse measures'') later in this preamble and how such 
standards must comply with MHPAEA under these final rules.
---------------------------------------------------------------------------

    \65\ The proposed rules referred to fraud, waste, and abuse. 
However, as explained later in this preamble, the Departments agree 
with commenters that the term ``waste'' can be construed in a manner 
that is overly broad. Thus, in these final rules, when discussing 
the exception in the proposed rules for NQTLs that are narrowly and 
reasonably designed to detect or prevent and prove fraud, waste, and 
abuse, while minimizing the impact on access to appropriate mental 
health and substance use disorder benefits, this preamble refers to 
``fraud, waste, and abuse measures.'' When discussing provisions of 
this final rule related to carefully circumscribed measures 
reasonably and appropriately designed to detect or prevent and prove 
fraud and abuse, this preamble refers to ``fraud and abuse 
measures.''
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c. Treatment Limitations
    The Departments proposed to amend the definition of ``treatment 
limitations'' 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'' (rather than ``permanent'') exclusion of 
all benefits for a particular condition or disorder is not a treatment 
limitation for purposes of the definition. In the preamble to the 
proposed rules, the Departments noted that, 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, and such NQTLs would still be evaluated in 
accordance with the rules for NQTLs under the statute and implementing 
regulations.
    Several commenters supported the Departments' amendment to the 
definition of ``treatment limitation'' to specify that ``a complete 
exclusion of all benefits for a particular condition or disorder is not 
a treatment limitation for purposes of this definition,'' rather than 
retaining the reference in the 2013 final regulations to a 
``permanent'' exclusion. These commenters stated that the proposed 
definition more clearly specifies that a plan or issuer can exclude a 
particular condition or service without creating an NQTL, but that in 
doing so, the exclusion must be total. The commenters suggested the 
Departments include specific examples of permissible exclusions and 
impermissible exclusionary language. Other commenters expressed concern 
that the proposed definition of ``treatment limitation'' is too broad 
and argued that the proposed definition would lead to increased 
uncertainty in determining which common plan practices could constitute 
an NQTL. One commenter stated that if there is no comparable medical or 
surgical treatment limitation, there is nothing to compare a treatment 
limitation on a mental health or substance use disorder benefit to, and 
that therefore such a limitation on the mental health or substance use 
disorder benefit is not subject to parity requirements. Several 
commenters recommended adopting a consistent and exhaustive definition 
for determining whether a medical management technique is a treatment 
limitation.
    The Departments are finalizing the definition of ``treatment 
limitation'' as proposed, with minor modifications to add an example of 
an NQTL. As reflected in the definition, medical management techniques 
are NQTLs if they limit the scope or duration of treatment. While the 
definition as amended is broad, plans and issuers have great latitude 
in the types of limitations that they may impose, and the Departments 
understand that plans and issuers do in fact impose a broad range of 
limitations on the scope or duration of treatment. In enacting MHPAEA 
and the amendments to MHPAEA contained in the CAA, 2021, Congress did 
not prohibit the use of these limitations for mental health and 
substance use disorder benefits, but

[[Page 77598]]

required that plans and issuers ensure that NQTLs satisfy the statutory 
requirements that (1) any treatment limitations imposed on mental 
health and substance use disorder benefits are no more restrictive than 
the predominant treatment limitations imposed on substantially all 
medical/surgical benefits; (2) that no treatment limitations be imposed 
only with respect to mental health and substance use disorder benefits; 
and (3) that plans and issuers perform and document comparative 
analyses of the design and application of NQTLs. Because of the broad 
range of treatment limitations that plans and issuers may impose, 
combined with the freedom that plans and issuers have to design their 
own unique limitations, the Departments cannot provide a comprehensive 
and exhaustive list of all limitations, as further explained later in 
this preamble.
    The Departments note that if a plan or issuer applies a treatment 
limitation to mental health and substance use disorder benefits where 
medical/surgical benefits are not subject to a comparable treatment 
limitation in the same classification, the plan or issuer would violate 
MHPAEA because it must not apply separate treatment limitations only to 
mental health and substance use disorder benefits. Further, the 
Departments have stated that, if a plan or issuer provides any benefits 
for a mental health condition or substance use disorder but excludes 
benefits for items or services for that condition or disorder in a 
classification in which it provides medical/surgical benefits, such an 
exclusion of a benefit for a condition or disorder that is otherwise 
covered is a treatment limitation because it is a limit on the scope or 
duration of treatment offered.\66\ While the Departments decline to 
provide additional examples of permissible exclusions and impermissible 
exclusionary language in these final rules, examples of such exclusions 
and language have been provided in guidance and in the Departments' 
reports to Congress.
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    \66\ See 75 FR 5410, 5413 (Feb. 2, 2010).
---------------------------------------------------------------------------

3. Nonquantitative Treatment Limitations--26 CFR 54.9812-1(c)(4), 29 
CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4)
    In the proposed rules, the Departments proposed changes designed to 
better ensure that plans and issuers do not design and implement NQTLs 
that impose greater restrictions on access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits. The Departments proposed to add requirements that apply to 
NQTLs with respect to mental health and substance use disorder 
benefits, to ensure that plans and issuers do not impose a greater 
burden on participants and beneficiaries accessing those benefits than 
the burden imposed on participants and beneficiaries accessing medical/
surgical benefits, while preserving the ability of plans and issuers to 
impose NQTLs to the extent they are consistent with generally 
recognized independent professional medical or clinical standards or 
legitimate and narrowly designed standards related to fraud, waste, and 
abuse. Subject to those two narrow exceptions for those types of NQTLs, 
the proposed rules provided that plans and issuers would not be 
permitted to impose an NQTL on mental health or substance use disorder 
benefits unless they satisfied all of the following three requirements: 
(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 as the no more restrictive requirement); (2) the plan or 
issuer satisfies requirements related to the design and application of 
the NQTL (also referred to as the design and application requirements); 
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 as the relevant data evaluation 
requirements).
    Specifically, under the no more restrictive requirement, the 
proposed rules specified 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. This requirement was 
intended to ensure that the implementing regulations more closely 
mirrored the statutory language in Code section 9812(a)(3)(A), ERISA 
section 712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
    The proposed rules outlined a four-prong test for a plan or issuer 
to determine compliance with the no more restrictive requirement. 
Specifically, this provision would have required plans and issuers to 
determine: (1) the portion of plan payments for medical/surgical 
benefits subject to an NQTL in a classification; (2) whether the NQTL 
applies to substantially all medical/surgical benefits in the 
classification; (3) if the NQTL applies to substantially all medical/
surgical benefits in the classification, the predominant variation of 
the NQTL that applies to substantially all medical/surgical benefits in 
the classification; and (4) 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.
    The second proposed requirement for NQTLs, the design and 
application requirements, retained the requirements for NQTLs from the 
2013 final regulations focused on the processes, strategies, 
evidentiary standards, and other factors used to apply an NQTL, with a 
proposed modification to better align the rules with the statute's 
focus on the design of an NQTL in addition to its application. In 
addition, the Departments proposed to 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 was based discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits.
    The third requirement for NQTLs under the proposed rules, the 
relevant data evaluation requirements, proposed to require plans and 
issuers to collect and evaluate relevant outcomes data and take 
reasonable action to address material differences in access between 
mental health and substance use disorder benefits and medical/surgical 
benefits as necessary to ensure compliance, in operation, with MHPAEA. 
This requirement also included a proposed special rule for NQTLs 
related to network composition.
    The proposed rules stated that, if a plan or issuer fails to meet 
any of the three requirements under the proposed rules with respect to 
an NQTL in a classification, the NQTL would violate MHPAEA and, as a 
result, could not be imposed on mental health or substance use disorder 
benefits in the classification without changes to the terms of the plan 
or coverage, or the way the NQTL is designed or applied, to ensure 
compliance with MHPAEA.
    The Departments proposed two limited exceptions to some of the 
requirements for NQTLs, consistent with the Departments' intention to 
avoid interference with a plan's or issuer's attempts to ensure that 
NQTLs imposed with respect to benefits for

[[Page 77599]]

treatment of mental health conditions or substance use disorders are 
consistent with generally accepted independent professional medical or 
clinical standards of care (also referred to as independent 
professional medical or clinical standards) or are narrowly and 
reasonably designed to detect or prevent and prove fraud, waste, and 
abuse, while minimizing the impact on access to appropriate mental 
health and substance use disorder benefits (also referred to as fraud, 
waste, and abuse measures). The Departments proposed to exempt NQTLs 
qualifying for the exception for independent professional medical or 
clinical standards from compliance with the no more restrictive 
requirement, the prohibition on discriminatory factors and evidentiary 
standards, and the relevant data evaluation requirements. The 
Departments proposed to exempt NQTLs qualifying for the exception for 
fraud, waste, and abuse measures from compliance with the no more 
restrictive requirement and the prohibition on discriminatory factors 
and evidentiary standards, but not the relevant data evaluation 
requirements.
    Finally, the Departments proposed to 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, would also be in violation 
of the substantive requirements that apply to NQTLs under MHPAEA, as 
determined by the Departments. Upon such a determination, the proposed 
rules would permit the Departments to 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.
    The Departments requested comments on all aspects of these proposed 
amendments, including the exceptions to the proposed rules regarding 
NQTLs. Many commenters expressed support for these provisions of the 
proposed rules as a whole, as a means of achieving increased access to 
mental health and substance use disorder benefits by targeting NQTLs 
that otherwise impede access. Other commenters expressed support for 
the proposed rules' enhanced specificity with respect to the 
requirements for imposing NQTLs, with one commenter also indicating 
that the proposals would help State insurance regulators better enforce 
MHPAEA and clarify plans' and issuers' compliance obligations.
    However, other commenters expressed the view that these provisions 
of the proposed rules were complex, ambiguous, confusing, subject to 
interpretation, or difficult to operationalize, which they argued could 
lead to substantial uncertainty for plans and issuers attempting to 
comply. Commenters also stated that it may be impossible for plans or 
issuers to meet the proposed mathematical substantially all and 
predominant tests as applied to NQTLs, leading them to eliminate 
necessary utilization management tools. Some commenters also indicated 
that these provisions of the proposed rules could lead to inconsistent 
application of NQTLs across plans administered by the same TPA or 
issuer, which could result in administrative complexity and cause 
confusion for consumers and providers. Other commenters highlighted 
that the proposed requirements would significantly increase the cost of 
administering plans and health insurance coverage. One commenter 
indicated that some plans might consider excluding all treatments or 
services for a particular mental health condition or substance use 
disorder as a result of the additional burdens imposed by the 
substantially all and predominant tests, if finalized as proposed. Some 
commenters also stated that the additional proposed requirements for 
NQTLs do not add value beyond distinctions already captured by the 
design and application requirements included in the 2013 final 
regulations, with some commenters stating those additional requirements 
go beyond MHPAEA's statutory requirements. Comments specific to each of 
the three requirements and two exceptions proposed at 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) are discussed in greater 
detail later in this preamble.
    The Departments acknowledge the concerns expressed by commenters 
and, in response to comments, the Departments are finalizing a modified 
framework that is still intended to prevent plans and issuers from 
designing and applying NQTLs that impose greater burdens on access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits, while limiting uncertainty, increases in 
cost, operational difficulty, and unintended consequences. These final 
rules streamline the proposed rules' general requirements to eliminate 
redundancies and add clarity for plans and issuers in a manner that 
remains consistent with the statutory text of MHPAEA, while also 
ensuring participants and beneficiaries will not face greater 
restrictions on access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits.
    These final rules do not finalize the language of the proposed ``no 
more restrictive'' requirement, as discussed in more detail later in 
this preamble, and instead incorporate the statutory requirements of 
Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act 
section 2726(a)(3)(A) as the overall general rule for NQTLs in 26 CFR 
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). 
Specifically, these final rules state that, consistent with the 
fundamental purpose of MHPAEA, a group health plan (or health insurance 
coverage offered by an issuer in connection with a group health plan) 
may not impose any NQTL 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 NQTL that applies to 
substantially all medical/surgical benefits in the same classification. 
However, as discussed later in this preamble, the Departments are 
declining to finalize the proposed four-prong test for the no more 
restrictive requirement, which was proposed to determine compliance 
with statutory requirements as they apply to NQTLs.\67\ Rather, to 
demonstrate compliance with the no more restrictive requirement, which 
is now the general rule for NQTLs, a plan or issuer is required under 
these final rules to satisfy (1) the design and application 
requirements and (2) the relevant data evaluation requirements, each of 
which the Departments are finalizing with modifications, as discussed 
in more detail later in this preamble. Additionally, the Departments 
are not finalizing the exceptions set forth in the proposed rules, but 
have added language to these final rules to explain how plans and 
issuers should analyze and account for independent professional medical 
or clinical standards and fraud and abuse measures in designing and 
applying their NQTLs. Finally, the Departments are finalizing a 
provision providing that, depending on the relevant facts and 
circumstances, the Departments or an applicable State authority may 
direct a plan or issuer that has received a final determination of 
noncompliance under the comparative analysis review process

[[Page 77600]]

established by the CAA, 2021 to not apply an impermissible NQTL.
---------------------------------------------------------------------------

    \67\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and 
PHS Act section 2726(a)(3)(A).
---------------------------------------------------------------------------

a. Requirement That NQTLs Be No More Restrictive for Mental Health 
Benefits and Substance Use Disorder Benefits--26 CFR 54.9812-1(c)(4), 
29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4)
    Through the proposed mathematical substantially all and predominant 
tests for NQTLs as part of the no more restrictive requirement, the 
Departments proposed to require plans and issuers 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 (referred to in this preamble as the proposed 
mathematical substantially all and predominant tests). As noted in the 
proposed rules, the steps in the proposed mathematical substantially 
all and predominant tests would have involved 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; if the NQTL applies to 
substantially all medical/surgical benefits in the classification, the 
predominant variation of the NQTL that applies to substantially all 
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.
    Many commenters generally supported application of the proposed 
mathematical substantially all and predominant tests to NQTLs, with 
some indicating that the tests would provide additional clarity, 
eliminate subjectivity, assist regulators, and result in compliance 
improvements. Many of these commenters also stated that the statute 
clearly supports the tests, as it requires treatment limitations to be 
``no more restrictive'' than the predominant treatment limitations that 
apply to substantially all medical/surgical benefits. Other commenters 
generally opposed the inclusion of the substantially all and 
predominant tests for NQTLs as part of the no more restrictive 
requirement. Some of these commenters stated that the proposed 
mathematical substantially all and predominant tests are a reversal of 
policy from the 2013 final regulations and are inconsistent with 
congressional intent, because Congress codified the design and 
application requirements from the 2013 final regulations in the CAA, 
2021. These commenters highlighted that the Departments had stated 
previously that they understood NQTLs could not be easily quantified 
and that the Departments had not sufficiently explained their change in 
interpretation under the proposed rules.
    Some commenters expressed general concerns that NQTLs are 
inherently unquantifiable, arguing that the proposal would result in 
unworkable standards or arbitrary outcomes that could prohibit plans 
and issuers from using evidence-based medical guidelines or other 
relevant factors specific to the item or service under consideration. 
Commenters also raised concerns that imposition of the proposed 
mathematical substantially all and predominant tests on certain types 
of NQTLs that are not commonly utilized for medical/surgical benefits 
may lead to some types of legitimate NQTLs no longer being permitted 
with respect to mental health and substance use disorder benefits. 
Specifically, several of these commenters contended that the proposed 
mathematical substantially all and predominant tests, as proposed, 
would result in the elimination of plans' and issuers' ability to 
impose certain NQTLs with respect to mental health and substance use 
disorder benefits, such as step therapy, prior authorization, and 
concurrent review, which they posited would negatively impact the 
quality and cost of care. Some commenters also cited potential 
negative, unintended consequences of the application of the proposed 
mathematical substantially all and predominant tests, as proposed, 
including patient safety concerns; impacts on health outcomes, quality, 
and affordability; and a chilling effect on access improvements and 
innovation. Further, some commenters expressed concern with the 
increased costs associated with complying with the proposed 
mathematical substantially all and predominant tests, with some stating 
that this increased burden would not be offset by any resulting 
increase in access to mental health and substance use disorder benefits 
for participants and beneficiaries.
    Several commenters expressed confusion as to how these tests, as 
proposed, would be applied in practice and highlighted the need for 
more detail. Specifically, some commenters stated that these proposed 
provisions lack clarity in how the tests apply to certain types of 
NQTLs (including those related to network composition), and the 
potential consequences of enforcement of these requirements. Many 
commenters provided specific comments and feedback on aspects of each 
part of the substantially all and predominant tests included in the 
proposed rules, as discussed later in this preamble, and highlighted 
ambiguities and challenges operationalizing the proposed quantitative 
testing requirements with respect to NQTLs.
    Under the first prong of the proposed mathematical substantially 
all and predominant tests, plans and issuers would have been required 
to determine the portion of plan payments for medical/surgical benefits 
in the classification 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). The proposed rules stated 
that, for purposes of this determination, any reasonable method could 
be used to determine the dollar amount expected to be paid under a plan 
for medical/surgical benefits.
    The Departments received many comments on the proposed requirement 
that the plan or issuer determine the portion of plan payments for 
medical/surgical benefits expected to be subject to an NQTL in the 
benefit classification. Several commenters indicated that the 
determination of the dollar amount of all plan payments for medical/
surgical benefits expected to be paid may be an inappropriate measure 
altogether because NQTLs like medical management, assessments related 
to medical necessity, experimental/investigational treatment 
exclusions, prior authorization requests, and provider network 
admission standards are not generally attached to claims. Some 
commenters highlighted that self-insured plan sponsors may face 
challenges in obtaining a complete and reliable set of plan-level 
claims data, and accordingly, would have limited data to use to assess 
individual NQTLs, or would incur additional costs.
    After determining the portion of plan payments for medical/surgical 
benefits in the classification expected to be subject to the NQTL, the 
Departments proposed that, under the second prong, plans and issuers 
would be required to determine whether the NQTL applies to 
substantially all medical/surgical benefits in the classification, 
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. Under the proposed rules, an NQTL would be considered to 
apply to substantially all medical/surgical benefits in a

[[Page 77601]]

classification if it applies to at least two-thirds of all medical/
surgical benefits in that classification. Under the proposed rules, 
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.\68\ The 
proposed rules further provided that if an NQTL does not apply to at 
least two-thirds of all medical/surgical benefits in a classification, 
that NQTL would not be permitted to be applied to mental health or 
substance use disorder benefits in that classification.
---------------------------------------------------------------------------

    \68\ 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, under the 
proposed rules, 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). 88 FR 51552, 51570 (Aug. 3, 2023).
---------------------------------------------------------------------------

    The Departments received many comments regarding this prong of the 
proposed mathematical substantially all and predominant tests. As 
mentioned earlier in this preamble, many commenters stated that, in 
practice, a numerical ``substantially all'' determination would be 
difficult to apply and assess for NQTLs for many reasons, including 
because they are often not quantifiable, and there are more medical/
surgical items and services (and associated benefits) than there are 
mental health and substance use disorder items and services. 
Additionally, commenters highlighted that plans and issuers already 
experience difficulty in obtaining data from service providers and 
would have difficulty in determining which NQTLs apply to at least two-
thirds of medical/surgical benefits in a classification. Some 
commenters predicted that, if the Departments finalize the 
substantially all and predominant tests as proposed, plans and issuers 
might increase the application of NQTLs to medical/surgical benefits to 
meet the two-thirds threshold.
    Further, some commenters requested that the Departments specify and 
provide examples showing how to apply the substantially all test to 
NQTLs that are not associated with plan payments, such as prescription 
drug formularies and network composition standards. One commenter 
highlighted that it is difficult to calculate the amount of plan 
payments expected to be paid for prescription drugs subject to an NQTL. 
Another commenter urged the Departments to clarify the determination of 
whether an NQTL applies regardless of whether the NQTL was triggered. 
For example, this commenter highlighted that insurers might state that 
prior authorization ``applies'' to all benefits in a classification 
where a benefit is considered or evaluated under the various factors 
for determining whether to apply prior authorization, even if the 
benefit ultimately is determined to not be subject to prior 
authorization based on the application of factors and evidentiary 
standards.
    In addition, in the proposed rules, the Departments solicited 
comments on whether plans and issuers maintain systems capable of 
determining, under the proposed mathematical substantially all and 
predominant tests, whether an NQTL applies to substantially all 
medical/surgical benefits in a classification, and the administrative 
burden that would be associated with such determinations. Several 
commenters highlighted that it would be difficult to comply with the 
substantially all and predominant tests as proposed, including because 
the requisite data may be housed in different parts of a plan's or 
issuer's organization. One commenter emphasized that current 
administrative systems would need to be adapted, and plans and issuers 
would need to hire additional staff or service providers to be able to 
perform the analysis that would be required under the proposed 
mathematical substantially all and predominant tests.
    Under the proposed rules, if a plan or issuer determined that an 
NQTL applies to substantially all medical/surgical benefits in a 
classification, the third prong of the test would require a plan or 
issuer 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 proposed that the term 
``predominant'' would, for this purpose, mean the most common or most 
frequent variation of an NQTL within a benefit classification.
    The Departments received many comments regarding this part of the 
proposed tests. Numerous commenters stated that this aspect of the 
substantially all and predominant tests is unworkable. Some commenters 
noted that, with a lack of guidance on how to identify all the 
variations of a particular NQTL (especially those that are complex and 
nuanced), the proposed rules may not be feasible for plans, issuers, 
and regulators to apply in real-life situations. Several commenters 
stated that, while financial requirements and quantitative treatment 
limitations will have only a few different variations, NQTLs are 
multifactorial and each difference could be considered a different 
variation, or even a separate NQTL. For example, some of these 
commenters highlighted that prior authorization or concurrent review 
may take varied forms: an admission that requires advance prior 
authorization; an admission that requires notification but no clinical 
review; a nonclinical review based on predetermined standards; a first-
level or nurse clinical review; a second-level or physician clinical 
review; and a peer-to-peer clinical review. These commenters noted that 
some processes may be automated or manual, some may be handled by 
vendors or directly by the plan or issuer, and some may have multiple 
utilization management systems within all of the aforementioned 
categories. Another commenter highlighted that a plan or regulator 
could conceivably determine that ``variations'' include a wide range of 
aspects, such as the credentials of the reviewer, the type or source of 
clinical criteria applied, the timing of the review (for example, 
urgent vs. nonurgent), the modality of authorization submission (for 
example, via electronic health record vs. fax or pdf form), among 
others. As a result, these commenters stated that determining how to 
identify the predominant variation of an NQTL may not be feasible 
without additional clarifications. Many commenters requested that the 
Departments provide a definition of the term ``variation'' and an 
explanation of how to determine whether a variation exists, as well as 
additional guidance and examples illustrating when an NQTL has no 
variation and when an NQTL has multiple variations (beyond variations 
based on numerical distinctions). These commenters also noted that, 
under the proposed rules, the predominant variation may only apply to a 
small percentage of medical/surgical services or items in the 
applicable benefit classification.
    Lastly, under the fourth prong, the proposed rules provided that an 
NQTL applied to mental health or substance use disorder benefits cannot 
be more restrictive than the predominant variation of the NQTL applied 
to substantially all medical/surgical benefits in the same 
classification. Under the proposed rules, for this purpose, an NQTL 
would be considered restrictive if it imposes conditions, terms, or 
requirements that limit access to benefits under the terms of the plan 
or coverage. For this purpose,

[[Page 77602]]

conditions, terms, or requirements would include, but not be 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. 
As discussed later in this preamble, the Departments also proposed 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 fraud, waste, and abuse 
measures, that meet specific requirements.
    Some commenters supported this approach to the ``more restrictive'' 
part of the test in the proposed rules because, according to these 
commenters, it provided a more concrete and less subjective standard. 
Other commenters emphasized, as discussed earlier in this preamble, 
that the proposed mathematical substantially all and predominant tests, 
which provide a quantitative basis for comparison, are unworkable for 
NQTLs and administratively burdensome. Many of these commenters 
requested that, if the proposed mathematical substantially all and 
predominant tests are finalized, the Departments provide extensive and 
detailed implementation guidance to assist plans and issuers in 
complying with what the commenters characterized as this challenging 
framework. Another commenter suggested that the Departments establish a 
safe harbor for plans and issuers from the substantially all and 
predominant tests for any variation in NQTL outcomes data driven by 
State law or regulation.
    The Departments appreciate the detailed comments received on all 
aspects of the proposed mathematical substantially all and predominant 
tests, including comments particular to each aspect of the proposed 
four-prong test. The Departments acknowledge that many commenters 
expressed concerns that applying to NQTLs the same proposed 
mathematical substantially all and predominant tests that are 
applicable to financial requirements or quantitative treatment 
limitations may be difficult to operationalize and could be unworkable. 
The Departments acknowledge that this framework was first developed for 
financial requirements and quantitative treatment limitations, where 
there are relatively clear and limited numbers of variations, and that 
the framework might be impractical or impossible for NQTLs, which 
differ in how they are designed and applied to various benefits.
    At the same time, the Departments agree with commenters who stated 
that applying the statutory no more restrictive requirement to NQTLs 
under the proposed rules would assist regulators tasked with enforcing 
MHPAEA's requirements and result in overall compliance improvements by 
formalizing and providing greater clarity on what plans and issuers 
must do to comply with MHPAEA. The Departments also agree with 
commenters who emphasized the importance of the statutory requirement 
that plans and issuers shall ensure that the treatment limitations they 
impose on mental health and substance use disorder benefits generally 
are no more restrictive than those they impose on medical/surgical 
benefits. The proposed rules made clear that the incorporation of this 
statutory language into regulations is key to ensuring that people 
seeking mental health and substance use disorder treatment do not face 
a greater burden on access to benefits for such treatment than on 
access to benefits for medical treatment and surgical procedures, a 
premise that is central to MHPAEA.
    After reviewing all the comments on the proposed four prongs of the 
no more restrictive requirement, the Departments have sought to address 
many of the workability concerns expressed by commenters, while 
honoring statutory requirements. Specifically, due to concerns raised 
by the commenters, the Departments are declining to finalize the 
proposed mathematical substantially all and predominant tests for 
NQTLs, which would have based these determinations on the dollar amount 
of all plan payments for medical/surgical benefits expected to be paid, 
similar to the steps that apply when analyzing parity with respect to 
financial requirements or quantitative treatment limitations under the 
2013 final regulations. These final rules address commenters' 
operability and feasibility concerns with respect to the proposed 
mathematical substantially all and predominant tests, while continuing 
to set forth a standard for parity compliance that is grounded in 
MHPAEA's statutory text and is also sufficiently flexible to account 
for the unique and nonquantifiable nature of NQTLs. As noted later in 
this preamble, these final rules retain the focus on the design and 
application of NQTLs, including with respect to relevant outcomes 
measures, to ensure that NQTLs are no more restrictive in the context 
of mental health and substance use disorder benefits than in the 
context of medical/surgical benefits.
    Therefore, these final rules do not finalize the provisions 
proposed under 26 CFR 54.9812-1(c)(4)(i)(A) through (E), 29 CFR 
2590.712(c)(4)(i)(A) through (E), and 45 CFR 146.136(c)(4)(i)(A) 
through (E). Instead, consistent with MHPAEA's express statutory 
requirement,\69\ the Departments are finalizing under 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) the general 
rule that, consistent with the fundamental purpose of MHPAEA, a group 
health plan (or health insurance coverage offered by an issuer in 
connection with a group health plan) may not impose any NQTL 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 NQTL that applies to substantially all medical/
surgical benefits in the same classification. Through this requirement, 
the Departments reiterate the importance of promoting the goals of the 
statute and ensuring that individuals have access to the mental health 
and substance use disorder benefits under their plan or coverage in a 
way that is not more restrictive than their access to the medical/
surgical benefits under their health coverage. For this purpose, 
consistent with the fundamental purpose of MHPAEA, an NQTL is more 
restrictive than the predominant NQTL that applies to substantially all 
medical/surgical benefits in the same classification if the plan or 
issuer fails to satisfy the design and application requirements at 26 
CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 
146.136(c)(4)(i) or the relevant data evaluation requirements at 26 CFR 
54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 
146.136(c)(4)(iii). Accordingly, plans and issuers must ensure that the 
processes, strategies, evidentiary standards, and other factors used to 
design and apply an NQTL to mental health or substance use disorder 
benefits are comparable to, and applied no more stringently than, the 
processes, strategies, evidentiary standards, and other factors used to 
design and apply the NQTL for medical/surgical benefits, including by 
ensuring that the information, evidence, sources, or standards on which 
factors and evidentiary standards are based are not biased and are 
objective. Additionally, plans and issuers must comply with the 
relevant data evaluation requirements,

[[Page 77603]]

including by collecting and evaluating relevant data, determining 
whether the data suggest an NQTL contributes to material differences in 
relevant outcomes related to access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits, and if 
material differences in relevant outcomes related to access exist, 
taking reasonable action, as necessary, to address the material 
differences to ensure compliance, in operation, with 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). Absent 
compliance with both the design and application requirements and the 
relevant data evaluation requirements with respect to an NQTL, which 
are addressed in more detail later in this preamble, a plan or issuer 
fails to comply with Code section 9812(a)(3)(A)(ii), ERISA section 
712(a)(3)(A)(ii), and PHS Act section 2726(a)(3)(A)(ii), as applicable, 
and may not impose the NQTL with respect to mental health or substance 
use disorder benefits. These requirements, taken together, require a 
plan to consider and evaluate an NQTL's design, application, and 
resulting outcomes to ensure that an NQTL is not more restrictive, as 
written or in operation, than the predominant NQTL that applies to 
substantially all medical/surgical benefits in the same classification.
---------------------------------------------------------------------------

    \69\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and 
PHS Act section 2726(a)(3)(A).
---------------------------------------------------------------------------

    These final rules also include a few technical changes to this 
language, including relocation of the reference to 26 CFR 54.9812-
1(a)(1), 29 CFR 2590.712(a)(1), and 45 CFR 146.136(a)(1) from the 
beginning of the general rule of the design and application 
requirements to the beginning of the regulatory requirements for NQTLs 
at 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 
146.136(c)(4), to make clear that plans and issuers should consider the 
fundamental purpose of MHPAEA in complying with all parts of the 
requirements for NQTLs. Additionally, the Departments are incorporating 
the phrase ``may not impose'' from the beginning of the proposed 
regulatory requirements for NQTLs, to make clear that this standard 
applies both to the design and application of NQTLs. The Departments 
are also replacing the word ``applied'' with ``applies'' in the clause 
describing ``the predominant NQTL that applies to substantially all 
medical/surgical benefits in the same classification.'' This adjustment 
from past to present tense is intended to clarify that plans and 
issuers should evaluate compliance with MHPAEA with respect to NQTLs 
that are currently imposed under the plan or coverage, rather than just 
those that might have been imposed at some point in the past.
b. Requirements Related to Design and Application of the NQTL--26 CFR 
54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 
146.136(c)(4)(i)
    The Departments proposed to redesignate the 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) in the 2013 final regulations as paragraph 
(c)(4)(ii)(A) and amend it to align with the Departments' 
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 
(as compared to only applying, as under the 2013 final regulations) the 
NQTL to mental health and substance use disorder benefits are 
comparable to, and are applied no more stringently than those used in 
designing and applying the limitation with respect to medical/surgical 
benefits in the classification. To codify this interpretation, and for 
consistency with the statutory language added by the CAA, 2021, the 
Departments proposed to revise the regulatory text to make this 
requirement with respect to designing the NQTL explicit.
    Some commenters generally supported the proposed design and 
application requirements as part of an overall framework for evaluating 
compliance with MHPAEA's requirements with respect to NQTLs. Some 
commenters indicated that they have encountered barriers in identifying 
whether plans and issuers comply with MHPAEA's requirements, and this 
proposal would help them identify whether the plan or issuer is 
compliant with respect to the design and application of NQTLs. Other 
commenters generally opposed the proposed changes to the design and 
application requirements. One commenter also stated that the design and 
application requirements would not improve benefit quality and would 
also constitute an impermissible retroactive application of the 
regulation in the case of regulated entities that were not required to 
comply with MHPAEA when they designed their benefit plans.
    With respect to commenters' concern that the design and application 
requirements would not improve benefit quality, the Departments 
anticipate that greater clarity with respect to these requirements, 
including the definitions of the terms ``processes,'' ``strategies,'' 
``evidentiary standards,'' and ``factors'' under these final rules, as 
discussed earlier in this preamble, will help plans and issuers assess 
their compliance and remedy any parity violations, which will result in 
improved benefit quality overall. The Departments also disagree with 
the concern expressed by commenters that the design and application 
requirements impermissibly apply to plans and issuers that were not 
required to comply with MHPAEA when they designed their benefit plans. 
As stated earlier in this preamble, this provision codifies the 
Departments' longstanding interpretation of the design and application 
requirements and the CAA, 2021 amendments to the MHPAEA statute. The 
CAA, 2021 amendments apply generally to 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. Congress did not exempt plans or issuers whose plans 
or benefit designs predated these requirements, and the Departments 
similarly did not take such an approach in implementing the 2010 
interim final regulations or the 2013 final regulations. In fact, as 
described in more detail later in this preamble, Congress included a 
provision in the CAA, 2023 that sunsets the option for self-funded non-
Federal governmental plans to elect to opt out of compliance with 
respect to MHPAEA, so that plans that previously were exempt from the 
requirements as a result of an opt-out election will no longer be able 
to make such an election.
    The Departments are finalizing as proposed the general rule with 
respect to the design and application requirements for NQTLs, with a 
few minor amendments. Accordingly, this provision clarifies that to 
satisfy these requirements, a plan or issuer must consider, as part of 
its assessment of an NQTL's compliance with the no more restrictive 
requirement, whether 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 limitation with respect to medical/surgical 
benefits in the classification. By requiring processes, strategies, 
evidentiary standards, or other factors used to be comparable to and 
applied no more stringently than, the design and application 
requirements

[[Page 77604]]

of these final rules give meaning to the statutory terms 
``substantially all'' and ``predominant.'' By making explicit in these 
final rules the Departments' interpretation of the design and 
application requirements, and codifying the requirements of the CAA, 
2021, this provision will help plans and issuers better understand 
their MHPAEA compliance obligations with respect to NQTLs, by 
emphasizing that, as written and in operation, the design of an NQTL is 
equally relevant as how it is applied. The design and application 
requirements of these final rules will also ensure that plans and 
issuers do not place greater burdens on access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits.
    The Departments note that a plan or issuer must comply with the 
relevant requirements under these final rules with respect to NQTLs 
applicable to mental health or substance use disorder benefits once the 
final rules become applicable to the plan or coverage, including with 
respect to any NQTLs that were developed and imposed when a plan or 
issuer was not subject to MHPAEA and that continue to be imposed after 
the applicability date. However, these final rules are not applicable 
to an NQTL imposed with respect to mental health or substance use 
disorder benefits for any such prior period of time (including a period 
when MHPAEA was not applicable).
    In these final rules, the Departments are codifying the design and 
application requirements at 26 CFR 54.9812-1(c)(4)(i)(A), 29 CFR 
2590.712(c)(4)(i)(A), and 45 CFR 146.136(c)(4)(i)(A), rather than as 
proposed at 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) because, as 
discussed earlier in this preamble, these final rules structure the 
design and application requirements as part of the statutory no more 
restrictive requirement, rather than as a unique prong of the three 
requirements for NQTLs included in the proposed rules. In addition, the 
Departments are making a technical correction by amending the 
regulatory text to refer to health insurance coverage, rather than an 
issuer, to generally use consistent terminology throughout the 
regulations. Finally, as noted earlier in this preamble, these final 
rules move the reference to 26 CFR 54.9812-1(a)(1), 29 CFR 
2590.712(a)(1), and 45 CFR 146.136(a)(1) from the beginning of the 
general rule of the design and application requirements to the 
beginning of the regulatory requirements for NQTLs at 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4).
Prohibition on Discriminatory Factors and Evidentiary Standards
    The proposed rules would add a new provision that, for purposes of 
determining comparability and stringency under the design and 
application requirements of proposed 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), plans and 
issuers would be prohibited from relying upon any factor or evidentiary 
standard if the information, evidence, sources, or standards on which 
the factor or evidentiary standard is based discriminate against mental 
health or substance use disorder benefits as compared to medical/
surgical benefits. The proposed rules stated that information would be 
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 would include, but not be limited 
to, the source of the information, the purpose or context of the 
information, and the content of the information. Therefore, under the 
proposed rules, plans and issuers would not be permitted to rely on 
information that reflects bias, as those factors or evidentiary 
standards would be discriminatory.
    For this purpose, the Departments stated in the proposed rules that 
information resulting 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. 
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 the 
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. The 
Departments also proposed that impartially applied independent 
professional medical or clinical standards and fraud, waste, and abuse 
measures that meet specific requirements would qualify for an exception 
and would not be considered to discriminate against mental health or 
substance use disorder benefits.
    Additionally, in the preamble to the proposed rules the Departments 
noted that the proposed prohibition on discriminatory factors and 
evidentiary standards 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. The Departments provided an example illustrating that 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 result in less 
favorable treatment of mental health and substance use disorder 
benefits. Consequently, under the framework in the proposed rules, 
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. The proposed rules stated, 
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 would violate the prohibition on 
discriminatory factors and evidentiary standards 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).
    Many commenters expressed general support for this provision of the 
proposed rules. For example, one commenter noted that the prohibition 
on discriminatory factors and evidentiary standards would more 
effectively protect against the inappropriate application of NQTLs 
that, although appearing to be compliant with MHPAEA as written, have a 
disproportionately negative effect on access to mental health and 
substance use disorder benefits. Some commenters also indicated that 
the proposed provision is consistent with the text and purpose of 
MHPAEA, as well as the ACA, and favored a broad interpretation

[[Page 77605]]

of the requirement to address particular examples of discrimination by 
plans and issuers, to which some of them expressly cited. Other 
commenters expressed opposition to the proposed prohibition on 
discriminatory factors and evidentiary standards. Some of these 
commenters stated that the proposal would be administratively 
burdensome, and it would be difficult for plans and issuers to 
operationalize due to ambiguity and inherent subjectivity. Some 
commenters opposed to the proposed prohibition stated that it is 
duplicative of the proposed relevant data evaluation requirements. 
These commenters thought the prohibition on discriminatory factors and 
evidentiary standards should be eliminated as superfluous, because the 
required evaluation of outcomes data under the proposed rules is 
intended to ensure that factors are applied no more stringently to 
mental health and substance use disorder benefits than medical/surgical 
benefits and do not result in a material difference in access.
    Some commenters expressed concern that the proposed requirement 
that information must not be biased and must be objective (which is 
based on facts and circumstances) is too subjective, can only be 
determined retroactively (yet must be applied prospectively), and is 
too difficult to apply for plans or issuers to be certain of 
compliance. One commenter requested clarification on the documentation 
and evidence required to demonstrate the absence of bias. Another 
commenter expressed concern that plans may not have the ability to 
prove that information is unbiased and objective.
    One commenter stated that it is unclear whether the Departments 
intend to focus on the factors and evidentiary standards themselves or 
on the effects of using those factors and standards. Some commenters 
assumed that whether a factor or evidentiary standard is discriminatory 
would be based on an evaluation of outcomes, and that therefore any 
disparity in outcomes data could be viewed as use of a discriminatory 
factor or evidentiary standard. These commenters requested examples of 
outcomes that would demonstrate compliance. In addition, many 
commenters requested examples of discriminatory factors and evidentiary 
standards and of nondiscriminatory information and data sources. 
Several commenters requested the Departments to make clear that plans 
and issuers may not establish compliance by relying on a fee schedule 
used by Medicare, although another commenter requested that plans and 
issuers be able to access a safe harbor if they paid above-Medicare 
rates.
    After considering commenters' feedback, the Departments are 
finalizing the prohibition on discriminatory factors and evidentiary 
standards with modifications. As the Departments stated in the preamble 
to the proposed rules this provision will help address the concern that 
various factors and evidentiary standards that plans and issuers have 
relied on to design NQTLs with respect to mental health or substance 
use disorder benefits might themselves discriminate against mental 
health and substance use disorder benefits by treating them in a less 
favorable manner. At the same time, the Departments acknowledge 
commenters' concerns about potential ambiguities in the proposed 
prohibition on discriminatory factors and evidentiary standards, 
questions about whether this provision is duplicative of other parts of 
the proposed rules, and confusion about how to operationalize the 
prohibition.
    In response to these concerns, and to assist plans and issuers in 
complying with the prohibition on discriminatory factors and 
evidentiary standards in these final rules, the Departments have 
modified the prohibition by providing additional clarity regarding what 
it means for information, evidence, sources, or standards to be 
``biased or not objective.'' The final rules both clarify the 
prohibition in a manner to ensure that it can be applied prospectively 
and revise it to expressly provide that potentially biased or not 
objective information, evidence, sources, or standards can be 
corrected, cured, or supplemented, and then relied upon by a plan or 
issuer to inform a factor or evidentiary standard that is not 
discriminatory. The Departments also provide additional examples of 
discriminatory factors and evidentiary standards later in this 
preamble.
    First, with respect to the general prohibition on discriminatory 
factors and evidentiary standards, these final rules at 26 CFR 54.9812-
1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B), and 45 CFR 
146.136(c)(4)(i)(B) \70\ provide that, for purposes of determining 
comparability and stringency under 26 CFR 54.9812-1(c)(4)(i)(A), 29 CFR 
2590.712(c)(4)(i)(A), and 45 CFR 146.136(c)(4)(i)(A), a plan (or health 
insurance coverage) may not rely upon discriminatory factors and 
evidentiary standards to design an NQTL to be imposed on mental health 
or substance use disorder benefits. The Departments intend that the 
focus of this prohibition be specifically on the design of NQTLs, to 
further distinguish the prohibition on discriminatory factors and 
evidentiary standards from the relevant data evaluation requirements. 
These final rules provide the necessary clarity for plans and issuers 
to determine whether information, evidence, sources, or standards are 
biased or not objective, and if so, cannot be used as the basis for a 
factor or evidentiary standard used to design an NQTL applicable to 
mental health or substance use disorder benefits.
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    \70\ As noted earlier in this preamble, the Departments are 
codifying the design and application requirements (including the 
prohibition on discriminatory factors and evidentiary standards) at 
26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 
146.136(c)(4)(i), rather than as proposed at 26 CFR 54.9812-
1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 
146.136(c)(4)(ii), because these final rules structure the design 
and application requirements as part of the no more restrictive 
requirement, rather than as a unique prong of the 3-part test 
proposed in the proposed rules.
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    Specifically, these final rules state that a factor or evidentiary 
standard is discriminatory if the information, evidence, sources, or 
standards on which the factor or evidentiary standard are based are 
biased or not objective in a manner that discriminates against mental 
health or substance use disorder benefits as compared to medical/
surgical benefits. This language is similar to that included under 
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) but adds the phrase ``is biased or not 
objective in a manner that,'' preceding the word ``discriminates.'' 
This phrase, in conjunction with the other changes to the prohibition 
on discriminatory factors and evidentiary standards discussed later in 
this preamble, was modified in response to comments and is intended to 
help clarify that a plan or issuer is expected to assess whether the 
information, evidence, sources, or standards on which each factor or 
evidentiary standard are based are biased or not objective in a manner 
that discriminates against mental health or substance use disorder 
benefits as compared to medical/surgical benefits. This analysis is 
distinct from the final rules' requirement to compare the comparability 
and stringency of factors and evidentiary standards used to design and 
apply an NQTL.
    Second, the Departments are finalizing a modified version of the 
provision originally proposed under 26 CFR 54.9812-1(c)(4)(ii)(B)(3), 
29 CFR 2590.712(c)(4)(ii)(B)(3), and 45 CFR 146.136(c)(4)(ii)(B)(3) as 
26 CFR 54.9812-1(c)(4)(i)(B)(1), 29 CFR 2590.712(c)(4)(i)(B)(1), and 45 
CFR 146.136(c)(4)(i)(B)(1) of these final rules. This provision of the 
proposed rules

[[Page 77606]]

provided that 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. As mentioned earlier in this 
preamble, the Departments received many comments opposing this 
provision as proposed, including comments expressing confusion as to 
how it is different from the relevant data evaluation requirements, 
questions regarding the kind of documentation and evidence needed to 
show compliance, and concern that it is subjective and difficult to 
operationalize.
    The prohibition on discriminatory factors and evidentiary standards 
is intended to work together with the other provisions of these final 
rules, including the relevant data evaluation requirements. Like all 
the provisions of these final rules, the provision further implements 
the statutory requirement that NQTLs be no more restrictive with 
respect to mental health or substance use disorder benefits than the 
predominant limitations applicable to substantially all medical/
surgical benefits. The test specifically focuses on the importance of 
ensuring that the factors and evidentiary standards relied upon by 
plans and issuers in designing NQTLs do not have built-in biases (at 
the time NQTLs are designed) against mental health or substance use 
disorder benefits as compared to medical/surgical benefits. To the 
extent plans and issuers rely upon factors and evidentiary standards to 
design NQTLs that systematically disfavor access or are specifically 
designed to disfavor access to mental health and substance use disorder 
benefits, the resultant NQTLs are more restrictive with respect to 
mental health or substance use disorder benefits than for medical/
surgical benefits.
    The Departments note that a factor or evidentiary standard may be 
based on or include information that solely relates to medical/surgical 
benefits (and is silent or without corollary with respect to mental 
health or substance use disorder benefits). Such a factor or 
evidentiary standard is not considered discriminatory for this purpose. 
For example, a plan can reasonably rely on a source of information on 
the clinical efficacy of a treatment or service to inform a factor used 
to design a medical management NQTL, even though that source does not 
address the clinical efficacy of any treatment of any mental health 
conditions or substance use disorders, without violating the 
prohibition on discriminatory factors and evidentiary standards. 
However, the use of such factor or evidentiary standard must comply 
with the design and application requirements, as described earlier in 
this preamble.
    In response to comments to provide additional clarity, the final 
rules elaborate on the meaning of the phrase ``biased and not objective 
in a manner that discriminates against mental health or substance use 
disorder benefits.'' Specifically, these final rules provide that 
information, evidence, sources, or standards are considered to be 
biased or not objective in a manner that discriminates against mental 
health or substance use disorder benefits as compared to medical/
surgical benefits if, based on all the relevant facts and 
circumstances, they systematically disfavor access or are specifically 
designed to disfavor access to mental health or substance use disorder 
benefits as compared to medical/surgical benefits.
    For purposes of determining whether information, evidence, sources, 
or standards are considered to be biased or not objective under these 
final rules, relevant facts and circumstances may include, but are not 
limited to, the reliability of information, evidence, sources, or 
standards, including any underlying data and the independence of the 
information, evidence, sources, and standards relied upon. The 
Departments note that internal data or information, such as claims 
data, would generally not be considered independent, but would not 
necessarily be considered discriminatory on that basis alone. In the 
Departments' view, independence is a relevant fact and circumstance for 
determining whether information, evidence, sources, or standards are 
considered to be biased or not objective. For example, a standard that 
is created or funded by the plan or issuer, or its service provider, 
would likely lack independence compared to a standard created by an 
impartial third party or governmental entity, and might require strong 
indicators of reliability in order to demonstrate that it is objective 
and unbiased. Additionally, relevant facts and circumstances include 
the analyses and methodologies employed to select the information, 
evidence, sources, or standards, and the consistency of their 
application; and any known safeguards deployed to prevent reliance on 
skewed data or metrics when determining whether they are biased or not 
objective. The Departments note that these final rules only provide 
examples, and not a comprehensive list, of relevant facts and 
circumstances that indicate information, evidence, sources, or 
standards are biased or not objective. Because plans and issuers rely 
on myriad factors and evidentiary standards to design NQTLs for their 
own unique benefit designs, this evaluation necessarily will be 
specific to the particular plan or coverage.
    Under these final rules, information, evidence, sources, and 
standards are not considered biased or not objective for purposes of 
the prohibition on discriminatory factors and evidentiary standards, if 
a plan or issuer has taken steps necessary to address the bias or lack 
of objectivity by correcting, curing, or supplementing the information, 
evidence, sources, or standards that would have been biased or not 
objective in the absence of such steps. If information, evidence, 
sources, or standards are corrected, cured, or supplemented, they may 
be used by plans and issuers as the basis for factors and evidentiary 
standards used to design an NQTL.
    Several commenters asked about the use of a fee schedule used by 
Medicare and CMS-set standards, such as network time and distance 
standards, by a plan or issuer to inform plan design. For example, some 
plans use the Medicare Physician Fee Schedule \71\ to establish base 
rates for in-network physician services. The Departments do not 
consider fee schedules used by Medicare and standards set by CMS to be 
biased or not objective, as defined under these rules, when used as the 
basis for a factor or evidentiary standard to design an NQTL such as 
reimbursement rate methodology.
---------------------------------------------------------------------------

    \71\ The Medicare Physician Fee Schedule is developed by CMS. To 
develop the Medicare Physician Fee Schedule, CMS utilizes 
recommendations from an independent assessment by a multi-specialty 
body and other market-based information sources, as well as 
independent assessment by CMS medical officers, to develop proposed 
relative value units for each physician service. CMS then engages in 
notice and comment rulemaking, including consideration of public 
comments, before establishing payment rates for specific services. 
Furthermore, CMS has made, and continues to make, numerous 
adjustments to the underlying methodology to increasingly ensure 
appropriate reimbursement for services paid under the Medicare 
Physician Fee Schedule, including behavioral health services. See, 
e.g., Medicare and Medicaid Programs; CY 2024 Payment Policies Under 
the Physician Fee Schedule and Other Changes to Part B Payment and 
Coverage Policies; Medicare Shared Savings Program Requirements; 
Medicare Advantage; Medicare and Medicaid Provider and Supplier 
Enrollment Policies; and Basic Health Program, 88 FR 78818 (Nov. 16, 
2023).
---------------------------------------------------------------------------

    The Departments note, however, that the mere use of the Medicare 
Physician Fee Schedule, for example, as one type of information, 
evidence, source, or standard that informs a factor used to design an 
NQTL does not automatically

[[Page 77607]]

render the NQTL permissible. For example, in most cases, a plan would 
be unable to justify a reimbursement rate methodology that paid 
physicians in medical/surgical specialties 125 percent of the Medicare 
Physician Fee Schedule rate and that paid physicians in mental health 
and substance use disorder specialties 75 percent of the Medicare 
Physician Fee Schedule rate.
    The Departments received several comments in support of the example 
included in the preamble to the proposed rules that illustrated the 
prohibition on plans' and issuers' reliance on historical plan data or 
other historical information from a time when the plan or coverage was 
not subject to MHPAEA, or not compliant with MHPAEA. Some commenters 
recognized that many plans and issuers have used their own historical 
data from a time when their plan or coverage was not subject to MHPAEA 
and have benefited from historic inequities in benefit structures that 
MHPAEA sought to prohibit. One commenter requested that this example be 
codified in the regulatory text of the final rules. The Departments 
agree that the example illustrating how the prohibition on 
discriminatory factors and evidentiary standards applies to the use of 
historical data and information to design an NQTL should be clearly set 
forth in the regulation text at 26 CFR 54.9812-1(c)(4)(ii)(B)(2), 29 
CFR 2590.712(c)(4)(ii)(B)(2), and 45 CFR 146.136(c)(4)(ii)(B)(2). To 
ensure compliance with this standard, plans and issuers that utilize 
historical data or information from a time when their plan or coverage 
was not subject to, or not compliant with, MHPAEA should ensure that 
the use of such data and information (for example, in cost calculations 
and controls) for mental health and substance use disorder benefits 
does not include, as a baseline, years when financial requirements and 
treatment limitations that would have been impermissible under MHPAEA 
were imposed on such benefits (unless they take steps to correct, cure, 
or supplement the data or information, as discussed earlier in this 
preamble).
    Some commenters provided other examples that they recommended 
including as illustrations of discriminatory factors and evidentiary 
standards in these final rules, including prior authorization for a 
prescription of buprenorphine to treat opioid use disorder (OUD) 
requiring additional licensure or certification for mental health and 
substance use disorder providers that is not required of similar 
medical/surgical providers; subjecting mental health and substance use 
disorder claims to different fraud, waste, and abuse processes, or 
requiring more documentation, than for medical/surgical claims; not 
covering nutrition counseling for the treatment of eating disorders 
while covering it for medical conditions; and requiring that mental 
health and substance use disorder claims and appeals be filed with a 
TPA, but not making this clear to enrollees, nor properly coordinating 
operations between the plan/issuer and TPA.
    However, many of these examples focus on the use of a factor to 
apply an NQTL to mental health and substance use disorder benefits in a 
manner that is not comparable or is more stringent than the use of the 
factor to apply an NQTL to medical/surgical benefits, or focus on the 
NQTL itself (rather than the discriminatory factor or evidentiary 
standard). The prohibition on discriminatory factors and evidentiary 
standards in these final rules, however, focuses on the information, 
evidence, sources, and standards that inform the factors and 
evidentiary standards used to design an NQTL. Factors and evidentiary 
standards that incorporate or otherwise rely on underlying data or 
information that systematically disfavor access or are specifically 
designed to disfavor access to mental health or substance use disorder 
benefits place a greater burden on access to such benefits. Therefore, 
these final rules prohibit the use of any factor or evidentiary 
standard to design an NQTL if the underlying information, evidence, 
sources, and standards are themselves biased or not objective in a 
manner that discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits, unless the 
plan or issuer takes steps to correct, cure, or supplement the 
information, evidence, sources and standards to address the bias or 
lack of objectivity.
    These final rules set forth a general rule to determine which 
specific factors and evidentiary standards (and the information, 
evidence, sources, and standards on which they are based) might or 
might not be biased and not objective in a manner that discriminates 
against mental health or substance use disorder benefits as compared to 
medical/surgical benefits. The Departments have provided new examples 
in these final rules illustrating the prohibition on discriminatory 
factors and evidentiary standards, which are discussed later in this 
preamble. The Departments acknowledge that these examples are not 
exhaustive and may provide additional examples in future guidance.
    Finally, as discussed in greater detail later in this preamble, the 
Departments are not finalizing the exceptions to the prohibition on 
discriminatory factors and evidentiary standards for independent 
professional medical or clinical standards and fraud, waste, and abuse 
measures. However, these final rules expressly clarify at 26 CFR 
54.9812-1(c)(4)(i)(B)(3), 29 CFR 2590.712(c)(4)(i)(B)(3), and 45 CFR 
146.136(c)(4)(i)(B)(3) that generally recognized independent 
professional medical or clinical standards and fraud and abuse measures 
that minimize the negative impact on access to appropriate mental 
health and substance use disorder benefits are not information, 
evidence, sources, or standards that are biased or not objective in a 
manner that discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits.
    The Departments recognize that commenters requested specificity as 
to what qualifies as independent professional medical or clinical 
standards. To ensure that they are not biased and are objective, 
independent professional medical or clinical standards should reflect 
the standards of care and clinical practice that are generally 
recognized in relevant clinical specialties across a range of settings 
of care and should be transparent. For example, sources that include 
such standards could be peer-reviewed scientific studies and medical 
literature, formal published recommendations of Federal Government 
agencies, drug labeling approved by the United States Food and Drug 
Administration (FDA), and recommendations of relevant nonprofit health 
care provider professional associations and specialty societies, 
including, but not limited to, patient placement criteria and clinical 
practice guidelines. Additionally, fraud and abuse measures should be 
reliably established through unbiased and objective data and narrowly 
tailored in a manner that minimizes the negative impact on access to 
appropriate mental health and substance use disorder benefits.
    These final rules also clarify that plans and issuers that rely on 
independent professional medical or clinical standards or fraud and 
abuse measures must comply with the general rule of the design and 
application requirements at 26 CFR 54.9812-1(c)(4)(i)(A), 29 CFR 
2590.712(c)(4)(i)(A), and 45 CFR 146.136(c)(4)(i)(A). If such a 
standard or measure is used as an NQTL, the plan or issuer also must 
comply with the relevant data evaluation requirements at 26 CFR 
54.9812-1(c)(4)(iii), 29 CFR

[[Page 77608]]

2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) in these final 
rules.
c. Illustrative, Non-Exhaustive List of NQTLs--26 CFR 54.9812-
1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii)
    The proposed rules proposed to 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 list. First, 
the Departments proposed amendments to make clear that this 
illustrative list of NQTLs is non-exhaustive and that there are 
additional NQTLs not captured in the list. The Departments also 
proposed to 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.'' Additionally, the Departments proposed to amend the 
description of the illustrative NQTL ``plan methods for determining 
usual, customary, and reasonable charges'' 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. Finally, the 
Departments proposed to 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.
    Some commenters supported the clarification in the proposed rules 
that the illustrative list is non-exhaustive and that there are 
additional NQTLs not included in the list. In general, many commenters 
found the list to be helpful for plans and issuers to identify NQTLs. 
Some of these commenters pointed out that the non-exhaustive nature of 
the list would allow new NQTLs developed by plans and issuers to fall 
under the scope of the requirements in these final rules. One commenter 
also noted that the definition of an NQTL is sufficiently clear such 
that an exhaustive list would not be needed to put plans or issuers on 
notice of their compliance obligations.
    Other commenters requested that the Departments instead provide an 
exhaustive list of NQTLs to eliminate uncertainty, promote consistency, 
and clarify plans' and issuers' compliance obligations. Several of 
these commenters suggested that the Departments update such an 
exhaustive list as new NQTLs are identified and allow adequate time for 
plans and issuers to come into compliance with respect to such NQTLs. 
Other commenters advocated for an approach where an exhaustive list of 
NQTLs would also represent the scope of NQTLs for which the relevant 
Secretary could request a comparative analysis. Some of these 
commenters requested that to the extent the relevant Secretary 
requested a comparative analysis for an NQTL not on the list, plans and 
issuers be provided with additional time to respond.
    The Departments agree with the commenter generally stating that the 
definition of an NQTL under 26 CFR 54.9812-1(a), 29 CFR 2590.712(a), 
and 45 CFR 146.136(a), in addition to the non-exhaustive, illustrative 
list of NQTLs, is sufficient to put plans and issuers on notice that a 
given plan provision would fall under the definition of an NQTL. 
Therefore, the Departments are finalizing as proposed the clarification 
that this illustrative list of NQTLs is non-exhaustive.
    The Departments decline to provide an exhaustive list of NQTLs, as 
requested by commenters, in these final rules; however, as described 
further below, the Departments may consider issuing separate guidance 
to add additional examples if needed. Plans and issuers, rather than 
the Departments, are best positioned to initially identify NQTLs, 
including any NQTLs that plans and issuers newly implement as their 
plan or coverage designs evolve over time. MHPAEA does not limit the 
scope of NQTLs that plans and issuers may impose on mental health and 
substance use disorder benefits. However, for any NQTLs applicable to 
such benefits, a plan or issuer must comply with MHPAEA and its 
implementing regulations. Any exhaustive list of NQTLs published by the 
Departments would likely lag behind those actually utilized by plans 
and issuers due to this information gap, along with the wide 
variability in NQTLs that exist now and could exist in the future. 
Furthermore, while some commonalities exist, plans and issuers 
generally do not use uniform nomenclature to refer to their medical 
management techniques or other NQTLs, making the task of identifying an 
exhaustive list difficult, if not impossible.
    An exhaustive list of NQTLs that does not include the full scope of 
NQTLs utilized by plans and issuers at any given time would undermine 
the fundamental purpose of MHPAEA and these final rules. While the 
Departments acknowledge and have considered plans' and issuers' 
requests for a finite list of NQTLs for which the Departments may 
request comparative analyses, the exhaustive nature of such a list 
would leave open a compliance loophole by incentivizing plans and 
issuers to wait to evaluate, document, and address compliance for an 
NQTL that is newly developed or has not come to the attention of the 
Departments. The approach some commenters suggested to expressly limit 
the comparative analysis requirement under 26 CFR 54.9812-2, 29 CFR 
2590.712-1, and 45 CFR 146.137 to only those NQTLs identified in an 
exhaustive list is similarly untenable due to a foreseeable mismatch 
between the NQTLs included on such an exhaustive list, and those 
utilized by plans and issuers over time, particularly where the 
Departments may receive a complaint or have reason to believe there may 
be a potential violation. The Departments recognize the desire of plans 
and issuers to have a list of NQTLs on which the Departments will focus 
their enforcement efforts. The Departments highlight that the most 
recent reports to Congress on MHPAEA contain lists of the NQTLs on 
which the Departments have focused their enforcement efforts, and the 
NQTLs the Departments have mostly commonly found to be 
noncompliant.\72\ Additionally, the 2020 MHPAEA Self-Compliance Tool 
includes an illustrative, non-exhaustive list of NQTLs.\73\ The 
statute, however, requires the Departments to request

[[Page 77609]]

comparative analyses from a plan or issuer for any NQTL that involves 
potential violations of MHPAEA or complaints regarding noncompliance 
with MHPAEA that concern NQTLs. To limit the Departments to requesting 
comparative analyses for only certain NQTLs identified in a list would 
not only be inconsistent with the statute but would also limit the 
ability of the Departments to dynamically respond to new NQTLs that 
plans and issuers design and apply that may restrict participant and 
beneficiary access to mental health and substance use disorder benefits 
as compared to medical/surgical benefits.
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    \72\ See, e.g., 2022 MHPAEA Report to Congress (Jan. 2022), pg. 
13, 19-20, 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 Comparative Analysis Report to Congress (July 2023), pg. 47-
48, 55-56, https://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.
    \73\ See Self-Compliance Tool for the Mental Health Parity and 
Addiction Equity Act (MHPAEA) (2020), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
---------------------------------------------------------------------------

    Additionally, allowing plans and issuers to categorically have 
additional time to assemble a comparative analysis for NQTLs that are 
not on a finite list of NQTLs, as requested by commenters, would also 
be inconsistent with the statutory requirement that, without exception, 
plans and issuers perform and document such comparative analyses of 
NQTLs applicable to mental health or substance use disorder benefits, 
beginning 45 days after the enactment of the CAA, 2021, and would 
result in the post-hoc justifications addressed with the CAA, 2021's 
enactment.\74\ The Departments nonetheless acknowledge commenters' 
requests for additional guidance about plan provisions that would be 
considered to be NQTLs and intend to provide additional examples of 
NQTLs through future reports to Congress, updates to the 2020 MHPAEA 
Self-Compliance Tool, and other guidance.
---------------------------------------------------------------------------

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

    The Departments received a handful of comments on the proposed 
expansion of the illustrative list's description of standards for 
provider admission to participate in a network, including reimbursement 
rates, to also refer 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. Some commenters supported these 
proposed amendments to ensure that patients have an adequate provider 
network. Others suggested that parity requirements for provider 
networks should address the administrative burden and credentialing 
requirements on providers when joining networks, which may limit 
network adequacy. The Departments are finalizing this amendment as 
proposed. The Departments agree with commenters who stated that MHPAEA 
applies to credentialing standards, as well as the procedures to join a 
network, and note that 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 are intended to be 
interpreted broadly, consistent with the fundamental purpose of MHPAEA. 
Because these final rules do not retain the proposed mathematical 
substantially all and predominant tests, the illustrative list appears 
in these final rules at 26 CFR 54.9812-1(c)(4)(ii), 29 CFR 
2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii) instead of 26 CFR 
54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 
146.136(c)(4)(iii) as in the proposed rules.
d. Required Use of Outcomes Data and Special Rule for NQTLs Related to 
Network Composition--26 CFR 54.9812-1(c)(4)(iii), 29 CFR 
2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii)
    In the proposed rules, the Departments proposed to amend the 2013 
final regulations to add a requirement 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 the NQTL, in operation, complies 
with the proposed no more restrictive requirement and the design and 
application requirements. The proposed rules included the general types 
of data that plans and issuers would have to collect and evaluate with 
regard to all NQTLs and additional data sets that would have to be 
collected and evaluated for NQTLs related to network composition 
standards. To the extent the relevant data collected and evaluated by 
the plan or issuer show material differences in access to mental health 
benefits and substance use disorder benefits as compared to medical/
surgical benefits, under the proposed rules, the differences would be 
considered a strong indicator that the plan or issuer violated the 
proposed rules. In these instances, 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 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), and would also be required to document 
the action that has been or is being taken by the plan or issuer to 
mitigate any material differences in access in the plan's or issuer's 
comparative analysis for the NQTL in that classification.
    Additionally, the Departments noted in the preamble to the proposed 
rules their concerns about standards related to network composition and 
other related NQTLs. Specifically, the Departments noted that network 
composition is the result of the design and application of myriad NQTLs 
and is informed by various processes, strategies, evidentiary 
standards, and other factors, many of which interact in complex ways. 
The Departments also expressed concern that NQTLs related to network 
composition inherently impact a participant's or beneficiary's access 
to mental health and substance use disorder benefits. Accordingly, the 
proposed rules included a special rule applicable to NQTLs related to 
network composition. Specifically, under the proposed rules, when 
designing and applying one or more NQTLs related to network composition 
standards, a plan or issuer would fail 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 benefits and substance use disorder benefits as compared to in-
network medical/surgical benefits in a classification.
    The Departments also proposed that plans and issuers would not be 
required to comply with the relevant data evaluation requirements for 
NQTLs that impartially apply independent professional medical or 
clinical standards. However, proposed 26 CFR 54.9812-1(c)(4)(iv)(D), 29 
CFR 2590.712(c)(4)(iv)(D), and 45 CFR 146.136(c)(4)(iv)(D) did not 
provide a comparable exception for fraud, waste, and abuse measures, as 
the Departments stated these tools, while important, are more likely to 
result in NQTLs that improperly restrict access to mental health or 
substance use disorder benefits and therefore the impact of those NQTLs 
should be assessed.
In General
    The Departments received many comments expressing general support 
for the proposal to require plans and issuers to collect and evaluate 
relevant data to assess an NQTL's impact on

[[Page 77610]]

access to mental health and substance use disorder benefits and 
medical/surgical benefits, including the proposed requirement related 
to data for network composition NQTLs. These commenters noted that the 
data collection and evaluation requirements would promote transparency 
and compliance with MHPAEA, stating that collecting and evaluating 
outcomes data is essential to assessing in-operation compliance and 
that plans and issuers had failed to conduct and share such analyses. 
Other commenters noted that collection and evaluation of data is 
critical to assessing an NQTL's impact on access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits, and by requiring plans and issuers to collect and assess 
outcomes data and to address material differences in access, the 
Departments are better aligning the focus of NQTL compliance with the 
fundamental purpose of MHPAEA. These commenters stated that, under the 
2013 final regulations, plans and issuers rarely appropriately measure 
and analyze an NQTL's impact on access in the manner outlined in the 
proposed rules, and instead rely on process-related rationales to 
justify disparate access to treatment for mental health conditions and 
substance use disorders as compared to access to treatment for medical 
conditions and surgical procedures.
    Other commenters stated that requiring plan sponsors to evaluate 
outcomes data to determine whether access to mental health and 
substance use disorder benefits is in parity with access to medical/
surgical benefit is not supported by the statute and stated this 
provision of the proposed rules would be a significant departure from 
previous guidance under MHPAEA, under which the Departments stated that 
outcomes are not determinative of compliance. These commenters also 
stated that, because not all NQTLs are quantifiable, data metrics 
should not be required to determine parity, and disagreed with the 
Departments' interpretation of the term ``in operation'' as the basis 
for the requirement that plans and issuers measure outcomes. The 
Departments also received many comments on the various components and 
specific comment solicitations related to the relevant data evaluation 
requirements in the proposed rules.
    The determination of whether an NQTL is ``more restrictive,'' 
within the meaning of the statute, as applied to mental health and 
substance use disorder benefits, cannot be divorced from the impact the 
NQTL has on access to these benefits. Accordingly, the Departments are 
finalizing the relevant data evaluation requirements, with some 
modifications based on the comments. These final rules require that 
plans and issuers be attentive to the impact of their NQTLs, in 
operation, by collecting and evaluating relevant data in a manner 
reasonably designed to assess the impact of the NQTL on relevant 
outcomes related to access, and carefully considering the impact as 
part of the plan's or issuer's evaluation.
    For this purpose, the term ``relevant data'' under these final 
rules is meant to be interpreted broadly but does not require a plan or 
issuer to collect and evaluate duplicative or overlapping data that 
reflect the same analysis. The obligation is to collect and evaluate 
relevant data in a manner reasonably designed to assess the impact of 
NQTLs. It is not a requirement to exhaustively survey all available 
data, nor a requirement that plans and issuers evaluate additional data 
that is duplicative or unlikely to change the determination of whether 
there is a material difference in access to mental health and substance 
use disorder benefits as compared to medical/surgical benefits. 
However, as discussed later in this preamble, a plan or issuer may be 
required to collect and evaluate more than one form of data to assess 
the aggregate impact of the NQTL (or NQTLs as related to network 
composition). For example, under these final rules, to assess the 
aggregate impact of NQTLs related to network composition, a plan or 
issuer could evaluate, as appropriate, 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 (for comparable services and as benchmarked to a 
reference standard).
    Further, a plan's or issuer's data collection and evaluation 
approach will not be considered to be conducted in a manner reasonably 
designed to assess the impact of an NQTL on relevant outcomes related 
to access to mental health and substance use disorder benefits and 
medical/surgical benefits if the plan or issuer does not consider data 
that it knows or reasonably should know suggest that the NQTL is 
associated with a material difference in access. The Departments expect 
that, in designing their data collection and evaluation approach, plans 
and issuers will consider outcomes data as necessary to assess the 
impact of the NQTL on access to mental health and substance use 
disorder benefits and medical/surgical benefits in the same 
classification. As explained later in this preamble, the plan's or 
issuer's evaluation of this data must be included as part of the 
comparative analysis of the NQTL. The Departments may require a plan or 
issuer to submit additional information to ensure that plans and 
issuers do not only collect and evaluate the impact of some relevant 
data, while disregarding other relevant data that is reasonably 
available and suggests the NQTL contributes to material differences in 
access to mental health or substance use disorder benefits as compared 
to medical/surgical benefits.
    The statutory language requires that a plan or issuer ensure that 
the treatment limitations (quantitative or nonquantitative) themselves 
that are 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).\75\ The relevant data evaluation requirements 
at 26 CFR 54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 
146.136(c)(4)(iii) are intended to give particular meaning to the 
statutory language with respect to an NQTL itself, which, in these 
final rules, also requires compliance, in operation, with the design 
and application requirements under 26 CFR 54.9812-1(c)(4)(i), 29 CFR 
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i). The Departments agree 
with commenters who noted that these requirements will promote 
transparency and compliance with MHPAEA, that such information is 
critical to assessing an NQTL's compliance with the statute, and that 
requiring plans and issuers to collect and assess outcomes data and 
address material differences in access appropriately aligns the focus 
of NQTL compliance more closely with the fundamental purpose of MHPAEA.
---------------------------------------------------------------------------

    \75\ Code section 9812(a)(3)(A)(ii), ERISA section 
712(a)(3)(A)(ii), and PHS Act section 2726(a)(3)(A)(ii).
---------------------------------------------------------------------------

    As stated in the preamble to the proposed rules, it is necessary to 
review and consider quantitative outcomes data to ascertain how the 
NQTL functions in the context of the plan's or issuer's administration 
and provision of benefits.\76\ Because the relevant data evaluation 
requirements in these final rules are meant to ensure and determine 
compliance, in operation, with the statutory language in Code section 
9812(a)(3)(A)(ii), ERISA section 712(a)(3)(A)(ii), and PHS Act section 
2726(a)(3)(A)(ii), as noted earlier in this

[[Page 77611]]

preamble, plans and issuers must comply with both the design and 
application requirements and the relevant data evaluation requirements 
in these final rules to demonstrate compliance with MHPAEA. That is, 
if, with respect to an NQTL, a plan or issuer fails to comply with 
either set of requirements in 26 CFR 54.9812-1(c)(4)(i) or (iii), 29 
CFR 2590.712(c)(4)(i) or (iii), and 45 CFR 146.136(c)(4)(i) or (iii), 
as applicable, the plan or issuer will be considered to violate MHPAEA 
and the relevant NQTL may not be imposed with respect to mental health 
or substance use disorder benefits in the classification unless and 
until the plan or issuer takes appropriate action to remedy the 
violation.
---------------------------------------------------------------------------

    \76\ 88 FR 51552, 51575. (Aug. 3, 2023).
---------------------------------------------------------------------------

Relevant Data
    The proposed rules identified types of relevant data that plans and 
issuers would be required to collect and evaluate for all NQTLs in each 
individual comparative analysis. Under the proposed rules, relevant 
data for all NQTLs would include, but would not be limited to, the 
number and percentage of claims denials and any other data relevant to 
the NQTL as required by State law or private accreditation standards. 
Additionally, relevant data for network composition NQTLs 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). The 
proposed rules further provided that the Departments may specify the 
type, form, and manner for the relevant data evaluation requirements in 
future guidance.\77\
---------------------------------------------------------------------------

    \77\ Contemporaneously with the proposed rules, DOL, in 
collaboration with HHS and the Treasury, issued Technical Release 
2023-01P, which set out principles and asked for public comment to 
inform future guidance with respect to data submissions for NQTLs 
related to network composition and a potential enforcement safe 
harbor. The comment period for the Technical Release closed on 
October 2, 2023. Comments on the Technical Release are available on 
DOL's website at https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/tr-23-01. Those 
comments were solicited separately and are not addressed in these 
final rules. Plans and issuers would be allowed adequate time to 
conform to any future guidance on the type, form, and manner of 
collection and evaluation for the relevant data required under the 
final rules.
---------------------------------------------------------------------------

    Many commenters supported the required use of data outcomes as 
proposed. Several commenters noted that many plans and issuers do not 
have access to the data they would need to comply with the relevant 
data evaluation requirements. Specifically, the Departments received 
several comments regarding limited access to data held by service 
providers, highlighting inconsistencies in service providers' 
willingness or ability to provide data and the extensive systems 
changes and expenses necessary to allow data to be provided. Some 
commenters suggested that, because plan sponsors do not have access to 
complete and reliable sets of claims data, the final rules should 
specify that a plan or issuer can meet its obligations related to the 
relevant data evaluation requirements by requesting access to data, 
documenting such requests, and advising service providers that their 
refusal to provide data will be relayed to the Departments.
    Some commenters suggested the Departments issue the ``type, form, 
and manner of collection and evaluation'' for the relevant data 
evaluation requirements in guidance that can be periodically updated. 
Other commenters suggested that the final rules provide an exception 
from the relevant data evaluation requirements for NQTLs for which no 
such data are reasonably available, and that data evaluation be 
required only for outcomes that can be reasonably measured. One of 
these commenters highlighted that many NQTLs, including certain types 
of medical management techniques, assessments related to medical 
necessity, and exclusions for experimental/investigational treatments, 
are not generally associated with claims. Some commenters requested 
that the Departments provide an exhaustive list of a uniform set of 
outcomes data that plans and issuers are required to collect and assess 
as part of their comparative analysis with respect to an NQTL.
    Commenters suggested additional or different types of data that 
should be considered relevant data and that could be provided by plans 
and issuers, as well as their service providers, including the 
percentage of in-network claims covered vs. those submitted; time and 
distance data that includes virtual or telehealth visits; median in-
network payments as compared to Medicare rates for inpatient benefits, 
office visits, and outpatient benefits; member satisfaction, as 
reported by standardized surveys such as the Consumer Assessment of 
Healthcare Providers and Systems program; and allowed amounts for 
certain specific Current Procedural Terminology (CPT) codes for various 
types of mental health and substance use disorder and medical/surgical 
providers. Many commenters suggested that relevant data include the 
number of authorizations issued for participants and beneficiaries for 
each of the levels (and sub-levels) of care described in the American 
Society for Addiction Medicine (ASAM) criteria and the age-specific 
Level of Care Utilization Services family of criteria. Some of these 
commenters also suggested outcomes data be reported separately for both 
mental health and substance use disorder services. Another commenter 
also suggested that relevant data include the number and percentage of 
drugs subject to prior authorization and step therapy (as an 
alternative to claims denials for the prescription drug 
classification), turnaround time for prior authorization, and inter-
rater reliability. One commenter suggested using, as a parity 
indicator, a ratio of mental health utilization to primary care (for 
both initial and follow-up services) using data from the Medical 
Expenditure Panel Survey. Some commenters requested that, for fully 
insured coverage, the relevant data evaluation requirements apply at 
the issuer or ``product'' level instead of the ``plan'' level (as those 
terms are defined in 45 CFR 144.103),\78\ while others sought 
clarification regarding whether the data to be analyzed should be 
group-specific or aggregate-level, as well as any differences in the 
level of data needed for fully insured and self-funded plans.
---------------------------------------------------------------------------

    \78\ 45 CFR 144.103 states ``[p]roduct'' means ``a discrete 
package of health insurance coverage benefits that are offered using 
a particular product network type (such as health maintenance 
organization, preferred provider organization, exclusive provider 
organization, point of service, or indemnity) within a service 
area'' and ``[p]lan'' means, ``with respect to a product, the 
pairing of the health insurance coverage benefits under the product 
with a particular cost-sharing structure, provider network, and 
service area.''
---------------------------------------------------------------------------

    Some commenters objected to the proposal to require the collection 
and evaluation of out-of-network utilization data for NQTLs related to 
network composition, stating that high out-of-network utilization of 
mental health and substance use disorder services alone does not 
necessarily indicate a network access deficiency and could instead be 
the product of other factors, such as a patient's preference to use a 
particular provider. One commenter suggested requiring the collection 
and evaluation of provider-to-enrollee ratio data, and another 
commenter expressed support for requiring the collection and evaluation 
of data on whether in-network providers are accepting new patients. 
Some commenters expressed support for the collection and evaluation of 
data on appointment wait times, time and distance data, types and 
numbers of mental health and substance

[[Page 77612]]

use disorder providers that are available in a network, and telehealth. 
Some commenters suggested collection and evaluation of provider 
reimbursement rates, stating that those rates have an impact on whether 
providers are able to join a network, how many patients they treat, and 
whether they can provide wages to attract and retain staff. Other 
commenters objected to the requirement to collect and evaluate provider 
reimbursement data, arguing that reimbursement rates are not equivalent 
data when comparing between medical/surgical and mental health and 
substance use disorder benefits because of the nature of mental health 
and substance use disorder treatment and the associated time and cost. 
Other commenters objected to the inclusion of billed charges, arguing 
that these are arbitrary amounts not necessarily tied to any 
independent standard or benchmark of what is a reasonable charge and 
that Medicare rates should be used instead.
    After review of the comments, the Departments decline to provide a 
list of all relevant outcomes data required to be collected and 
evaluated by plans and issuers at this time; however, the Departments 
intend to issue in future guidance the type, form, and manner of 
collection and evaluation for the data required and the lists of 
examples of data that are relevant across the majority of NQTLs,\79\ as 
well as additional relevant data for NQTLs related to network 
composition. As part of this guidance, the Departments intend to update 
the MHPAEA Self-Compliance Tool to provide a robust framework and 
roadmap for plans and issuers to determine which data to collect and 
evaluate.
---------------------------------------------------------------------------

    \79\ As explained later in this preamble, these final rules 
provide additional provisions on how to comply with the relevant 
data evaluation requirements for an NQTL newly imposed by a plan or 
issuer or an NQTL where no data exist that can reasonably assess any 
relevant impact of the NQTL on access. The provisions of these final 
rules with respect to these types of NQTLs shall only apply in very 
limited circumstances.
---------------------------------------------------------------------------

    While, as discussed earlier in this preamble, commenters provided 
various suggestions for relevant outcomes data to be collected and 
evaluated, many comments also suggested that what data are considered 
relevant depends on the nature of an NQTL. The Departments agree and 
intend to issue future guidance to help ensure that the data required 
to be collected and evaluated under the relevant data evaluation 
requirements of these final rules provide a meaningful representation 
of whether a plan or issuer is improperly applying an NQTL under 
MHPAEA. In developing this guidance, the Departments intend to take 
into consideration the feedback received regarding relevant data 
elements.
    Until additional guidance is provided, the Departments expect a 
plan or issuer with a typical plan or coverage design will collect and 
evaluate certain data that are likely to be relevant for the majority 
of NQTLs under the relevant data evaluation requirements. As the 
relevant data for any given NQTL will depend on the facts and 
circumstances of the NQTL at issue and the circumstances under which 
the NQTL was designed and applied, these final rules provide some 
flexibility for plans and issuers to determine what relevant data 
should be collected and evaluated, as appropriate.
    Under these final rules, relevant data for the majority of NQTLs 
could include, as appropriate, but are not limited to, the number and 
percentage of claims denials in a classification of benefits and any 
other data relevant to the NQTL required by State law or private 
accreditation standards. However, the Departments note that these final 
rules do not mandate that plans or issuers use private accreditation 
standards or evaluate data under State laws to which they are not 
subject. In addition, relevant data for a typical plan or coverage 
might include utilization data for mental health and substance use 
disorder services and medical/surgical services. For NQTLs such as 
prior authorization, relevant data could include rates of approvals and 
denials of prior authorization requests, rates of denials of post-
service claims, application of penalties for a failure to obtain prior 
authorization, and turnaround times for prior authorization requests. 
Such information could be provided for benefits subject to prior 
authorization in each benefit classification in which the NQTL is 
imposed on mental health and substance use disorder benefits and 
medical/surgical benefits. All such examples of relevant data are non-
exhaustive and whether any particular type of data is relevant for a 
plan or coverage is based on each plan's or coverage's unique design.
    Relevant data for NQTLs related to network composition standards 
could include, as appropriate, but are 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 (for comparable services and as 
benchmarked to a reference standard). The Departments modified this 
illustrative list of relevant data for NQTLs related to network 
composition by specifying that provider reimbursement rates should be 
analyzed for comparable services and as benchmarked to a reference 
standard, to better ensure that comparisons between access to mental 
health and substance use disorder benefits and medical/surgical 
benefits will be informative. Thus, for example, the Departments expect 
a plan or issuer with a typical plan or coverage design could look at 
the ratio of inpatient, in-network and outpatient, in-network mental 
health and substance use disorder and medical/surgical claims, as 
compared to inpatient, out-of-network and outpatient, out-of-network 
mental health and substance use disorder and medical/surgical claims. 
Plans and issuers could also look at the number of providers (or 
facilities) within specified mental health and substance use disorder 
and medical/surgical provider categories (or categories of facilities) 
per 1,000 participants and beneficiaries who have actively submitted 
claims within the past 6 months, which would reflect the experience of 
a plan's or issuer's participants and beneficiaries within a recent 
period of time, controlled for plan or issuer size. Additionally, a 
plan or issuer could look at the turnaround time for applications to be 
approved for a provider to join the plan's or issuer's network and the 
approval and denial rates for applications submitted by mental health 
and substance use disorder providers as compared to medical/surgical 
providers. The Departments recognize that providers may differ in 
education, training, and specialization, and the categories of mental 
health and substance use disorder and medical/surgical providers for 
which data is compared should take this into account. Additionally, 
relevant data could include the percentage of participants and 
beneficiaries who can access, within a specified time and distance by 
county-type designation, one (or more) in-network providers who are 
available to accept new patients for mental health and substance use 
disorder and medical/surgical provider categories. Relevant data for 
NQTLs related to network composition could also include median in-
network reimbursement rates for services with the same CPT codes, as 
well as median in-network reimbursement rates for inpatient mental 
health and substance use disorder benefits and medical/surgical 
benefits, as compared to Medicare rates; and median in-network 
reimbursement rates for outpatient mental health and substance use

[[Page 77613]]

disorder benefits, and medical/surgical benefits, as compared to 
Medicare rates.
    The Departments have the authority to request data--in addition to 
what a plan or issuer determines to be relevant data for any particular 
NQTL and includes in its comparative analyses--to sufficiently analyze 
the plan's or issuer's assertions, pursuant to the applicable 
enforcement statutes and as permitted by the amendments made by the 
CAA, 2021 to the Code, ERISA, and the PHS Act.\80\ Similarly, nothing 
in these final rules would prohibit an applicable State authority from 
requesting additional data with regard to an issuer's comparative 
analysis. Accordingly, plans and issuers may be required to take 
reasonable action if the additional data requested by the Departments 
or an applicable State authority reveal material differences in access 
to mental health and substance use disorder benefits as compared to 
medical/surgical benefits.
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    \80\ See Code section 9812(a)(8)(B)(ii), ERISA sections 504 and 
712(a)(8)(B)(ii), and PHS Act sections 2723 and 2726(a)(8)(B)(ii).
---------------------------------------------------------------------------

    The Departments understand that many plans and issuers rely on TPAs 
and other service providers to administer a group health plan or health 
insurance coverage and acknowledge that several commenters highlighted 
the difficulty plans and issuers sometimes face obtaining the necessary 
information from their service providers to perform and document their 
comparative analyses. However, other commenters highlighted categories 
of data that TPAs and other service providers are able to provide for 
purposes of the relevant data evaluation requirements. Plans and 
issuers remain responsible for compliance with MHPAEA, and for ERISA-
covered group health plans, fiduciaries, including TPAs or other 
service providers who are acting as fiduciaries, must work with plan 
sponsors and issuers to ensure that the plans and coverage they help 
establish and administer comply with the law. In the preamble to the 
proposed rules, the Departments highlighted that, under ERISA, TPAs may 
be fiduciaries with respect to private sector, employment-based group 
health plans. To the extent these TPAs are fiduciaries for those 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 also noted their commitment to using 
all available authority to ensure compliance by plans and issuers with 
MHPAEA and requested specific 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.
    Some commenters requested that the Departments require that plan 
sponsors include MHPAEA compliance provisions in their contracts with 
TPAs, likening such a requirement to actions taken by HHS to require 
that covered entities include provisions in their contracts with 
outside entities related to obligations under the Health Insurance 
Portability and Accountability Act (HIPAA) Privacy Rule. Others 
suggested focusing on compliance at the service provider level and 
working with Congress to obtain the ability to issue civil monetary 
penalties for violations of MHPAEA.
    The Departments decline to make any changes in these final rules to 
specifically address these issues after consideration of the 
suggestions contained in the comments. These proposals, including 
requiring the inclusion of contracting provisions similar to HIPAA 
``business associate agreements,'' would go beyond the scope of this 
rulemaking. However, these types of contract provisions are a best 
practice that could be helpful to many plans and issuers in complying 
with their obligations to perform and document comparative analyses of 
NQTLs applied to mental health or substance use disorder benefits and 
medical/surgical benefits.
    Additionally, DOL also underscores its commitment to holding 
fiduciaries of ERISA-covered group health plans liable through existing 
means and working with all relevant entities, including service 
providers, to effectuate MHPAEA compliance. DOL remains committed to 
its current enforcement approach, which prioritizes potential 
violations that affect not just one plan or coverage, but hundreds or 
thousands of plans that provide coverage for thousands or millions of 
individuals. Where NQTL violations are identified in a plan or 
coverage, DOL generally examines the role that each of the plan's or 
issuer's service providers have in the design and administration of 
each NQTL to ascertain whether any of the service providers play a 
similar role serving other plans or issuers that might have the same 
violations, and seeks to bring them into compliance. Where necessary, 
DOL determines who is a fiduciary under ERISA and what additional 
enforcement actions are necessary. DOL notes that determinations of 
fiduciary liability are often based on the facts and circumstances 
specific to individual cases, but to the extent a TPA exercises 
discretionary authority or discretionary responsibility in the 
administration of an ERISA-covered health plan, DOL generally considers 
them to be fiduciaries.\81\
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    \81\ ERISA section 3(21)(A). See, e.g., Mertens v. Hewitt 
Assocs., 508 U.S. 248, 262 (1993) (stating that a fiduciary is 
defined ``not in terms of formal trusteeship, but in functional 
terms of control and authority over the plan''); Hamilton v. Allen-
Bradley Co., Inc. 244 F.3d 819, 824 (11th Cir. 2001) (stating a 
person is a fiduciary ``to the extent'' that ``he has any 
discretionary authority or discretionary responsibility in the 
administration of such plan'').
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    The Departments acknowledge both the challenges, cost, and 
complexity of collecting and evaluating data and the importance of data 
to measure the impact of an NQTL on access. The Departments also 
understand the importance of performing and documenting comparative 
analyses consistent with the statute. Therefore, these final rules 
provide additional provisions on how to comply with the relevant data 
evaluation requirements for an NQTL newly imposed by a plan or issuer 
or an NQTL where no data exist that can reasonably assess any relevant 
impact of the NQTL on access. A rule of construction at 26 CFR 54.9812-
1(c)(4)(iii)(A)(3)(iii), 29 CFR 2590.712(c)(4)(iii)(A)(3)(iii), and 45 
CFR 146.136(c)(4)(iii)(A)(3)(iii) in these final rules explains that 
the provisions of these final rules with respect to these types of 
NQTLs shall only apply in very limited circumstances and, where 
applicable, shall be construed narrowly, consistent with the 
fundamental purpose of MHPAEA. The Departments are of the view that 
relevant data can be collected and evaluated for nearly all NQTLs, and 
note that, when designing a new NQTL, or making changes to an existing 
NQTL, plans and issuers must consider what data is relevant and how it 
will be collected and evaluated.
    The Departments recognize that there may be a lag between when an 
NQTL is newly designed and applied and when relevant data are available 
if there are no data available initially to assess the NQTL's impact on 
access to mental health and substance use disorder benefits and 
medical/surgical benefits. Under these final rules, if a plan or issuer 
newly imposes an NQTL (including because the plan or coverage itself is 
newly offered) for which data are initially and temporarily 
unavailable, and the plan or issuer therefore cannot comply with the 
relevant data evaluation requirements for the NQTL, a plan or issuer 
must include in its comparative analysis a detailed explanation of the 
lack of relevant data, the basis for the plan's or

[[Page 77614]]

issuer's conclusion that there is a lack of relevant data, and when and 
how the data will become available and be collected and analyzed. 
Additionally, the plan or issuer must comply with the relevant data 
evaluation requirements as soon as practicable once relevant data 
becomes available. These additional provisions are intended to be 
applicable only in very limited circumstances where a plan or issuer 
newly imposes an NQTL for which no relevant data is available for a 
limited time after it is first imposed, and will not be available for a 
new NQTL where data is available but not evaluated due to lack of 
collection. The Departments note that a change in an NQTL's design or 
application is generally not considered a new NQTL for which there is 
no data initially available. In the very limited situations where a 
data lag exists for a new NQTL, the Departments expect a plan or issuer 
to comply with the relevant data evaluation requirements and include 
data in its comparative analyses within a limited amount of time (as 
soon as practicable, but no later than the end of the second plan year 
that follows the imposition of a new NQTL).
    These final rules also acknowledge that some limited circumstances 
may exist in which no data exists that can reasonably assess any 
relevant impact of an NQTL on access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits. Such NQTLs 
might include, in certain circumstances, for example, some exclusions 
based on whether a treatment is experimental or investigative. As 
commenters have highlighted, these NQTLs are not generally attached to 
claims, so plans and issuers may not have reliable data on the impact 
of these excluded services with respect to participants and 
beneficiaries. In the limited circumstances where no relevant data 
exist relating to an NQTL, these final rules require the plan or issuer 
to include in its comparative analysis a reasoned justification as to 
the basis for its conclusion that there are no data that can reasonably 
assess the NQTL's impact, why the nature of the NQTL prevents the plan 
or issuer from reasonably measuring its impact, an explanation of what 
data was considered and rejected, and documentation of any additional 
safeguards or protocols used to ensure that the NQTL complies with 
MHPAEA. A plan or issuer also must comply with the relevant data 
evaluation requirements as soon as practicable if the plan or issuer 
becomes aware (or reasonably should become aware) of data that can 
reasonably assess any relevant impact of the NQTL.
    The Departments also note that the unavailability of data for 
purposes of the relevant data evaluation requirements of these final 
rules does not affect the plan's or issuer's obligation to comply with 
the design and application requirements.
Material Differences in Access
    Under the proposed rules, to the extent the relevant data evaluated 
show 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 has violated the proposed no more restrictive requirements or 
the design and application requirements. In such instances, the 
proposed rules would require plans and issuers to take reasonable 
action to address the material differences in access as necessary to 
ensure compliance, in operation, with the proposed no more restrictive 
requirement and design and application requirements, and document the 
action that has been or is being taken by the plan or issuer to address 
any material differences in access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits. The 
Departments stated in the preamble to the proposed rules that material 
differences alone would not automatically result in a finding of 
noncompliance, except where related to network composition, as 
discussed in more detail later in this preamble.
    Some commenters supported the proposal that material differences in 
access would constitute a strong indicator of noncompliance, stating 
that such approach is a reasonable method to identify potential 
instances of noncompliance while allowing for instances where 
disparities in access are due to factors beyond the plan's or issuer's 
control. Several commenters opposed the proposal that material 
differences would constitute a strong indicator of noncompliance, 
stating that this would be inconsistent with the Departments' previous 
statements in the 2020 MHPAEA Self-Compliance Tool that negative 
outcomes data is a red flag, but not determinative of compliance. One 
commenter stressed that it was important to provide clarity on how the 
Departments would impose this standard.
    Several commenters requested that the Departments define the term 
``material differences,'' and many commenters provided suggested 
meanings for the term. A number of commenters requested that the term 
be defined as a serious or significant variation, or one that would 
have a major effect on access to care. One commenter suggested that the 
definition of material differences should set a high standard to 
identify clear outliers and major differences in access rather than 
moderate variations. Some commenters stated that any definition of 
material differences in access should be based only on statistical 
significance. One commenter suggested a 10-percent difference as the 
definition of a material difference. Other commenters requested that 
the Departments adopt a ``de minimis'' standard, rather than a material 
differences in access standard. Additionally, some commenters suggested 
that material differences in access should mean that a substantial 
number of members could not access mental health and substance use 
disorder benefits. Several other commenters suggested that material 
differences be defined to allow an acceptable level of difference in 
access to mental health and substance use disorder benefits as compared 
to medical/surgical benefits, accounting for participant behavior as a 
driver of accessibility, with consideration of data credibility and the 
amount of available data. Another commenter highlighted that relevant 
factors should include the size of the data pool, variability over 
time, availability of complementary measures, and the degree of 
control.
    Some commenters suggested that differences in data outcomes might 
result from a wide variety of reasons that do not indicate 
noncompliance, including random variability, provider or member 
behavior, changes to unrelated Federal or State laws, or other factors 
that are outside of the plan's or issuer's control. One commenter 
requested that plans and issuers be permitted to take into account 
relevant context (for example, there are many more drugs that are 
considered medical/surgical benefits than mental health and substance 
use disorder benefits, so the percentage of mental health and substance 
use disorder drugs to which NQTLs apply may be higher).
    The Departments are finalizing language specifying that, to the 
extent the relevant data evaluated suggest that the NQTL contributes to 
material differences in access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits in a 
classification, such differences will be considered a strong indicator 
that the plan or issuer is in violation of MHPAEA. The material 
differences standard reflects an interpretation of the

[[Page 77615]]

statutory terms ``substantially all'' and ``predominant'' in a manner 
that takes into account the multifaceted nature of NQTLs, as well as 
the complexity of analyzing such NQTLs. The material differences 
standard is intended to set forth a principle-based approach to 
determining whether relevant data suggest that an NQTL applied to 
mental health or substance use disorder benefits is more restrictive 
than the predominant NQTL applied to substantially all medical/surgical 
benefits in a classification. The standard also allows plans and 
issuers, when applying an outcomes-based analysis, the flexibility to 
assess comparability in a way that can be tailored to a variety of 
different types of NQTLs, and to account for outliers or claims 
experience that may not be reflective of a difference in access 
resulting from the NQTL itself.
    The Departments emphasize that the material differences standard 
works together with the other requirements contained in these final 
rules. A plan or issuer cannot determine whether an NQTL applied to 
mental health or substance use disorder benefits is more restrictive 
than the predominant NQTL applied to substantially all medical/surgical 
benefits without evaluating the effect of imposing the NQTL on access 
to mental health and substance use disorder benefits as compared to 
medical/surgical benefits. Additionally, when the plan or issuer knows 
or should know that one or more of its NQTLs is contributing to 
material differences in access, it cannot simply disregard or avoid 
ascertaining that information, and continue its current practices, but 
instead must act consistent with its obligation to ensure that NQTLs 
applied to mental health and substance use disorder benefits generally 
are no more restrictive than those applied to medical/surgical 
benefits.
    While the preamble to the 2013 final regulations stated that 
``[d]isparate results alone do not mean that the NQTLs in use do not 
comply with these requirements,'' \82\ the Departments have 
consistently stressed in subregulatory guidance that disparate results 
are a red flag or a warning sign of noncompliance, including in the 
2020 MHPAEA Self-Compliance Tool, which states that ``. . . while 
outcomes are not determinative of a MHPAEA violation, they can often 
serve as red flags or warning signs to alert the plan or issuer that a 
particular provision may warrant further review.'' \83\ The experience 
of the Departments in enforcing MHPAEA, moreover, has shown that plans 
and issuers are commonly unprepared to explain material differences in 
outcomes data, and in some cases, have mistakenly considered the 2013 
final regulations as granting freedom to ignore potentially problematic 
or significant differences, even where such differences appear to have 
a direct causal link to the plan's practices and limitations.
---------------------------------------------------------------------------

    \82\ 78 FR 68240, 68245 (Nov. 13, 2013).
    \83\ Final FAQs About Mental Health and Substance Use Disorder 
Parity Implementation and the 21st Century Cures Act Part 39, Q 7 
(Sept. 5, 2019), 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); EBSA, Self-
Compliance Tool for the Mental Health Parity and Addiction Equity 
Act (MHPAEA) (2020), pg. 27, https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
---------------------------------------------------------------------------

    These final rules, as discussed later in this preamble, make clear 
that plans and issuers must consider whether such material differences 
exist, and whether the differences are attributable to the NQTL. In 
instances where the relevant data suggest that the NQTL contributes to 
material differences, these final rules require plans and issuers to 
take reasonable action, as necessary, to address the material 
differences and to document that such action has or will be taken to 
ensure compliance, in operation, with the requirements for NQTLs under 
these final rules.
    This increased emphasis on outcomes data and the material 
differences standard will help ensure that more restrictive NQTLs are 
not imposed on mental health and substance use disorder benefits as 
compared to the predominant NQTLs applied to substantially all medical/
surgical benefits in the same classification by identifying when an 
NQTL results in differences in access that are likely to have a 
negative impact on access to mental health or substance use disorder 
benefits as compared to medical/surgical benefits. This standard 
generally would not include a de minimis difference in access or a 
difference driven by an outlier, such as a single plan participant's 
claims experience or a single claim. The Departments also note that the 
existence of material differences in access do not automatically result 
in a finding of noncompliance, and that plans and issuers will continue 
to have the opportunity provide additional information as part of the 
NQTL comparative analysis process, as well as to respond to the 
Departments in any enforcement actions, by submitting additional data, 
the sources of the data, explanatory material, related documents, 
evidence of reasonable actions that have been or are being taken by the 
plan or issuer to address such differences, and other material and 
information to demonstrate compliance with MHPAEA.
    The Departments acknowledge comments from plans and issuers asking 
for guidance on how to determine whether a difference is material for 
purposes of the relevant data evaluation requirements, as well as those 
asking for a principle-based approach rather than specific thresholds 
for each outcome measure, because what is material will likely vary by 
NQTL, market, plan, and benefit classification for each item or 
service, as well as the number of participants and beneficiaries 
affected. In these final rules, the Departments set forth a standard 
that takes into account the range of commenters' suggestions and 
incorporates them into a single standard, while helping to ensure that 
participants' and beneficiaries' access to mental health and substance 
use disorder benefits is in parity with their access to medical/
surgical benefits.
    Specifically, under these final rules, relevant data are considered 
to suggest that the NQTL contributes to material differences in access 
to mental health or substance use disorder benefits as compared to 
medical/surgical benefits if, based on all relevant facts and 
circumstances, and taking into account specific considerations,\84\ the 
difference in the data suggests that the NQTL is likely to have a 
negative impact on access to mental health or substance use disorder 
benefits as compared to medical/surgical benefits. For this purpose, 
these final rules specify that relevant facts and circumstances may 
include, but are not limited to, the terms of the NQTL at issue, the 
quality or limitations of the data, causal explanations and analyses, 
evidence as to the recurring or non-recurring nature of the results, 
and the magnitude of any disparities. The Departments note that plans 
and issuers may consider other

[[Page 77616]]

relevant facts and circumstances that are not specifically listed in 
these final rules, as appropriate, and that differences in access to 
mental health or substance use disorder benefits attributable to 
independent professional medical or clinical standards or fraud and 
abuse measures are not considered to be material, as discussed later in 
this preamble.
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    \84\ The considerations outlined in these final rules refer to 
differences in access to mental health or substance use disorder 
benefits attributable to generally recognized independent 
professional medical or clinical standards or carefully 
circumscribed measures reasonably and appropriately designed to 
detect or prevent and prove fraud and abuse that minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits. See 26 CFR 54.9812-1(c)(4)(iii)(B)(2)(ii), 29 
CFR 2590.712(c)(4)(iii)(B)(2)(ii), and 45 CFR 
146.136(c)(4)(iii)(B)(2)(ii). Differences solely attributable to 
such standards or measures are not treated as material differences 
for purposes of these final rules.
---------------------------------------------------------------------------

    The Departments are of the view that the quality or limitations of 
the relevant data are a key consideration in determining whether a 
difference in the data suggests that an NQTL contributes to a material 
difference in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits. As discussed earlier 
in this preamble, the Departments acknowledge the difficulty some plans 
and issuers may face in obtaining the necessary information, including 
data, from their service providers to perform and document their 
comparative analyses. The Departments are also aware that plans and 
issuers might not have direct control over the quality of the data they 
receive from a service provider. Despite this, the Departments do not 
intend for this consideration to create a loophole that allows plans 
and issuers to avoid determining materiality when evaluating 
differences in relevant data. Rather, the Departments expect plans and 
issuers to consider the quality and limitations of any available 
relevant data as just one of multiple potential facts and circumstances 
when assessing the impact of an NQTL on access to mental health and 
substance use disorder benefits and medical/surgical benefits.
    When considering causal explanations and analyses in determining 
whether a difference in the data suggests that an NQTL contributes to a 
material difference in access, plans and issuers should consider 
whether they are attributable to the NQTL, instead of being 
attributable to other factors or considerations. As discussed in more 
detail later in this preamble, a plan's or issuer's comparative 
analysis for an NQTL applicable to mental health and substance use 
disorder benefits and medical/surgical benefits must include a 
discussion of the actions that have been or are being taken by the plan 
or issuer to address any material differences in access. This 
discussion must include, as applicable, a reasoned explanation of any 
considerations beyond a plan's or issuer's control that contribute to 
the existence of material differences in access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits, including those that result in the persistence of such 
material differences despite reasonable actions that have been or are 
being taken to address such differences by the plan or issuer.
    For example, if a plan or issuer identifies, based on reliably 
established indicia of fraud and abuse, that a particular provider or 
facility has submitted fraudulent claims for mental health or substance 
use disorder benefits, resulting in a higher percentage of denials of 
claims for mental health or substance use disorder benefits than for 
medical/surgical benefits in the same classification, the evidence of 
fraud and abuse could be considered part of the relevant facts and 
circumstances for purposes of determining whether a material difference 
in access exists. Further, if a material difference in access exists, 
the evidence of fraud and abuse could also be considered part of the 
relevant facts and circumstances for purposes of determining whether 
the difference is attributable to the NQTL. In such a case, the plan or 
issuer might reasonably conclude that the difference in outcomes is 
attributable to higher underlying levels of fraud for mental health and 
substance use disorder benefits than for medical/surgical benefits in 
the same classification (with the commission of the fraud being a 
circumstance that is beyond the plan's or issuer's control), rather 
than the application of a more restrictive NQTL to mental health or 
substance use disorder benefits. As explained later in this preamble, 
under these final rules, the plan or issuer must include in its 
comparative analysis a reasoned explanation of the reliably established 
indicia of fraud and abuse beyond the plan's or issuer's control that 
contribute to the existence of material differences in access to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits.
    The Departments note that a difference in access to mental health 
or substance use disorder benefits as compared to medical/surgical 
benefits that is driven by an outlier, such as a single plan 
participant's claims experience or a single claim, will generally not 
be considered material for this purpose because the nature of the 
results of the evaluation of relevant data would not be considered 
recurring. Therefore, such a difference would not trigger the 
requirement to take reasonable action, as necessary, under these final 
rules.
    In the preamble to the proposed rules, the Departments solicited 
comments on whether materiality should be defined in terms of the 
results of statistical testing and requested feedback from interested 
parties on the optimal method for assembling data and statistical 
analysis. As highlighted earlier in this preamble, commenters requested 
that the definition of material differences account for statistically 
significant differences, and take into account the amount of available 
data, while also excluding differences related to random variability. 
The Departments are of the view that plans and issuers can explain in 
their comparative analyses whether differences are or are not 
statistically significant and why, based on the relevant facts and 
circumstances, such differences are determined to be or not to be 
material. However, the Departments also recognize that statistical 
significance might not always be appropriate to consider, and that 
there would be challenges with requiring plans and issuers to use a 
statistical analysis in determining whether material differences in 
access exist for all NQTLs, as well as whether and how those 
differences are attributable to the NQTL or NQTLs in question.\85\
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    \85\ The Departments also recognize that smaller plans may have 
limited relevant data to evaluate, which could result in the plan 
not having sufficient data to identify statistically significant 
differences in the data. The Departments note that, because these 
final rules do not require that a difference be statistically 
significant to constitute a material difference, small sample size 
does not amount to circumstances under which the provisions in 26 
CFR 54.9812-1(c)(4)(iii)(A)(3), 29 CFR 2590.712(c)(4)(iii)(A)(3), 
and 45 CFR 146.136(c)(4)(iii)(A)(3) would apply.
---------------------------------------------------------------------------

    Plans and issuers should carefully consider the magnitude of any 
negative impact on access to mental health or substance use disorder 
benefits as compared to medical/surgical benefits and whether the 
relevant data therefore suggest an NQTL contributes to a material 
difference in access that might require the plan or issuer to take 
reasonable action, as necessary, to ensure compliance, in operation, 
with the requirements for NQTLs under these final rules. As noted 
earlier in this preamble, a difference in access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits that is de minimis will not be considered material for 
purposes of the relevant data evaluation requirements. The size of any 
negative impact on access, even if small, is part of the relevant facts 
and circumstances that could determine whether a disparity in access is 
material. These final rules do not require a plan or issuer to obtain a 
statistical, actuarial, or other equivalent opinion to support a 
conclusion as to whether a difference in access demonstrated by 
relevant data is material, based on the relevant facts and

[[Page 77617]]

circumstances. However, a plan or issuer may obtain such an opinion, 
and if relying on it as part of performing its comparative analysis, 
the plan or issuer should document the relevance of that opinion to the 
conclusion that a difference in data suggests or does not suggest 
material difference in access, as part of the comparative analysis. For 
plans and issuers that do use such an opinion to support a conclusion 
as to the materiality of differences in access, the Departments would 
expect these opinions or determinations to be made by a qualified and, 
if applicable, licensed or otherwise accredited individual or 
organization. Additionally, the individual's or organization's 
qualifications must be documented as part of the comparative analysis, 
along with a description of the extent to which the plan or issuer 
ultimately relied upon the individual's or organization's evaluation in 
performing and documenting the comparative analysis of the design and 
application of the NQTL, as discussed in more detail later in this 
preamble. The Departments note that a statistical, actuarial, or other 
equivalent opinion obtained by a plan or issuer to support a conclusion 
as to whether a difference in access based on relevant data is or is 
not material is not dispositive simply because it is made by a 
qualified, licensed or otherwise accredited individual or organization. 
In the course of enforcement, the Departments and applicable State 
authorities may review and assess the validity of the assertions, and 
the factors upon which such assertions are based, contained in such an 
opinion, as well as a plan's or issuer's determination as to whether 
any particular difference in access to mental health or substance use 
disorder benefits as compared to medical/surgical benefits is or is not 
material.
    In these final rules, the Departments decline to finalize the 
proposed exception to the relevant data evaluation requirements for 
independent professional medical or clinical standards, as discussed 
later in this preamble. The Departments are of the view that plans and 
issuers that impose NQTLs that utilize such standards as the basis for, 
or as, factors or evidentiary standards, should collect and evaluate 
relevant data, to determine the impact of NQTLs developed or applied 
using these standards on access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits. However, 
reliance on such standards can improve care and health outcomes for 
participants and beneficiaries. The Departments also recognize that 
clinical differences between mental health conditions, substance use 
disorders, medical conditions, and surgical procedures may sometimes 
drive apparent differences in data outcomes, even where plans and 
issuers rely on independent professional medical or clinical standards. 
Therefore, under these final rules, differences in access to mental 
health or substance use disorder benefits attributable to generally 
recognized independent professional medical or clinical standards that 
are used as the basis for a factor or evidentiary standard used to 
design or apply an NQTL are not considered to be material. To the 
extent a plan or issuer attributes any differences in access to the 
application of such standards, the plan or issuer must explain its 
bases for that conclusion in the plan's or issuer's comparative 
analysis, as discussed later in this preamble.
    The Departments did not propose that NQTLs related to fraud, waste, 
and abuse measures would be excepted from the relevant data evaluation 
requirements. However, as discussed earlier in this preamble, reliably 
established indicia of fraud and abuse could, if appropriate, be 
considered relevant facts and circumstances taken into account by a 
plan or issuer when determining whether a difference in access is 
material. Indicia of fraud and abuse could also be relevant in 
determining whether a material difference in access is attributable to 
an NQTL or, instead, is attributable to the use of fraud and abuse 
measures. Therefore, under these final rules, a difference in access to 
mental health or substance use disorder benefits attributable to 
carefully circumscribed measures reasonably and appropriately designed 
to detect or prevent and prove fraud and abuse that minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits are not considered to be material. As discussed 
later in this preamble, in such a case, a plan's or issuer's 
comparative analysis must provide a thorough and reasoned explanation 
that indicia for fraud and abuse have been reliably established through 
objective and unbiased data, and that such measures are narrowly 
designed to minimize the negative impact on access to appropriate 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits in the same classification.
Reasonable Action, as Necessary, To Address Material Differences in 
Access
    The proposed rules provided that 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 the proposed no 
more restrictive requirement and design and application requirements. 
The preamble to the proposed rules noted that whether any particular 
action would be considered reasonable in response to any 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 proposed that, in addition to taking 
reasonable action to address material differences, a plan or issuer 
would also be required to document in its comparative analyses any such 
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. The Departments noted in the preamble to the proposed rules 
that plans and issuers could use this documentation to explain why 
material differences demonstrated by the relevant outcomes data should 
not be considered a violation of the rules for NQTLs (other than NQTLs 
related to network composition) and solicited comments on what 
additional information is necessary to clarify what would constitute 
reasonable action in response to relevant data that reveal material 
differences in access.
    Several commenters supported the requirement to take reasonable 
action in response to relevant data that reveals material differences 
in access. Some commenters suggested that ``reasonable action'' should 
be defined and should mean actions, including, but not limited to, 
internal reforms and modifications or elimination of the NQTL to 
resolve the material differences. One commenter stated that requiring 
reasonable action where there is no violation of the law and without an 
opportunity to explain why material differences in access may not in 
fact be a violation of MHPAEA is arbitrary and capricious and goes 
beyond the authority of the Departments. Therefore, the commenter noted 
reasonable action should be

[[Page 77618]]

required only after an opportunity to rebut a presumption of 
noncompliance.
    Under these final rules, when a plan or issuer knows or reasonably 
should know that NQTLs may be contributing to material differences in 
access, it must take reasonable action, as necessary, to ensure 
compliance, in operation, with the requirements for NQTLs under these 
final rules. The standard is not focused on inconsequential 
differences, but rather only on those that are material, meaning those 
that are likely to have a negative impact on access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits. If a plan or issuer is aware of information that suggests a 
potential violation of MHPAEA, the statute requires the plan or issuer 
to address such potential violations as necessary to satisfy its 
obligation to ensure that the NQTLs comply with the substantive 
requirements of the statute,\86\ and to be able to continue to impose 
the NQTL. The requirement to take reasonable action, as necessary, 
where material differences in access exist is consistent with the 
statutory requirement that plans and issuers ensure that treatment 
limitations (including NQTLs) applicable to mental health or substance 
use disorder benefits are no more restrictive than the predominant 
treatment limitations applied to substantially all medical/surgical 
benefits. If the relevant data suggest that an NQTL contributes to 
material differences in access, a plan or issuer generally is not able 
to ensure compliance with MHPAEA, in operation, unless the plan or 
issuer takes action that is reasonably designed to try to close the gap 
and address those differences.
---------------------------------------------------------------------------

    \86\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and 
PHS Act section 2726(a)(3)(A).
---------------------------------------------------------------------------

    The proposed rules would have required plans and issuers to take 
reasonable action to address material differences in access as 
necessary to ensure compliance, in operation, with the proposed no more 
restrictive requirement and design and application requirements. 
However, as discussed earlier in this preamble, these final rules do 
not retain the proposed mathematical substantially all and predominant 
tests and instead retain language that incorporates the statutory 
requirements of Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), 
and PHS Act section 2726(a)(3)(A), as the general rule for NQTLs. 
Therefore, these final rules make technical changes to replace the 
cross-references in the material differences standard to the proposed 
no more restrictive requirement and design and application 
requirements, and replace them with a cross-reference to the general 
rule for NQTLs.
    The Departments acknowledge commenters' requests for guidance on 
what constitutes reasonable action for this purpose. The Departments 
anticipate that, in many cases, the reasonable actions that plans and 
issuers might take, as necessary, to address material differences in 
access will be similar to actions they might have taken independent of 
the requirements contained in these final rules. For example, some 
plans and issuers may already take certain action in response to 
changes in demand for services, needs of patients, or requests from 
plan sponsors, which could be considered reasonable action for this 
purpose, depending on the relevant facts and circumstances. Commenters 
highlighted that, since the enactment of MHPAEA, plans and issuers have 
increased spending and raised reimbursement rates for mental health and 
substance use disorder services, and invested in programs to help 
members identify mental health and substance use disorder care needs 
and to connect them to the appropriate services as early as possible. 
Commenters also highlighted that plans and issuers have also developed 
mental health assessment screening tools for youth populations to 
detect those at risk. Depending on the facts and circumstances, all of 
these actions could be examples of reasonable actions that plans and 
issuers can take, as necessary, where the relevant data suggest that an 
NQTL contributes to material differences, as required under these final 
rules. However, plans and issuers will ultimately be responsible for 
assessing the nature of a material difference in access to determine 
what reasonable action should be taken, as necessary, to address those 
differences.
    In addition, a plan or issuer must document the actions that have 
been or are being taken in the plan's or issuer's comparative analysis 
and include a reasoned explanation of any material differences in 
access that persist despite reasonable actions that have been or are 
being taken. For a plan or issuer designing and applying one or more 
NQTLs related to network composition standards, the comparative 
analysis must include a discussion of the actions that have been or are 
being taken to address material differences in access to in-network 
mental health and substance use disorder benefits as compared to in-
network medical/surgical benefits.
Special Rule for NQTLs Related to Network Composition
    In the preamble to the proposed rules, the Departments noted a 
growing disparity between in-network reimbursement rates for mental 
health and substance use disorder providers and medical/surgical 
providers, as well 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. The Departments also 
expressed their specific concerns about standards related to network 
composition and other related NQTLs, because these standards are 
critical to ensuring parity in access to mental health and substance 
use disorder benefits for participants and beneficiaries. Therefore, 
the Departments included in the proposed rules a requirement that, in 
addition to the relevant data required for all NQTLs, plans and issuers 
would also be required to collect and evaluate relevant data for NQTLs 
related to network composition. For this purpose, the proposed rules 
stated that network composition NQTLs 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. Under the proposed special rule, when designing and applying 
one or more NQTLs related to network composition standards, a plan or 
issuer would fail to meet the requirements of the proposed no more 
restrictive requirement and design and application requirements, 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. This 
standard proposed to set a higher bar for NQTLs related to network 
composition than for other NQTLs by treating material differences in 
access to in-network mental health or substance use disorder benefits 
as compared to in-network medical/surgical benefits as a failure to 
meet the requirements of MHPAEA, instead of as a strong indicator of a 
violation of MHPAEA.
    The Departments proposed that plans and issuers be required to take 
action to

[[Page 77619]]

address material differences in access for NQTLs related to network 
composition or no longer impose the relevant NQTLs to avoid a violation 
of MHPAEA. Examples of such actions listed by the Departments in the 
preamble to the proposed rules for NQTLs related to network composition 
include ensuring that plans and issuers 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 plan's or issuer's 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 also recognized that shortages of mental health and 
substance use disorder providers could pose challenges to issuers, 
plans, and their service providers. The preamble to the proposed rules 
noted that, if, despite taking appropriate action, relevant data 
collected and evaluated for NQTLs related to network composition 
continue to reveal material differences due to, for example, 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 the proposed relevant data evaluation 
requirements with respect to NQTLs related to network composition if 
the plan or issuer otherwise complied with other applicable MHPAEA 
requirements. However, the Departments noted that plans and issuers 
should be prepared 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.
    Several commenters supported the special rule for NQTLs related to 
network composition, stating that it would address significant barriers 
to accessing mental health and substance use disorder services, and 
requested that the heightened requirement for such NQTLs be maintained 
in the final rules. Some commenters questioned the justification for 
treating standards for network composition differently than all other 
NQTLs. Several commenters stated that the Departments misrepresented 
several of the key studies they relied on to support the proposed 
special rule. Some commenters highlighted that analyzing outcomes data 
related to network composition is a long-recognized and widely accepted 
tool in population health management but stated that the proposed rules 
would turn this tool into a compliance standard that would be virtually 
impossible to satisfy. One commenter highlighted that MHPAEA requires 
equity in treatment, not equity in outcomes, and that the special rule 
would go beyond what is required by statute, as well as the 
Departments' own admission that parity across mental health and 
substance use disorder and medical/surgical networks does not 
necessarily mean an equal number of providers in a classification. 
Another commenter stressed that the special rule was inappropriate 
without clarity about what the definition of a material difference 
would be. This commenter stated that the Departments should finalize, 
following additional public comment, an NQTL definition, a specific set 
of measures with technical specifications, and a benchmark for what 
they will consider to be ``material difference'' for each NQTL type. 
Other commenters suggested that the Departments not finalize this 
proposed provision.
    Some commenters noted that there can be many reasons why outcomes 
might be different for mental health and substance use disorder 
benefits than medical/surgical benefits when evaluating relevant data, 
particularly with respect to network composition. Some of these 
commenters highlighted reasons that are outside the control of plans 
and issuers, such as shortages of mental health and substance use 
disorder providers or specialists. Some commenters requested that the 
final rules address situations where material differences in access are 
due to a lack of mental health and substance use disorder providers, 
while other commenters stated that general citations to provider 
shortages as the only cause of material differences in access should be 
rejected as inadequate, especially without evidence that those 
shortages drove disparities, rather than plan or issuer choices. One 
commenter argued that plans and issuers should have the opportunity to 
address any apparent gaps in network access and explain long-term 
initiatives to address those gaps.
    Several commenters expressed concern that the special rule as 
proposed would have adverse consequences for patient outcomes and 
safety because it would encourage plans and issuers to accept lower 
quality providers into their networks. One commenter noted that 
behavioral health care is commonly provided by primary care providers, 
and without including those providers in relevant data, a significant 
percentage of mental health treatment would not be captured when 
determining whether material differences in access exist. Other 
commenters expressed the importance of taking into account telehealth 
providers when analyzing relevant data for purposes of NQTLs related to 
network composition.
    The Departments acknowledge the concerns raised by commenters on 
this aspect of the proposed rules; namely, the fact that a variety of 
metrics could be consulted as a plan or issuer evaluates its parity 
compliance regarding NQTLs related to network composition, and that 
parity for mental health and substance use disorder benefits as 
compared to medical/surgical benefits does not necessarily mean an 
equal number of mental health or substance use disorder and medical/
surgical network providers. The Departments also understand the value 
of a consistent approach with regard to all NQTLs, while recognizing 
the impact of NQTLs related to network composition on access to care. 
Additionally, the Departments acknowledge the questions some commenters 
raised requesting more specific details on how to account for material 
differences in access for network composition NQTLs, including those 
due to provider shortages, which plans and issuers may not be able to 
effectively address through no fault of their own despite taking 
reasonable action. The Departments also note that certain outcomes 
measures, such as high out-of-network utilization for mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits, may not necessarily represent a per se violation of MHPAEA.
    The Departments agree with commenters that it is important to allow 
plans and issuers to address apparent gaps in relevant data, and that 
it is also important that the regulatory standard for NQTLs related to 
network composition is one that plans and issuers are able to satisfy. 
However, as stated in the preamble to the proposed rules, the 
Departments also recognize that network composition and access to 
mental health and substance use disorder benefits are the product of 
myriad NQTLs; processes, strategies, evidentiary standards, and other 
factors

[[Page 77620]]

used to design and apply NQTLs; and information, evidence, sources, and 
standards on which factors and evidentiary standards are based. As a 
result, the Departments remain concerned that plans and issuers could 
too readily evade their obligations under MHPAEA, if they were not 
obligated to diligently collect and evaluate relevant data, perform a 
careful analysis to determine whether material differences in access to 
mental health and substance use disorder benefits exist as a result of 
the cumulative impact of NQTLs related to network composition, and take 
reasonable actions that meaningfully address such differences in 
access.
    After consideration of the comments, the Departments are not 
finalizing the proposed special rule for NQTLs related to network 
composition, and are instead including language in these final rules to 
explain how plans and issuers are expected to comply with the relevant 
data evaluation requirements with respect to those NQTLs. Specifically, 
these final rules require that a plan or issuer must collect and 
evaluate data in a manner reasonably designed to assess the aggregate 
impact of all such NQTLs on access to mental health and substance use 
disorder benefits and medical/surgical benefits, instead of evaluating 
relevant data for each NQTL separately (which is generally required 
under these final rules for NQTLs other than those related to network 
composition), to determine if there is a material difference in access. 
Furthermore, the final rules provide examples of possible actions that 
a plan or issuer could take to comply with the requirement to take 
reasonable action, as necessary, to address any material differences in 
access with respect to network composition NQTLs. While under these 
final rules, material differences in access related to network 
composition NQTLs are not automatically treated as a violation of 
MHPAEA (and instead are treated as a strong indicator of a violation, 
the same as all other NQTLs), the Departments emphasize that plans and 
issuers must engage in, and document in their comparative analyses, all 
reasonable actions, as necessary, to address any material differences 
in access.
    While the approach to material differences for NQTLs related to 
network composition is different than that set forth in the proposed 
rules, these final rules will achieve the same goal of ensuring access 
to mental health and substance use disorder benefits in parity with 
access to medical/surgical benefits, by requiring plans and issuers to 
take reasonable action, as necessary, to address material differences 
in access for in-network mental health and substance use disorder 
benefits as compared to in-network medical/surgical benefits. 
Furthermore, the approach for NQTLs related to network composition in 
these final rules will ensure that participants and beneficiaries are 
not subject to NQTLs with respect to mental health and substance use 
disorder benefits that are more restrictive than the predominant NQTLs 
applied to substantially all medical/surgical benefits under the plan 
or coverage.
    The Departments stress the importance of the requirement under 
these final rules that plans and issuers take reasonable action, as 
necessary, where relevant data suggest that NQTLs related to network 
composition contribute to a material difference in access to in-network 
mental health and substance use disorder benefits as compared to in-
network medical/surgical benefits in a classification, to ensure 
compliance with MHPAEA. These final rules provide an illustrative list 
of possible actions the Departments expect plans and issuers, working 
with their service providers, to take, as necessary, to address any 
material differences in access with respect to NQTLs related to network 
composition under the relevant data evaluation requirements. This 
includes plans and issuers working with their service providers, as 
applicable, to strengthen efforts to recruit and encourage a broad 
range of available mental health and substance use disorder providers 
and facilities to join the plan's or issuer's network of providers, 
including taking actions to increase compensation or other inducements, 
streamline credentialing processes, or contact providers reimbursed for 
items and services provided on an out-of-network basis to offer 
participation in the network, and expand the availability of telehealth 
arrangements to mitigate overall mental health and substance use 
disorder provider shortages in a geographic area. Additionally, plans 
and issuers should provide additional outreach and assistance to 
participants and beneficiaries enrolled in the plan or coverage to 
assist them in finding available in-network mental health and substance 
use disorder providers and facilities, and ensure that provider 
directories are accurate and reliable (including in accordance with 
Code section 9820(a), ERISA section 720(a), PHS Act section 2799A-5(a), 
and future implementing regulations and guidance). The Departments also 
expect plans and issuers to take other reasonable actions, as 
necessary, that are intended to mitigate any material differences (even 
if not enumerated in these final rules).
    As with other types of NQTLs, these final rules require plans and 
issuers to explain in their comparative analyses for NQTLs related to 
network composition the circumstances of any material differences in 
access and the actions that have been or are being taken to address 
these differences. If such actions do not fully resolve the material 
differences, a plan or issuer must provide a reasoned explanation in 
its comparative analysis of any material differences that persist 
despite reasonable actions that have been or are being taken. The 
Departments stress that a comparative analysis making only a cursory 
reference to provider shortages with little or no explanation of 
reasonable actions taken to address material differences in access will 
likely result in a finding by the relevant Secretary that the 
comparative analysis is insufficient and, without additional 
comparative analyses in response to an insufficiency notice or initial 
determination of noncompliance from the Secretary, may result in a 
final determination of noncompliance. As noted elsewhere in this 
preamble, the Departments expect that, if a plan or issuer intends to 
rely on an explanation of existing circumstances that cannot 
effectively be addressed through reasonable action, the explanation 
should include significant detail as to the circumstances resulting in 
material differences in access that are outside the plan's or issuer's 
control, and a robust discussion of the reasonable actions the plan or 
issuer has taken or is taking in an attempt to address such material 
differences.
Exception for Independent Professional Medical or Clinical Standards
    The proposed rules specified a narrow exception under which plans 
and issuers would not be required to comply with the relevant data 
evaluation requirements for NQTLs that impartially apply independent 
professional medical or clinical standards.\87\ As discussed in the 
following section of the preamble to these final rules, the Departments 
are not finalizing this proposed exception.
---------------------------------------------------------------------------

    \87\ The proposed rules did not include a similar exception from 
the relevant data evaluation requirements for standards related to 
fraud, waste, and abuse.
---------------------------------------------------------------------------

e. Independent Professional Medical or Clinical Standards and Fraud and 
Abuse Measures
    In the preamble to the proposed rules, the Departments acknowledged 
that the application of independent professional

[[Page 77621]]

medical or clinical standards and fraud, waste, and abuse measures 
generally improve and help to ensure appropriate care for participants 
and beneficiaries, rather than restrict access to needed benefits. The 
Departments stated that NQTLs that reflect independent professional 
medical or clinical standards or guard against fraud, waste, and abuse 
(while minimizing the negative impact on access to appropriate 
benefits) are premised on standards that generally provide an 
independent and less suspect basis for determining access to mental 
health and substance use disorder treatment. Accordingly, the 
Departments proposed two narrow exceptions; one for NQTLs that 
impartially apply independent professional medical or clinical 
standards, and one for NQTLs reasonably designed to detect or prevent 
and prove fraud, waste, and abuse. Under those proposed exceptions, an 
NQTL that, with respect to mental health or substance use disorder 
benefits in any classification, impartially applies independent 
professional medical or clinical standards (consistent with generally 
accepted standards of care) would not be considered under the proposed 
rules to violate the proposed no more restrictive requirements, the 
prohibition on discriminatory factors and evidentiary standards, and 
the relevant data evaluation requirements. An NQTL that applies fraud, 
waste, and abuse measures would not be considered under the proposed 
rules to violate the proposed no more restrictive requirements or the 
prohibition on discriminatory factors and evidentiary standards.
    The Departments noted in the preamble to the proposed rules that 
they do not intend to interfere with a plan's or issuer's ability to 
ensure that coverage for benefits for the treatment of mental health 
conditions and substance use disorders is consistent with independent 
professional medical or clinical standards or fraud, waste, and abuse 
measures. The Departments also recognized that there are instances in 
which the application of independent professional medical or clinical 
standards or fraud, waste, and abuse measures might result in 
differences in the design or application of NQTLs to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits due to clinical differences between mental health conditions 
and substance use disorders and medical/surgical conditions, as well as 
differences in the model of care, in a manner that could otherwise 
violate certain aspects of the requirements for NQTLs in the proposed 
rules.
    Several commenters opposed the proposed exceptions because they 
stated that plans and issuers would exploit them to improperly limit 
access to mental health and substance use disorder services. Some of 
these commenters stated that the Departments lack authority or a legal 
basis to implement the proposed exceptions because, in their view, the 
statute does not provide authority to establish exceptions to MHPAEA's 
requirements. Commenters also stated that the proposed exceptions could 
significantly undermine the other provisions of the proposed rules that 
would otherwise strengthen MHPAEA protections by creating opportunities 
for misuse or exploitation. Conversely, some commenters generally 
supported the proposed exceptions, but highlighted ambiguities related 
to how the exceptions would operate under the proposed rules to allow 
NQTLs to be applied with respect to mental health and substance use 
disorder benefits. These commenters also stated that the exceptions may 
be too narrow as proposed and that it is unclear how and what a plan or 
issuer must demonstrate to confidently rely on the proposed exceptions.
    The Departments acknowledge these comments, as well as the comments 
received on each of the two proposed exceptions, which are addressed in 
more detail in this section of the preamble. After considering the 
comments, and for the reasons discussed later in this preamble, the 
Departments are not finalizing the proposed exceptions for independent 
professional medical or clinical standards or fraud, waste, and abuse 
measures, but explain how plans and issuers can account for such 
standards and fraud and abuse measures in implementing the provisions 
of these final rules.
Exception for Independent Professional Medical or Clinical Standards
    To qualify for the exception for independent professional medical 
or clinical standards under the proposed rules, an NQTL would have to 
impartially apply those standards (consistent with generally accepted 
standards of care) to medical/surgical benefits and mental health or 
substance use disorder benefits. The NQTL could not deviate from those 
standards in any way, such as by modifying or otherwise imposing 
additional or different requirements. Under the proposed rules, an NQTL 
qualifying for this exception would not be required to satisfy the 
proposed no more restrictive requirement or the proposed relevant data 
evaluation requirements. In addition, the independent professional 
medical or clinical standards would not be considered a discriminatory 
factor or evidentiary standard. The Departments noted that, under the 
proposed rules, the plan or issuer would still be required to ensure 
that such an NQTL complies with the rest of the design and application 
requirements. Additionally, the plan or issuer would be required to 
perform and document comparative analyses for NQTLs that impartially 
apply independent professional medical or clinical standards.
    Some commenters stated that the exception for NQTLs that 
impartially apply independent professional medical or clinical 
standards should not be finalized, because the Departments rejected a 
similar exception in previous rulemaking. Specifically, these 
commenters highlighted that the Departments included an exception to 
the NQTL requirements for ``recognized clinically appropriate standards 
of care'' in the 2010 MHPAEA interim final regulations, which was later 
deleted in the 2013 final regulations. The preamble to the 2013 final 
regulations supported the decision to eliminate the exception by 
pointing to commenters' concern about abuse and the use of this 
exception by plans and issuers to try to justify stricter application 
of NQTLs.\88\ These commenters highlighted that MHPAEA's statutory 
standard, as amended by the CAA, 2021 does not contain such exceptions 
to the NQTL requirements.
---------------------------------------------------------------------------

    \88\ 78 FR 68240, 68245 (Nov. 13, 2013).
---------------------------------------------------------------------------

    Some commenters urged the Departments to not finalize the proposed 
exception for NQTLs that impartially apply independent professional 
medical or clinical standards and instead require those standards to be 
considered as a factor in the NQTL comparative analysis, subject to all 
applicable requirements for NQTLs under the proposed rules. 
Alternatively, commenters requested that plans and issuers be required 
to document in their comparative analyses the ways in which the 
clinical standards and practices used to design and apply NQTLs deviate 
from independent professional medical or clinical standards, which 
should be tied to criteria or guidelines from relevant nonprofit 
clinical specialty associations. These commenters also stated that they 
support analogous State definitions of ``generally accepted standards 
of care'' instead of the proposed ``generally recognized independent 
professional

[[Page 77622]]

medical or clinical standards.'' \89\ Additionally, they suggested 
support for tying the definition to the criteria or guidelines from the 
relevant nonprofit clinical specialty associations.
---------------------------------------------------------------------------

    \89\ 215 Ill. Comp. Stat. 5/370c, https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=021500050K370c; Cal. Health & 
Saf. Code section 1374.72, https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB855; Ga. Code section 33-1-
27 https://www.legis.ga.gov/api/legislation/document/20212022/211212; and N.M. Stat. section 59A-23-22, https://www.nmlegis.gov/Sessions/23%20Regular/final/SB0273.pdf.
---------------------------------------------------------------------------

    Some commenters highlighted that the proposed exception appears to 
presume that there is a single set or ``gold standard'' of independent 
professional medical or clinical standards, when in practice, these 
standards can vary greatly, and consensus may not always exist for a 
particular condition. The commenters noted that medical and clinical 
standards are generally designed to guide health care providers and 
facilities in determining appropriate care for a given diagnosis or 
stage of treatment, not to determine how the standards should best be 
utilized for other purposes, so plans and issuers may need to adapt 
clinical standards to apply them in the context of health coverage. 
Therefore, they stated, it is unclear that the exception for 
independent professional medical or clinical standards as proposed 
could be relied on by plans and issuers as they design and apply NQTLs 
as it is unclear if this necessary adaptation would cause a plan or 
issuer to fail to impartially apply such standards.
    Other commenters, who generally supported this proposed exception, 
stated that they found it to be generally vague and undefined. These 
commenters urged the Departments to define more clearly what 
constitutes independent professional medical or clinical standards for 
purposes of the proposed exception, and many commenters suggested 
language for the Departments to consider providing as additional 
clarifications. Some commenters noted that to ``apply'' such standards 
should be understood to mean to primarily rely on these resources when 
developing NQTLs and claimed that these standards lack the precision 
and detail necessary for the exception to be useful. Additionally, 
commenters requested that the Departments provide examples of standards 
that would qualify for the proposed exception and descriptions of their 
application.
    After considering the comments, the Departments are not finalizing 
the exception for independent professional medical or clinical 
standards as proposed. In light of the modifications to the 
requirements made in the final rules, the Departments agree with 
commenters that it is more appropriate for plans and issuers to include 
independent professional medical or clinical standards under the 
framework of the existing NQTL parity analysis than to provide an 
exception from the requirements of the final rules. Therefore, instead 
of finalizing the exception, the Departments are instead providing 
clarifications for how independent professional medical and clinical 
standards will be treated under these final rules. Specifically, NQTLs 
that are designed or applied, are based on, or are related to 
independent professional medical or clinical standards are subject to 
the design and application requirements and the relevant data 
evaluation requirements. As noted earlier in this preamble, such 
medical or clinical standards are not information, evidence, sources, 
or standards that are biased or not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits. Additionally, for purposes of 
the relevant data evaluation requirements, differences in access to 
mental health or substance use disorder benefits that are attributable 
to the use of independent professional medical or clinical standards as 
the basis for a factor or evidentiary standard used to design or apply 
an NQTL are not considered to be material. To the extent the plan or 
issuer attributes any differences in access to the application of such 
standards, the plan or issuer must explain the bases for that 
conclusion in their comparative analysis.
Exception for Measures To Detect or Prevent and Prove Fraud and Abuse
    The Departments also proposed an exception for NQTLs reasonably 
designed to detect or prevent and prove fraud, waste, and abuse. To 
qualify for the exception under the proposed rules, fraud, waste, and 
abuse measures would have to be reasonably designed to detect or 
prevent and prove fraud, waste, and abuse, based on indicia that have 
been reliably established through objective and unbiased data. The 
proposed rules also required that such standards be narrowly designed 
to minimize the negative impact on access to appropriate mental health 
and substance use disorder benefits. Under the proposed rules, an NQTL 
qualifying for this exception would not be required to satisfy the 
proposed no more restrictive requirement. In addition, fraud, waste, 
and abuse measures would not be considered a discriminatory factor or 
evidentiary standard. The Departments noted that, under the proposed 
rules, the plan or issuer would still be required to ensure that such 
an NQTL complies with the rest of the design and application 
requirements. The proposed rules would also apply the relevant data 
evaluation requirements to these NQTLs, as the Departments stated that 
these tools, while important, are more likely than independent 
professional medical or clinical standards to result in NQTLs that may 
improperly restrict access to mental health and substance use disorder 
benefits because these NQTLs are largely both designed by, and applied 
within the control of, the plan or issuer. Additionally, the plan or 
issuer would be required to perform and document comparative analyses 
for NQTLs that are fraud, waste, and abuse measures.
    Many commenters opposed the exception for NQTLs that are fraud, 
waste, and abuse measures. Similar to the objections to the exception 
for independent professional medical or clinical standards, these 
commenters highlighted that MHPAEA's statutory language, as amended by 
the CAA, 2021 does not contain exceptions for any NQTLs. These 
commenters voiced concern that the two proposed exceptions, together, 
could allow plans and issuers to avoid compliance with the strengthened 
requirements of MHPAEA set forth in the proposed rules. Commenters 
opposing the fraud, waste, and abuse exception generally recommended 
that the Departments remove it altogether; however, some commenters 
recommended that, if retained, the exception should include stronger 
language limiting plans' and issuers' ability to invoke the exception. 
These commenters also recommended that the Departments eliminate 
references to ``waste,'' as this is arguably targeted by all forms of 
utilization management. Commenters requested that, alternatively, plans 
and issuers be required to document in their comparative analyses how 
their efforts to combat fraud, waste, and abuse comply with MHPAEA 
(including as a factor used to design or apply an NQTL).
    Other commenters were generally supportive of the exception but 
expressed concerns that the Departments would interpret it too 
narrowly. They generally recommended that the Departments add 
definitional clarity to allow for flexibility and account for the use 
of a range of NQTLs that are fraud, waste, and abuse measures and 
provide examples. Some commenters also sought clarification

[[Page 77623]]

about the documentation or evidence required for a plan or issuer to 
prove its qualification for the exception.
    The Departments acknowledge that many NQTLs consider the potential 
for fraud, waste, and abuse as a factor in their design and application 
and have concluded that it is appropriate for plans and issuers to be 
required to treat these types of factors and NQTLs following the same 
framework as other NQTLs, subject to all applicable requirements. The 
Departments also agree that the term ``waste'' is too broad and could 
arguably include all forms of utilization management. Therefore, 
instead of finalizing the exception as proposed, the Departments are 
providing clarifications on how fraud and abuse measures will be 
treated under these final rules. Specifically, NQTLs that are designed 
or applied, are based on, or are related to fraud and abuse measures 
are subject to the design and application requirements and the relevant 
data evaluation requirements. However, for purposes of the prohibition 
on discriminatory factors and evidentiary standards, the final rules 
provide that fraud and abuse measures are not information, evidence, 
sources, or standards that are biased or not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits. Additionally, for purposes of 
the relevant data evaluation requirements, a difference in access to 
mental health and substance use disorder benefits attributable to the 
use of fraud and abuse measures as the basis for a factor or 
evidentiary standard used to design or apply an NQTL is not considered 
to be material. To the extent that a plan or issuer attributes any 
differences in access to the application of such measures, the plan or 
issuer must explain the bases for that conclusion in their comparative 
analyses.
Requests for Additional Exceptions
    Some commenters suggested additional exceptions to the requirements 
for NQTLs that the Departments should consider adding to the final 
rules. Specifically, some commenters requested an exception for NQTLs 
related to the quality and safety of mental health and substance use 
disorder services. Similarly, another commenter recommended the 
Departments include an exception for practices to ensure high-quality 
care, based on the view that the two exceptions (for independent 
professional medical or clinical standards and fraud, waste, and abuse 
measures) in the proposed rules are not sufficient to curb substandard 
and ineffective treatment that does not reach the level of fraud, 
waste, and abuse. Other commenters suggested exceptions for compliance 
with Federal and State law, an exception to ensure the quality and 
safety of mental health and substance use disorder benefits, an 
exception to the quantitative testing and discriminatory factor 
analysis for Network NQTLs, and an exception for when no outcomes data 
are reasonably available.
    The Departments have considered whether additional exceptions 
beyond those included in the proposed rules should be included in these 
final rules. As discussed earlier in this preamble, there are a very 
limited number of NQTLs where no data exist that can reasonably assess 
the NQTL's impact on access. Such NQTLs might include, for example, 
exclusions based on whether the treatment is experimental or 
investigative. Therefore, the Departments have provided guidance in 
these final rules on how plans and issuers must comply with the 
relevant data evaluation requirements for such NQTLs. However, as noted 
earlier in this preamble, such plans and issuers must still consider 
whether data can be used to reasonably assess the impact of the NQTL on 
relevant outcomes related to mental health and substance use disorder 
benefits and medical/surgical benefits. Consistent with the reasons 
described earlier in this preamble as to why the Departments declined 
to finalize the exceptions contained in the proposed rules, these final 
rules do not contain any additional exceptions.
f. Effect of Final Determination of Noncompliance--26 CFR 54.9812-
1(c)(4)(v), 29 CFR 2590.712(c)(4)(v), and 45 CFR 146.136(c)(4)(v)
    The proposed rules provided that if a plan or issuer receives a 
final determination from the relevant Secretary that it is not in 
compliance with the comparative analysis requirements with respect to 
an NQTL, the NQTL would violate the substantive requirements for 
NQTLs,\90\ 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 proposed 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 
the 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.
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    \90\ See 88 FR 51552, 51579 (Aug. 3, 2023).
---------------------------------------------------------------------------

    The Departments noted in the proposed rules that MHPAEA requires 
that ``such plan or coverage shall ensure that'' the treatment 
limitations comply with the substantive requirements of the 
statute.\91\ The Departments also noted that the statute further 
requires that the plan or issuer perform and document adequate 
comparative analyses for NQTLs to ensure compliance.\92\ Therefore, to 
comply with MHPAEA, plans and issuers must comply with both the 
substantive MHPAEA requirements and the documentation requirements. 
Under the proposed rules, plans and issuers would be required to ensure 
both that they are complying with MHPAEA's substantive requirements at 
all times an NQTL is imposed with respect to mental health or substance 
use disorder benefits, and that they have properly performed and 
documented comparative analyses for the NQTLs imposed on mental health 
or substance use disorder benefits (regardless of the timing of any 
request for such documentation).
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    \91\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and 
PHS Act section 2726(a)(3)(A).
    \92\ Code section 9812(a)(8), ERISA section 712(a)(8), and PHS 
Act section 2726(a)(8).
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    Under the proposed rules, when a plan or issuer receives a final 
determination from the Departments with respect to an NQTL that it has 
failed to demonstrate compliance with the NQTL comparative analysis 
documentation requirements under proposed 26 CFR 54.9812-2, 29 CFR 
2590.712-1, or 45 CFR 146.137, including because the plan or issuer has 
not submitted a sufficient comparative analysis to demonstrate 
compliance, the failure would be treated 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 acknowledged that immediate cessation of the application of 
an NQTL may not be feasible for all NQTLs. Therefore, under the 
proposed rules, a determination by the Departments of whether to 
require immediate cessation would be based on the evaluation of facts 
and

[[Page 77624]]

circumstances involved in the specific violation and nature of the 
underlying NQTL. The Departments provided examples of such facts and 
circumstances, including 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 needed to cease or modify the NQTL. Additionally, the Departments 
noted that this kind of determination would take into account feedback 
from the plan or issuer. The Departments provided that 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 solicited comments on this proposed provision, 
including whether there are specific challenges or considerations the 
Departments should be aware of regarding ceasing application of 
particular NQTLs.
    Several commenters supported a provision that would give the 
Secretaries the ability to direct a plan or issuer to not impose an 
NQTL after a final determination of noncompliance and stated that 
meaningful consequences are important to incentivize plans and issuers 
to comply with MHPAEA. Some commenters urged the Departments to change 
the proposed language stating that ``the relevant Secretary may direct 
the plan or issuer not to impose the NQTL'' to ``the relevant Secretary 
shall direct the plan or issuer not to impose the NQTL'' to indicate 
that a plan or issuer will not be permitted to apply a noncompliant 
NQTL. Several commenters recommended extending this provision to States 
with primary enforcement authority for MHPAEA with respect to issuers. 
Some commenters opposed the proposed provision, stating that in their 
view there is no legal authority under MHPAEA or the CAA, 2021 to 
demand immediate cessation of an NQTL without intervention of a court 
of law. Some commenters raised concerns about the ability of plans and 
issuers to immediately stop imposing an NQTL, particularly mid-year, 
and with regard to NQTLs related to network composition. Several 
commenters suggested that, in light of the significant potential 
consequences of a final determination of noncompliance, the Departments 
should provide some type of appeals process modeled on the process for 
appeals of civil money penalties for Medicare Advantage Organizations 
or require review by EBSA's national office or the director of the 
Center for Consumer Information and Insurance Oversight (CCIIO) within 
CMS before taking such action when there is a final determination of 
noncompliance.
    The Departments are finalizing the provision governing the effect 
of a final determination of noncompliance, with modifications. The 
language contained in proposed 26 CFR 54.9812-1(c)(4)(vii), 29 CFR 
2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii) is being finalized 
at 26 CFR 54.9812-1(c)(4)(v)(A), 29 CFR 2590.712(c)(4)(v)(A), and 45 
CFR 146.136(c)(4)(v)(A). These final rules add references to the 
relevant statutory citation,\93\ to make clear that the effect of the 
final determination of noncompliance provision of these final rules, 
including the evaluation of the relevant facts and circumstances used 
to determine whether cessation of an NQTL is appropriate, is only 
applicable with respect to a plan's or issuer's violation of the 
comparative analysis requirements, as set forth in Code section 
9812(a)(8), ERISA section 712(a)(8), and PHS Act section 2726(a)(8). 
If, however, the plan or issuer violates MHPAEA's substantive 
requirements, as set forth in Code section 9812(a)(3), ERISA section 
712(a)(3), and PHS Act section 2726(a)(3), and 26 CFR 54.9812-1(c)(4), 
29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4), by imposing an NQTL 
that violates the ``no more restrictive'' standard, the statute clearly 
contemplates that the plan or issuer not apply the NQTL, and the 
Departments have full authority to prohibit the plan or issuer from 
continuing to impose the unlawful NQTL.\94\
---------------------------------------------------------------------------

    \93\ Code section 9812(a)(8), ERISA section 712(a)(8), and PHS 
Act section 2726(a)(8).
    \94\ Specifically, Code section 9812(a)(3)(A), ERISA section 
712(a)(3)(A), and PHS Act section 2726(a)(3)(A) state that a plan or 
coverage ``shall ensure that . . . the treatment limitations 
applicable to such 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). If a plan or coverage does not ensure 
compliance with these statutory requirements, the Departments may 
require the plan or issuer to no longer impose the NQTL or to 
otherwise come into compliance. Similarly, 26 CFR 54.9812-1(c)(4), 
29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) of these final rules 
state that a plan (or coverage) may not impose any NQTL unless it 
complies with the statutory requirement in Code section 
9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act section 
2726(a)(3)(A).
---------------------------------------------------------------------------

    The HHS final rules at 45 CFR 146.136(c)(4)(v)(A) also add 
references to an applicable State authority, as requested by 
commenters, so that the regulations are clear that, like the 
Departments, States with enforcement authority with respect to MHPAEA 
\95\ are also permitted to direct issuers not to impose an NQTL when 
there is a final determination of noncompliance, unless and until the 
issuer demonstrates compliance or takes appropriate action to remedy 
the violation. These final rules also provide additional specificity by 
clarifying that this provision allows the Departments (and an 
applicable State authority) to direct a plan or issuer not to impose an 
NQTL with respect to mental health or substance use disorder benefits 
in the relevant classification.
---------------------------------------------------------------------------

    \95\ PHS Act section 2723(a)(1).
---------------------------------------------------------------------------

    Additionally, these final rules add new paragraph (c)(4)(v)(B) to 
make clear that a determination of whether the Departments will require 
cessation of the application of an NQTL will be based on an evaluation 
of the relevant facts and circumstances involved in the specific final 
determination and the nature of the underlying NQTL. For this purpose, 
the Departments expect that such facts and circumstances may include, 
but are not limited to, 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 of continuing or 
ceasing to apply the NQTL, and the likely time needed to cease or 
modify the NQTL. Under these final rules, such a determination will 
also take into account the interest of plan participants and 
beneficiaries and feedback from the plan or issuer. States that are the 
primary enforcers of MHPAEA may take into account these or other facts 
and circumstances when determining whether the State will require 
cessation of application of an NQTL.
    The Departments decline to modify the proposed language to provide 
that the Secretary ``shall'' direct the plan or issuer not to impose 
the NQTL after a final determination of noncompliance with the 
comparative analysis requirements. In the preamble to the proposed 
rules and in these final rules, the Departments acknowledged that 
immediate cessation of the application of an NQTL may not be feasible 
for all NQTLs and that feedback from the plan or issuer would be taken 
into account. The Departments understand that not requiring immediate 
cessation of a noncompliant NQTL in every situation that involves a 
final determination of noncompliance with the comparative analysis 
requirements may allow participants and beneficiaries to be subject to 
noncompliant NQTLs. As these commenters noted, meaningful

[[Page 77625]]

consequences are important to incentivize plans and issuers to comply 
with MHPAEA. However, the Departments are of the view that the 
potential negative impacts for participants and beneficiaries of 
continuing to apply the NQTL should be balanced with the operational 
feasibility of immediately modifying business practices, particularly 
for NQTLs that are inherent to the plan design and may require time to 
reform. Such potential negative impacts for participants and 
beneficiaries may be better evaluated after the Departments review the 
specific facts and circumstances of the relevant determination of 
noncompliance with the comparative analysis requirements. Therefore, 
these final rules specify that, when determining the effect of a final 
determination of noncompliance with the comparative analysis 
requirements, each specific violation will have its own analysis of the 
applicable facts and circumstances that will be taken into account.
    The Departments stress that MHPAEA requires plans and issuers to 
ensure that the treatment limitations, including NQTLs imposed on 
mental health or substance use disorder benefits in a classification, 
are not more restrictive than those applied to medical/surgical 
benefits in the same classification. In many cases, a failure to submit 
a sufficient or compliant comparative analysis is evidence that a plan 
or issuer cannot substantiate an NQTL's compliance with these 
applicable requirements, and therefore is violating MHPAEA's 
substantive parity requirements. Therefore, where the Departments have 
come to a final conclusion that a comparative analysis is not compliant 
and are issuing a final determination of noncompliance, including 
because the plan or issuer has not submitted a sufficient comparative 
analysis to demonstrate compliance, the required corrective action may 
include the removal of such NQTL. The CAA, 2021 also requires the 
Departments to specify the actions a plan or issuer must take to 
address the violation, and include the required actions in the annual 
report to Congress.\96\ This provision makes clear the Departments have 
broad authority to determine the appropriate remedy where a plan's or 
issuer's comparative analysis is not compliant, and this authority 
allows the Departments, depending on the relevant facts and 
circumstances, to specify removal of the NQTL as the appropriate remedy 
to address a determination of noncompliance. Nothing, however, prevents 
the Departments or applicable State authorities from specifying other 
or additional corrective actions or from taking enforcement action 
within their respective authorities.
---------------------------------------------------------------------------

    \96\ Code section 9812(a)(8)(B)(iv)(V), ERISA section 
712(a)(8)(B)(iv)(V), and PHS Act section 2726(a)(8)(B)(iv)(V).
---------------------------------------------------------------------------

    As stressed in the Departments' reports to Congress, the 
Departments generally engage plans and issuers in repeated exchanges--
asking follow-up questions, seeking additional documentation, 
performing further assessments, and affording opportunities for 
explanation--before making a final determination of noncompliance.\97\ 
The Departments note that plans and issuers are given multiple 
opportunities to engage with the Departments after an initial request 
for comparative analysis and before a final determination of 
noncompliance. As described later in this preamble, after an initial 
request for a comparative analysis, if the Department concludes that a 
plan or issuer has not submitted sufficient information to review the 
requested comparative analyses, the plan or issuer will be provided 
with another opportunity to respond to the Department's initial 
request. If the Department reviews the comparative analyses (and any 
additional information submitted upon request) and makes an initial 
determination that the plan or issuer is not in compliance, the plan or 
issuer is provided another opportunity to respond to the Department. 
Because of the multiple opportunities to engage with the Departments 
prior to a final determination of noncompliance, the Departments 
decline to add any additional formal appeal or review requirements 
beyond that required under the statute. Any direction not to impose an 
NQTL provided to a plan or issuer by the relevant Department will take 
into account all correspondence and discussions with the plan or 
issuer.
---------------------------------------------------------------------------

    \97\ See, e.g., 2023 MHPAEA Comparative Analysis Report to 
Congress (July 2023), pg. 52, https://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.
---------------------------------------------------------------------------

g. NQTL Examples--26 CFR 54.9812-1(c)(4)(vi), 29 CFR 
2590.712(c)(4)(vi), and 45 CFR 146.136(c)(4)(vi)
    The proposed rules contained thirteen examples illustrating the 
NQTL requirements, including revised versions of some examples included 
in the 2013 final regulations and several new examples. Additionally, 
the proposed rules proposed to eliminate some examples that were 
included in the 2013 final regulations, in light of the additional 
proposed requirements.
    The Departments received comments on each of the proposed examples 
and comments recommending additional examples be added. Some commenters 
suggested the Departments use different data elements in the examples 
related to the relevant data evaluation requirements that in their view 
would better evaluate compliance with MHPAEA. Other commenters 
expressed concerns regarding how the proposed exceptions to the NQTL 
requirements discussed earlier in this preamble would apply and 
requested that the examples address what a plan or issuer would be 
required to document to rely on these exceptions. One of these 
commenters also requested an example showing analysis of an NQTL that 
is developed based on multiple standards, some of which qualify for the 
proposed exception for independent professional medical or clinical 
standards and some of which do not. Some commenters expressed concern 
regarding whether the proposed mathematical substantially all and 
predominant tests could be performed on all NQTLs and requested more 
detailed examples of how to apply such tests.
    As noted earlier in this preamble, the Departments are declining to 
finalize the proposed mathematical substantially all and predominant 
tests, as well as the proposed exceptions for NQTLs that impartially 
apply independent professional medical or clinical standards or fraud, 
waste, and abuse measures. Therefore, rather than providing examples to 
address these provisions, the examples address the substantive 
provisions the Departments are finalizing in these final rules, 
including the general requirement that NQTLs for mental health and 
substance use disorder benefits not be more restrictive, as written or 
in operation, than the predominant NQTL that applies to substantially 
all medical/surgical benefits in the same classification, the design 
and application requirements, and the relevant data evaluation 
requirements (including potential data elements that plans and issuers 
may consider to be relevant data with respect to an NQTL).
    The Departments are adapting some of the fact patterns used in the 
examples in the proposed rules related to provisions that are not being 
finalized to instead illustrate concepts applicable in these final 
rules, but these final rules do not include all of the examples 
included in the proposed rules (or all of the examples included in the 
2013 final regulations). The Departments note that the exclusion in 
these final rules of any

[[Page 77626]]

particular fact pattern that was previously addressed in examples in 
the proposed rules or the 2013 final regulations is not intended to 
indicate that any particular set of facts is permissible or prohibited 
under these final rules. Rather, the examples in these final rules are 
included to illustrate the application of the various provisions 
included in these final rules. Thus, plans and issuers are expected to 
apply the requirements in paragraph (c)(4) of these final rules to the 
specific facts and circumstances of the benefit design of their 
respective plans and coverage options with respect to all NQTLs 
applicable to mental health and substance use disorder benefits, as 
well as the processes, strategies, evidentiary standards, and other 
factors used to design or apply them, and any information, evidence, 
sources, or standards on which a factor or evidentiary standard is 
based. Additionally, as in the proposed rules, any example that 
concludes that the plan violates or complies with a requirement of 
these final rules for NQTLs should not be read to imply compliance with 
any other requirements of these final rules for NQTLs.
    Example 1--Not comparable and more stringent factors for 
reimbursement rate methodology, in operation. In the proposed rules, 
Example 4 illustrated how plans and issuers would be required to ensure 
compliance in operation with the proposed design and application 
requirements for a plan's reimbursement rate methodology NQTL.\98\ 
These final rules redesignate proposed Example 4 as Example 1 and 
illustrate the application of the general rule of the design and 
application requirements of these final rules with respect to a plan's 
reimbursement rate methodology NQTL. The language in the facts and 
conclusion of proposed Example 4 referencing an assumption that the 
plan's methods for determining reimbursement rates for mental health 
and substance use disorder benefits satisfy the no more restrictive 
requirement has been eliminated to reflect, as discussed earlier in 
this preamble, that the Departments decline to finalize the proposed 
mathematical substantially all and predominant tests in these final 
rules.
---------------------------------------------------------------------------

    \98\ As stated in the preamble to the proposed rules, Example 4 
was based in part on guidance in FAQs Part 39, Q6, 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.
---------------------------------------------------------------------------

    Accordingly, the facts of Example 1 in these final rules assume a 
plan's reimbursement rate methodology for outpatient, in-network 
providers is based on a variety of factors. As written, for mental 
health, substance use disorder, and medical/surgical benefits, all 
reimbursement rates for physicians and non-physician practitioners for 
the same CPT code are based on a combination of factors, such as the 
nature of the service, duration of the service, intensity and 
specialization of training, provider licensure and type, number of 
providers qualified to provide the service in a given geographic area, 
and market need (demand). In operation, the plan utilizes an additional 
strategy to further reduce reimbursement rates for mental health and 
substance use disorder non-physician providers from those 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.
    Example 1 concludes that the plan violates the rules of paragraph 
(c)(4). The plan reimburses non-physician providers of mental health 
and substance use disorder services by reducing their reimbursement 
rates from the rates for physician providers of such services by the 
same percentage for every CPT code but does not apply the same 
reduction to non-physician providers of medical/surgical services from 
the rate for physician providers of medical/surgical services. 
Therefore, in operation, the factors used in designing and applying the 
NQTL to mental health and substance use disorder benefits in the 
outpatient, in-network classification are not comparable to, and are 
applied more stringently than, the factors used in designing and 
applying the NQTL with respect to medical/surgical benefits in the same 
classification. As a result, the NQTL with respect to mental health or 
substance use disorder benefits in the outpatient, in-network 
classification is more restrictive than the predominant NQTL that 
applies to substantially all medical/surgical benefits in the same 
classification, in violation of 26 CFR 54.9812-1(c)(4), 29 CFR 
2590.712(c)(4), and 45 CFR 146.136(c)(4) of these final rules. This 
example illustrates that the plan violates the design and application 
requirements and does not address whether the plan complies with the 
relevant data evaluation requirements.
    Example 2--Strategy for exclusion for experimental or investigative 
treatment more stringently applied to Applied Behavior Analysis (ABA) 
therapy in operation. These final rules redesignate proposed Example 10 
as Example 2 with modifications to the conclusion. Proposed Example 10 
concluded that the plan violates the proposed no more restrictive 
requirements because, in operation, the plan's exclusion for 
experimental or investigative treatment imposed on ABA therapy 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. As discussed earlier in this preamble, the 
Departments declined to finalize the proposed mathematical 
substantially all and predominant tests. However, multiple commenters 
in response to the proposed rules expressed support for including an 
example that specifically addresses the exclusion of benefits to treat 
ASD. Therefore, in Example 2 of these final rules, the Departments are 
adapting proposed Example 10 to demonstrate how a strategy for a plan's 
exclusion of benefits for experimental or investigative treatment that 
applies more stringently to ABA therapy, in operation, violates the 
design and application requirements, and therefore violates the 
requirements for NQTLs under these final rules.
    In Example 2, the facts of proposed Example 10 are generally 
unchanged. A plan, as written, generally excludes coverage for all 
treatments that are experimental or investigative for medical/surgical 
benefits and mental health and substance use disorder benefits in the 
outpatient, in-network classification. As a result, the plan generally 
excludes, as experimental, a treatment or procedure when no 
professionally recognized treatment guidelines include the treatment or 
procedure as a clinically appropriate standard 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. As written, the plan provides benefits for the 
treatment of ASD, which is a mental health condition, but, in 
operation, 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 as including ABA therapy and more than two randomized 
controlled trials are available to support the use of ABA therapy as 
one intervention to treat certain children with ASD.
    Example 2 concludes that the plan violates the design and 
application requirements with respect to the exclusion of ABA therapy 
because, in operation, the plan deviates from its strategy to exclude 
coverage of experimental treatment of medical

[[Page 77627]]

conditions and surgical procedures, mental health conditions, and 
substance use disorders because more than one professionally recognized 
treatment guideline defines clinically appropriate standards of care 
for ASD as including ABA therapy to treat certain children with ASD and 
more than two randomized controlled trials are available to support the 
use of ABA therapy as one intervention to treat certain children with 
ASD. Therefore, in operation, the strategy used to design the NQTL for 
benefits for the treatment of ASD, which is a mental health condition 
for purposes of MHPAEA, in the outpatient, in-network classification is 
not comparable to, and is applied more stringently than, the strategy 
used to design and apply the NQTL for medical/surgical benefits in the 
same classification. As a result, the example concludes that the NQTL 
is more restrictive and therefore violates MHPAEA. This example 
illustrates that the plan violates the design and application 
requirements and does not address whether the plan complies with the 
relevant data evaluation requirements.
    Example 3--Step therapy protocol with exception for severe or 
irreversible consequences, discriminatory factor. The Departments 
received several comments asking the Departments to provide additional 
clarification on what would be considered discriminatory factors and 
evidentiary standards for purposes of determining compliance with the 
design and application requirements. Accordingly, the Departments are 
including in these final rules a new Example 3 to provide an example of 
circumstances under which a plan or issuer would violate the 
prohibition against discriminatory factors and evidentiary standards in 
the context of step therapy with exceptions for severe or irreversible 
consequences.
    The facts of Example 3 assume a plan has a step therapy protocol 
that requires participants and beneficiaries who are prescribed certain 
drugs to try and fail a generic or preferred brand name drug before the 
plan will cover the treatment or medication originally prescribed by a 
provider. The plan has an exception to this protocol that was developed 
solely by relying on a methodology developed by an external third-party 
organization. The third-party organization's methodology, which is not 
based on an independent professional medical or clinical standard, 
identifies instances in which a delay in treatment with a drug 
prescribed for a medical condition or surgical procedure could result 
in either severe or irreversible consequences. However, with respect to 
a drug prescribed for a mental health condition or a substance use 
disorder, the third-party organization's methodology only identifies 
instances in which a delay in treatment could result in both severe and 
irreversible consequences. The plan does not take any steps to correct, 
cure, or supplement the methodology.
    The conclusion to Example 3 explains that the plan violates the 
prohibition on discriminatory factors and evidentiary standards under 
26 CFR 54.9812-1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B), and 45 CFR 
146.136 (c)(4)(i)(B). The source upon which the factor used to apply 
the step therapy protocol is based is biased or not objective in a 
manner that discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits because it 
addresses instances in which a delay in treatment with a drug 
prescribed for a medical condition or surgical procedure could result 
in either severe or irreversible consequences, but only addresses 
instances in which a delay in treatment with a drug prescribed for a 
mental health condition or substance use disorder could result in both 
severe and irreversible consequences, and the plan fails to take the 
steps necessary to correct, cure, or supplement the methodology so that 
it is not biased and is objective. Based on the relevant facts and 
circumstances, this source systematically disfavors access or is 
specifically designed to disfavor access to mental health or substance 
use disorder benefits as compared to medical/surgical benefits. 
Therefore, the factor used to design exceptions to the step therapy 
protocol is discriminatory, for purposes of determining comparability 
and stringency under the design and application requirements, and it 
may not be relied upon by the plan unless the plan takes the steps 
necessary to correct, cure, or supplement it (by, for example, taking 
into account instances in which a delay in treatment with a drug 
prescribed for a mental health condition or a substance use disorder 
could result in severe or irreversible consequences).
    Example 4--Use of historical plan data and steps the plan or issuer 
can take to correct, cure, or supplement. The Departments are including 
as Example 4 of these final rules a revised example illustrating how 
plans and issuers can correct, cure or supplement the use of historical 
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 so that the information is not considered to be biased or 
not objective and can be used as the basis for a factor or evidentiary 
standard that is not discriminatory. The Departments stated in the 
preamble to the proposed rules that the proposed rules would prohibit 
reliance 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) and provided an example addressing 
calculation of reimbursement rates based on historical data on total 
plan spending. Example 4 of these final rules references the fact 
pattern from Example 4 in the proposed rules but provides additional 
detail and analysis to illustrate the application of the prohibition on 
discriminatory factors and evidentiary standards under these final 
rules, including how a plan or issuer could correct, cure, or 
supplement the use of such data so that the information is not 
considered to be biased or not objective.
    Specifically, the facts of Example 4 assume a plan's methodology 
for calculating provider reimbursement rates relies only on historical 
plan data on total plan spending for each specialty, divided between 
mental health and substance use disorder providers and medical/surgical 
providers from a time where the plan was not subject to MHPAEA. The 
plan used these historical plan data for many years to establish base 
reimbursement rates in all provider specialties for which it provides 
medical/surgical, mental health, and substance use disorder benefits in 
the inpatient, in-network classification. In evaluating the use of 
these historical plan data in the design of the methodology for 
calculating provider reimbursement rates, the plan determined, based on 
all the relevant facts and circumstances, that the historical plan data 
systematically disfavor access or are specifically designed to disfavor 
access to mental health or substance use disorder benefits as compared 
to medical/surgical benefits. To ensure this information about 
historical reimbursement rates is not biased and is objective, the plan 
supplements its methodology to develop the base reimbursement rates for 
mental health and substance use disorder providers in accordance with 
additional information, evidence, sources, and standards that reflect 
the increased demand for mental health and substance use disorder 
benefits in the inpatient, in-network classification and to attract 
sufficient mental health and substance use disorder providers to the 
network. The relevant facts and circumstances indicate that the 
supplemented

[[Page 77628]]

information, evidence, sources, or standards do not systematically 
disfavor access and are not specifically designed to disfavor access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits.
    Example 4 of these final rules concludes that the plan does not 
violate the prohibition on discriminatory factors and evidentiary 
standards with respect to the plan's methodology for calculating 
provider reimbursement rates in the inpatient, in-network 
classification. The relevant facts and circumstances indicate that the 
plan's use of only historical plan data to design its methodology for 
calculating its provider reimbursement rates in the inpatient, in-
network classification would otherwise be considered to be biased or 
not objective in a manner that discriminates against mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits since the historical data systematically disfavor access or 
are specifically designed to disfavor access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits. However, the plan took the steps necessary to supplement the 
information, evidence, sources, and standards to reasonably reflect the 
increased demand for mental health and substance use disorder benefits 
in the inpatient, in-network classification, and adjusted the 
methodology to increase reimbursement rates for those benefits, thereby 
ensuring that the information, evidence, sources, and standards relied 
upon by the plan for this purpose are not biased and are objective. 
Therefore, the factors and evidentiary standards used to design the 
plan's methodology for calculating provider reimbursement rates in the 
inpatient, in-network classification are not considered discriminatory 
factors and evidentiary standards.
    Example 5--Generally recognized independent professional medical or 
clinical standards and more stringent prior authorization requirement 
in operation. In the proposed rules, the Departments proposed Example 6 
to illustrate the exception for impartially applied independent 
professional medical or clinical standards and when a plan fails to 
satisfy the exception. The Departments received comments requesting 
examples to provide further clarity on how a plan or issuer may 
properly rely on independent professional medical or clinical standards 
in the design and application of NQTLs. As described earlier in this 
preamble, the Departments are not finalizing this exception as 
proposed. Instead, these final rules specify that the use of 
independent professional medical or clinical standards generally will 
not be considered to be biased and not objective under these final 
rules. The Departments note that, under these final rules, the use of 
such standards must also comply with the other provisions of these 
final rules, including the general rule in the design and application 
requirements and the relevant data evaluation requirements. Therefore, 
the Departments are modifying proposed Example 6 and redesignating it 
as Example 5 in these final rules, to illustrate a violation of the 
design and application requirements of these final rules when a plan 
relies on independent professional medical or clinical standards to 
inform a factor used to design an NQTL with respect to mental health 
and substance use disorder benefits that, in operation, is not 
comparable to, and is applied more stringently than, the same factor 
used to design the NQTL for medical/surgical benefits in the same 
classification.
    In Example 5 of these final rules, the provisions of a plan state 
that it relies on, and does not deviate from, independent professional 
medical or clinical standards to inform the factor used to design prior 
authorization requirements for both medical/surgical and mental health 
and substance use disorder benefits in the prescription drug 
classification. In this example, the plan uses the ASAM national 
practice guidelines as the independent professional medical or clinical 
standard to inform the factors used to design and apply the prior 
authorization requirement for treatment of OUD. The ASAM practice 
guidelines do not support prior authorization every 30 days for 
buprenorphine/naloxone combination for treatment of OUD. However, in 
operation, the plan requires prior authorization for buprenorphine/
naloxone combination for treatment of OUD every 30 days, which is 
inconsistent with independent professional medical standards on which 
the factor used to design the limitation is based. The plan's factor 
used to design and apply prior authorization requirements for medical/
surgical benefits in the prescription drug classification relies on, 
and does not deviate from, independent professional medical or clinical 
standards.
    The conclusion to Example 5 in these final rules states that the 
plan violates the requirements for NQTLs. The ASAM national practice 
guidelines on which the factor used to design prior authorization 
requirements for substance use disorder benefits is based are 
independent professional medical or clinical standards that are not 
considered to be biased or not objective in a manner that discriminates 
against mental health and substance use disorder benefits under these 
final rules. However, the plan must comply with other requirements in 
these final rules for NQTLs, as applicable, with respect to such 
standards or measures that are used as the basis for a factor or 
evidentiary standard used to design or apply an NQTL. In operation, the 
plan's factor used to design and apply prior authorization requirements 
with respect to substance use disorder benefits is not comparable to, 
and is applied more stringently than, the same factor used to design 
and apply prior authorization requirements for medical/surgical 
benefits, because the factor relies on, and does not deviate from, 
independent professional medical or clinical standards for medical/
surgical benefits, but deviates from the relevant guidelines for 
substance use disorder benefits. As a result, the NQTL with respect to 
substance use disorder benefits in the prescription drug classification 
is more restrictive than the predominant NQTL that applies to 
substantially all medical/surgical benefits in the same classification.
    Example 6--Plan claims no data exist to reasonably measure impact 
of NQTL on access; medical necessity criteria. As described earlier in 
this preamble, these final rules require plans and issuers to collect 
and evaluate relevant data in a manner reasonably designed to assess 
the impact of an NQTL on relevant outcomes related to access to mental 
health and substance use disorder benefits as compared to medical/
surgical benefits. Additionally, these final rules provide guidance for 
plans and issuers to comply with the relevant data evaluation 
requirements when data are initially temporarily unavailable for a 
newly imposed NQTL or no data exist that can reasonably measure any 
relevant impact of an NQTL on access.\99\
---------------------------------------------------------------------------

    \99\ As explained earlier in this preamble, these final rules 
state that the provisions with respect to these types of NQTLs shall 
only apply in very limited circumstances and, where applicable, 
shall be construed narrowly, consistent with the fundamental purpose 
of MHPAEA. The Departments are of the view that data can be 
collected and evaluated for nearly all NQTLs.
---------------------------------------------------------------------------

    Under the facts of new Example 6, a plan approves or denies claims 
for mental health and substance use disorder benefits and for medical/
surgical benefits in the inpatient, in-network and outpatient, in-
network classifications based on medical necessity criteria. The plan 
states in its comparative analysis that no data exist that can 
reasonably measure any

[[Page 77629]]

relevant impact of the medical necessity criteria NQTL on access to 
mental health or substance use disorder benefits as compared to the 
NQTL's impact on access to medical/surgical benefits in the relevant 
classifications, without further explanation.
    The example concludes that the plan violates the requirements of 
these final rules. The plan does not comply with the requirements under 
these final rules for NQTLs where no data exist that can reasonably 
measure any relevant impact of the NQTL on access because the plan did 
not include in its comparative analysis a reasoned justification as to 
the basis for its conclusion that there are no data that can reasonably 
measure the NQTL's impact, an explanation of why the nature of the NQTL 
prevents the plan from reasonably measuring its impact, an explanation 
of what data was considered and rejected, and documentation of any 
additional safeguards or protocols used to ensure the NQTL complies 
with the requirements of MHPAEA. For example, data the plan could have 
considered that could reasonably assess the NQTL's impact might include 
the number and percentage of claims denials, or the number and 
percentage of claims that were approved for a lower level of care than 
the level requested on the initial claim. The plan has violated the 
relevant data evaluation requirements, as it has not collected and 
evaluated relevant data in a manner reasonably designed to assess the 
impact of the NQTL on relevant outcomes related to access nor did it 
include sufficient information it its comparative analysis with respect 
to the lack of relevant data.
    Example 7--Concurrent review data collection; no material 
difference in access. Example 7 in these final rules illustrates the 
application of the relevant data evaluation requirements to a 
concurrent review NQTL. This example is based on similar facts from 
Example 2 in the proposed rules, but language in the facts and 
conclusion of proposed Example 2 referencing the no more restrictive 
requirement have been eliminated to reflect, as discussed earlier in 
this preamble, that the Departments decline to finalize the proposed 
mathematical substantially all and predominant tests in these final 
rules (that would prohibit any NQTL that is more restrictive than the 
most common or most frequent variation of the NQTL applied to at least 
two-third of medical/surgical benefits in a classification).
    In this example as modified in these final rules, a plan follows a 
written process to apply a concurrent review NQTL to all medical/
surgical benefits and mental health and substance use disorder benefits 
within the inpatient, in-network classification. Under this 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. The plan collects 
relevant data, including the number of referrals to second-level 
review, and the number of denials of concurrent review claims as 
compared to the total number of concurrent review claims in the 
inpatient, in-network classification. The plan also collects the number 
of denied claims that are overturned on appeal, separately for mental 
health and substance use disorder benefits and medical/surgical 
benefits in the inpatient, in-network classification. The plan 
evaluates the relevant data and determines that, based on the facts and 
circumstances, the data do not suggest that the concurrent review NQTL 
contributes to material differences in access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits in the inpatient, in-network classification. Upon requesting 
the plan's comparative analysis for the concurrent review NQTL and 
reviewing the relevant data, the Secretary does not request additional 
data and agrees that the data do not suggest material differences in 
access.
    In Example 7 of these final rules, the conclusion explains that the 
plan does not violate the relevant data evaluation requirements as it 
collected and evaluated relevant data in a manner reasonably designed 
to assess the impact of the NQTL on relevant outcomes related to access 
to mental health and substance use disorder benefits and medical/
surgical benefits and considered the impact as part of its evaluation. 
Because the relevant data do not suggest that the NQTL contributes to 
material differences in access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits in the 
inpatient, in-network classification, there is no strong indicator that 
the plan violates the requirements for NQTLs under these final rules. 
However, the plan is still required to comply with the design and 
application requirements under these final rules, including the 
prohibition on discriminatory factors and evidentiary standards.
    Example 8--Material difference in access for prior authorization 
requirement with reasonable action. In the proposed rules, Example 1 
illustrates the effect of a disparity in the routine approval of 
benefits for mental health conditions and substance use disorders 
compared to benefits for medical/surgical conditions in a 
classification under the no more restrictive requirement in the 
proposed rules. However, as discussed earlier in this preamble, the 
Departments have declined to finalize the proposed mathematical 
substantially all and predominant tests. Therefore, the Departments are 
adapting proposed Example 1 for use as Example 8 of these final rules 
to illustrate how a plan or issuer can satisfy the requirement to take 
reasonable action to address any material differences in access as 
necessary to ensure compliance with the relevant data evaluation 
requirements, in the context of material differences in access in the 
routine approval of benefits for mental health conditions and substance 
use disorders compared to medical/surgical benefits in a 
classification.
    In Example 8 of these final rules, a plan requires prior 
authorization 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. The plan 
collects and evaluates relevant data in a manner reasonably designed to 
assess the impact of the prior authorization requirement on relevant 
outcomes related to access to mental health and substance use disorder 
benefits and medical/surgical benefits in the inpatient, in-network 
classification. The plan's written process for prior authorization 
states that the plan approves inpatient, in-network benefits for 
medical conditions and surgical procedures and mental health and 
substance use disorder benefits 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. Approvals for mental health and 
substance use disorder benefits are most commonly given only for 1 day, 
after which a treatment plan must be submitted by the patient's 
attending provider and approved by the plan. The relevant data show 
that approvals for 7 days are most common for medical conditions and 
surgical procedures under this plan. Based on all the relevant facts 
and

[[Page 77630]]

circumstances, the difference in the data suggests that the NQTL is 
likely to have a negative impact on access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits. Therefore, the differences in the data suggest that the NQTL 
contributes to material differences in access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits. To address these material differences, the plan consults more 
recent medical guidelines to update the factors that inform its medical 
necessity NQTLs and modifies the prior authorization NQTL so that 
inpatient, in-network prior authorization requests for mental health or 
substance use disorder benefits are approved for similar periods to 
what is approved for medical/surgical benefits. The plan includes 
documentation of this action as part of its comparative analysis.
    The conclusion to Example 8 provides that, while relevant data for 
the plan's prior authorization requirements suggested that the NQTL 
contributes to material differences in access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits in the classification, the plan has taken reasonable action, 
as necessary, to ensure compliance, in operation, with the requirements 
for NQTLs under these final rules by updating the factors that inform 
its prior authorization NQTL for inpatient, in-network mental health 
and substance use disorder benefits, so that such benefits are approved 
for similar periods to what is approved for medical/surgical benefits, 
and documenting its action taken to address material differences in 
access to inpatient, in-network benefits, as required under these final 
rules.
    Example 9--Differences attributable to the use of independent 
professional medical or clinical standards. In the proposed rules, the 
Departments proposed to add new Example 5 to illustrate how a plan may 
satisfy the proposed exception for independent professional medical or 
clinical standards. As noted earlier in this preamble, the Departments 
are not finalizing that exception, and instead, under these final 
rules, the use of independent professional medical or clinical 
standards are not considered to be information, evidence, sources, or 
standards that are biased and not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits, as long as the use of these 
standards to design or apply an NQTL complies with other applicable 
requirements. Furthermore, under these final rules, differences in 
access attributable to the use of independent professional medical or 
clinical standards for both medical/surgical benefits and mental health 
and substance use disorder benefits are not considered to be material. 
However, to the extent a plan or issuer attributes any differences in 
access to the application of such standards, the plan or issuer must 
explain its bases for reaching that conclusion in its comparative 
analysis. Therefore, the Departments are adapting Example 5 of the 
proposed rules for use as Example 9 of these final rules to illustrate 
the treatment of the use of independent professional medical or 
clinical standards.
    In Example 9 of these final rules, a 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 
factors and evidentiary standards used to design and apply the medical 
management requirement rely on independent professional medical or 
clinical standards that are generally recognized by health care 
providers and facilities in relevant clinical specialties. 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. The plan 
collects and evaluates relevant data in a manner reasonably designed to 
assess the impact of the medical management NQTL on relevant outcomes 
related to access to mental health and substance use disorder benefits 
and medical/surgical benefits, and considers the impact as part of the 
plan's evaluation. 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. The plan correctly determines that 
these differences in access are attributable to the independent 
professional medical or clinical standards that are used as the basis 
for the factors and evidentiary standards used to design or apply the 
NQTL and adequately explains the bases for that conclusion as part of 
its comparative analysis.
    Example 9 concludes that the plan does not violate the requirements 
under these final rules for its medical management NQTL. Independent 
professional medical or clinical standards are not considered to be 
information, evidence, sources, or standards that are biased and not 
objective in a manner that discriminates against mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits and the plan otherwise complies with the design and 
application requirements. Additionally, the plan does not violate the 
relevant data evaluation requirements because it has collected and 
evaluated relevant data, the differences in access are attributable to 
the independent professional medical or clinical standards that are 
used as the basis for the factors and evidentiary standards used to 
design or apply the medical management NQTL, and the plan explains the 
bases for this conclusion in its comparative analysis. As a result, the 
NQTL with respect to mental health or substance use disorder benefits 
in the inpatient, out-of-network classification is no more restrictive 
than the predominant NQTL that applies to substantially all medical/
surgical benefits in the same classification.
    Example 10--Material difference in access for standards for 
provider admission to a network with reasonable action. In the proposed 
rules, the Departments proposed new Example 13 to illustrate how plans 
and issuers may comply with the proposed relevant data evaluation 
requirements with respect to NQTLs related to network composition, 
including NQTLs 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. These final rules largely adopt Example 13 as proposed, with 
some modifications to reflect the standards included in these final 
rules, and redesignate it as Example 10.
    In Example 10 of these final rules, a plan applies NQTLs related to 
network composition in the inpatient, in-network and outpatient, 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 also assume

[[Page 77631]]

that the processes, strategies, evidentiary standards, and other 
factors used in designing and applying the NQTLs related to network 
composition for mental health or substance use disorder benefits in the 
inpatient, in-network and outpatient, 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 NQTLs with respect to medical/surgical benefits in the 
same classifications. In order to ensure, in operation, that the NQTLs 
are no more restrictive than the predominant NQTLs applied to 
substantially all medical/surgical benefits in the classification, the 
plan collects and evaluates relevant data in a manner reasonably 
designed to assess the aggregate impact of all the NQTLs related to 
network composition on relevant outcomes related to access to mental 
health and substance use disorder benefits as compared with medical/
surgical benefits and considers the impact as part of the plan's 
evaluation. The plan considers relevant data that is known, or 
reasonably should be known, including 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 (for comparable services and benchmarked 
to a reference standard, as appropriate); and in-network and out-of-
network utilization rates (including data related to the dollar value 
and number of provider claims submissions). The plan determines that 
the relevant data suggest that the NQTLs in the aggregate contribute to 
material differences in access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits in the 
classifications because, based on all the relevant facts and 
circumstances, the differences in the data suggest that the plan's 
NQTLs related to network composition are likely to have a negative 
impact on access to mental health or substance use disorder benefits as 
compared to medical/surgical benefits in the same classifications. The 
plan takes reasonable actions, as necessary, to address the material 
differences in access, to ensure compliance, in operation, with the 
requirements for NQTLs under these final rules, by strengthening its 
efforts to recruit and encourage a broad range of available providers 
and facilities to join the plan's network of providers, including by 
taking actions to increase compensation and other inducements, 
streamline credentialing processes, contact providers reimbursed for 
items and services provided on an out-of-network basis to offer 
participation in the network, and develop a process to monitor the 
effects of such efforts; expanding the availability of telehealth 
arrangements to mitigate overall provider shortages in certain 
geographic areas; providing additional outreach and assistance to 
participants and beneficiaries enrolled in the plan to assist them in 
finding available in-network providers and facilities; and ensuring 
that the plan's provider directories are accurate and reliable. The 
plan documents the efforts that it has taken to address the material 
differences in access that the data revealed, and also documents the 
reasons beyond the plan's control that the plan believes may contribute 
to the material differences in access, and the plan includes the 
documentation as part of its comparative analysis submission.
    Example 10 concludes that the plan does not violate the 
requirements for NQTLs under these final rules. The plan complies with 
the design and application requirements, and also collects and 
evaluates relevant data, as required under these final rules, in a 
manner reasonably designed to assess the aggregate impact of all such 
NQTLs on relevant outcomes related to access to mental health and 
substance use disorder benefits and medical/surgical benefits. While 
the data suggest that the NQTLs contribute to material differences in 
access to mental health and substance use disorder benefits as compared 
to medical/surgical benefits, the plan takes reasonable action, as 
necessary, to ensure compliance with these final rules. The plan also 
documents the actions that have been and are being taken by the plan to 
address material differences in access and documents the reasons beyond 
the plan's control that the plan believes may contribute to the 
material differences in access. As a result, the network composition 
NQTLs with respect to mental health or substance use disorder benefits 
in the inpatient, in-network and outpatient, in-network classifications 
are no more restrictive than the predominant NQTLs that apply to 
substantially all medical/surgical benefits in the same 
classifications.
    Example 11--Separate employee assistance program (EAP) exhaustion 
treatment limitation applicable only to mental health or substance use 
disorder benefits. Example 11 in the proposed rules amended Example 6 
of the 2013 final regulations. These final rules retain this example as 
proposed with minor, non-substantive changes.
    Specifically, in Example 11, an employer maintains both a major 
medical plan and an EAP. The EAP provides, among other benefits, a 
limited number of mental health or substance use disorder counseling 
sessions. These sessions, 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, and no similar exhaustion 
requirement applies with respect to medical/surgical benefits provided 
under the major medical plan.
    Example 11 concludes that the requirement that limits eligibility 
for mental health and substance use disorder benefits under the major 
medical plan until benefits under an EAP are exhausted is an NQTL 
subject to MHPAEA. Because the limitation does not apply to medical/
surgical benefits, it violates the prohibition on a separate NQTL 
applicable only to mental health or substance use disorder benefits. 
The Departments have also included language to note that under other 
Departmental regulations,\100\ the EAP does not qualify as excepted 
benefits because participants in the major medical plan are required to 
use and exhaust benefits under the EAP (making the EAP a gatekeeper) 
before they are eligible for benefits under the plan.
---------------------------------------------------------------------------

    \100\ 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).
---------------------------------------------------------------------------

    Example 12--Separate exclusion for treatment in a residential 
facility applicable only to mental health and substance use disorder 
benefits. Under Example 12 of these final rules, which is substantively 
identical to Example 12 in the proposed rules and only includes minor, 
non-substantive changes, a plan generally covers inpatient, in-network 
and inpatient, out-of-network treatment without any limitations on 
setting, including skilled nursing facilities and rehabilitation 
hospitals, provided other medical necessity standards are satisfied. 
The plan has an exclusion for treatment at residential facilities, 
which the plan defines as an inpatient benefit for mental health and 
substance use disorder benefits. This exclusion was

[[Page 77632]]

not generated through any broader NQTL (such as medical necessity or 
other clinical guideline).
    Example 12 concludes that the plan violates these final rules. 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 because the 
plan does not apply a comparable exclusion with respect to any medical/
surgical benefits in the same benefit classification.
    Example 13--Impermissible NQTL imposed following a final 
determination of noncompliance and direction by the Secretary. In the 
proposed rules, Example 7 provides that a plan that continues to impose 
an NQTL after the Secretary issues a final determination of 
noncompliance with the NQTL comparative analysis documentation 
requirements and directs the plan not to impose the NQTL by a certain 
date, would not comply with the requirements applicable to NQTLs. These 
final rules retain this example with modifications to add specificity 
and reflect the substantive provisions of the final rule and 
redesignate it as Example 13.
    In this example, following an initial request by the Secretary for 
a plan's comparative analysis of the plan's exclusion of mental health 
and substance use disorder benefits for failure to complete a course of 
treatment in the inpatient, in-network classification, the plan submits 
a comparative analysis for the NQTL. The comparative analysis included 
insufficient information to conduct an appropriate comparison of the 
NQTL. After review of the comparative analysis, as well as additional 
information submitted by the plan after the Secretary determines that 
the plan has not submitted sufficient information to be responsive to 
the request, 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 exclusion to mental health or substance use disorder 
benefits in the inpatient, in-network classification are comparable to, 
and applied no more stringently than, those used in designing and 
applying the NQTL to medical/surgical benefits in the classification. 
Although the plan submits a corrective action plan and additional 
comparative analyses within 45 calendar days after the initial 
determination, it does not eliminate or alter the exclusion or alter 
the processes, strategies, evidentiary standards, and other factors 
used in designing and applying the exclusion. Moreover, the additional 
comparative analysis still does not include sufficient information. The 
Secretary determines that the additional comparative analyses do not 
demonstrate compliance with the requirements for NQTLs under MHPAEA. 
Accordingly, the plan receives a final determination of noncompliance 
with the statutory comparative analysis documentation requirements from 
the Secretary, which concludes that the plan did not demonstrate 
compliance through the comparative analysis process. After considering 
the relevant facts and circumstances, and considering the interests of 
plan participants and beneficiaries, as well as feedback from the plan, 
the Secretary directs the plan not to impose the NQTL 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 exclusion of benefits for failure to complete a course of treatment 
in the inpatient, in-network classification.
    This Example 13 concludes that, by continuing to impose the 
exclusion of mental health and substance use disorder benefits for 
failure to complete a course of treatment in the inpatient, in-network 
classification after the Secretary directs the plan not to impose this 
NQTL, the plan violates the requirements of these final rules related 
to the effect of a final determination of noncompliance.
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)(iv), 29 CFR 2590.712(c)(2)(i) and 
(c)(4)(iv), and 45 CFR 146.136(c)(2)(i) and (c)(4)(iv)
    The Departments proposed 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 preamble to the 
proposed rules noted that the 2013 final regulations do not explicitly 
incorporate the statutory prohibitions on separate financial 
requirements and treatment limitations that are imposed only with 
respect to mental health or substance use disorders in Code sections 
9812(a)(3)(A)(i) and (ii), ERISA sections 712(a)(3)(A)(i) and (ii), and 
PHS Act sections 2726(a)(3)(A)(i) and (ii), respectively, but noted 
that financial requirements and quantitative treatment limitations 
imposed only with respect to mental health or substance use disorder 
benefits generally could not comply with the parity requirements 
contained in paragraph (c)(3) of 26 CFR 54.9812-1, 29 CFR 2590.712, and 
45 CFR 146.136. Additionally, the Departments referred to an example in 
the 2013 final regulations that demonstrates and affirms that an NQTL 
applied only to mental health or substance use disorder benefits would 
not be permissible.\101\ The Departments noted in the proposed rules 
that these amendments would directly incorporate the statutory 
prohibitions by expressly stating that plans and issuers are not 
permitted to impose any type 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.
---------------------------------------------------------------------------

    \101\ See 26 CFR 54.9812-1(c)(4)(iii), Example 6, 29 CFR 
2590.712(c)(4)(iii), Example 6, and 45 CFR 146.136(c)(4)(iii), 
Example 6.
---------------------------------------------------------------------------

    Additionally, since the 2013 final regulations state that the 
application of paragraph (c)(2) to NQTLs is addressed in paragraph 
(c)(4) of the regulations, the Departments also proposed to add similar 
language to the 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-
reference the language proposed to be added to 26 CFR 54.9812-
1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 CFR 146.136(c)(2)(i). The 
Departments proposed 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. The Departments noted that 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. As a result, such an NQTL 
would be evaluated to determine whether such NQTL complies with all 
applicable requirements of these final rules.

[[Page 77633]]

    Many commenters supported reiterating the statutory requirement 
that a plan or issuer must not impose a financial requirement or 
treatment limitation that is applicable only to mental health or 
substance use disorder benefits and specifying that if an exclusion of 
a mental health or substance use disorder treatment or service is not 
due to the application of another NQTL to both mental health or 
substance use disorder benefits and medical/surgical benefits in a 
classification, such exclusion would be subject to this prohibition. 
Commenters also agreed with the Departments that, if an exclusion of 
benefits for a mental health condition or substance use disorder is not 
generated through a process, strategy, or factor, or informed by an 
evidentiary standard of a broader NQTL like medical necessity, such an 
exclusion would need to be evaluated for parity compliance (and would 
therefore be prohibited, provided it does not apply to medical/surgical 
benefits). One commenter requested the Departments clarify that a 
specific NQTL need not be applicable to medical/surgical benefits in 
the same classification to overcome the notion that the limitation is 
separately applicable.
    The Departments agree with commenters that the proposed prohibition 
on NQTLs applicable only to mental health or substance use disorder 
benefits is consistent with the statute, and that an exclusion of 
benefits for a mental health condition or substance use disorder 
otherwise covered under the plan or coverage not generated through a 
process, strategy, or factor, or informed by an evidentiary standard of 
a broader NQTL like medical necessity should be evaluated for MHPAEA 
compliance. This exclusion is prohibited as an impermissible separate 
treatment limitation if a comparable exclusion does not apply to 
medical/surgical benefits in the classification. Additionally, as 
evaluation of a plan's or issuer's compliance with MHPAEA is generally 
assessed within a classification of benefits, the prohibition on 
separately applicable financial requirements or treatment limitations 
applies with respect to benefits in the same benefit classification. 
Therefore, the Departments are finalizing these amendments as proposed 
at 26 CFR 54.9812-1(c)(2)(i) and (c)(4)(iv), 29 CFR 2590.712(c)(2)(i) 
and (c)(4)(iv), and 45 CFR 146.136(c)(2)(i) and (c)(4)(iv) 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 with respect to any 
medical/surgical benefits in the same benefit classification.
5. Other Amendments
a. Meaningful Benefits
    The Departments proposed to amend 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) to specify 
that, if a plan (or health insurance coverage) 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. The proposed rules 
proposed that for purposes of this provision, if a plan (or health 
insurance coverage) 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 conditions and surgical procedures in 
such classification. The Departments noted in the preamble to the 
proposed rules that 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 requested comments on this provision of the proposed rules, 
including whether and how to define ``meaningful benefits'' and other 
potential alternatives.
    Many commenters expressed support for this provision of the 
proposed rules. Several of these commenters noted that this requirement 
is essential to ensure that plans and issuers are no longer able to 
deny reimbursement of fundamental evidence-based services for the 
treatment of mental health conditions and substance use disorders in a 
way that similar services would never be excluded for medical/surgical 
care.
    Conversely, some commenters opposed adopting any ``meaningful 
benefit'' or similar standard in these final rules. Several commenters 
argued that this proposed requirement exceeds the Departments' 
statutory authority, and that by requiring ``meaningful benefits,'' the 
Departments would convert MHPAEA into a mandate to cover mental health 
and substance use disorder benefits. Other commenters stated that the 
approach would require plans and issuers to compare specific 
treatments, which is inconsistent with congressional intent to preserve 
the ability of a plan or issuer to determine whether a specific 
treatment is medically necessary or appropriate, instead of comparing 
coverage for medical/surgical benefits and mental health or substance 
use disorder benefits more generally. Additionally, one commenter 
stated this provision would significantly broaden the scope and 
complexity of a plan's or issuer's compliance analysis and limit 
flexibility in benefit design. Some commenters noted that the 
meaningful benefits standard, as proposed, might adversely affect the 
operation of closed panel plans, as the provision of any services 
outside the network could require such plans to evaluate and expand the 
scope of covered mental health and substance use disorder benefits, or 
alternatively, restrict out-of-network benefits.
    Commenters also expressed concern that the term ``meaningful 
benefits'' may not include services such as coordinated specialty care 
for first episode psychosis, and without a clear definition of the 
term, such services would not be covered for privately insured 
individuals. Another commenter stated that the proposed meaningful 
benefit standard may overlook and devalue the mental health and 
substance use disorder services provided by primary care physicians and 
pediatricians, who are generally considered to be medical/surgical 
providers.
    The Departments received many comments on how to define the term 
``meaningful benefits,'' as well as potential alternatives, including 
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. 
Many commenters generally recommended defining ``meaningful benefits'' 
based on independent medical and clinical guidelines or primary 
evidence-based treatment based on independent standards of current 
medical practice. Some commenters recommended that ``meaningful 
benefits'' be defined as the

[[Page 77634]]

full continuum of services that are consistent with independent 
professional medical or clinical standards (or, equivalently, the term 
``generally accepted standards of care''). Other commenters recommended 
that these final rules require coverage of at least one primary 
treatment for a mental health condition or substance use disorder in a 
classification or coverage that aligns with coverage under the State's 
designated EHB-benchmark plan. A few commenters recommended that the 
definition of ``meaningful benefits'' or primary treatment be further 
developed through additional notice and comment rulemaking or a request 
for information.
    The Departments recognize, as commenters stated, that additional 
clarifications are warranted regarding the definition of the term 
``meaningful benefits.'' With regard to comments stating that this 
provision of the proposed rules is a benefit mandate that would require 
plans and issuers to cover specific treatments, as well as comments 
that raised concerns about specific mental health and substance use 
disorder services not being considered meaningful benefits (and 
therefore not being covered by plans and issuers), the Departments 
reiterate that this requirement does not require plans and issuers to 
cover mental health and substance use disorder benefits independently 
or irrespective of what is provided with respect to medical/surgical 
benefits.
    After considering comments received, the Departments are finalizing 
the proposed meaningful benefits standard, with modifications and 
clarifications. These final rules require that, if a plan (or health 
insurance coverage) provides any benefits for a mental health condition 
or substance use disorder in any classification of benefits, it must 
provide meaningful benefits for that mental health condition or 
substance use disorder in every classification in which medical/
surgical benefits are provided. For this purpose, whether the benefits 
provided are meaningful benefits is determined in comparison to the 
benefits provided for medical conditions and surgical procedures in the 
classification, and requires, at a minimum, coverage of benefits for 
that condition or disorder in each classification in which the plan (or 
coverage) provides benefits for one or more medical conditions or 
surgical procedures. Additionally, a plan (or coverage) does not 
provide meaningful benefits under these final rules unless it also 
provides benefits for a core treatment for that condition or disorder 
in each classification in which the plan (or coverage) provides 
benefits for a core treatment for one or more medical conditions or 
surgical procedures.
    The Departments note that, while these final rules only require 
plans and issuers to cover a minimum of one core treatment for a 
covered mental health condition or substance use disorder in every 
classification of benefits in which the plan (or coverage) provides 
benefits for a core treatment for one or more medical conditions or 
surgical procedures, plans and issuers are strongly encouraged to 
provide more robust coverage to ensure that participants and 
beneficiaries have access to the mental health and substance disorder 
care they need. The Departments incorporate this requirement in 26 CFR 
54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR 
146.136(c)(2)(ii) of these final rules, as suggested by commenters, to 
ensure that plans and issuers offering mental health or substance use 
disorder benefits do not provide coverage for the full range of 
medical/surgical benefits in a classification, yet cover only one or a 
few isolated ancillary benefits for a covered mental health condition 
or substance use disorder in the same classification. As noted earlier 
in this preamble, a commenter expressed the concern that this 
requirement would broaden the scope and complexity of analyzing MHPAEA 
NQTL compliance and limit benefit design. However, as noted above, this 
provision amends the general requirement and limits the ability of a 
plan or issuer to implement a benefit design that provides robust 
benefits for medical conditions and surgical procedures while offering 
minimal benefits for mental health conditions and substance use 
disorders. This requirement, in combination with the other amendments 
to these final rules, will help to better ensure equitable access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits.
    For purposes of these final rules, a core treatment for a condition 
or disorder is a standard treatment or course of treatment, therapy, 
service, or intervention indicated by generally recognized independent 
standards of current medical practice. This definition of ``meaningful 
benefits'' takes an approach that is similar to the suggestion made by 
multiple commenters, as noted earlier in this preamble, that meaningful 
benefits be defined as the primary treatment for a condition or 
disorder based on generally recognized independent standards of current 
medical practice. However, instead of defining ``meaningful benefits'' 
as coverage for the primary treatment for a condition or disorder in a 
classification, these final rules require the coverage of a core 
treatment because, from a medical or clinical perspective, there may 
not be a single primary treatment in many cases for a given condition 
or disorder (even where there are evidence-based treatments, services, 
therapies, and standards of care).
    These final rules do not set forth specific requirements for plans 
and issuers to determine what constitutes a core treatment for any 
particular condition or disorder, but plans and issuers, in determining 
a core treatment for a condition or disorder in this context, should 
rely on current evidence-based medical and clinical information. The 
Departments note that a core treatment for a particular condition or 
disorder may not necessarily refer to a single item or service but may 
instead encompass a suite of items and services that together 
constitute a core treatment, depending on the relevant generally 
recognized independent standards of current medical practice. In such a 
case, the Departments expect that under this provision, plans and 
issuers will cover all components of at least one core treatment if the 
items and services provided as part of the treatment span a number of 
classifications, provided the plan or coverage provides benefits for 
one or more core treatments for any medical conditions or surgical 
procedures in those classifications. For example, one core treatment 
for major depressive disorder generally includes prescription drugs and 
psychotherapy. However, a core treatment may also include only 
prescription drugs or only psychotherapy (and in cases of severe 
depression, may also include inpatient hospitalization or other types 
of residential or outpatient treatment). The Departments note that a 
core treatment, with respect to a classification, may include the same 
item or service in other benefit classifications. For example, for 
major depressive disorder, psychotherapy could be a core treatment with 
respect to both the outpatient, in-network and outpatient, out-of-
network classifications. In response to commenter requests for examples 
of meaningful benefits, the Departments have modified proposed Examples 
5 and 6, and added examples that further illustrate the application of 
the meaningful benefit standard, as discussed in more detail later in 
this preamble.
    The Departments also recognize the workability concerns raised by 
commenters with respect to the proposed meaningful benefits standard

[[Page 77635]]

in the proposed rules. In response to these comments, the Departments 
include language in these final rules to provide that, if there is no 
core treatment for a mental health condition or substance use disorder 
with respect to a classification, the plan (or coverage) is not 
required to provide benefits for a core treatment for such condition or 
disorder in that classification. Instead, the plan (or coverage) must 
provide benefits for such condition or disorder in every classification 
in which medical/surgical benefits are provided. Additionally, under 
these final rules, if the plan (or coverage) does not provide 
meaningful benefits for any medical condition or surgical procedure in 
a classification, the plan (or coverage) is not required to provide 
meaningful benefits for any mental health conditions or substance use 
disorders in the classification. This language further makes clear that 
the requirement to provide coverage of meaningful benefits for a 
condition or disorder is not a coverage mandate, but rather another 
approach to ensuring parity between mental health or substance use 
disorder benefits and medical/surgical benefits in a classification.
    The Departments also stated in the preamble to the proposed rules 
that they recognize that the meaningful benefits proposal is related to 
an issue characterized as ``scope of services'' or ``continuum of 
care,'' as addressed in the preamble to the 2013 final 
regulations.\102\ ``Scope of services,'' when used in this context, 
generally refers to the types of treatment and treatment settings that 
are covered by a plan or coverage. The Departments requested comments 
on whether additional guidance is needed regarding how the proposed 
meaningful benefits standard would interact with the approach related 
to scope of services adopted under the 2013 final regulations.
---------------------------------------------------------------------------

    \102\ See 78 FR 68240, 68246-68247 (Nov. 13, 2013).
---------------------------------------------------------------------------

    Commenters suggested the Departments add ``scope of services'' or 
``scope of covered services'' to the illustrative, non-exhaustive list 
of NQTLs. These commenters noted the importance of psychiatric care 
being fully integrated with the rest of medicine in primary care 
settings and in hospitals. Despite the language in the 2013 final 
regulations on intermediate services,\103\ these commenters highlighted 
that plans and issuers sometimes exclude fundamental services and do 
not assess those exclusions as NQTLs. These commenters noted that 
identifying ``scope of services'' or ``scope of covered services'' as a 
covered NQTL would remove ambiguity and require plans and issuers to 
determine whether an exclusion of mental health or substance use 
disorder benefits met the NQTL comparability and stringency test.
---------------------------------------------------------------------------

    \103\ Ibid. In the preamble to the 2013 final regulations, the 
Departments stated that plans and issuers must assign covered 
intermediate mental health and substance use disorder benefits to 
the existing six benefit classifications in the same way that they 
assign comparable intermediate medical/surgical benefits to these 
classifications. The 2013 final regulations also included additional 
examples illustrating the application of the NQTL rules to plan 
exclusions affecting the scope of services and clarified that plan 
or coverage restrictions based on geographic location, facility 
type, provider specialty, and other criteria that limit the scope or 
duration of treatment must comply with the NQTL parity standard 
under the final rules.
---------------------------------------------------------------------------

    The Departments acknowledge these comments and the importance of 
psychiatric care being fully integrated in primary care settings and in 
hospitals but decline to add scope of services as an NQTL in the 
illustrative list in these final rules. Like the 2013 final 
regulations, these final rules are not intended to mandate coverage of 
any particular benefits. These final rules continue to require mental 
health and substance use disorder benefits and medical/surgical 
benefits to be assigned to the six classifications set forth in the 
regulations. For intermediate services like residential treatment, 
partial hospitalization, and intensive outpatient treatment, the 
Departments continue to require plans and issuers to assign covered 
intermediate mental health and substance use disorder benefits to the 
existing six benefit classifications in the same way that they assign 
comparable intermediate medical/surgical benefits to these 
classifications.\104\ The Departments point to the examples in these 
final rules that address coverage restrictions based on geographic 
location, facility types, provider specialty, and other criteria that 
limit the scope or duration of benefits. Plans and issuers are required 
to comply with the NQTL requirements with respect to these types of 
restrictions. Further, the Departments note that exclusions of services 
to treat a condition or disorder otherwise covered by the plan or 
coverage are NQTLs that must comply with the provisions applicable to 
NQTLs under the final rules (including that there are no separate NQTLs 
that apply only to mental health or substance use disorder benefits in 
a classification).
---------------------------------------------------------------------------

    \104\ Id. at 68247. For example, as described in the preamble to 
the 2013 final regulations, 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 use 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.
---------------------------------------------------------------------------

    In response to questions about whether the No Surprises Act's 
requirements that certain out-of-network items and services be covered 
by plans and issuers might adversely affect the operation of closed 
panel plans by effectively requiring the coverage of out-of-network 
mental health or substance use disorder benefits (including in the 
context of the meaningful benefits standard in these final rules), the 
Departments note that nothing in these final rules requires a plan or 
coverage that provides coverage for medical/surgical benefits in the 
inpatient, out-of-network and outpatient, out-of-network 
classifications only to the extent required under Code sections 9816 
and 9817, ERISA sections 716 and 717, and PHS Act sections 2799A-1 and 
2799A-2 to provide additional mental health or substance use disorder 
benefits in the inpatient, out-of-network and outpatient, out-of-
network classifications in accordance with this section. This approach 
is consistent with language in the 2013 final regulations which stated 
that compliance with PHS Act section 2713 (requiring coverage for 
recommended preventive services without any cost-sharing requirements) 
should not require that the full range of benefits for a mental health 
condition or substance use disorder be provided under MHPAEA. 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 make 
explicit the Departments' interpretation that the requirement to 
provide coverage for mental health and substance use disorder benefits 
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 2010 interim final rules implementing 
MHPAEA.\105\
---------------------------------------------------------------------------

    \105\ 75 FR 5410, 5413 (Feb. 2, 2010).
---------------------------------------------------------------------------

    The Departments solicited comments on the provisions of the 
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. 
The Departments received very few comments on this issue. Most of the 
comments received related to the classification of certain

[[Page 77636]]

benefits as medical/surgical instead of mental health or substance use 
disorder. One comment suggested that a new classification of ``urgent/
crisis care'' should be added to encompass both medical/surgical urgent 
care and mental health or substance use disorder crisis services. 
Because additional classifications are not required or necessary, the 
Departments are finalizing these amendments as proposed. Plans and 
issuers are reminded that the list of the current classifications in 
these final rules is exhaustive. Classification of benefits as medical/
surgical benefits instead of mental health or substance use disorder 
benefits is discussed in more detail earlier in this preamble. The 
Departments will consider whether and to what extent additional 
guidance may be needed to address the application of MHPAEA to urgent/
crisis care.
    In the proposed rules, the Departments proposed to add two 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. The Departments are finalizing these examples with 
modifications to align with these final rules and are providing 
additional clarity on the application of the meaningful benefits 
standard to plans and issuers by redesignating proposed Example 6 as 
Example 7 and adding new Examples 6 and 8.
    In proposed Example 5, a plan generally covers treatment for ASD, a 
mental health condition,\106\ 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. The preamble of the proposed rules stated 
that, based on generally recognized independent standards of current 
medical practice consulted, ABA therapy is the primary treatment for 
ASD in children. In this proposed example, the plan generally covers 
the full range of outpatient treatments and treatment settings, 
including primary treatments, for medical conditions and surgical 
procedures when provided on an out-of-network basis. The proposed 
example concluded that the plan violates the proposed meaningful 
benefits standard because, by not providing benefits for ABA therapy, 
it fails to provide meaningful benefits for ASD in the outpatient, out-
of-network classification, but generally covers the full range of 
medical/surgical benefits in the classification.
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    \106\ As stated earlier in this preamble, the proposed rules 
stated, and these final rules continue to state, that for purposes 
of MHPAEA, ASD is a mental health condition under generally 
recognized independent standards of current medical practice. 
Therefore, benefits for this condition are considered mental health 
benefits, and are subject to the protections of MHPAEA and its 
implementing regulations.
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    In 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. The 
example in the proposed rules noted that nutrition counseling is the 
primary treatment for eating disorders in the outpatient, in-network 
classification and stated that the plan generally provides benefits for 
the primary treatments for medical conditions and surgical procedures 
in the outpatient, in-network classification. The proposed example 
concluded that the plan violates the proposed meaningful benefits 
standard because, by not providing benefits for nutrition counseling, 
it fails 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. The Departments noted that, if the plan covers 
medical/surgical benefits for nutrition counseling, the plan would also 
violate the prohibition on separate NQTLs applicable only to mental 
health or substance use disorder benefits.
    Several commenters generally expressed support for the proposed 
Examples 5 and 6, which illustrated clear instances where exclusions of 
key services for ASD and eating disorders violate MHPAEA, noting that 
these examples remove any ambiguity whether such exclusions are 
inconsistent with MHPAEA's requirements. One commenter expressed 
concerns about references to ABA therapy specifically because referring 
to a specific treatment may be limiting as evidence evolves regarding 
ASD. This commenter also cited a relatively weak evidence base for ABA 
therapy as a reason why the example should not specifically reference 
ABA therapy. Another commenter requested that Example 6 define 
``primary treatments'' and ``meaningful benefits'' based on independent 
medical and clinical guidelines. A few commenters suggested that the 
Departments use the term ``medical nutrition therapy'' instead of 
nutrition counseling, to better reflect the clinical term used in 
treatment codes. Another commenter suggested providing an additional 
example related to the treatment of OUD, to reinforce the clear 
requirement to cover opioid treatment program services as part of the 
``meaningful'' coverage of substance use disorder benefits in all 
classifications in which meaningful medical/surgical services are 
covered.
    After considering comments, the Departments are finalizing Examples 
5 and 6 in the proposed rules with modifications, to make the examples 
consistent with the clarifications described earlier in this preamble 
stating that a plan or issuer will be required to provide meaningful 
benefits for a mental health condition or substance use disorder in a 
classification if it provides meaningful benefits for one or more 
medical conditions or surgical procedures in the same classification. 
These final rules also make minor clarifying changes to reflect more 
appropriate clinical terminology and introduce two new, additional 
examples. In each example in these final rules that illustrates the 
meaningful benefits standard, the group health plan is subject to the 
requirements of MHPAEA and provides both medical/surgical benefits and 
mental health and substance use disorder benefits. Additionally, these 
final rules note that references in these examples to any particular 
core treatment are included for illustrative purposes only and are not 
intended to limit coverage in any way. The Departments remind plans and 
issuers that they must consult generally recognized independent 
standards of current medical practice to determine the applicable core 
treatment, therapy, service, or intervention for any covered condition 
or disorder, and note that, as medical evidence evolves, the core 
treatment options for any condition or disorder may change.
    In Example 5 of these final rules, a plan covers treatment for ASD. 
As explained earlier in this preamble and in the proposed rules, for 
purposes of MHPAEA, ASD is a mental health condition under generally 
recognized independent standards of current medical practice.\107\ 
Specifically, the plan covers outpatient, out-of-network developmental 
screenings for ASD, but excludes all other benefits for outpatient 
treatment for ASD, including ABA therapy, when provided on an out-of-
network basis. The plan generally covers the full range of outpatient 
treatments (including core treatments)

[[Page 77637]]

and treatment settings for medical conditions and surgical procedures 
when provided on an out-of-network basis. Under the generally 
recognized independent standards of current medical practice consulted 
by the plan, developmental screenings alone that are covered for 
diagnostic purposes, without any coverage for a therapeutic 
intervention, do not constitute a core treatment for ASD. Example 5 
concludes that the plan violates these final rules. Although the plan 
covers benefits for ASD, in the outpatient, out-of-network 
classification, it only covers developmental screenings, so it does not 
cover a core treatment for ASD in the classification. Since the plan 
generally covers the full range of medical/surgical benefits including 
a core treatment for one or more medical conditions or surgical 
procedures in the classification, it fails to provide meaningful 
benefits for treatment of ASD in the classification, as required under 
these final rules.
---------------------------------------------------------------------------

    \107\ DSM (5th ed.), Section II: Diagnostic Criteria and Codes, 
Autism Spectrum Disorder.
---------------------------------------------------------------------------

    New Example 6 of these final rules starts with the same facts as 
Example 5 and illustrates how these final rules apply where a plan or 
issuer does not cover a core treatment for any medical conditions or 
surgical procedures in a classification. The facts of new Example 6 
state that the plan is a health maintenance organization (HMO) that 
does not cover the full range of medical/surgical benefits, including a 
core treatment for any medical conditions or surgical procedures in the 
outpatient, out-of-network classification (except as required under 
Code sections 9816 and 9817, ERISA sections 716 and 717, and PHS Act 
sections 2799A-1 and 2799A-2), but covers benefits for medical 
conditions and surgical procedures in the inpatient, in-network; 
outpatient, in-network; emergency care, and prescription drug 
classifications. Example 6 concludes that the plan does not violate the 
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 the plan does not provide meaningful 
benefits including a core treatment for any medical condition or 
surgical procedure in the outpatient, out-of-network classification 
(except as required under Code sections 9816 and 9817, ERISA sections 
716 and 717, and PHS Act sections 2799A-1 and 2799A-2), the plan is not 
required to provide meaningful benefits, for any mental health 
conditions or substance use disorders in that classification.\108\ The 
Departments note that, nevertheless, the plan must provide meaningful 
benefits for each mental health condition and substance use disorder 
for which the plan provides benefits in every classification in which 
meaningful medical/surgical benefits are provided. Additionally, the 
Departments note that plans and issuers must comply with other 
requirements of these final rules, as applicable, including the 
prohibition on NQTLs applicable only to mental health and substance use 
disorder benefits.\109\
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    \108\ As discussed earlier in this preamble, the Departments 
note that this conclusion would hold if the plan provides benefits 
for a core treatment for a medical/surgical condition in the 
outpatient, out-of-network classification, solely to meet 
requirements under the provisions of the No Surprises Act.
    \109\ For example, if the plan excludes coverage for ABA therapy 
and the exclusion does not comply with the provisions applicable to 
NQTLs under the final rules--including the design and application 
requirements and the relevant data evaluation requirements (if the 
exclusion was generated through a broader NQTL such as medical 
necessity or other clinical guideline that also applies to medical/
surgical benefits in the relevant classification), or the 
requirement that there are no separate NQTLs that apply only to 
mental health or substance use disorder benefits in a 
classification--the plan violates the rules of 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4).
---------------------------------------------------------------------------

    In Example 7 of these final rules, which was redesignated from 
Example 6 in the proposed rules, a plan provides extensive benefits, 
including for core treatments for many medical conditions and surgical 
procedures in the outpatient, in-network classification, including 
nutrition counseling for diabetes and obesity. The plan also generally 
covers diagnosis and treatment for eating disorders, which are mental 
health conditions, including coverage for nutrition counseling \110\ to 
treat eating disorders in the outpatient, in-network classification. 
Under this example, nutrition counseling is a core treatment for eating 
disorders, in accordance with generally recognized independent 
standards of current medical practice consulted by the plan. Example 7 
concludes that the plan does not violate the meaningful benefits 
standard in these final rules. The coverage of diagnosis and treatment 
for eating disorders, including nutrition counseling, in the 
outpatient, in-network classification results in the plan providing 
meaningful benefits for the treatment of eating disorders in the 
classification, as determined in comparison to the benefits provided 
for medical conditions and surgical procedures in the classification.
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    \110\ The proposed rules and these final rules refer to benefits 
for ``nutrition counseling.'' The Departments acknowledge several 
commenters who noted that other terminology may be more appropriate, 
such as ``medical nutrition therapy'' or ``medical nutrition therapy 
provided by a dietitian'' using specific CPT codes. The Departments 
intend that references to nutritional counseling for eating 
disorders be interpreted broadly to include these and other 
appropriate types of treatment for eating disorders.
---------------------------------------------------------------------------

    In response to commenters who requested an additional example 
illustrating what plans and issuers must do to provide meaningful 
benefits for the treatment of OUD, the Departments are also finalizing 
new Example 8. In this new example, a plan provides extensive benefits 
for the core treatments for many medical conditions and surgical 
procedures in the outpatient, in-network and prescription drug 
classifications. The plan provides coverage for diagnosis and treatment 
for OUD, a substance use disorder, in the outpatient, in-network 
classification, by covering counseling and behavioral therapies, also 
referred to as psychosocial treatments. Additionally, the plan provides 
coverage for diagnosis and treatment for OUD, in the prescription drug 
classification, by covering medications to treat opioid use disorder 
(MOUD). Under this example, counseling and behavioral therapies and 
MOUD, in combination, are one of the core treatments for OUD, in 
accordance with generally recognized independent standards of current 
medical practice consulted by the plan.
    Example 8 concludes that the plan does not violate these final 
rules. The coverage of counseling and behavioral therapies and MOUD, in 
combination, in the outpatient, in-network classification and 
prescription drug classification, respectively, results in the plan 
providing meaningful benefits for the treatment of OUD in the 
outpatient, in-network and prescription drug classifications.
b. Classification of 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. The Departments proposed to reiterate 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 a plan or issuer may not divide benefits into 
any sub-classifications other than those specifically permitted under 
the regulations. The Departments did not propose any substantive 
changes to the existing sub-classifications or to permit any new sub-
classifications. The Departments also proposed non-substantive changes 
to 26 CFR 54.9812-1(c)(3)(iv), 29 CFR 2590.712(c)(3)(iv), and 45 CFR 
146.136(c)(3)(iv) to label the

[[Page 77638]]

tables in the examples, update references in the examples, and 
redesignate the examples as paragraphs.
    A few commenters expressed concerns about the classification of 
certain types of benefits and providers into existing classifications 
and sub-classifications, including intensive outpatient treatment, 
partial hospitalization programs, and other team-based models of care. 
Some commenters requested additional clarification, including a 
standard definition for the outpatient sub-classifications, citing the 
fact that some plans and issuers use differing variations to define the 
outpatient, office visit sub-classification. One commenter requested 
that the Departments indicate that the sub-classifications applicable 
to financial requirements and quantitative treatment limitations under 
paragraph (c)(3)(iii) of the 2013 final regulations may also be used 
for NQTLs.
    As discussed earlier in this preamble, plans and issuers must 
assign covered intermediate mental health and substance use disorder 
benefits to the existing six benefit classifications in the same way 
that they assign comparable intermediate medical/surgical benefits to 
these classifications. Additionally, plans and issuers that opt to use 
sub-classifications for outpatient benefits must assign covered 
outpatient benefits to the permissible outpatient sub-classifications 
for mental health and substance use disorder benefits in the same way 
they assign comparable medical/surgical benefits. The Departments are 
finalizing the clarification that a plan or issuer is not permitted to 
divide benefits into any sub-classifications other than those 
specifically permitted under the regulations,\111\ as well as the 
clarification 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.\112\ Consistent with the proposed rules, the 
Departments are not making any substantive changes to the existing sub-
classifications or to permit any new sub-classifications of benefits in 
these final rules. The Departments are also finalizing the non-
substantive changes to 26 CFR 54.9812-1(c)(3)(iv), 29 CFR 
2590.712(c)(3)(iv), and 45 CFR 146.136(c)(3)(iv), for which no comments 
were received.
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    \111\ 26 CFR 54.9812-1(c)(3)(iii), 29 CFR 2590.712(c)(3)(iii), 
and 45 CFR 146.136(c)(3)(iii).
    \112\ 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).
---------------------------------------------------------------------------

    The Departments noted in the preamble to the proposed rules that 
they have received questions and requests for guidance on how to comply 
with MHPAEA's requirements with respect to telehealth benefits, 
including where telehealth fits into the existing classifications and 
sub-classifications of benefits and whether changes are necessary to 
account for telehealth benefits. The Departments did not propose any 
changes in the proposed rules with respect to telehealth benefits and 
instead stated that they expected plans and issuers to treat telehealth 
benefits the same way they treat those benefits when provided in person 
in determining the classification or sub-classifications in which a 
particular benefit belongs. The Departments requested comments on 
whether changes to the framework and existing regulations implementing 
MHPAEA were necessary to account for telehealth benefits.
    Several commenters stated that the expansion of telehealth services 
can supplement a plan's or issuer's network where there are in-person 
provider shortages and expressed support for treating telehealth 
benefits the same way those benefits are treated when provided in 
person. Some commenters discussed the growth and sustained usage of 
telehealth services since the start of the COVID-19 pandemic, 
particularly for mental health and substance use disorder services. 
Commenters stressed that telehealth is particularly valuable in rural 
and medically underserved areas. However, commenters stressed that 
telehealth may not be appropriate for all patients and does not fully 
replace in-person mental health and substance use disorder care. The 
Departments reiterate that plans and issuers are expected to treat 
telehealth benefits the same way they treat those benefits when 
provided in person in determining the classification or sub-
classifications in which a particular benefit belongs.
    As discussed earlier in the preamble, several commenters requested 
the Departments take into account telehealth in the relevant data 
evaluation requirements, as well as the requirements for standards 
related to network composition; however, the Departments are not 
addressing any specific data metrics for telehealth in these final 
rules. After reviewing the comments received on this issue, the 
Departments are not making changes in these final rules to address how 
to classify telehealth benefits. The Departments understand that 
telehealth plays a vital role in the provision of health care, 
particularly following the COVID-19 pandemic, and may support access to 
services for those with transportation barriers. When evaluating MHPAEA 
compliance, plans and issuers must include any covered telehealth 
benefits in the six classifications used to apply the parity 
requirements. The Departments also understand that telehealth can be 
used by plans and issuers as a tool to address provider shortages. 
These final rules also acknowledge telehealth can be leveraged to 
mitigate provider shortages in a geographic area and that leveraging 
telehealth is a potential reasonable action that can be used to address 
material differences in in-network access.
c. Availability of Plan Information
    Treasury and DOL proposed 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 to clarify that 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 proposed 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 the 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. The Departments noted that this 
clarification is consistent with proposed 26 CFR 54.9812-2(e)(2), 29 
CFR 2590.712-1(e)(2), and 45 CFR 146.137(e)(2), 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 
when requested by 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. The 
Departments noted in the preamble to the proposed rules that 
participants and beneficiaries in ERISA plans should be able to request 
copies of comparative analyses to ensure they

[[Page 77639]]

are informed about their health plans or group health insurance 
coverage. Additionally, the Departments noted that 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.
    The Departments received several comments on this aspect of the 
proposed rules. A few commenters recommended that the Departments add 
language to the end of paragraph (d)(3) of 26 CFR 54.9812-1, 29 CFR 
2590.712, and 45 CFR 146.136 making clear that no part of the 
comparative analyses or other applicable information required by 26 CFR 
54.9812-2, 29 CFR 2590.712-1, or 45 CFR 146.137 may be withheld when 
requested, including because the information is proprietary, has 
commercial value, or is commercially protected. One of these commenters 
also urged the Departments to conform this provision with the standard 
proposed in 26 CFR 54.9812-2(e), 29 CFR 2590.712-1(e), and 45 CFR 
146.137(e), so that individuals can have information at the time of the 
denial, which is needed to assess whether to raise a parity compliance 
claim in an internal grievance or appeal.
    After considering comments, the Departments are finalizing the 
amendments to 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR 
146.136(d)(3) as proposed, with a correction. The final rules remove 
the phrase ``upon appeal of an adverse benefit determination'' and 
replace it with ``who have received an adverse benefit determination'' 
in the third sentence of 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), 
and 45 CFR 146.136(d)(3) to conform with the requirements under the DOL 
claims procedure rule at 29 CFR 2560.503-1 and rules issued by the 
Departments at 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR 
147.136, which set forth rules regarding claims and appeals. The 
Departments also decline to exempt plans and issuers from providing 
certain types of information as part of their comparative analyses, to 
ensure transparency when an individual (or their authorized 
representative) requests a comparative analysis. As stated earlier in 
this preamble, this information is relevant to a claimant's claim for 
benefits and should therefore be made available.
d. Other Provisions
    The proposed rules included proposed amendments to 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). The preamble to the proposed rules noted that 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 EHB. The preamble further stated that HHS 
has updated 45 CFR 156.115(a)(3) to state that provision of EHB 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.'' \113\ The Departments did not 
receive comments on this provision. 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 are finalizing this change as proposed with minor edits for 
precision, and to reflect that the requirement would only apply to a 
health insurance issuer offering non-grandfathered health insurance 
coverage in the individual or small group market that is required to 
provide mental health and substance use disorder services, including 
behavioral health treatment services, as part of EHB required under 45 
CFR 156.110(a)(5) and 156.115(a).
---------------------------------------------------------------------------

    \113\ 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 (Sept. 27, 2021), https://www.federalregister.gov/documents/2021/09/27/2021-20509/patient-protection-and-affordable-care-act-updating-payment-parameters-section-1332-waiver.
---------------------------------------------------------------------------

    The proposed rules also included several technical edits to update 
paragraph (c)(3)(i) of the 2013 final regulations to add citations, 
include additional specificity in citations, and strike an outdated 
reference to limitations on annual deductibles for non-grandfathered 
health plans in the small group market at PHS Act section 2707(b) and 
ACA section 1302(c). The Departments did not receive any comments on 
these provisions and are finalizing as proposed.
    The Departments are finalizing proposed technical amendments to 26 
CFR 54.9812-1(c)(3)(iii)(A) and (B), 29 CFR 2590.712(c)(3)(iii)(A) and 
(B), and 45 CFR 146.136(c)(3)(iii)(A) and (B) to update citations. No 
comments were received on these technical amendments. In finalizing 
these provisions, the Departments are also restoring parenthetical 
references to health insurance coverage. Re-insertion of the phrase 
``health insurance coverage'' is not intended to be a substantive 
change from the proposed rules, but rather corrects this omission and 
is consistent with the text of the 2013 final regulations.

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

    The CAA, 2021 amended MHPAEA, in part, to expressly require plans 
and issuers that offer coverage that provides 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 comparative analyses of the design and application 
of NQTLs, and make their comparative analyses and certain information 
available to the Departments or applicable State authorities upon 
request. The Departments proposed to codify this requirement.
    Many commenters expressed support for codification of this 
requirement with several of these commenters noting that such detailed 
requirements are necessary to clarify what plans' or issuers' analyses 
must contain, as well as to hold plans and issuers accountable in 
following such requirements.
    Many other commenters criticized the proposed content elements and 
requested specific changes to the rules as proposed to assist plans and 
issuers in complying with the requirement to perform and document 
comparative analyses. Several commenters requested examples of a 
compliant comparative analysis to assist in understanding what 
documentation, in the Departments' view, is required to meet the 
standards. Another commenter stated that critical components of the 
terms, such as what a test comprises, the standards for

[[Page 77640]]

meeting that test, and compiling the proper information are subject to 
interpretation, which can lead to regulators and auditors having 
different perspectives on the requirements, creating substantial 
uncertainty for plans and issuers that are attempting to comply. 
Several commenters also expressed a desire for additional clarification 
regarding the proposed content elements with respect to specific NQTLs. 
One commenter was concerned that the proposed rules did not provide 
clarity on how to apply the new comparative analysis requirements to 
complex NQTLs, such as those related to network administration.
    After reviewing comments, the Departments are finalizing the 
codification of the new statutory requirement that plans and issuers 
that offer coverage that provides both medical/surgical benefits and 
mental health or substance use disorder benefits and impose NQTLs on 
mental health or substance use disorder benefits must perform and 
document a comparative analysis of the design and application of each 
such NQTL, with modifications in response to comments as noted. This 
finalized provision aligns the regulations with the statutory 
requirements under MHPAEA, as amended by the CAA, 2021. In response to 
commenter concerns that the proposed rules did not clarify how a plan 
or issuer should apply the new comparative analysis requirements to 
factors and evidentiary standards used to design and apply NQTLs that 
are especially complex (including those related to network 
composition), the Departments disagree that the proposed rules and 
these final rules do not rationally relate to factors and evidentiary 
standards used to design and apply NQTLs like standards related to 
network composition or methods for determining out-of-network rates. 
Using the definitions of the terms ``processes,'' ``strategies,'' 
``evidentiary standards,'' and ``factors'' under these final rules to 
inform the content elements required in a comparative analysis, these 
final rules provide sufficient guidance for plans and issuers to 
perform and document their comparative analyses of all NQTLs.
    Additionally, these final rules also provide additional guidance on 
how a plan or issuer with a typical plan or coverage design should 
collect and evaluate data for NQTLs related to network composition 
(which must be included in the comparative analysis) under the relevant 
data evaluation requirements, and provides examples of reasonable 
actions that plans and issuers may take (and document in the 
comparative analysis) if such data suggest that NQTLs related to 
network composition contribute to material differences in access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits in a classification. The Departments 
acknowledge that a plan or issuer imposing a complex NQTL with respect 
to mental health and substance use disorder benefits by relying on a 
large number of complicated factors and evidentiary standards will 
likely require more resources to perform and document their comparative 
analysis in a manner that is compliant with these final rules. The 
Departments also appreciate that some of the required content for 
comparative analyses are described broadly and therefore could lead to 
the Departments and applicable State authorities taking different 
approaches in determining what constitutes a sufficient comparative 
analysis. However, these broad descriptions are necessary to ensure 
that these final rules set forth a single set of content elements that 
are flexible enough to apply to the wide variety of different NQTLs 
imposed by plans and issuers with respect to mental health and 
substance use disorder benefits.
    The Departments are not providing an example of a comparative 
analysis that complies with these final rules, but continue to consider 
what additional resources and guidance are necessary to assist the 
regulated community in complying with MHPAEA and these final rules. A 
plan or issuer that analyzes the design and application of an NQTL 
along with the relevant data and considers it in the manner described 
earlier in this preamble will be well positioned to perform and 
document a comparative analysis in a manner consistent with these final 
rules. The Departments also note, as stated earlier in this preamble, 
that they intend to update the MHPAEA Self-Compliance Tool for plans 
and issuers to determine which data to collect and evaluate. The 
Departments note that what constitutes a compliant comparative analysis 
will depend on all the relevant facts and circumstances, including the 
provisions of the plan or coverage and the relevant NQTL. The 
Departments remain committed to providing additional guidance to assist 
with the implementation of these final rules.
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 proposed 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). Specifically, the 
Departments proposed that each comparative analysis would include, at a 
minimum, with respect to each NQTL imposed under the plan or coverage 
on mental health and substance use disorder benefits, six 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.
    In addition to proposing to require the inclusion of specific 
elements in each comparative analysis, the proposed rules would require 
each plan or issuer to prepare and make available to the Departments, 
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.
    Several commenters expressed general support for the proposed 
elements that plans and issuers would be required to include in their 
comparative analyses under the proposed rules. Some commenters 
highlighted that the clarity the proposed rules provided would help to 
reduce confusion as to how plans and issuers should perform and 
document their comparative analyses, and others reasoned that, by 
clarifying the comparative analysis content requirements under the 
proposed rules, regulators will be able to better determine compliance 
with MHPAEA.
    Some commenters, however, stated that the proposed rules did not 
provide enough clarity, which they stated may make complying with the 
requirements more challenging. These commenters stated that providing a 
list of all NQTLs imposed under a plan or coverage would be challenging 
without either a definitive list of all NQTLs or requiring that plans 
and issuers perform and document comparative analyses only for NQTL 
types that the Departments define through regulations or guidance. As 
discussed earlier in the preamble, several commenters requested that 
the Departments provide an exhaustive list of NQTLs for which a 
comparative analysis would be required.

[[Page 77641]]

    Commenters also expressed concerns about whether plans and issuers 
would be able to access the information and data necessary to perform 
and document a sufficient comparative analysis that includes all of the 
proposed content requirements. Several of these commenters mentioned 
difficulty acquiring the necessary information and data from their 
service providers and business partners, while other commenters stated 
that the proposed content requirements for comparative analyses are 
superfluous, unhelpful, or unreasonably burdensome. Some commenters 
described concerns related to cost and feasibility of preparing 
comparative analyses that would comply with the proposed content 
requirements.
    After reviewing comments, the Departments are finalizing the 
requirement that a comparative analysis include, at a minimum, the six 
content elements listed in the proposed rules, consistent with the 
statute, with several modifications. This section of the preamble to 
these final rules discusses the comments received with respect to each 
content element in the proposed rules and the modifications made to 
each content element in these final rules.
    With respect to the requirement to prepare and make available, upon 
request, a written list of all NQTLs imposed under the plan or coverage 
and commenters who noted that this requirement would be challenging to 
meet without a definitive list of all NQTLs, as stated earlier in this 
preamble, the Departments decline to provide an exhaustive list of 
NQTLs in these final rules or separate guidance. The Departments also 
note that, like the substantive requirements for NQTLs, the comparative 
analysis requirements of MHPAEA are not limited to a list of specific 
NQTLs, but apply to all NQTLs that limit the scope or duration of 
treatment under a plan or coverage. As a result, these final rules 
require that, in addition to the comparative analysis for each NQTL, 
each plan or issuer must prepare and make available to the Secretary, 
upon request, a written list of all NQTLs imposed under the plan or 
coverage.
    Additionally, for ERISA-covered plans, the written list must be 
provided to the named fiduciaries of the plan who are required to 
include a certification as part of each comparative analysis, as 
discussed later in this preamble. However, because the Departments 
recognize that a sufficient comparative analysis will include 
descriptions of the information, evidence, sources, and standards, as 
well as factors and evidentiary standards, that the plan or issuer 
considered or relied upon as part of the content elements, these final 
rules eliminate the separate requirement that proposed to require plans 
and issuers to provide a general description of any information 
considered or relied upon by the plan or issuer in preparing a 
comparative analysis for an NQTL.
    The Departments are aware of reports that some self-insured plans 
have been unsuccessful in receiving comparative analyses (or the 
information required to perform and document comparative analyses) 
requested from their TPAs or other service providers. The Departments 
emphasize that, as of the date of the publication of these final rules, 
the statutory requirement to perform and document comparative analyses 
has been applicable to plans and issuers for over 3 years. The 
Departments have previously stated that TPAs and other service 
providers are expected to work closely with plans and issuers to 
support their needs by providing data and other information about the 
design and application of NQTLs applicable to mental health and 
substance use disorder benefits and to medical/surgical benefits so 
that comparative analyses can be performed and documented (regardless 
of whether the Departments or an applicable State authority have 
requested them). Because plans and issuers are the entities required by 
statute to perform and document comparative analyses and there is no 
exception to the requirement when necessary information cannot be 
obtained from another entity, plans and issuers must work with their 
TPAs and service providers to obtain the information they need for 
their comparative analyses. Any ERISA-governed group health plans that 
contract with service providers refusing or otherwise failing to 
provide the requisite information should notify DOL.
    Additionally, as noted earlier in this preamble, the Departments 
acknowledge the challenges, cost, and complexity of collecting and 
evaluating data, but are of the view that it is important to include 
specific content requirements in these final rules, including those 
related to relevant data to measure the impact of an NQTL on access to 
mental health and substance use disorder benefits. However, in 
recognition of these challenges and to align with other changes made in 
these final rules the Departments have modified certain specific 
provisions within some of the listed content elements as described in 
the following paragraphs.
a. Description of the NQTL
    For each comparative analysis, the proposed rules would require a 
plan or issuer 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 the 
statute. This would include the documents that contain the specific 
language of the NQTL that the plan or issuer imposes. The plan or 
issuer would also be required to identify all mental health or 
substance use disorder benefits and medical/surgical benefits to which 
the NQTL applies, including a list identifying which of those 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. Finally, under the proposed rules, 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 and how the plan 
identified the variations of the NQTL.
    The Departments received few comments on this proposed first 
content element. One commenter suggested an alternative approach, 
arguing that, instead of requiring that plans and issuers provide all 
policies, guidelines, provider contracts, and any other documents where 
the NQTL ``appears or is described,'' plans and issuers should be 
required under these final rules to provide only the documents, 
policies, or procedures that govern the NQTL.
    After reviewing comments, the Departments are finalizing the 
requirement that a comparative analysis include a description that 
identifies the NQTL, identifies all mental health or substance use 
disorder benefits and medical/surgical benefits to which the NQTL 
applies, and describes which benefits are included in each 
classification. The Departments emphasize that these final rules still 
require a plan or issuer to identify the specific terms of the plan or 
coverage or other relevant terms regarding the

[[Page 77642]]

NQTL, including 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. Under these final rules, the entire policy, guideline, or 
document is not required to be included in a comparative analysis, but 
could be requested by the Departments in the course of reviewing a 
comparative analysis. The Departments decline to require the inclusion 
of only the documents that govern the NQTL, because that might not 
include all the policies or guidelines that determine how the NQTL is 
designed or applied with respect to mental health or substance use 
disorder benefits.
    Additionally, as noted earlier in these final rules, the 
Departments are not finalizing the proposed mathematical substantially 
all and predominant tests. Therefore, these final rules do not finalize 
the proposed content requirement that the description of the NQTL in a 
comparative analysis 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 and how the plan or issuer identified 
the variations of the NQTL.\114\
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    \114\ However, as discussed earlier in this preamble, the 
Departments are of the view that the concept of material differences 
in access helps to give meaning to the concepts of ``substantially 
all'' and ``predominant'' from the statutory language in the context 
of NQTLs.
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b. Identification and Definition of the Factors and Evidentiary 
Standards Used To Design or Apply the NQTL
    Under the second proposed content element, 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 also be required to define each 
factor, by including a detailed description of the factor, and 
providing a description of each evidentiary standard (and the source of 
each evidentiary standard) identified. The Departments stressed in the 
preamble to the proposed rules that when identifying the evidence or 
sources from which an evidentiary standard is derived, a 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 Departments received few comments on this content element. One 
commenter noted that the requirement to provide detailed descriptions 
of each factor, including evidence and sources relied upon with data 
and relevant citations, may be challenging for plans and issuers to 
operationalize. One commenter highlighted that it may be difficult to 
identify evidence and sources for factors that are processes, such as 
provider referral requirements, requirements to submit information for 
clinical review, or the development and approval of a treatment plan, 
and that processes used to apply the NQTL ``in operation'' should be 
analyzed under a separate step of the comparative analysis. Another 
commenter stated that the requirement to do a historical analysis of 
the factors utilized by plans and issuers, including dating and 
providing citations for sources (from the time they decided to impose 
the NQTL), would be burdensome, and recommended such a requirement be 
eliminated or that the Departments accept references to factors that 
are generally accepted business standards without the need for specific 
dates and citations.
    After reviewing comments, the Departments are finalizing the 
requirement that the comparative analysis identify and define all of 
the factors considered or relied upon to design or apply the NQTL to 
mental health or substance use disorder benefits and medical/surgical 
benefits as proposed, with minor non-substantive changes and a 
modification to align with changes made in these final rules to the 
prohibition on discriminatory factors and evidentiary standards. 
Specifically, these final rules clarify that a plan or issuer must 
identify every factor and the evidentiary standards considered or 
relied upon to design or apply each factor, instead of all of the 
factors considered, consistent with other provisions of these final 
rules. These final rules also add new 26 CFR 54.9812-2(c)(2)(ii)(C), 29 
CFR 2590.712-1(c)(2)(ii)(C), and 45 CFR 146.137(c)(2)(ii)(C) to make 
clear that plans and issuers must describe any steps taken to correct, 
cure, or supplement any information, evidence, sources, or standards 
that are the basis for a factor or evidentiary standard and that would 
otherwise have been considered biased or not objective in the absence 
of such steps. Additionally, as discussed earlier in this preamble, 
these final rules also make minor modifications to better distinguish 
evidentiary standards from factors within the definitions of those 
terms, and clarify that, while this content element requires a plan or 
issuer to include a description of each evidentiary standard used to 
design or apply each factor, this information is part of the required 
detailed description of each factor.
    While the Departments acknowledge that identifying and defining all 
factors takes time for a plan or issuer to complete (for newly applied 
and existing NQTLs), the Departments note that this requirement was not 
new when it was included in the proposed rules. The CAA, 2021 
specifically requires the identification and definition of factors 
relied upon to design and apply the NQTL,\115\ and has been applicable 
to plans and issuers since February 10, 2021. Identification and 
definition of the factors considered in the design and application of 
an NQTL was also previously addressed in FAQs Part 45.\116\ It is 
important for comparative analyses to include detailed information 
about factors, evidentiary standards, and their sources when a plan or 
issuer starts to perform and document its comparative analysis, to 
support the plan's or issuer's analysis of how factors and evidentiary 
standards are used to design and apply NQTLs. Such analysis should 
include support for the factors utilized from the time a plan or issuer 
decided to impose, or continues to impose, an NQTL on the relevant 
mental health and substance use disorder benefits, as well as medical/
surgical benefits. To the extent a plan or issuer cannot support its 
use of factors and evidentiary standards, including by providing 
information on the sources of the factors and evidentiary standards 
considered and relied on by plans and issuers (from the time they 
decided to impose the NQTL), it is unclear how

[[Page 77643]]

such plan or issuer can ensure that the factors and evidentiary 
standards are comparable and no more stringently designed and applied 
for mental health and substance use disorder benefits, than for 
medical/surgical benefits, as required under the statute (and the 
fourth and fifth content elements of a comparative analysis under these 
final rules).
---------------------------------------------------------------------------

    \115\ Code section 9812(a)(8)(A)(iii), ERISA section 
712(a)(8)(A)(iii), and PHS Act section 2726(a)(8)(A)(iii).
    \116\ 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. Additionally, the 2020 MHPAEA Self-Compliance Tool 
includes robust guidance related to requirements for NQTLs. Step two 
of the analysis outlined in the 2020 MHPAEA Self-Compliance Tool for 
NQTLs suggests identifying the factors considered in the design of 
the NQTL. See EBSA, Self-Compliance Tool for the Mental Health 
Parity and Addiction Equity Act (MHPAEA) (2020), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
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    Without such information, a comparative analysis likely would not 
accurately describe factors and their sources and would not demonstrate 
that, when factors are used to design or apply an NQTL to mental health 
or substance use disorder benefits, they are comparable to, and not 
more stringently applied, than they are when used to design or apply an 
NQTL to medical/surgical benefits. The absence of this information 
would also make it difficult for the Departments and applicable State 
authorities to confirm compliance with MHPAEA. The Departments stress 
that to the extent a plan or issuer applies factors that are processes, 
such as provider referral requirements, requirements to submit 
information for clinical review, or the development and approval of a 
treatment plan, such processes include both as written and in operation 
components. In addition, for these processes, a plan or issuer should 
be prepared to identify any sources utilized in determining the 
appropriateness of such requirements. To properly evaluate the 
comparability and stringency of such factors, it is important that any 
sources utilized be specifically identified in a comparative analysis. 
As stated earlier in this preamble, if a plan's or issuer's comparative 
analysis is requested by the Departments, the plan or issuer generally 
has multiple opportunities to engage with the Departments on these 
requirements.
c. Description of How Factors Are Used in the Design and Application of 
the NQTL
    Under the third proposed content element, a plan or issuer would be 
required to provide a description of how each factor identified and 
defined in the second content element of the comparative analysis is 
used in the design or application of an NQTL to mental health and 
substance use disorder benefits and medical/surgical benefits in a 
classification. This would 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. The proposed rules further 
provided 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. The Departments noted that the terms 
``deviations'' or ``variations'' in this context referred to any 
differences in how a factor is applied with respect to an NQTL.
    The Departments received few comments on this content element. One 
commenter requested that the Departments clarify the requirement to 
document the qualifications of staff as well as for the professional 
designations and qualifications of each decision maker involved in the 
application of a given NQTL factor, requesting that the Departments 
describe how the requirement to document the professional designations 
and qualifications of each decision maker should be appropriately 
applied to health plan operations, and specifically Pharmacy and 
Therapeutics (P&T) committees.
    After reviewing comments, the Departments are finalizing, with 
minor non-substantive changes, the requirement that plans and issuers 
provide a description of how each factor identified and defined in the 
second content element of the comparative analysis is used in the 
design or application of an NQTL to mental health and substance use 
disorder benefits and medical/surgical benefits in a classification. 
This includes the requirement to include a detailed explanation of how 
each identified and defined factor is used to determine which benefits 
are subject to the NQTL, and 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 benefits are subject to the NQTL. If the application of a factor 
depends on specific decisions made in the administration of benefits, 
the comparative analysis must also provide information on the nature 
and timing of the decisions, and the professional designations and 
qualifications of each decision maker. Additionally, if there is more 
than one factor, the comparative analysis must explain how all of the 
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. Finally, the comparative analysis must 
address any deviations or variations 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 or substance use disorder benefits as 
compared to medical/surgical benefits, and a description of how the 
plan or issuer establishes such deviations or variations. As used in 
this context, the terms ``deviations'' or ``variations'' in these final 
rules refer to any differences in how a factor is applied with respect 
to an NQTL.
    In response to the request for how the requirement to document 
professional designations and qualifications applies to health plan 
operations, including P&T committees, the Departments emphasize that 
these committees must have members with similar expertise for mental 
health conditions and substance use disorders as for medical conditions 
and surgical procedures. This may not necessarily require the same 
number of members with expertise relevant to

[[Page 77644]]

mental health conditions and substance use disorders as it does for 
medical conditions and surgical procedures, but plans and issuers 
should ensure that members of a P&T committee include individuals with 
similar expertise with respect to these conditions and disorders.
d. Demonstration of Comparability and Stringency, as Written
    Under the fourth proposed content element, plans and issuers would 
be required to 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 NQTL 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 NQTL with respect to medical/surgical 
benefits. The proposed rules would require plans and issuers to include 
in their comparative analyses, with respect to the NQTL and the factors 
used in designing and 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 to determine that the NQTL would or would not apply. In 
addition, such documentation would be required to 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 analyses, in each classification in which the NQTL applies, 
a comparison of how the NQTL, 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 NQTL 
or that address the application of the NQTL. Additionally, the plan or 
issuer would be required to include documentation in its comparative 
analysis 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. If there is any deviation(s) or 
variation(s) in the application of a factor, the plan or issuer would 
be required to include in its comparative analysis an explanation of 
the reason(s) for such 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 in the same classification, 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. In the preamble to the proposed 
rules, the Departments noted that the terms ``deviations'' or 
``variations'' in this context refer to any differences in how a factor 
is applied with respect to an NQTL.
    Multiple commenters expressed support for the requirement to 
demonstrate comparability and stringency as written through the 
proposed requirements for the fourth content element. However, other 
commenters raised concerns about the proposal, with some requesting 
additional clarification or guidance to assist with achieving 
compliance. For example, one commenter requested that the Departments 
clarify the difference between the proposed requirement that plans and 
issuers provide documentation that demonstrates how factors are 
comparably applied in step 4 of the comparative analysis content 
requirements, and the service-by-service documentation requirement for 
each factor under step 3 of the analysis, which requires a description 
of how factors are used in the design and application of the NQTL.
    Another commenter expressed concerns about how this content element 
may create operational challenges due to its breadth and how it would 
require plans to also consider other factors that were considered and 
not applied. Other commenters suggested ways that the Departments might 
ease the burden of the proposed fourth content element requirements on 
plans and issuers. One comment included a recommendation that the 
Departments clarify that plans and issuers can document each factor 
that was applied, including quantitative data, at the issuer level, 
rather than at the plan or coverage level. Another commenter encouraged 
the Departments to limit documentation requirements and enforcement to 
apply only to the comparability of the NQTL, as written and in 
operation; to acknowledge that subject matter experts may rely on 
professional knowledge, experience, and judgment to evaluate the 
evidentiary standard for identified factors; and to not require the use 
of quantitative data, calculations, or other analyses. Another 
commenter stated that the requirement to provide records documenting 
the consideration and application of all factors and evidentiary 
standards, as well as the results of their application, was 
inconsistent with the descriptions elsewhere of requiring a ``general 
description'' of the factors relied upon, and therefore urged the 
Departments to eliminate the requirement to include the actual evidence 
and related records in the comparative analysis itself.
    The Departments note that, while the third content element requires 
a plan or issuer to provide details on how each factor (and evidentiary 
standards or other information or sources) is used in the design and 
application of an NQTL, that content element does not require an 
evaluation of whether the use of those factors complies with MHPAEA. 
Instead, these final rules require a demonstration of comparability and 
stringency, both as written and in operation, in the fourth and fifth 
content requirements for a comparative analysis, respectively. 
Additionally, the Departments are of the view that a plan or issuer 
cannot effectively demonstrate comparability and stringency, as written 
and in operation, without sufficiently identifying and defining each 
factor (in the second content element), and explaining how each factor 
is used to design and apply an NQTL (in the third content element).
    After reviewing comments, these final rules retain all of the 
proposed substantive features of the fourth content element 
requirements, which require that plans and issuers 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 NQTL to mental 
health or substance use disorder benefits are comparable to, and are 
applied no more stringently than, the processes, strategies, 
evidentiary standards, or

[[Page 77645]]

other factors used in designing and applying the NQTL with respect to 
medical/surgical benefits. As finalized, this provision includes a 
technical modification to a citation that accounts for the 
reorganization of language in 26 CFR 54.9812-1(c)(4)(iii), 29 CFR 
2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) and also now 
specifies that the comparative analysis must include 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, 
instead of only as applied.\117\ The requirements related to 
demonstrating comparability and stringency as written under the fourth 
content element are otherwise being finalized as proposed.
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    \117\ As explained earlier in this preamble, these final rules 
amend the general rule in the design and application requirements, 
to align the language of the 2013 final regulations with the 
Departments' interpretation that a plan or issuer must consider the 
comparability and relative stringency of any processes, strategies, 
evidentiary standards, or other factors, used in both designing and 
applying NQTLs to mental health or substance use disorder benefits 
as compared to medical/surgical benefits in a classification. These 
final rules revise the regulatory text to make this requirement with 
respect to designing the NQTL explicit and for consistency with the 
statutory language added by the CAA, 2021.
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    The Departments note that this content requirement does not require 
the use of quantitative data, calculations, or other analyses, nor does 
it prohibit plans from relying on professional knowledge, experience, 
and judgment to evaluate the evidentiary standard for the identified 
factors. Instead, this content element is meant to show how the factors 
described in the third content element used in designing and applying 
an NQTL to mental health and substance use disorder benefits are 
comparable to, and applied no more stringently than, the factors used 
in designing and applying the NQTL to medical/surgical benefits in the 
same classification, as written. Despite the potential operational 
challenges associated with the breadth of this content element, the 
Departments are of the view that it is a vital component of comparative 
analyses and is necessary to demonstrate compliance with MHPAEA as 
written, consistent with the statute.\118\ The Departments note that, 
as discussed earlier in this preamble, these final rules eliminate the 
duplicative requirement from the proposed rules that plans and issuers 
include a general description of any information considered or relied 
upon in preparing the comparative analysis for each NQTL. The final 
rules also eliminate a duplicative reference to the evaluation of 
relevant data in the fourth content element for comparative analyses, 
which is addressed as part of the fifth content element.
---------------------------------------------------------------------------

    \118\ 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 recognize that a factor may be considered, but not 
used, to apply an NQTL to a specific benefit; however, to the extent 
such factor is used to design or apply the NQTL to mental health and 
substance use disorder benefits, it must be addressed in the plan's or 
issuer's comparative analysis, including in this fourth content 
element. The Departments are of the view that, to the extent an issuer 
or TPA uses factors or evidentiary standards to design and apply an 
NQTL consistently for multiple plans and coverage they administer, 
nothing in these final rules specifically prohibits the issuer or TPA 
from performing and documenting a comparative analysis at the level of 
the issuer (or TPA). However, to the extent relevant data exists at the 
level of the plan or coverage that measures access to mental health or 
substance use disorder benefits in a manner that is different than data 
at the level of the issuer or TPA, the Departments of are the view that 
a plan's or issuer's comparative analysis must account for that data, 
as described later in this preamble.
    The Departments note that it is possible that the reasons for any 
deviations or variations in the application of a factor used to apply 
the NQTL, or the application of the NQTL, might include steps to 
correct, cure, or supplement information, evidence, sources, or 
standards that would otherwise be considered biased or not objective in 
a manner that discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits. To the 
extent a plan or issuer has adequately documented such steps as part of 
its comparative analysis, as required in the second content element of 
these final rules requiring the identification and definition of the 
factors used to design or apply the NQTL, the plan or issuer is not 
required to address such steps again in the fourth content element if 
otherwise applicable, and instead may include references to the 
description of such steps in the second content element, as 
appropriate.
e. Demonstration of Comparability and Stringency, in Operation
    The Departments proposed that plans and issuers be required to 
evaluate in a comparative analysis 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 NQTL 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. A 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.
    To comply with the proposed fifth content element, plans and 
issuers would also be required to identify the relevant data collected 
and evaluated in their comparative analyses and provide an evaluation 
of the outcomes that resulted from the application of the NQTL to 
mental health or substance use disorder benefits and medical/surgical 
benefits to demonstrate compliance with the design and application 
requirements. Additionally, 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. Finally, under this content element, 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 material differences in access with respect to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits.
    Many commenters expressed support for the proposed requirement and 
standards for the demonstration of comparability and stringency in 
operation captured in the proposed fifth content element, especially 
with respect to NQTLs related to network composition and the use and 
application of clinical guidelines. Commenters supported the proposed 
requirements for detailed comparative analyses because they reasoned 
that these requirements would help

[[Page 77646]]

regulators understand participant and beneficiary access to mental 
health and substance use disorder services under real conditions as 
opposed to only looking to written plan terms and policies. Some 
commenters also included recommendations for additional data 
transparency requirements to ensure compliance and ease the burden on 
the Departments in enforcing MHPAEA's requirements. Several commenters 
also indicated a desire for additional clarification regarding this 
proposed content element. For example, one commenter noted that the 
fifth content element requires the demonstration of comparability and 
stringency in operation to be comprehensive, without discussion of what 
that term means.
    After reviewing comments, the Departments are finalizing the 
proposed requirements for the fifth content element with several 
clarifications and modifications. The Departments are finalizing the 
requirement that the comparative analysis must evaluate whether, in any 
classification, 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 are comparable to, and 
are applied no more stringently than those used with respect to 
medical/surgical benefits. However, the Departments have removed the 
references to the terms of the plan (or health insurance coverage) from 
this requirement, in recognition of the fact that the operations of the 
plan (or health insurance coverage) may not necessarily be reflected in 
its terms.
    The Departments are also finalizing the requirement that the 
comparative analysis must include a comprehensive explanation 
addressing the comparability and stringency of these processes, 
strategies, evidentiary standards, and other factors. These final rules 
require that this explanation address how the plan or issuer 
``evaluates whether'' (instead of ``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, those used in designing and applying 
the NQTL with respect to medical/surgical benefits.
    In these final rules, the Departments finalize with additional 
clarifications the proposal that, as part of the proposed fifth content 
element, a comprehensive explanation of how the plan or issuer 
evaluates in-operation compliance with the design and application 
requirements of MHPAEA would include an explanation of the methodology 
and underlying data used to demonstrate the application of the NQTL, as 
well as 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. These final rules also include language to 
align with changes made to address a lag between when an NQTL is newly 
designed and applied and when relevant data are available, as well as 
some limited circumstances in which no data exist that can reasonably 
assess any relevant impact of an NQTL on access to benefits. 
Specifically, with respect to an NQTL for which relevant data are 
temporarily unavailable, the Departments clarify that the comparative 
analysis must include a detailed explanation of the lack of relevant 
data, the basis for the plan's or issuer's conclusion that there is a 
lack of relevant data, and when and how the data will become available 
and be collected and analyzed.
    With respect to an NQTL for which no data exist that can reasonably 
assess any relevant impact of the NQTL on relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits, the fifth content element requires the plan 
or issuer to include as part of the comparative analysis a reasoned 
justification as to the basis for the conclusion that there are no data 
that can reasonably measure the NQTL's impact, an explanation of why 
the nature of the NQTL prevents the plan or issuer from reasonably 
measuring its impact, an explanation of what data was considered and 
rejected, and documentation of any additional safeguards or protocols 
used to ensure that the NQTL complies with all applicable requirements. 
As noted earlier in this preamble, the Departments recognize that plans 
and issuers may encounter difficulties when attempting to collect and 
evaluate relevant data in certain circumstances, and, accordingly, 
intend to review the explanation provided in a plan's or issuer's 
comparative analysis to understand those difficulties in determining 
whether the plan or issuer is in compliance with these final rules. 
However, the Departments reiterate their intention that the provisions 
of these final rules regarding the unavailability of data shall only 
apply in very limited circumstances and, where applicable, shall be 
construed narrowly.
    The Departments are finalizing the proposed requirements for the 
fifth content element that a comparative analysis must include 
identification of the relevant data collected and evaluated, as well as 
documentation of the outcomes that resulted from the application of the 
NQTL to mental health or substance use disorder benefits and medical/
surgical benefits, including the evaluation of relevant data as 
described earlier in this preamble. This also includes a reasoned 
justification and analysis that explains whether, and if so, why the 
plan or issuer concluded that differences in relevant data do or do not 
suggest the NQTL contributes to material differences in access to 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits.
    The Departments recognize that, for NQTLs related to network 
composition, under these final rules, a plan or issuer must collect and 
evaluate relevant data in a manner reasonably designed to assess the 
aggregate impact of all such NQTLs on access to mental health and 
substance use disorder benefits and medical/surgical benefits. 
Therefore, for NQTLs related to network composition, comparative 
analyses should analyze their impact as a whole. Plans and issuers may 
also, however, indicate in these comparative analyses where one 
particular NQTL may affect differences in access.
    Furthermore, in response to comments, these final rules provide 
more specifics on the requirement for the fifth content element to 
provide a detailed explanation of any material differences in access 
demonstrated by the outcomes evaluated, by requiring a reasoned 
explanation of any material differences in access that are not 
attributable to differences in the comparability or relative stringency 
of an NQTL as applied to mental health or substance use disorder 
benefits and medical/surgical benefits. This explanation should include 
a detailed discussion of any considerations beyond a plan's or issuer's 
control that contribute to the existence of material differences, as 
well as a detailed explanation of the bases for concluding that 
material differences are not attributable to differences in the 
comparability or relative stringency of the NQTL. The Departments note 
that such an explanation should be comprehensive and include evidence 
to support the conclusion that considerations beyond a plan's or 
issuer's control contribute to the

[[Page 77647]]

existence of material differences in access.
    Additionally, these final rules add that, to the extent differences 
in access to mental health or substance use disorder benefits are 
attributable to independent professional medical or clinical standards 
or fraud and abuse measures, and such standards or measures are used as 
the basis for a factor or evidentiary standard used to design or apply 
an NQTL, comparative analyses must include documentation explaining how 
any such differences in access are attributable to those standards or 
measures. By requiring plans and issuers to analyze and explain 
material differences in access as demonstrated by outcomes, the 
Departments aim to encourage plans and issuers to examine closely and 
critically the extent to which access to benefits is shaped by 
particular NQTLs so that they can take effective, reasonable actions as 
necessary to mitigate material differences.
    Finally, these final rules specify that, in demonstrating 
comparability and stringency in operation under the fifth content 
element in these final rules, plans and issuers must discuss in their 
comparative analyses the actions that have been or are being taken by 
the plan or issuer, as necessary, to address any material differences 
in access. Under these final rules, this discussion must include, as 
applicable, a reasoned explanation of any material differences in 
access to mental health or substance use disorder benefits as compared 
to medical/surgical benefits that persist despite reasonable actions 
that have been or are being taken. Additionally, for a plan or issuer 
designing and applying one or more NQTLs related to network 
composition, to comply with this aspect of the fifth content element, 
the comparative analysis must include a discussion of the actions that 
have been or are being taken, as necessary, to address material 
differences in access to in-network mental health and substance use 
disorder benefits as compared to in-network medical/surgical benefits, 
including those listed in these final rules as examples of possible 
actions that a plan or issuer could take to comply,\119\ if any such 
material differences exist. The Departments recognize that plans and 
issuers may already be aware of material differences in access to 
mental health or substance use disorder benefits and, as a result, may 
have taken actions to comply with MHPAEA's requirements. The 
Departments are of the view that comparative analyses should address 
any such actions taken to address material differences in access and 
their effectiveness, to improve access to mental health and substance 
use disorder care for participants and beneficiaries and demonstrate 
compliance with MHPAEA.
---------------------------------------------------------------------------

    \119\ See 26 CFR 54.9812-1(c)(4)(iii)(C), 29 CFR 
2590.712(c)(4)(iii)(C), and 45 CFR 146.136(c)(4)(iii)(C).
---------------------------------------------------------------------------

f. Findings and Conclusions
    Under the sixth and final proposed content element, a plan or 
issuer would be required to include in its comparative analysis its 
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. For this purpose, 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 
the 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, the 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. 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 the proposed rules.
    With respect to the requirements regarding reliance on an 
evaluation by an expert, one commenter was supportive of the rule as 
proposed, and another recommended that the Departments not require that 
the comparative analyses include the name of the expert so that experts 
would not be dissuaded from providing their expertise to avoid public 
identification.
    Some commenters were supportive of the fiduciary certification 
requirement for plans subject to ERISA, with one stating that this 
would help to ensure that plan fiduciaries meet their obligations to 
review comparative analyses and monitor their plans for compliance. 
Many other commenters expressed concern, with some reasoning that 
requiring a named fiduciary to review and certify that a comparative 
analysis complies with the content requirements of the proposed rules 
would put an unrealistic expectation on that fiduciary to understand 
the required nuance and complexity of the proposed rules. Other 
commenters opined that the requirement would create an unnecessary 
burden. These commenters stressed that the requirement would increase 
compliance costs (as fiduciaries would have to contract with additional 
service providers to assess compliance) without increasing access to 
benefits. Other commenters highlighted that Congress knew how to 
provide for a certification or attestation requirement but refrained 
from doing so for the MHPAEA comparative analysis. These comments urged 
against including the fiduciary certification requirement.
    The Departments are of the view that requiring plans and issuers to 
address the findings and conclusions of both comparability and 
stringency of processes, strategies, evidentiary standards and other 
factors in their comparative analysis is necessary and appropriate to 
increase and ensure compliance with MHPAEA. The Departments' experience 
enforcing the current regulatory framework has shown that, too often, 
plans and issuers design and apply NQTLs without considering the impact 
those NQTLs have on access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits for participants and 
beneficiaries. In practice, the Departments have encountered many NQTLs 
that often impose a greater burden on access to mental health and 
substance use disorder benefits than medical/surgical benefits. 
Therefore, the Departments are finalizing, with modifications, the 
requirements for the sixth content element that requires plans and 
issuers

[[Page 77648]]

to address the findings and conclusions as to the comparability and 
relative stringency of the processes, strategies, evidentiary 
standards, and other factors used in designing and applying NQTLs in 
their comparative analyses. The requirement under these final rules 
that plans and issuers must include any findings and conclusions is 
consistent with the statutory text, and these final rules also specify 
that these findings and conclusions must be included whether or not the 
plan or coverage is or is not (or might or might not be) in compliance. 
The Departments stress that, while these final rules require an 
assessment of each expert's qualifications and the extent to which the 
plan or issuer ultimately relied on their evaluation (if at all), these 
final rules do not require the name of the expert in the comparative 
analysis. These final rules also make additional minor technical edits 
to the sixth content requirement, for clarity.
    In response to comments expressing concern with the named fiduciary 
certification requirement for plans subject to ERISA in the proposed 
rules, DOL is modifying this requirement. These final rules continue to 
require, for plans subject to ERISA, the comparative analysis to 
include a certification by one or more named fiduciaries. However, 
instead of requiring noted fiduciaries to state whether they found the 
comparative analysis to be in compliance with the content requirements, 
these final rules require certification confirming the fiduciary's 
engagement in a prudent process to select one or more qualified service 
providers to perform and document a comparative analysis in connection 
with the imposition of any NQTLs that apply to mental health and 
substance use disorder benefits under the plan in accordance with 
MHPAEA and its implementing regulations, as well as satisfaction of the 
duty to monitor those service providers. For this purpose, DOL expects 
that a plan fiduciary making such a certification will, at a minimum, 
review the comparative analysis prepared by or on behalf of the plan 
with respect to an NQTL applicable to mental health and substance use 
disorder benefits and medical/surgical benefits; ask questions about 
the analysis and discuss it with service providers, as necessary, to 
understand the findings and conclusions documented in the analysis; and 
ensure that a service provider responsible (in whole or in part) for 
performing and documenting a comparative analysis provides assurance 
that, to the best of its ability, the NQTL and associated comparative 
analysis complies with the requirements of MHPAEA and its implementing 
regulations. While not required, a plan fiduciary may alternatively 
provide a certification that each comparative analysis is in compliance 
with the content requirements, consistent with the proposed 
certification requirement in the proposed rules.\120\ Because the 
statute expressly places the obligation on the plan (or issuer) to 
ensure compliance with MHPAEA, these final rules align with the duties 
ERISA imposes on plan fiduciaries under part 4 of ERISA.
---------------------------------------------------------------------------

    \120\ See 88 FR 51552, 51651 (Aug. 3, 2023), setting forth the 
proposed requirement that one or more named fiduciaries who have 
reviewed a comparative analysis provide a certification stating 
whether they found the comparative analysis to be in compliance with 
the content requirements of the regulations.
---------------------------------------------------------------------------

2. Requirement To Provide Comparative Analyses and Notices to the 
Department 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)
    Effective February 10, 2021, plans and issuers have been required, 
consistent with the statute, to perform and document comparative 
analyses and make them available to the Departments or applicable State 
authorities upon request.\121\ The proposed rules would require that 
plans and issuers make a comparative analysis available and submit it 
upon request to the relevant Secretary (as well as applicable State 
authorities and participants and beneficiaries in certain 
circumstances), explain that additional information may be required to 
be provided after a comparative analysis is deemed insufficient, and 
outline requirements for plans and issuers after an initial 
determination of noncompliance and a final determination of 
noncompliance. Some commenters were supportive of the proposed 
requirements, though others offered suggestions for improving the 
various elements, as described later in this preamble.
---------------------------------------------------------------------------

    \121\ Code section 9812(a)(8), ERISA section 712(a)(8), and PHS 
Act section 2726(a)(8). This requirement was reiterated in FAQs Part 
45, 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.
---------------------------------------------------------------------------

    Once a comparative analysis is requested, plans and issuers would 
be required 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). Some commenters 
remarked that 10 business days is not sufficient to provide a 
comparative analysis upon request. While a few commenters requested 
that the Departments allow plans and issuers at least 30 days to 
provide the requested information, others requested a 60-day period to 
provide an updated comparative analysis. Several commenters highlighted 
that plans and issuers might not anticipate what is regarded as an NQTL 
by the Departments and requested that the Departments provide 
additional time to respond to a request for a comparative analysis for 
an NQTL that was not on an illustrative list of NQTLs provided by the 
Departments.
    After reviewing comments, the Departments are finalizing, as 
proposed, the requirement that plans and issuers make available a 
comparative analysis and submit it to the relevant Secretary within 10 
business days of receipt of a request from the relevant Secretary (or 
an additional period of time specified by the relevant Secretary). 
Plans and issuers are statutorily obligated to perform and document 
their NQTL comparative analyses, and to be ready to make them available 
in response to a request, regardless of whether the plan or issuer has 
actually received a request from the Departments or an applicable State 
authority, and have been since February 10, 2021. While these final 
rules specify content elements that comparative analyses must contain, 
the Departments have expected, and will continue to expect, that plans 
and issuers perform and document their NQTL comparative analyses 
without waiting for a request from the Departments or an applicable 
State authority. Where plans and issuers have performed and documented 
their NQTL comparative analyses, additional time will not generally be 
required to respond to an initial request. The language allowing an 
additional period of time specified by the Secretary for a plan or 
issuer to submit a comparative analysis to the Secretary provides 
sufficient flexibility to plans and issuers where the Departments 
determine it to be appropriate.
    Under the proposed rules, in instances in which the Secretary 
determines that the plan or issuer has not submitted sufficient 
information for the Secretary to review the requested comparative 
analysis, 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. 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

[[Page 77649]]

additional information to be submitted (or an additional period of time 
specified by the relevant Secretary). The Departments noted in the 
preamble to the proposed rules that 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 data required by the 
Departments to be collected and evaluated under the relevant data 
evaluation requirements. A few commenters stated that 10 business days 
was not enough time to respond with supplemental information, calling 
the timeframe overly restrictive and unrealistically short. One 
requested 60 days to respond to such a request instead of 10 business 
days as proposed.
    After reviewing comments, the Departments are finalizing with minor 
technical edits the requirement that plans and issuers furnish the 
additional requested 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). The Departments acknowledge that in some, 
but not all, cases, 10 business days may not be enough time to respond 
with supplemental information and recognize that not all requests for 
supplemental information are equal in terms of the volume and 
complexity of the information requested, which is why these final rules 
allow for additional time to be specified by the relevant Secretary 
(for example, where the volume or complexity of the additional 
information requested would take more time to collect and provide). The 
Departments emphasize that additional information must be provided 
within 10 business days, rather than calendar days, and are of the view 
that, in the majority of cases, 10 business days should be sufficient. 
However, unless otherwise specified, the other timelines associated 
with the comparative analysis requirements generally refer to calendar 
days.
    In instances where the relevant Secretary 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, the 
Departments proposed to require the plan or issuer to respond to the 
relevant Secretary, specifying the actions it will take to come into 
compliance. The plan or issuer would also be required to provide to the 
relevant Secretary additional comparative analyses meeting the 
requirements of the proposed rules that demonstrate compliance with 
MHPAEA. The plan or issuer would be required to submit these responses 
to the relevant Secretary not later than 45 calendar days after the 
relevant Secretary's initial determination that the plan or issuer is 
not in compliance.
    One commenter stated that the proposed penalties for noncompliance 
are not strict enough to discourage noncompliant issuer behavior and 
stated that, without strict enforcement penalties, issuers will 
continue to attempt to skirt the law. Additionally, as discussed 
earlier in the preamble, other commenters urged the Departments to 
provide procedural guardrails and due process protections for plans and 
issuers prior to the final determination of noncompliance, suggesting 
that the plan or issuer should have an opportunity to meet with the DOL 
or HHS national office, review the determination, and work together to 
achieve compliance.
    After reviewing comments, the Departments are finalizing this 
requirement with minor edits. These final rules clarify, however, that 
the plan or issuer must respond to the initial determination by the 
Secretary, instead of more generally requiring the plan or issuer to 
respond to the Secretary, as proposed, to better match the statutory 
text. In response to the commenter who criticized the penalties for 
noncompliance, the Departments note that they do not have the statutory 
authority to increase penalties for violations of MHPAEA, but, as 
discussed earlier in this preamble, have stepped up enforcement efforts 
and anticipate continuing to prioritize enforcement of these 
requirements.
    As discussed earlier in the preamble, the statute establishes the 
comparative analysis request process, as well as the penalties for 
failing to comply, and, working within this process, the Departments 
have worked with many plans and issuers to achieve compliance, often 
without issuing a final determination of noncompliance, as described at 
length in our MHPAEA Reports to Congress.\122\ The Departments expect 
that this approach will continue to work after the issuance of these 
final rules. To the extent possible, the Departments expect to continue 
to work with plans and issuers to ensure compliance, without need of 
issuance of a final determination of noncompliance.
---------------------------------------------------------------------------

    \122\ See, e.g., 2023 MHPAEA Comparative Analysis Report to 
Congress (July 2023), https://www.dol.gov/sites/dolgov/files/ebsa/
laws-and-regulations/laws/mental-health-parity/report-to-congress-
2023-mhpaea-comparative-analysis.pdf. Other reports are available at 
https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/reports.
---------------------------------------------------------------------------

    If the relevant Department makes a final determination that the 
plan or issuer is not in compliance with MHPAEA (after issuance of an 
initial determination of noncompliance, a failure by the plan or issuer 
to sufficiently respond to the initial determination and specify the 
actions the plan or issuer will take to bring the plan or coverage into 
compliance, and a failure to provide additional sufficient comparative 
analyses within the 45-calendar-day corrective action period), the plan 
or issuer must, within 7 calendar days of the receipt of the final 
determination of noncompliance, 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 the 
proposed rules. The plan or issuer would also be required to provide a 
copy of the notice to the relevant Secretary, any service provider 
involved in the claims process, and any fiduciary responsible for 
deciding benefit claims within the same timeframe. The Departments 
noted in the preamble to the proposed rules that this notice gives 
participants and beneficiaries (or their authorized representatives) 
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. 
The proposed rules set forth requirements for the content of this 
notice and the manner in which it would be required to be provided, 
including that the notice be written in plain language and in a manner 
calculated to be understood by the average plan participant. The notice 
would also be required to include the following statement prominently 
displayed on the first page, in no less than 14-point font:

    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 proposed rules would also require the notice contain a summary 
of

[[Page 77650]]

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, 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 concurred with those actions. Finally, the proposed rules 
would require that 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 the proposed rules, a plan or issuer would be required to 
make the notice available in paper form. The plan or issuer may 
alternatively 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 participants and beneficiaries in paper form 
(such as a postcard) or email that the documents are available on the 
internet, provides the internet address, and notifies participants and 
beneficiaries that the documents are available in paper form upon 
request. The Departments noted that this approach is similar to 
standards for when a plan or issuer is permitted to provide a copy of 
its plan's or coverage's summary of benefits and coverage with respect 
to participants and beneficiaries who are eligible but not enrolled for 
coverage.\123\ 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.
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    \123\ See 26 CFR 54.9815-2715(a)(4)(ii)(B), 29 CFR 2590.715-
2715(a)(4)(ii)(B), and 45 CFR 147.200(a)(4)(ii)(B).
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    Multiple commenters recommended that the requirement for plans and 
issuers to include information in the notice about any opportunity for 
a participant or beneficiary to have claims reprocessed be revised to 
instead place affirmative obligations on plans and issuers who receive 
a final determination of noncompliance to identify affected 
participants or beneficiaries, reprocess claims, and take other 
necessary steps to rectify harms. One commenter further suggested that 
plans or issuers be required to describe the process they will follow 
and the time frames for reprocessing claims in the notice of 
noncompliance. Another commenter opposed the requirement that a plan 
deemed noncompliant send a notice to all beneficiaries, arguing that it 
amounted to public shaming and that it was beyond the scope of the 
authorizing statute.
    Several commenters suggested that the notice should be provided to 
participating providers, as such providers may have experienced issues 
submitting claims to plans and issuers for reimbursement, including 
improper denials, and stopped submitting further claims. One commenter 
requested that these final rules be accompanied by guidance and online 
compliance resources developed by the Departments to help the affected 
plans and issuers draft their notices of noncompliance.
    Several commenters expressed concern that providing notice within 7 
calendar days would not be feasible, particularly with the level of 
information that a plan or issuer is required to compile and provide. 
Some commenters requested a 30-day period to provide this notice and 
others requested a 45-day period.
    After reviewing comments, the Departments are finalizing with minor 
clarifications the provision that a 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 MHPAEA if the Secretary makes a final determination of 
noncompliance, as required by the statute. The Departments highlight 
that the statute specifies the notice be provided within 7 days, and 
the Departments lack the statutory authority to extend this timeframe, 
such as to 30 or 45 days, as suggested by commenters. However, in 
response to comments, these final rules provide that plans and issuers 
have 7 business days instead of 7 calendar days to notify participants 
and beneficiaries of a final determination of noncompliance, to provide 
plans and issuers additional time to prepare the notice of final 
determination as required under these final rules.
    The Departments also note that the relevant statutory language 
requires notice to be sent to ``all individuals enrolled in the plan or 
applicable health insurance coverage offered by the issuer,'' which 
includes participants and beneficiaries, rather than attending 
providers. However, if a single notice is provided to a participant and 
any beneficiaries at the participant's last known address, the 
requirement to provide notice to participants and beneficiaries is 
considered satisfied, unless the plan or issuer knows (or reasonably 
should have known) that the beneficiary's last known address is 
different, in which case a notice is required to be provided to the 
beneficiary at the beneficiary's last known address.
    The Departments are also finalizing the requirement for ERISA-
covered plans that the plan or issuer must provide a copy of the notice 
to any service provider involved in the claims process, and any 
fiduciary responsible for deciding benefit claims within 7 business 
days of receipt of the final determination of noncompliance. DOL 
recognizes that, depending on the nature of the NQTL and the final 
determination of noncompliance, not all such determinations will impact 
adjudicated claims, but is of the view that it is important for such 
information to be disclosed to relevant service providers and 
fiduciaries, so they can properly consider whether such changes are 
required.
    The Departments are finalizing the proposed notice content 
requirements and stress that the notice must describe any other actions 
the plan or issuer is taking to come into compliance with MHPAEA. 
Generally, when noncompliance has been identified, the Departments will 
require plans and issuers to take steps to identify affected 
participants, reprocess claims, and take other necessary steps to 
rectify harms; however, the specific steps a plan or issuer will be 
required to take in response to a final determination of noncompliance 
will depend on the facts and circumstances of the violations.

[[Page 77651]]

While these final rules generally require a plan or issuer to include 
an explanation of any opportunity for a participant or beneficiary to 
have a claim for benefits reprocessed (or, as explained below, 
submitted) in a notice describing a final determination of 
noncompliance, the Departments do not intend that provision to imply 
that plans and issuers will not be obligated to take any other 
particular actions intended to provide appropriate corrections to 
affected individuals or otherwise remediate potential harms.
    As noted throughout this preamble to these final rules, the 
Departments are committed to ensuring that participants and 
beneficiaries have access to the mental health and substance use 
disorder benefits covered under their plan or coverage and are not 
adversely affected by violations of MHPAEA. The Departments are, 
however, modifying the requirement that plans and issuers must include 
a clear and accurate statement as to whether the Secretary has 
indicated that those actions, if completed, will result in compliance, 
to reflect that the Secretary may not be able to know whether the 
actions taken or being taken will bring the plan into compliance. 
Instead, under these final rules, plans and issuers must indicate 
whether the relevant Secretary has concurred with those actions. The 
Departments are also modifying the requirement that the notice include 
a description of any opportunity for a participant or beneficiary to 
have a claim for benefits reprocessed to include any opportunity to 
submit a new claim, to account for participants and beneficiaries who 
did not initially file a claim for a mental health or substance use 
disorder benefit that could have been covered.
    In the proposed rules, the Departments solicited 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. One commenter suggested that to improve 
transparency, all informational materials published to the public 
following final agency determinations of noncompliance should clearly 
state the name of the insurer who holds contracts with the TPA or MBHO 
if a TPA or MBHO is found to be in violation of MHPAEA. The commenter 
also recommended that the Departments require all States to make 
notices of MHPAEA violations publicly available via State agency 
websites and other avenues easily accessible by beneficiaries within a 
reasonable timeframe after determinations of noncompliance with MHPAEA 
are made. The Departments acknowledge these comments and will continue 
to consider them.
    In addition to making the comparative analyses available upon 
request to the relevant Secretary, the Departments proposed to codify a 
requirement that plans and issuers make available the comparative 
analyses when requested by any applicable State authority, as well as 
participants and beneficiaries (including 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, for ERISA-covered plans, 
participants and beneficiaries at any time, under authority under ERISA 
section 104. The Departments noted that, while the proposed rules would 
codify the statutory requirement to make comparative analyses available 
to the applicable State authority upon request, the proposed rules 
would not otherwise apply the timeframes and processes regarding the 
Secretarial request process to requests for comparative analyses made 
by applicable State authorities. The Departments requested comments on 
these proposals, including whether the proposed requirements should 
apply to plans and issuers with respect to a request made by the 
applicable State authority for an NQTL comparative analysis, including 
the proposed notice requirement following a final determination of 
noncompliance.
    Some commenters recommended that the Departments emphasize that 
health insurance issuers have an unambiguous duty to share their MHPAEA 
comparative analyses with applicable State authorities upon request 
even if the relevant Secretary has not also made the same request. 
Commenters also recommended that the Departments work closely with 
State insurance authorities to incentivize and facilitate the 
implementation of comparable review and notice standards. Several other 
commenters requested the Departments include applicable State 
authorities in proposed 26 CFR 54.9812-2(b), 29 CFR 2590.712-1(b), and 
45 CFR 146.137(b), to make clear that States have the authority to 
request comparative analyses. Some commenters noted that some issuers 
refuse to provide comparative analyses to the applicable State 
authority upon request. Commenters requested guidance concerning 
requests from participants, beneficiaries, and authorized 
representatives who have received an adverse benefit determination 
related to mental health and substance use disorder benefits, including 
one commenter requesting guidance on how participants, beneficiaries, 
and their authorized representatives may report potential violations of 
MHPAEA, and another commenter that requested clear guidelines regarding 
when the issuance of an adverse benefit determination triggers a 
requirement by the plan to disclose its comparative analyses, upon 
request.
    After reviewing comments, the Departments are finalizing as 
proposed the requirement that plans and issuers must make available a 
copy of the comparative analysis when requested by any applicable State 
authority, 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, for ERISA-covered 
plans, participants and beneficiaries generally, who may request the 
comparative analysis at any time under ERISA section 104. The 
Departments are of the view that it is important that participants and 
beneficiaries are able to access comparative analyses of NQTLs imposed 
on mental health and substance use disorder benefits under their plan 
or coverage. In implementing MHPAEA, the Departments have heard 
repeated complaints that plans and issuers fail to disclose information 
on the processes, strategies, evidentiary standards, and other factors 
used to design and apply an NQTL, including the relevant comparative 
analyses to participants and beneficiaries, despite clear statements by 
the Departments regarding this requirement.\124\ The Departments are 
concerned that limiting the ability of participants and beneficiaries 
(or their authorized representatives) to request the

[[Page 77652]]

comparative analyses to only those situations where there is an adverse 
benefit determination related to mental health or substance use 
disorder benefits, would frustrate participants' and beneficiaries' 
ability to get the information they need about their mental health and 
substance use disorder benefits to effectuate their rights, including 
in situations where they forgo submitting a claim for benefits. The 
Departments remain committed to responding to inquiries and complaints 
about compliance with MHPAEA, and participants, beneficiaries, and 
enrollees, as well as their authorized representatives, may contact 
EBSA at 1-866-444-3272 or https://www.dol.gov/agencies/ebsa/about-ebsa/ask-a-question/ask-ebsa or HHS at 1-800-985-3059 or https://www.cms.gov/medical-bill-rights/help/submit-a-complaint.
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    \124\ See, e.g., 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), 
and 45 CFR 146.136(d)(3); FAQs About Affordable Care Act 
Implementation Part V and Mental Health Parity Implementation (Dec. 
22, 2010), 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 31, 
Mental Health Parity Implementation and Women's Health and Cancer 
Rights Action Implementation (Apr. 20, 2016), 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 Mental 
Health Parity Implementation and the Consolidated Appropriations 
Act, 2021 Part 45 (Apr. 2, 2021), 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.
---------------------------------------------------------------------------

    As specified earlier in the preamble, the statute requires that 
plans and issuers must provide a copy of the comparative analysis to 
any applicable State authority upon request. The statute does not 
require applicable State authorities to follow the same procedure to 
review and request comparative analyses as that applicable to the 
Departments, and, therefore, these final rules do not include 
``applicable State authorities'' in the regulatory text that describes 
this procedure. However, these final rules at 26 CFR 54.9812-2(e), 29 
CFR 2590.712-1(e), and 45 CFR 146.137(e) provide that a health 
insurance issuer in a State must provide the comparative analysis to 
the applicable State authority (that is, the State insurance 
commissioner or official or officials designated by the State to 
enforce the requirements of title XXVII of the PHS Act for the State 
involved with respect to such issuer) upon request. Additionally, 
compliance with MHPAEA is not determinative of compliance with other 
State or Federal laws. Applicable State authorities retain independent 
authority over issuers of group and individual health insurance 
coverage and may request or require additional information under their 
own authorities. Issuers of group and individual health insurance 
coverage must also comply with State insurance laws, to the extent they 
do not prevent the application of the requirements 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)

    The Departments proposed 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), the proposed rules applicable to group 
health plans (and health insurance coverage offered by an issuer in 
connection with such plans) \125\ would apply on the first day of the 
first plan year beginning on or after January 1, 2025. The Departments 
acknowledged in the preamble of the proposed rules that the proposed 
requirements would take time for plans and issuers to implement. 
Therefore, the Departments sought to strike an appropriate balance for 
the date by which plans and issuers must comply with final rules. The 
Departments noted that until the proposed applicability date, plans and 
issuers would be required to continue to comply with the most recent 
MHPAEA regulations codified in the CFR,\126\ as applicable. The 
Departments similarly proposed that the requirements in 26 CFR 54.9812-
2, 29 CFR 2590.712-1, and 45 CFR 146.137 of the proposed rules, 
governing the requirements for comparative analyses under MHPAEA, would 
apply for plan years beginning on or after January 1, 2025. However, 
the Departments reminded plans and issuers that the statutory 
provisions added to MHPAEA by the CAA, 2021 are self-implementing and 
took effect on February 10, 2021. As such, the proposed delayed 
applicability date for the comparative analysis requirements in the 
proposed rules would not alter a plan's or issuer's obligations under 
the statute. The Departments solicited comments on the proposed 
applicability dates.
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    \125\ Coverage offered by Medicaid managed care organizations, 
CHIP, and Medicaid Alternative Benefit Programs are subject to 
separate mental health parity regulations at codified at 42 CFR 
parts 438, 440, 456, and 457. See Medicaid and Children's Health 
Insurance Programs; Mental Health Parity and Addiction Equity Act of 
2008; Application of Mental Health Parity Requirements to Coverage 
Offered by Medicaid Managed Care Organizations, the Children's 
Health Insurance Program (CHIP), and Alternative Benefit Plans; 
Final Rule. 81 FR 18390 (Mar. 30, 2016), https://www.federalregister.gov/documents/2016/03/30/2016-06876/medicaid-and-childrens-health-insurance-programs-mental-health-parity-and-addiction-equity-act-of.
    \126\ 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.
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    Several commenters stated that the proposals put forward sweeping 
changes to the existing rules. To allow time for implementation, 
commenters requested that the applicability date of the final rules for 
plans and issuers be for plan years beginning on or after January 1, 
2026, or 2 years following publication of the final rules. Several 
commenters requested an implementation period ranging from 1 to 2 
years. Some of these commenters additionally requested a 1-year good 
faith enforcement safe harbor to allow plans and issuers additional 
time to comply with the new requirements. Another commenter requested 
that the proposed rules be effective in 2024, in order to not delay 
access to vital mental health and substance use disorder benefits.
    In order to effectuate these final rules in a timely manner and to 
ensure that participants and beneficiaries seeking benefits to treat 
mental health conditions or substance use disorders do not face a 
greater burden on access to mental health and substance use disorder 
benefits than medical/surgical benefits, while acknowledging the 
challenges to plans and issuers of implementing some of the 
requirements in these final rules, the Departments are finalizing the 
applicability provision, with some modifications. Accordingly, these 
final rules apply to group health plans (and health insurance coverage 
offered by an issuer in connection with a group health plan) on the 
first day of the first plan year beginning on or after January 1, 2025, 
except for the meaningful benefits standard, the prohibition on 
discriminatory factors and evidentiary standards, the relevant data 
evaluation requirements, and the related requirements in the provisions 
for comparative analyses, which apply on the first day of the first 
plan year beginning on or after January 1, 2026. Until these rules are 
applicable, plans and issuers must continue to comply with the 
regulations implementing MHPAEA as in effect prior to the effective 
date of these final rules, and must comply with the statutory 
provisions of MHPAEA, as amended by the CAA, 2021, both before and 
after these final rules become applicable. The Departments remind plans 
and issuers that guidance provided in FAQs Part 45 addresses what 
information plans and issuers should make available under MHPAEA, as 
amended by the CAA, 2021, in response to the Departments' request for 
comparative analyses and can be relied on pending the applicability 
dates of these final rules.
    In response to the comments raising concerns about the magnitude of 
the changes of the proposed requirements in the proposed rules, 
particularly in relation to the amount of data collection and analysis 
that would be required and the time needed by plans and issuers to 
implement these changes, the Departments are delaying the applicability 
date with respect to certain provisions in these final rules, as

[[Page 77653]]

discussed in this section of the preamble.
    As part of the request to the Departments to extend the 
applicability date of these final rules, several commenters raised 
concerns regarding the amount of new documentation and the time 
necessary to implement the relevant data evaluation requirements, 
which, as noted earlier in this preamble, require plans and issuers to 
collect and evaluate data in a manner that is not currently required. 
The Departments acknowledge that the relevant data evaluation 
requirements and the related requirements in the provisions requiring 
the comparative analyses to demonstrate comparability and stringency, 
in operation, impose specific new obligations that plans and issuers 
must comply with in order to demonstrate that an NQTL with respect to 
mental health or substance use disorder benefits in any classification 
is no more restrictive in operation than the predominant NQTL that 
applies to substantially all medical/surgical benefits in the same 
classification. These final rules identify examples of relevant data 
that a plan or issuer may be required to collect, but ultimately the 
plan or issuer will need to determine which data must be collected and 
analyzed to comply with these final rules, whether any differences 
reflected in the data are material, and what reasonable actions to 
take, as necessary, when there are material differences in access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits in the same classification. Similarly, the 
Departments recognize that the meaningful benefits standard under these 
final rules could impose new obligations for plans and issuers, which 
may require changes to benefit design that may be difficult to 
implement within a short period of time after the issuance of these 
final rules. Additionally, the Departments acknowledge that the 
prohibition on discriminatory factors may require plans and issuers to 
evaluate their NQTLs to determine whether such limitations are based on 
prohibited factors or evidentiary standards and whether changes need to 
be made to such factors or evidentiary standards in order to comply 
with these final rules.
    The Departments agree with commenters that this process will take 
time and that plans and issuers will face difficulty complying with 
these requirements by the start of a plan year beginning on or after 
January 1, 2025. Therefore, the Departments are delaying the 
applicability date for the meaningful benefits standard under 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); the prohibition on discriminatory factors and 
evidentiary standards under 26 CFR 54.9812-1(c)(4)(i)(B), 29 CFR 
2590.712(c)(4)(i)(B), and 45 CFR 146.136(c)(4)(i)(B); the relevant data 
evaluation requirements under 26 CFR 54.9812-1(c)(4)(iii), 29 CFR 
2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii); and the related 
requirements in the provisions for comparative analyses; \127\ to apply 
on the first day of the first plan year beginning on or after January 
1, 2026. The Departments emphasize that plans and issuers must continue 
to comply with the 2013 final regulations until the respective 
applicability dates in these final rules. For example, even though the 
prohibition on discriminatory factors does not apply to plans and 
issuers until plan years beginning on or after January 1, 2026, plans 
and issuers should still be prepared to demonstrate that the factors 
used to design or apply an NQTL to mental health and substance use 
disorder benefits are comparable to and applied no more stringently 
than the factors used to design and apply an NQTL to medical/surgical 
benefits in the same classification in accordance with the 2013 final 
regulations. The Departments expect that plans and issuers will utilize 
the delayed applicability period to work in good faith to update 
systems and processes to comply with the new requirements of these 
final rules. Accordingly, the Departments encourage plans and issuers 
to start working to ensure that they are in a position to comply with 
all aspects of these final rules in a timely manner, including by 
working to comply with the meaningful benefits standard, the 
prohibition on discriminatory factors and evidentiary standards, and 
the relevant data evaluation requirements, as well as the associated 
comparative analysis requirements, no later than for plan years 
beginning on or after January 1, 2026.
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    \127\ 26 CFR 54.9812-2(c)(2)(ii)(C), (c)(5)(i)(C) and (D), and 
(c)(5)(ii) through (v); 29 CFR 2590.712-1(c)(2)(ii)(C), (c)(5)(i)(C) 
and (D), and (c)(5)(ii) through (v); and 45 CFR 137(c)(2)(ii)(C), 
(c)(5)(i)(C) and (D), and (c)(5)(ii) through (v).
---------------------------------------------------------------------------

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 proposed severability clauses in the proposed rules 
to capture the Departments' intent that, to the extent a reviewing 
court holds that any provision of the final rules 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 expressed their view that if the proposed rules were 
finalized as proposed or as a substantially similar version, such rules 
would provide comprehensive protections that implement MHPAEA's 
requirements. The Departments noted that the aim of the 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 the proposed rules 
would individually contribute to furthering that aim. Therefore, the 
Departments proposed that if a court were to hold that any provisions 
were invalid or unenforceable, any affected provisions would be 
severable from the rest of the proposed rules, if finalized, and would 
not affect any other provisions or their application to persons not 
similarly situated or to dissimilar circumstances.
    The Departments did not receive any comments relating to the 
proposed severability provisions and are finalizing these provisions 
without change. The Departments note that, while the requirements under 
26 CFR 54.9812-1(c)(4)(i) and (iii), 29 CFR 2590.712(c)(4)(i) and 
(iii), and 45 CFR 146.136(c)(4)(i) and (iii) are part of a 
comprehensive regulatory scheme, the provisions are separate aspects of 
the parity analysis and can continue to apply independently if other 
provisions of these final rules are invalidated. While the Departments 
have made some changes from the proposed rules in these final rules, as 
discussed earlier in this preamble, the Departments are not of the view 
that these changes affect the severability of the provisions of these 
final rules.

E. Request for Information

    In the preamble to the proposed rules, the Departments requested 
information on ways to improve the coverage of mental health and 
substance use disorder benefits through other consumer protection laws, 
including the ACA. The Departments requested comments on ways to 
incentivize TPAs to facilitate compliance with MHPAEA on behalf of the 
plans that they design and administer and methods to enhance access to 
mental health and substance use disorder benefits through the 
Departments' implementation of PHS Act section 2706(a), the provider 
nondiscrimination requirements. The Departments also requested comments

[[Page 77654]]

on ways that they could improve the coverage of and enhance access to 
mental health and substance use disorder benefits through their 
implementation of the provider directory requirements under Code 
section 9820(a) and (b), ERISA section 720(a) and (b), and PHS Act 
section 2799A-5(a) and (b), the requirements for telehealth, and the 
ways in which the Departments could leverage ERISA's and the ACA's 
existing claims procedure requirements to help facilitate access to 
mental health and substance use disorder benefits. Finally, the 
Departments requested information on whether HHS and the Treasury 
should consider potential amendments to the minimum value rule and on 
how behavioral health crisis services fit within the existing MHPAEA 
classifications or the EHB categories.
    The Departments appreciate the many comments received in response 
to the request for information and will use the comments to inform 
potential future rulemaking and guidance.

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

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

    Prior to the enactment of the CAA, 2023 on December 29, 2022, 
sponsors of self-funded non-Federal governmental plans were permitted 
to elect to exempt those plans from (opt out of) compliance with the 
MHPAEA requirements, among other specified requirement categories, in 
title XXVII of the PHS Act.\128\
---------------------------------------------------------------------------

    \128\ PHS Act section 2722(a)(2); 45 CFR 146.180.
---------------------------------------------------------------------------

    The CAA, 2023 included a provision that sunsets the election option 
with respect to MHPAEA.\129\ Specifically, that provision amended PHS 
Act section 2722(a)(2) to specify that no MHPAEA opt-out election may 
be made on or after the date of the enactment of the CAA, 2023, and 
that, subject to certain exceptions, no MHPAEA opt-out election 
expiring on or after the date that is 180 days after the date of such 
enactment may be renewed.\130\
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    \129\ Division FF, Title I, Subtitle C, Chapter 3, section 1321, 
Public Law 117-328, 136 Stat. 4459 (Dec. 29, 2022).
    \130\ PHS Act section 2722(a)(2)(F)(i).
---------------------------------------------------------------------------

    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 self-funded non-Federal governmental 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.\131\
---------------------------------------------------------------------------

    \131\ PHS Act section 2722(a)(2)(F)(ii).
---------------------------------------------------------------------------

    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 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).
    In the proposed rules, HHS proposed to amend 45 CFR 146.180 to 
align with the CAA, 2023 amendments to PHS Act section 2722(a)(2). 
Specifically, HHS proposed 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 plans 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 proposed to add new paragraph (f)(4)(iii) specifying 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 proposed to make conforming edits to 
paragraph (a)(2), paragraphs (a)(5)(i) and (ii) and (a)(6)(ii), as 
proposed to be redesignated, and paragraph (f)(1). HHS proposed that 
the amendments to 45 CFR 146.180 would apply on the effective date of 
the final rule.\132\ HHS sought comments on these proposed amendments, 
including whether additional guidance or clarifications were necessary 
to implement the sunset of the MHPAEA opt-out election provision.
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    \132\ The statutory provisions implemented by 45 CFR 146.180 
became effective December 29, 2022 (the date of enactment of the 
CAA, 2023).
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    Several commenters expressed support for the proposal to codify the 
sunset for sponsors of self-funded non-Federal governmental plans to 
opt out of compliance with the MHPAEA requirements. Many of these 
commenters recommended prioritizing MHPAEA compliance reviews of these 
plans as soon as their respective opt-outs are no longer valid. 
Furthermore, some commenters suggested these plans should immediately 
be requested to submit the NQTL comparative analyses required under PHS 
Act section 2726(a)(8)(A) to ensure compliance with MHPAEA. One 
commenter encouraged HHS to oversee self-funded non-Federal 
governmental plans to ensure full MHPAEA compliance by such plans that 
previously opted out of compliance with the MHPAEA requirements.
    HHS appreciates the support for the proposed amendments to codify 
the sunset of the option for self-funded non-Federal governmental plans 
to elect to opt out of compliance with the MHPAEA requirements. HHS did 
not receive any comments objecting to the proposed amendments to 45 CFR 
146.180 and is finalizing those amendments as proposed in these final 
rules. HHS is committed to ensuring that self-funded non-Federal 
governmental plans that previously opted out of compliance with MHPAEA 
come into compliance with MHPAEA requirements. In determining the 
degree to which HHS will prioritize compliance reviews, NQTL 
comparative analysis reviews, and enforcement of MHPAEA with respect to 
self-funded non-Federal governmental plans once the plans' respective 
opt-outs sunset, HHS will weigh all relevant considerations, such as 
the number of complaints of MHPAEA noncompliance with respect to such 
plans.
    One commenter suggested HHS implement a tiered approach to penalty 
assessment for compliance with MHPAEA that employs varying levels of 
penalties which consider the severity of and frequency of violations. 
This approach, according to the commenter, would encourage greater 
compliance as non-Federal governmental entities diligently work to 
modify their health plans, and would mitigate detrimental fiscal 
impacts that would reduce the ability of non-Federal governmental 
entities to both recruit and retain a strong workforce and continue to 
provide necessary services to residents.
    With respect to penalties for violations of MHPAEA and other PHS 
Act requirements, HHS has determined that the enforcement processes and

[[Page 77655]]

procedures set forth in existing regulations are sufficient to address 
the tiered approach to penalty assessment recommended by the commenter. 
The HHS enforcement processes and procedures applicable to self-funded 
non-Federal governmental plans are set forth at 45 CFR 150.301 through 
150.347. Rather than specifying a specific set penalty amount for any 
and all violations, the regulations at 45 CFR 150.317, 150.319, 
150.321, and 150.323 specify the factors HHS uses in determining the 
amount of any penalty, including the entity's previous record of 
compliance and the gravity of the violation; mitigating circumstances; 
aggravating circumstances; and other matters as justice may 
require.\133\ These factors allow HHS to structure penalties in a 
manner that encourages compliance while taking into account the 
relevant facts and circumstances.
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    \133\ HHS proposed amendments to the provisions in 45 CFR part 
150 related to enforcement processes and procedures and penalties 
for noncompliance. 86 FR 51730 (Sept. 16, 2021).
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    One commenter requested that HHS provide guidance on how self-
funded non-Federal governmental plans can leverage the expertise of 
TPAs to comply with MHPAEA.
    HHS acknowledges that most self-funded group health plans contract 
with one or more TPAs to administer, and in some cases, to design plan 
benefits. To the extent a self-funded non-Federal governmental plan 
that contracts with a TPA has previously elected to opt out of MHPAEA 
compliance, HHS urges the sponsors of such plans to work with their 
TPAs to ensure that, under the plan's contract with the administrator, 
if the TPA is required to administer benefits, it collects and analyzes 
data, and provides data to the sponsor in such a way that will enable 
the sponsor to comply with all the requirements of MHPAEA. HHS also 
notes that Federal regulations at 45 CFR 150.305 identify the entity 
liable for civil money penalties for noncompliance with applicable PHS 
Act requirements, including MHPAEA. Under the regulations, if a non-
Federal governmental plan is sponsored by two or more employers and 
fails to comply with an applicable PHS Act requirement, the plan is 
subject to a civil money penalty, irrespective of whether the plan is 
administered by a health insurance issuer, an employer sponsoring the 
plan, or a TPA.\134\ If a non-Federal governmental plan is sponsored by 
a single employer and fails to comply with an applicable PHS Act 
requirement, the employer is subject to a civil money penalty, 
irrespective of whether the plan is administered by a health insurance 
issuer, the employer, or a TPA.\135\
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    \134\ 45 CFR 150.305(b).
    \135\ 45 CFR 150.305(c).
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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 would apply in the same manner to health insurance issuers 
offering individual health insurance coverage. Further, HHS proposed to 
include a cross reference in 45 CFR 147.160 to the comparative analysis 
requirements that were proposed in 45 CFR 146.137. 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. HHS proposed that these provisions would apply to health 
insurance issuers offering individual health insurance coverage for 
policy years beginning on or after January 1, 2026. Finally, for 
greater clarity and precision and to align with the statutory 
terminology, HHS proposed 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.''
    Commenters expressed support for HHS' proposal to apply the 
proposed amendments to 45 CFR 146.136 in the same manner to individual 
health insurance coverage. HHS is finalizing this proposal as proposed.
    HHS received one comment supporting its proposal to include a cross 
reference in 45 CFR 147.160 to the comparative analysis requirements 
that were proposed in 45 CFR 146.137 to 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, and did not receive 
any comments opposing that proposal. HHS did not receive any comments 
on its proposal 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.'' HHS is finalizing these proposals as proposed.
    With respect to HHS' proposal that these provisions would apply to 
individual health insurance coverage for policy years beginning on or 
after January 1, 2026, one commenter stated that this applicability 
date should align with the applicability date for self-funded non-
Federal governmental plans to come into compliance with MHPAEA's 
requirements under PHS Act section 2726 and its implementing 
regulations, while other commenters requested that the applicability 
date for individual health insurance coverage be delayed until January 
1, 2027. As stated in the proposed rules, 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, which precludes alignment with the 
applicability date for self-funded non-Federal governmental plans, and 
prior to when rates and benefits must be finalized and approved for the 
following calendar year. In addition, HHS declines to delay the 
applicability date until January 1, 2027, in order to ensure the 
protections of these final rules apply in a timely manner. Therefore, 
with respect to its proposal that these provisions would apply to 
individual health insurance coverage, HHS is finalizing the 
applicability date of January 1, 2026, as proposed.
    Until the applicability date, issuers are required to continue to 
comply with the most recent MHPAEA regulations codified in the CFR 
\136\ and must comply with the statutory provisions of MHPAEA, as 
amended by the CAA, 2021, both before and after these final

[[Page 77656]]

rules become applicable. HHS reminds issuers that the guidance in FAQs 
Part 45 addresses what information plans and issuers should make 
available under MHPAEA, as amended by the CAA, 2021, in response to the 
Departments' request for comparative analyses and can be relied on 
pending the applicability date of these final rules.
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    \136\ Specifically, issuers must continue to comply with 45 CFR 
147.160, incorporating 45 CFR 146.136, each revised as of October 1, 
2023.
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IV. Regulatory Impact Analysis

Summary--Departments of Health and Human Services and Labor

    The Departments \137\ have examined the impacts of these final 
rules as required by Executive Order 12866,\138\ Executive Order 
13563,\139\ Executive Order 14094,\140\ the Paperwork Reduction Act of 
1995,\141\ the Regulatory Flexibility Act,\142\ section 202 of the 
Unfunded Mandates Reform Act of 1995,\143\ Executive Order 13132,\144\ 
and the Congressional Review Act.\145\
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    \137\ The Department of the Treasury is not included as part of 
the Departments in the regulatory impact analysis.
    \138\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 
1993).
    \139\ Improving Regulation and Regulatory Review, 76 FR 3821 
(Jan. 18, 2011).
    \140\ Modernizing Regulatory Review, 88 FR 21879 (Apr. 6, 2023).
    \141\ 44 U.S.C. 3506(c)(2)(A) (1995).
    \142\ 5 U.S.C. 601 et seq. (1980).
    \143\ 2 U.S.C. 1501 et seq. (1995).
    \144\ Federalism, 64 FR 153 (Aug. 4, 1999).
    \145\ 5 U.S.C. 801 et seq. (1996).
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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,\146\ 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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    \146\ Modernizing Regulatory Review, 88 FR 21879 (Apr. 6, 2023).
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    (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.
    Based on the Departments' estimates, OMB's OIRA has determined this 
rulemaking is significant per section 3(f)(1) as measured by the $200 
million or more in any one year. Therefore, the Departments have 
provided an assessment of the potential costs, benefits, transfers, and 
alternatives associated with these final rules, and OMB has reviewed 
these final rules.
2. Introduction and Need for Regulations
    Mental health is crucial to a person's overall well-being, and 
access to quality mental health and substance use disorder treatment is 
as essential for health as access to medical/surgical treatment.\147\ 
According to the NSDUH, in 2022, 50.6 percent of adults in the United 
States with any mental illness had received treatment within the past 
year; 66.7 percent of adults with a serious mental illness had received 
treatment.\148\
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    \147\ Commonwealth Fund, Behavioral Health Care in the United 
States: How It Works and Where It Falls Short (Sept. 7, 2022), 
https://www.commonwealthfund.org/publications/explainer/2022/sep/behavioral-health-care-us-how-it-works-where-it-falls-short.
    \148\ SAMHSA, Center for Behavioral Health Statistics and 
Quality, National Survey on Drug Use and Health, Table 6.21B (2022), 
https://www.samhsa.gov/data/sites/default/files/reports/rpt42728/NSDUHDetailedTabs2022/NSDUHDetailedTabs2022/NSDUHDetTabsSect6pe2022.htm.
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    Failure to treat mental health conditions or substance use 
disorders can be costly. For example, depression is associated with 
increased risk of cardiovascular disease, diabetes, stroke, Alzheimer's 
disease, suicidality, and osteoporosis, and an untreated substance use 
disorder may result in hospital emergency room care for a drug 
overdose.\149\ One study examined the costs and benefits of 58 grants 
provided through the Garrett Lee Smith Memorial Suicide Prevention 
Program (GPP) between 2005 and 2009, which provides Federal funding to 
States, Tribes, and colleges for community-based suicide prevention 
programs. The study estimated that the programs resulting from GPP 
funding prevented 79,379 suicide attempts and resulted in $4.50 in 
medical cost savings for each dollar invested.\150\
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    \149\ Government Accountability Office (GAO), Behavioral Health: 
Research on Health Care Costs of Untreated Conditions is Limited, 
GAO-19-274 (Feb. 2019), https://www.gao.gov/assets/gao-19-274.pdf.
    \150\ Lucas Godoy Garraza, Christine Walrath, Simone Peart 
Boyce, & David Goldston, An Economic Evaluation of the Garrett Lee 
Smith Memorial Suicide Prevention Programs, 48(1) Suicide and Life-
Threatening Behavior (2018), https://onlinelibrary.wiley.com/doi/10.1111/sltb.12321.
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    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 2022, approximately 27 percent 
of adults 18 and older with any mental illness in the past year who did 
not receive mental health treatment reported a perceived unmet need for 
treatment.\151\ Individuals reported a variety of reasons for not 
receiving treatment: 59 percent thought it would cost too much; 26 
percent were concerned their information would not be kept private; 20 
percent were unable to get an opening in the treatment program or with 
the health care professional they wanted to see; 16 percent thought it 
may cause their community to have a negative opinion about them; and 15 
percent thought it might impact their job, parental rights or 
housing.\152\
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    \151\ SAMHSA, Center for Behavioral Health Statistics and 
Quality, National Survey on Drug Use and Health, Figure 64 (2022), 
https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
    \152\ SAMHSA, Center for Behavioral Health Statistics and 
Quality, National Survey on Drug Use and Health, Table A.47B (2022), 
https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf. Respondents could indicate multiple reasons for 
not receiving treatment and so response categories are not mutually 
exclusive.
---------------------------------------------------------------------------

    The Departments are particularly concerned with access barriers 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

[[Page 77657]]

past year and 28 percent of those with unmet substance use disorder 
care needs in the past year reported that their inability to get an 
immediate appointment had prevented them from getting needed care.\153\
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    \153\ 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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    Obtaining appointments with primary care physicians instead of 
behavioral health specialists can be significantly easier. According to 
the 2023 KFF Employer Health Benefits Survey, 91 percent of firms that 
offer physical health benefits believe there is a sufficient number of 
primary care providers in the plans' network, whereas only 67 percent 
and 59 percent, respectively, believe there is a sufficient number of 
mental health providers and substance use disorder providers.\154\ 
However, while up to 70 percent of all primary care visits include a 
behavioral health component,\155\ research suggests that primary care 
providers face significant barriers to delivering these services, 
including insufficient resources, inadequate related knowledge, and 
limited time with patients.\156\
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    \154\ KFF, 2023 Employer Health Benefits Survey (Oct. 18, 2023), 
https://www.kff.org/report-section/ehbs-2023-section-13-employer-practices-telehealth-provider-networks-coverage-limits-and-coverage-for-abortion/.
    \155\ Health Affairs, Combating a Crisis by Integrating Mental 
Health Services and Primary Care, Health Affairs Forefront (July 8, 
2022), https://www.healthaffairs.org/do/10.1377/forefront.20220706.603540.
    \156\ Danielle F. Loeb, Elizabeth A. Bayliss, Ingrid A. 
Binswanger, Carey Candrian, & Frank V. Degruy, Primary Care 
Physician Perceptions on Caring for Complex Patients with Medical 
and Mental Illness, 27(8) Journal of General Internal Medicine pp. 
945-952 (2012), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3403152/; Lusine Poghosyan, Allison A. Norful, Affan Ghaffari, 
Maureen George, Shruti Chhabra, Mark Olfson, Mental Health Delivery 
in Primary Care: The Perspectives of Primary Care Providers, 33(5) 
Archives of Psychiatric Nursing pp. 63-67 (Oct. 2019), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7077950.
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    In seeking out specialists, individuals tend to face less adequate 
mental health provider networks than medical/surgical provider networks 
through their plan or coverage. A 2024 study of 2019-2021 claims and 
enrollment data for employer-sponsored health plans reported that 
office visits with psychiatrists and psychologists occurred out-of-
network 8.9 and 10.6 times more, respectively, than those with medical/
surgical specialist physicians.\157\ According to a 2021 study, which 
compared the experiences of patients receiving both specialty mental 
health and medical/surgical care, patients who were receiving mental 
health treatment from only a mental health practitioner were more 
likely to rate their plan's mental health network as inadequate 
compared with their plan's medical/surgical provider network.\158\ The 
study referenced research that found specialty mental health networks 
tend to be narrower due to a growing workforce shortage of mental 
health providers, a high demand for mental health services, and 
specialty mental health practitioners opting out of participating in 
provider networks due to low reimbursements for mental health services 
compared with other specialties. These factors have consequentially 
resulted in higher out-of-network utilization rates for mental health 
care services.\159\ \160\ \161\
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    \157\ Tami L. Mark & William Parish, Behavioral Health Parity--
Pervasive Disparities in Access to In-Network Care Continue, RTI 
International (2024), https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf.
    \158\ Susan H. Busch & Kelly Kyanko, Assessment of Perceptions 
of Mental Health vs Medical Health Plan Networks Among US Adults 
with Private Insurance, 4(10) JAMA Network Open (2021).
    \159\ Davenport, Stoddard, Travis Gray, & Stephen P. Melek, 
Addiction and Mental Health vs. Physical Health: Widening 
Disparities in Network Use and Provider Reimbursement, Milliman 
(Nov. 20, 2019), https://www.milliman.com/en/insight/addiction-and-mental-health-vs-physical-health-widening-disparities-in-network-use-and-p/.
    \160\ Tara F. Bishop, Joanna K. Seirup, Harold Alan Pincus, & 
Joseph S. Ross, Population of US Practicing Psychiatrists Declined, 
2003-13, Which May Help Explain Poor Access to Mental Health Care, 
35(7) Health Affairs (Millwood) (2016) pp. 1271-1277.
    \161\ Daria Pelech & Tamara Hayford. Medicare Advantage and 
Commercial Prices for Mental Health Services, 38(2) Health Affairs 
(Millwood) (2019) pp. 262-267.
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    Use of out-of-network providers can place additional burdens on 
families seeking mental health and substance use disorder treatments. A 
2022 study of families experiencing out-of-network behavioral health 
expenditures in their employer-sponsored insurance claims found that 
roughly half of the families were subject to ``balance billing,'' with 
the yearly mean total for those families being $861. This study, 
however, focused on out-of-network claims submitted by providers to 
insurers, which suggests that, for individuals seeking treatment from 
behavioral health care from providers not accepting insurance, the out-
of-pocket costs could be even greater.\162\
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    \162\ Sarah A. Friedman, Haiyong Xu, Francisca Azocar, & Susan 
L. Ettner, Quantifying Balance Billing for Out-of-Network Behavioral 
Health Care in Employer-Sponsored Insurance, 73(9) Psychiatric 
Services pp. 1019-1026 (2022).
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    Despite access barriers to seeking mental health and substance use 
disorder treatment, the need for these services has only increased. An 
estimated 37 percent of U.S. adults reported being diagnosed with a 
mental health condition in 2023, a 5-percentage-point increase from 
pre-pandemic levels in 2019.\163\ Research suggests that the need for 
mental health services has also increased among children and 
adolescents. For instance, a 2022 study using 2009 to 2019 data from 
the NSDUH found that the prevalence of a major depressive episode among 
adolescents aged 12 to 17 increased by 7.7 percentage points, from 
approximately 8.1 percent in 2009 to 15.8 percent in 2019. The study 
found that the increase in prevalence of major depressive episodes was 
even higher among female adolescents, finding a 12.0-percentage-point 
increase.\164\
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    \163\ American Psychological Association, Stress in America 
2023: A Nation Recovering from Collective Trauma (Nov. 2023), 
https://www.apa.org/news/press/releases/stress/2023/collective-trauma-recovery.
    \164\ Michael Daly, Prevalence of Depression Among Adolescents 
in the US from 2009 to 2019: Analysis of Trends by Sex, Race/
Ethnicity, and Income, 70 Journal of Adolescent Health 3 pp. 496-499 
(2022). Additional information regarding these trends in mental 
health services among children and adolescents is addressed earlier 
in this preamble.
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    The enactment of MHPAEA, as well as the CAA, 2021 \165\ and 
associated regulations and guidance issued by the Departments, were 
intended to assist plans and issuers in improving their policies and 
procedures to ensure parity between mental health and substance use 
disorder benefits and medical/surgical benefits, particularly with 
regards to applying NQTLs.\166\ However, as documented in the past two 
Reports to Congress 167 168 and discussed later in this 
regulatory impact analysis, the Departments have found from their 
initial reviews that plans and issuers failed to comply with these 
requirements.
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    \165\ Public Law 116-260 (Dec. 27, 2020).
    \166\ NQTLs consist of any limitations on the scope and duration 
of benefits that are not expressed numerically. Because they are 
non-quantitative, it can be difficult to measure their impact on 
restricting access and whether they are applied in parity across 
mental health and substance use disorder benefits and medical/
surgical benefits.
    \167\ 2022 MHPAEA Report to Congress, 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.
    \168\ 2023 MHPAEA Comparative Analysis Report to Congress, 
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
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    In order to address these issues and improve the health and well-
being of both individuals and their communities, the Departments are 
committed to promoting equal access to treatment for

[[Page 77658]]

mental health conditions and substance use disorders. These final 
rules, by clarifying requirements for comparative analyses and setting 
forth additional requirements for how NQTLs must be designed and 
applied for group health plans and health insurance coverage, will 
serve to improve compliance with MHPAEA by plans and issuers. This will 
in turn promote more equitable access to affordable and comprehensive 
care for individuals with mental health conditions and substance use 
disorders and reduce barriers to mental health and substance use 
disorder treatments, resulting in greater access and utilization of 
these services as well as better patient outcomes.
2.1. History of MHPAEA Related Government Actions
    To implement the requirements of MHPAEA, the Departments published 
a request for information soliciting comments on issues under MHPAEA in 
2009 \169\ and interim final regulations in 2010.\170\ After 
considering the comments and other feedback received from interested 
parties, the Departments published the 2013 final regulations.\171\ In 
subsequent years, the Departments 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, including the 2020 MHPAEA 
Self-Compliance Tool, which provided a basic framework for plans and 
issuers to assess whether their NQTLs satisfy MHPAEA's parity 
requirements. The Departments also have provided materials to educate 
consumers, their family members, and policymakers about parity for 
mental health and substance use disorder benefits,\172\ and may develop 
new materials and undertake additional educational efforts as necessary 
after the publication of these final rules.
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    \169\ 74 FR 19155 (Apr. 28, 2009).
    \170\ 75 FR 5410 (Feb. 2, 2010).
    \171\ 78 FR 68240 (Nov. 13, 2013).
    \172\ SAMHSA, Know Your Rights: Parity for Mental Health and 
Substance Use Disorder Benefits (2022), https://store.samhsa.gov/product/know-your-rights-parity-mental-health-and-substance-use-disorder-benefits/pep21-05-00-003; SAMHSA, The Essential Aspects of 
Parity: A Training Tool for Policymakers (2022), https://store.samhsa.gov/product/essential-aspects-parity-training-tool-policymakers/pep21-05-00-001; DOL, Understanding Your Mental Health 
and Substance Use Disorder Benefits, https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/publications/understanding-your-mental-health-and-substance-use-disorder-benefits.
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    The CAA, 2021 amended MHPAEA, in part, by expressly requiring group 
health plans and health insurance issuers that provide both medical and 
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. Plans and issuers must provide those analyses to 
the Departments or applicable State authorities, upon request. 
Moreover, the CAA, 2021 compels the Departments to request and evaluate 
no fewer than 20 NQTL comparative analyses per year and submit to 
Congress and make available to the public an annual report summarizing 
the Departments' review process and findings. Shortly after the 
enactment of the amendments to MHPAEA made by the CAA, 2021, the 
Departments issued FAQs Part 45 to help plans and issuers comply with 
the comparative analysis requirements.\173\
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    \173\ FAQs about Mental Health and Substance Use Disorder Parity 
Implementation and the Consolidated Appropriations Act, 2021 Part 45 
(Apr. 2, 2021), 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.
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    As documented in the 2022 MHPAEA Report to Congress,\174\ the 
Departments found that under the first year of the CAA, 2021, none of 
the NQTL comparative analyses they reviewed contained sufficient 
information and documentation from plans and issuers upon initial 
receipt. Similarly, the 2023 MHPAEA Comparative Analysis Report to 
Congress \175\ notes that nearly all the comparative analyses reviewed 
by the Departments contained insufficient information upon initial 
receipt and identified common deficiencies in the comparative analyses 
prepared by plans and issuers. Moreover, despite plans' and issuers' 
longstanding obligations under MHPAEA to ensure that the processes, 
strategies, evidentiary standards, and other factors used to apply 
NQTLs are equitable, it was apparent upon review of the analyses, that 
plans and issuers had not carefully designed and implemented their 
NQTLs to be compliant with MHPAEA prior to the enactment of the CAA, 
2021. Many 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. Consequently, the comparative 
analyses appeared to focus on finding after-the-fact rationales for 
decisions and designs involving NQTLs, rather than reflecting proper 
attention to MHPAEA compliance in the first place.
---------------------------------------------------------------------------

    \174\ 2022 MHPAEA Report to Congress, 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.
    \175\ 2023 MHPAEA Comparative Analysis Report to Congress, 
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------

    The Departments are committed to ensuring parity in access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits. By issuing these final rules, the 
Departments will provide additional guidance to affected parties to 
facilitate compliance with MHPAEA and to help ensure that individuals 
with mental health conditions and substance use disorders benefit from 
the full protections required by law consistent with the fundamental 
purpose of MHPAEA.
2.2. Current Regulatory Actions
    These final rules amend existing regulatory definitions and add new 
definitions of key terms, including ``factors,'' ``processes,'' 
``strategies,'' and ``evidentiary standards.'' They also add more 
specificity as to what conditions or disorders plans and issuers must 
treat as mental health conditions and substance use disorders for 
purposes of MHPAEA to be consistent with generally recognized 
independent standards of current medical practice. These final rules 
also clarify the way the parity requirements apply to NQTLs, including 
by prohibiting discriminatory factors and evidentiary standards, and 
provide additional examples of the application of MHPAEA to NQTLs to 
improve the understanding and ability of the regulated community to 
comply with the law. Additionally, these final rules require that plans 
and issuers provide meaningful benefits for covered mental health 
conditions and substance use disorders in each classification in which 
meaningful medical/surgical benefits are provided.
    Under these final rules, plans and issuers are required to collect 
and evaluate relevant data in a manner reasonably designed to assess 
the impact of the NQTL on relevant outcomes related to access to mental 
health and substance use disorder benefits and medical/surgical 
benefits. These final rules provide guidance for how to comply with the 
relevant data evaluation requirements in limited circumstances where 
data is initially and temporarily unavailable for new and newly imposed 
NQTLs and where no data exists that can reasonably measure any relevant 
impact of the NQTL on relevant outcomes related to access to mental 
health and substance use disorder benefits and medical/

[[Page 77659]]

surgical benefits. In those instances, the plan or issuer must include 
specific information in their comparative analyses, as explained 
earlier in this preamble.
    These final rules also set forth 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. 
Additionally, in these final rules, HHS finalizes regulatory amendments 
to implement a provision in the CAA, 2023 that sunsets the election 
option for sponsors of self-funded non-Federal governmental plans to 
opt out of requirements under MHPAEA.
    In their reviews of plans' and issuers' comparative analyses under 
the requirements of the CAA, 2021, the Departments identified 
exclusions related to treatment for ASD with ABA therapy and OUD with 
medication assisted treatment, as well as gatekeeping provisions for 
treatment applied with respect to mental health or substance use 
disorder benefits but not to medical/surgical benefits, such as 
requiring referrals for appointments and prior authorization for mental 
health and substance use disorder outpatient services, resulting in 
corrections by the plans and issuers.\176\ However, the comparative 
analyses alone are often less effective in identifying substantive 
parity violations for more complex NQTLs, such as those related to 
network composition. The Departments expect that these additional 
requirements will 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. As such, these final rules will 
help plans and issuers comply with these requirements, increase the 
ability of plans and issuers to provide compliant comparative analyses 
during future reviews or investigations, and result in improved access 
to treatment and coverage of mental health conditions and substance use 
disorders, as intended by MHPAEA.
---------------------------------------------------------------------------

    \176\ 2023 MHPAEA Comparative Analysis Report to Congress, 
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.
---------------------------------------------------------------------------

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 final 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 were 
required to make their comparative analyses available to the 
Departments or an applicable State authority upon request. Plans and 
issuers are further required to make these comparative analyses and 
other applicable information required by the CAA, 2021 available upon 
request to participants, beneficiaries, and enrollees in all non-
grandfathered group health plans and non-grandfathered group or 
individual health insurance coverage (including a provider or other 
person acting as a participant's, beneficiary's, or enrollee's 
authorized representative) in connection with an adverse benefit 
determination, as well as to participants and beneficiaries in plans 
subject to ERISA.\177\
---------------------------------------------------------------------------

    \177\ FAQs Part 45, Q6.
---------------------------------------------------------------------------

    The 2022 and 2023 MHPAEA Reports to Congress documented that many 
comparative analyses prepared by plans and issuers prior to these final 
rules were deficient even after multiple requests for correction by the 
Departments.178 179 In addition, at least some plans and 
issuers failed to conduct the required comparative analyses until after 
the Departments requested them, rather than performing and documenting 
them prospectively within 45 days following the enactment of the CAA, 
2021.
---------------------------------------------------------------------------

    \178\ 2022 MHPAEA Report to Congress, 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.
    \179\ 2023 MHPAEA Comparative Analysis Report to Congress, 
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------

    The Departments' view is that plans and issuers that were already 
timely fulfilling the comparative analysis requirements outlined in 
CAA, 2021 will incur only incremental costs to comply with these final 
rules. Plans and issuers not already meeting those requirements may, on 
the other hand, face significant costs to come into compliance with the 
CAA, 2021 comparative analysis requirements and these final rules. 
However, because those actions to comply with the CAA, 2021 comparative 
analysis requirements would need to occur absent these final rules, 
those costs are included in the baseline.
    Therefore, this regulatory impact analysis does not include 
benefits or costs for performing and documenting comparative analyses 
for NQTLs applicable to mental health and substance use disorder 
benefits and medical/surgical benefits, or making them available upon 
request, as these are already required by the provisions of the CAA, 
2021 and are in the baseline. However, this regulatory impact analysis 
does take into account the expected impacts of these final rules on the 
preparation of plans' and issuers' comparative analyses, how these 
final rules will impact plans' and issuers' compliance and, in turn, 
access for participants, beneficiaries, and enrollees needing mental 
health and substance use disorder treatments, and whether plans and 
issuers need to change their policies and procedures to provide 
benefits in parity.
    Some commenters stated that the proposal would require plans and 
issuers to substantially revise their comparative analyses, arguing the 
significance of those revisions makes the Departments' approach of 
conducting an incremental analysis of the additional requirements of 
this rulemaking inappropriate. In particular, one commenter stated that 
the imposition of the new ``substantially all'' test would require all 
comparative analyses to be redone, thereby imposing the full cost of 
performing these analyses under the proposed rules. In response, the 
Departments note that, as discussed earlier in this preamble, they are 
not finalizing the proposed mathematical tests for applying the 
substantially all and predominant tests, which would have based these 
determinations on the dollar amount of all plan payments for medical/
surgical benefits expected to be paid. Instead, these final rules 
provide that an NQTL with respect to mental health or substance use 
disorder benefits is more restrictive, as written or in operation, than 
the predominant NQTL that applies to substantially all medical/surgical 
benefits in the same classification if the plan or issuer fails to 
satisfy the design and application requirements or the relevant data 
evaluation requirements. Additionally, the material differences 
standard in the relevant data evaluation requirements reflects an 
interpretation of the statutory terms ``substantially all'' and 
``predominant'' in a manner that takes into account the multi-faceted 
nature of NQTLs, as well as the complexity of analyzing such NQTLs.
    Because the CAA, 2021 requires that comparative analyses be 
performed and documented, the fact that plans and issuers were not 
adequately conducting the required analyses and documenting

[[Page 77660]]

how they determined NQTLs were being applied in parity, is not a 
justification for why these final rules should account for the full 
cost of those actions. Rather, these final rules consider as the 
baseline what plans and issuers should have done given the relevant 
statute and guidance irrespective of these final rules. Therefore, for 
this category of cost, the effect of these final rules is limited to 
those additional requirements included by the Departments in the final 
rules. Estimates are made based on the impact from the baseline on 
plans and issuers affected by these final rules, and assuming full 
compliance with the new requirements.
4. Summary of Impacts
    These final rules define certain terms associated with MHPAEA's 
requirements for NQTLs and require that plans and issuers provide 
meaningful benefits for covered mental health conditions and substance 
use disorders in each classification in which meaningful medical/
surgical benefits are provided. These final rules also provide that a 
group health plan (or health insurance coverage offered by an issuer in 
connection with a group health plan) may not impose any NQTL with 
respect to mental health or substance use disorder benefits in any 
classification that is more restrictive, as written and in operation, 
than the predominant NQTL that applies to substantially all medical/
surgical benefits in the same classification. For this purpose, the 
plan and issuer must ensure that the NQTL satisfies both the design and 
application requirements and the relevant data evaluation requirements. 
Specifically, under these final rules, plans and issuers must continue 
to satisfy the design and application requirements from the 2013 final 
regulations, which require an analysis of the processes, strategies, 
evidentiary standards, and other factors used to design and apply NQTLs 
to mental health and substance use disorder benefits as compared to 
medical/surgical benefits. Plans and issuers have struggled with these 
requirements, as detailed in the Departments' 2022 MHPAEA Report to 
Congress \180\ and the 2023 MHPAEA Comparative Analysis Report to 
Congress.\181\ Additionally, plans and issuers are not permitted to use 
any discriminatory factors or evidentiary standards to design or apply 
an NQTL, and they must satisfy new relevant data evaluation 
requirements as well as new requirements related to the elements and 
documentation of their comparative analyses.
---------------------------------------------------------------------------

    \180\ 2022 MHPAEA Report to Congress, 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.
    \181\ 2023 MHPAEA Comparative Analysis Report to Congress, 
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------

    In particular, to comply with the required content elements for a 
comparative analysis, plans and issuers must describe each NQTL and 
identify and define all the factors and evidentiary standards used to 
design or apply the NQTL. The plan or issuer must also describe how the 
factors identified are used in the design and application of the NQTL, 
and evaluate whether 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 with respect to medical/
surgical benefits, both as written and in operation. Finally, plans and 
issuers 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 NQTLs within each 
classification, and the relative stringency of their application, both 
as written and in operation.
    Accordingly, these final rules will increase plan and issuer 
compliance with the requirements for imposing NQTLs under MHPAEA and 
help ensure that NQTLs applicable to mental health and substance use 
disorder benefits are no more restrictive than the predominant NQTLs 
applicable to substantially all medical/surgical benefits in the same 
classification. The Departments acknowledge that past parity 
implementation has lacked consistency and thus had varied results, 
particularly for laws limiting management of behavioral health benefits 
or NQTLs. A 2012 study on the implementation of Oregon's 2007 
comprehensive parity law, which mandated benefits for substance use 
disorders and restricted the use of behavioral health management for 
fully insured commercial group plans, compared their expenditures for 
treatments to those of self-funded plans not covered by Oregon's law. 
The study found that while plan expenditures for alcohol treatment 
services increased, other substance use treatments were not associated 
with a statistically significant increase in expenditures and that 
overall, the impact of parity on spending was not significantly 
different from zero.\182\ However, a broader study conducted in 2013 
looked at treatment counts at specialty substance use disorder 
facilities between 2000 and 2008 across the United States to assess the 
impact of State-level substance use disorder parity laws on State 
aggregate treatment rates. While the study was not able to control for 
the source of insurance and employment status of those receiving 
treatment, the study did find that the implementation of any State 
substance use disorder parity laws was associated with increased access 
to specialty substance use disorder treatments--by 9 percent in all 
specialty substance use disorder treatment facilities and 15 percent in 
facilities accepting private insurance.\183\
---------------------------------------------------------------------------

    \182\ K. John McConnell, M. Susan Ridgely, & Dennis McCarty, 
What Oregon's Parity Law Can Tell Us About the Federal Mental Health 
Parity and Addiction Equity Act and Spending on Substance Abuse 
Treatment Services, 124(3) Drug and Alcohol Dependence pp. 340-346 
(2012).
    \183\ Hefei Wen, Janet R. Cummings, Jason M. Hockenberry, Laura 
M. Gaydos, & Benjamin G. Druss, State Parity Laws and Access to 
Treatment for Substance Use Disorder in the United States: 
Implications for Federal Parity Legislation, 70 (12) JAMA Psychiatry 
pp. 1355-1362 (2013).
---------------------------------------------------------------------------

    The Departments are of the view that, by finalizing these rules and 
requiring better documentation related to how plans and issuers design 
and apply NQTLs, the Departments and applicable State authorities will 
be better able to enforce existing parity requirements. In doing so, 
access to in-network, medically necessary treatments will increase for 
a significant segment of individuals whose health coverage will be 
affected by these final rules, resulting in better health outcomes and 
lower out-of-pocket costs related to mental health and substance use 
disorder benefits for participants, beneficiaries, and enrollees.
    Plans and issuers will incur costs to comply with the requirements 
in these final rules. However, the Departments have determined that the 
benefits of these final 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 final 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 final 
rules.

[[Page 77661]]



                      Table 1--Accounting Statement
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Benefits:
     Improved understanding of and compliance with MHPAEA by
     plans and issuers, resulting in better frameworks for determining
     whether plans and issuers are complying with MHPAEA with respect to
     NQTLs applicable to mental health and substance use disorder
     benefits and medical/surgical benefits.
     Greater access and utilization of mental health and
     substance use disorder services by reducing barriers to coverage of
     mental health and substance use disorder treatment, which will
     result in better health outcomes for those with mental health
     conditions or substance use disorders.
     Reduction in the negative impacts on families, friends,
     caregivers, and coworkers of those with untreated or poorly managed
     mental health conditions or substance use disorders based on their
     improved access to treatment.
------------------------------------------------------------------------
Costs:
     Increased costs to plans and issuers to implement changes
     associated with the revision of plan provisions, which would result
     in increased costs from expanded coverage of mental health and
     substance use disorder services.
     Costs to plans and issuers from collecting and evaluating
     outcomes data and documenting NQTL comparative analyses consistent
     with the requirements of these final rules of approximately $656.2
     million in the first year and approximately $131.2 million in
     subsequent years or between 0.07 percent and 0.01 percent of total
     health insurance premiums in the group and individual markets.
     Costs to plans and issuers for preparing and mailing the
     comparative analyses upon request to participants, beneficiaries,
     and enrollees of approximately $14.8 million annually.
     Cost to plan and issuers for providing comparative analyses
     for audits is approximately $23,800.
     First-year regulatory review costs to plans and issuers for
     familiarizing themselves with these final rules of approximately
     $10.8 million.
     Cost to plan and issuers to maintain recordkeeping is
     approximately $12.2 million.
     Potential increase in cost-sharing requirements and/or
     treatment limitations for medical/surgical benefits for
     participants, beneficiaries, and enrollees, if plans and issuers
     try to achieve parity by imposing new restrictions on medical/
     surgical benefits, 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 opted out of MHPAEA to come into compliance with
     requirements under MHPAEA.
     Cost savings to self-funded non-Federal governmental plans
     of approximately $11,783 annually in total from no longer sending
     opt-out notices regarding a plan's MHPAEA opt-out election.
     Cost savings for the Federal Government of approximately
     $5,200 annually from fewer opt-out notices being submitted by self-
     funded non-Federal governmental plans.
------------------------------------------------------------------------


 
                                                                                     Discount rate      Period
                          Costs                             Estimate   Year dollar     (percent)       covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($million/Year)....................      $217.35         2024                7    2024-2033
                                                               207.04         2024                3    2024-2033
----------------------------------------------------------------------------------------------------------------
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 or contributions associated with 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 conditions and substance use disorders as a result of an increased number of in-network
     mental health and substance use disorder providers and decisions by participants, beneficiaries, and
     enrollees to obtain treatment from those providers instead of a primary care provider......................
----------------------------------------------------------------------------------------------------------------

5. Affected Entities
    The following table summarizes the number of plans, issuers,\184\ 
TPAs, and multiple employer welfare arrangement (MEWAs) that would be 
affected by the final rules.\185\ These estimates are discussed in 
greater detail later in this regulatory impact analysis.
---------------------------------------------------------------------------

    \184\ For purposes of this regulatory impact analysis, health 
insurance company refers to a single entity that offers health 
insurance coverage in one or multiple States, which might own or be 
affiliated with one or multiple entities that are separately 
required to be licensed to engage in the business of insurance in 
each such State. Health insurance issuer or issuer means an 
insurance company, insurance service, or insurance organization 
(including an HMO) that is required to be licensed to engage in the 
business of insurance in a State and that is subject to State law 
that regulates insurance. PHS Act section 2791(b)(2) and 45 CFR 
144.103.
    \185\ The Departments note that the number of issuers may be 
underestimated, since some managed behavioral health organizations 
may not be included in the issuer count.

                                           Table 2--Affected Entities
----------------------------------------------------------------------------------------------------------------
                                                                           Self-funded   Mixed insured
                                                                           plan count      plan count     Total
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance company/State combinations)...................  ............  ...............    1,467
TPAs....................................................................  ............  ...............      205
Plan MEWAs that are not fully insured...................................  ............  ...............      132
Non-plan MEWAs that are not fully insured...............................  ............  ...............       21
Plans (total) 186 187...................................................        46,080            4,501   50,581
    Under 100 participants..............................................        25,150              176   25,326
    100 to 199 participants.............................................         5,209              402    5,611
    200 to 499 participants.............................................         6,861              755    7,616

[[Page 77662]]

 
    500 to 999 participants.............................................         3,812              671    4,483
    1,000 to 2,499 participants.........................................         2,880              948    3,828
    2,500 to 4,999 participants.........................................         1,119              561    1,680
    5,000 and above participants........................................         1,049              988    2,037
Plans with less than 500 participants that will seek assistance with the        37,220            1,333   38,553
 comparative analyses from TPAs, MEWAs, or service providers............
Plans with more than 500 participants that will conduct the comparative            709              253      962
 analysis themselves....................................................
Plans with more than 500 participants that will receive generic                  4,076            1,458    5,534
 comparative analyses from TPAs or service providers and will then
 customize it...........................................................
Non-Federal governmental plans with less than 500 participants that will        26,584  ...............   26,584
 seek assistance with the comparative analyses from TPAs or service
 providers..............................................................
Non-Federal governmental plans with more than 500 participants that will           505  ...............      505
 conduct the comparative analysis themselves............................
Non-Federal governmental plans with more than 500 participants that will         2,906  ...............    2,906
 initially receive generic comparative analyses from TPAs or service
 providers and will then customize it...................................
----------------------------------------------------------------------------------------------------------------

5.1. Issuers, TPAs, and MEWAs
---------------------------------------------------------------------------

    \186\ The Departments note that the final rules will affect 
approximately 106,000 fully insured plans with 50 to 100 
participants. (Note: The Departments estimate that there are 140,998 
ERISA-covered group health plans with 50 to 100 participants based 
on the Medical Expenditure Panel Survey Insurance Component (MEPS-
IC) and the 2020 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 these same data. Thus, the Departments have 
calculated the number of fully insured plans with 50 to 100 
participants in the following manner: 140,998 ERISA-covered group 
health plans with 50 to 100 participants x 75 percent = 105,749.)
    \187\ The Departments also note that the final rules will affect 
approximately 1,719,000 fully insured, non-grandfathered plans with 
less than 50 participants. (Note: The Departments estimate that 
there are 2,465,483 ERISA-covered group health plans with less than 
50 participants based on data from the 2022 MEPS-IC and the 2020 
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 2022 MEPS-
IC. The 2020 KFF 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 percent (100 percent - 16 percent). KFF, 2020 Employer Health 
Benefits Survey (Oct. 8, 2020), 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: 2,465,483 small ERISA-covered group health plans x 83 
percent x 84 percent = 1,718,935.)
---------------------------------------------------------------------------

    Under the Departments' final rules, issuers are responsible for 
providing data and comparatives analyses for individual market plans. 
For small and large group market fully insured, employer-sponsored 
plans, including non-Federal governmental plans, both employer-
sponsored health plans and health insurance issuers are responsible for 
providing data and comparative analyses, though for those plans, 
underlying data and analyses will likely be provided by issuers that 
design and market the plans. Self-funded group health plans, while 
responsible for complying with these rules, will likely seek assistance 
from their TPAs, MEWA administrators, and other service providers for 
collecting and analyzing the data, and generating the comparative 
analyses.
    The Departments estimate that the final rules will affect 479 
health insurance companies nationwide that provide coverage, including 
mental health and substance use disorder benefits, in the group and 
individual health insurance markets, with 1,467 issuers (health 
insurance company/State combinations).\188\ In addition, there are an 
estimated 205 TPAs that provide services to group health plans, 
particularly for self-funded plans where TPAs often establish provider 
networks and adjudicate claims, which would be impacted by these final 
rules.\189\ The Departments estimate that the final rules will affect 
at least 40 managed behavioral health organizations providing mental 
health and substance use disorder benefits to group health plans.\190\ 
Additionally, based on the Form M-1 filings, the Departments estimate 
that there are 687 plan MEWAs, of which 132 are not fully insured, and 
50 non-plan MEWAs, of which 21 are not fully insured.\191\ These MEWAs, 
similar to issuers, are likely to provide support to employers or 
plans.
---------------------------------------------------------------------------

    \188\ The Departments' estimate of the number of health 
insurance issuers is based on medical loss ratio (MLR) reports 
submitted by issuers for the 2022 reporting year. CMS, Medical Loss 
Ratio Data and System Resources (2022), https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
    \189\ Non-issuer TPAs based on data derived from the 2016 
benefit year reinsurance program contributions.
    \190\ The Departments' estimate of the number of managed 
behavioral health organizations is based on industry trade 
association membership, including the National Behavioral Consortium 
(https://www.nbcgroup.org/member-directory/) and ABHW (https://abhw.org/about/).
    \191\ EBSA, 2020 Form M-1 Bulletin, Table 1, https://www.dol.gov/sites/dolgov/files/ebsa/researchers/statistics/health-and-welfare-bulletins/m-1/2020.pdf.
---------------------------------------------------------------------------

    Issuers, TPAs, and MEWAs provide key support for plan compliance 
with laws and regulations for group health plans, including MHPAEA. The 
Departments' understanding, based on discussions with the regulated 
community and numerous direct investigations of plans, including the 
review of comparative analyses, is that issuers of fully insured 
coverage provide a menu of benefit combinations from which interested 
parties select their coverage designs. These coverage designs may 
include different features, such as varying deductibles, copayments, 
and coverage for specific items and services, allowing interested 
parties to choose the plan that best suits their health care needs. 
While issuers of fully insured health plans are responsible for 
overseeing the compliance framework and ensuring that plans comply with 
legal and regulatory requirements, TPAs play a crucial role in 
facilitating compliance for self-funded plans by providing 
administrative support, including claims adjudication, member 
enrollment, and customer service.
    TPAs and insurance companies providing administrative services only 
(ASO) to self-funded plans overwhelmingly design the plans, administer 
the networks, manage claims, provide plan services, maintain and hold 
the data relevant for the comparative analyses, and help ensure MHPAEA 
compliance.\192\ Self-funded plans rarely build independent provider 
networks and instead rely on those built

[[Page 77663]]

by TPAs (including those that are also health insurance companies). 
According to the 2019 KFF Employer Health Benefits Survey, only 8 
percent of large, self-funded plans with 200 or more employees reported 
that they directly contracted with hospitals and health systems, 
independent of the plan's TPA, to provide health care services separate 
from the provider networks included in the plan network.\193\
---------------------------------------------------------------------------

    \192\ 85 FR 72158 (Jan 11, 2021).
    \193\ KFF, 2019 Employer Health Benefits Survey, Table 14.15 
(Sept. 25, 2019), https://www.kff.org/report-section/ehbs-2019-section-14-employer-practices-and-health-plan-networks/.
---------------------------------------------------------------------------

    While the requirement to comply with MHPAEA is directly applicable 
to group health plans and health insurance issuers, the Departments 
anticipate that issuers and TPAs are best situated to conduct 
comparative analyses as required under the CAA, 2021 and these final 
rules, and to provide the analyses in an efficient and cost-effective 
manner, helping to reduce the compliance burden. Self-funded plans may, 
however, incur some additional costs to complete the comparative 
analysis initially prepared by the issuer or TPA to address unique plan 
issues and include all the information necessary to perform comparative 
analyses.
    One commenter stated they are not aware of any TPA that has assumed 
compliance obligations wholesale, though they acknowledged that TPAs 
had cooperated and provided data in response to a government audit. 
Another commenter reported that TPAs working on behalf of group health 
plan sponsors struggle to obtain needed information to perform and 
document comparative analyses, such as when claims expenditure data 
collected by TPAs is not compatible for testing purposes and, moreover, 
is not reported at the plan sponsor level. It should be noted that 
these reported challenges are not unique to TPAs, but are the same 
issues facing issuers and self-funded plans. However, TPAs are more 
likely than plan sponsors to have expertise to navigate the challenges.
    Other commenters supported the Departments' assumptions that 
employer-sponsored plans rely on their services providers and TPAs to 
conduct their comparative analyses. One commenter noted that only the 
insurance carriers, TPAs, and service providers that play a role in 
designing plans, administering networks, managing claims, providing 
plan services, and maintaining and holding the data relevant for the 
comparative analyses have the expertise to comply with and fulfill all 
the requirements outlined in the proposed rules. Another commenter 
noted that self-funded plan sponsors rely on TPAs and/or the owners of 
provider networks to develop plan designs and develop and impose NQTLs, 
arguing that if the TPA or owner of the provider networks do not share 
claims data, then the TPA or owner of the provider networks should be 
required to conduct analyses for the plans.
    While the Departments acknowledge these concerns, based on their 
own observations when reviewing comparative analyses, the Departments 
expect that issuers, TPAs, and service providers will continue to 
provide assistance to evaluate NQTLs and perform and document 
comparative analyses, including data required under these final rules, 
for their plan clients. The Departments emphasize that the requirement 
to perform and document comparative analyses of the design and 
application of NQTLs has been effective under the CAA, 2021 for more 
than 3 years (since February 10, 2021) and is an independent statutory 
obligation that is not dependent upon a request by the Secretaries or 
an applicable State authority. Issuers and plans, in conjunction with 
their TPAs for self-funded group health plans, have had ample time to 
develop the internal structures required for analyzing NQTLs to ensure 
that their plans and coverage comply with MHPAEA. Finally, while plans 
could be charged for the services of issuers, TPAs, and other service 
providers, 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 plan designs, and, in 
combination with TPAs and other service providers, provide support for 
other requirements.
5.2. Group Health Plans
    Group health plans sponsored by employers with 50 or more employees 
that offer mental health and substance use disorder benefits are 
generally required to comply with MHPAEA. Although MHPAEA includes a 
small employer exemption, group health plans sponsored by employers 
with less than 50 employees who purchase non-grandfathered small group 
coverage are required to comply with MHPAEA under the EHB requirements 
of the ACA. In this analysis, plan size is used as a proxy for employer 
size to determine if a plan is affected. Evidence suggests that most 
large group plans offer mental health and substance use disorder 
benefits and nearly all participants are covered.\194\
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    \194\ DOL, Selected Medical Benefits: A Report from the 
Department of Labor to the Department of Health and Human Services 
(Apr. 15, 2011), https://www.bls.gov/ebs/additional-resources/selected-medical-benefits-a-report-from-dol-to-hhs.pdf.
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    The Departments estimate that approximately 1,719,000 fully 
insured, non-grandfathered ERISA-covered group health plans with less 
than 50 participants and approximately 411,000 ERISA-covered group 
health plans with 50 or more participants, of which approximately 
246,000 are self-funded group health plans, will be affected by these 
final rules.\195\ In addition, the Departments estimate that these 
final rules will affect approximately 90,900 non-Federal governmental 
plans,\196\ of which approximately 12,700 are plans with 50 or more 
participants.\197\ The Departments requested comments on these 
estimates in the proposal, but did not receive any.
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    \195\ The Departments estimate that there are 2,465,483 ERISA-
covered group health plans with less than 50 participants and that 
83 percent of group health plans with less than 50 participants are 
fully insured based on data from the 2022 MEPS-IC and the 2020 
County Business Patterns from the Census Bureau. The 2020 KFF 
Employer Health Benefits Survey reported that in 2020, 16 percent of 
firms offering health benefits offered at least one grandfathered 
health plan. KFF, 2020 Employer Health Benefits Survey (Oct. 8, 
2020), 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: 2,465,483 small 
ERISA-covered group health plans x 83 percent x (100 percent - 16 
percent) = 1,718,935. Based on the 2022 MEPS-IC and the 2020 County 
Business Patterns from the Census Bureau, the Departments estimate 
60 percent of ERISA-covered group health plans with 50 or more 
participants are self-funded. Thus, the Departments calculate the 
number of self-funded group health plans in the following manner: 
410,581 ERISA-covered group health plans with 50 or more 
participants x 60 percent = 246,349.
    \196\ Based on data from the 2022 Census of Governments (https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html), 
there are 90,887 State and local entities. The Departments assume 
there is one plan per entity on average. Therefore, the Departments 
estimate that there are 90,887 non-Federal governmental plans.
    \197\ MHPAEA applies to non-Federal governmental plans. Using 
data from the 2022 MEPS-IC and the 2020 County Business Patterns 
from the Census Bureau, the Departments estimate that 14 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 12,724 public, non-Federal 
governmental plans with 50 or more participants that offer mental 
health or substance use disorder benefits (90,887 non-Federal 
governmental plans x 14 percent of plans with 50 or more employees = 
12,724).
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    The estimated compliance costs associated with these final rules 
are

[[Page 77664]]

impacted by whether a plan is fully insured or self-funded. The 
Departments anticipate that fully insured plans will receive compliance 
support in the form of comparative analyses and data analyses prepared 
by the issuer. For these plans, the burden is estimated as a cost for 
the issuer to prepare the analyses and analyze the data. Self-funded 
plans may rely on issuers or TPAs acting as service providers, receive 
some support from their service providers that they supplement 
themselves, or produce the required information themselves.
    Most employer-sponsored health plans are exempt from filing a Form 
5500 due to size and the absence of plan assets, the majority of which 
are fully insured. Large health plans are required to file a Form 5500, 
regardless of funding arrangement. For statistical year 2021, 81,800 
health plans filed a Form 5500. Of these plans, 50,600 were self-funded 
or mixed-insured,\198\ of which 38,600 had less than 500 
participants.\199\ Additionally, the Departments estimate that there 
are 26,600 self-funded non-Federal governmental plans with less than 
500 participants.\200\ The Departments assume that self-funded plans 
with less than 500 participants will receive assistance with the 
comparative analyses and data requirements from TPAs or service 
providers involved with the plans.
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    \198\ A mixed-insured plan is funded through a mixture of 
insurance and self-insurance. EBSA, Self-Insured Health Benefit 
Plans 2024: Based on Filings through 2021 (Sept. 30, 2023), Table 2, 
https://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bulletins/annual-report-on-self-insured-group-health-plans-2024-appendix-b.pdf.
    \199\ Estimates based on the 2021 Form 5500 data.
    \200\ Based on the 2022 Census of Governments, there are 90,887 
non-Federal governmental plans. Based on the 2022 MEPS-IC, the 
Departments estimate that 36.2 percent of non-Federal governmental 
plans are self-funded. Thus, 90,887 plans x 36.2 percent = 32,901 
self-funded non-Federal governmental plans. Based on the 2021 Form 
5500 data, the Departments estimate that 80.8 percent of self-funded 
health plans with less than 500 participants have filed the Form 
5500. The Departments use the percent of self-funded health plans 
with less than 500 participants that have filed a Form 5500 as a 
proxy for the percent of self-funded non-Federal governmental plans 
with less than 500 participants. Thus, 32,901 self-funded non-
Federal governmental plans x 80.8 percent = 26,584 self-funded non-
Federal governmental plans with less than 500 participants.
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    The Departments assume that some of the largest plans will incur 
the full cost of preparing the comparative analysis and conducting the 
required data analyses. Commenters suggested that some large, self-
funded plans would conduct the comparative analyses themselves. To 
account for these plans, the Departments estimate that 8 percent of 
self-funded plans with 500 or more participants, or 962 ERISA covered 
plans \201\ and 505 non-Federal governmental plans,\202\ will prepare 
the comparative analysis and conduct the required data analyses 
themselves. The Departments estimate that 50 percent of the remaining 
self-funded plans with 500 or more participants, or 5,535 self-funded 
plans,\203\ and 2,900 self-funded non-Federal governmental plans with 
500 or more participants will receive a generic comparative analysis 
from the TPA,\204\ which they will subsequently customize to suit their 
specific needs. These plans will incur costs, but not at the same level 
other entities preparing the comparative analysis and data for 
themselves.
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    \201\ Based on the 2021 Form 5500 data, there are 12,028 self-
funded plans with 500 or more participants. According to the 2019 
KFF Employer Health Benefits Survey, only 8 percent of large, self-
funded 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. KFF, 2019 
Employer Health Benefits Survey (Sept. 25, 2019), Table 14.15, 
https://www.kff.org/report-section/ehbs-2019-section-14-employer-practices-and-health-plan-networks/. Thus, 12,028 self-funded plans 
with 500 or more participants x 8 percent = 962 self-funded plans 
with more than 500 participants.
    \202\ Based on the 2022 Census of Governments, there are 90,887 
non-Federal governmental plans. Based on the 2022 MEPS-IC, the 
Departments estimate that 36.2 percent of non-Federal governmental 
plans are self-funded. Thus, 90,8888 plans x 36.2 percent = 32,901 
self-funded non-Federal governmental plans. Based on the 2021 Form 
5500 data, the Departments estimate that 19.2 percent of health 
plans with more than 500 participants have filed the Form 5500. The 
Departments use the percent of health plans with more than 500 
participants that have filed a Form 5500 as a proxy for the percent 
of non-Federal governmental plans with more than 500 participants. 
According to the 2019 KFF Employer Health Benefits Survey, only 8 
percent of large, self-funded 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. KFF, 2019 Employer Health Benefits Survey (Sept. 
25, 2019), Table 14.15, https://www.kff.org/report-section/ehbs-2019-section-14-employer-practices-and-health-plan-networks/. Thus, 
32,901 non-Federal governmental plans x 19.2 percent x 8 percent = 
505 non-Federal governmental plans with more than 500 participants.
    \203\ Based on the 2021 Form 5500 data, there are a total of 
50,581 self-funded plans. Thus, (50,581 self-funded plans - 38,533 
self-funded plans with less than 500 participants - 962 self-funded 
plans with more than 500 participants) x 50 percent = 5,535 self-
funded plans with more than 500 participants.
    \204\ Based on the 2022 Census of Governments, there are 90,887 
non-Federal governmental plans. Based on the 2022 MEPS-IC, the 
Departments estimate that 36.7 percent of non-Federal governmental 
plans are self-funded. Thus, 90,888 plans x 36.2 percent = 32,901 
self-funded non-Federal governmental plans. Thus, (32,901 non-
Federal governmental plans - 26,584 non-Federal governmental plans 
with less than 500 participants - 505 self-funded plans with more 
than 500 participants) x 50 percent = 2,906 non-Federal governmental 
plans with more than 500 participants.
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    Finally, HHS estimates that 230 self-funded non-Federal 
governmental plans will be affected by the implementation of the CAA, 
2023 provision that sunsets the MHPAEA opt-out election.\205\ HHS is 
aware of at least 14 plans with collective bargaining agreements whose 
sponsors' MHPAEA opt-out elections could be in effect beyond 2024. The 
MHPAEA opt-out election of these plans with collective bargaining 
agreements will remain in effect until the last of these plans' 
respective collective bargaining agreements expires, all of which are 
anticipated to expire by 2028. 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 261 participants, on average, in 
each self-funded non-Federal governmental plan.\206\ HHS also estimates 
that there is one beneficiary for each plan participant on average. 
Therefore, approximately 120,000 participants and beneficiaries will be 
affected by this final provision.\207\
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    \205\ CMS, HIPAA Opt-Out Elections for Self-Funded Non-Federal 
Governmental Plans, as of January 6, 2023.
    \206\ According to data from the 2022 MEPS-IC (https://meps.ahrq.gov/mepsweb/), there are 19,231,948 State and local 
government employees, and 67.1 percent of these employees 
(12,904,637) are enrolled in health coverage through their jobs. Of 
these employees, 66.5 percent (8,581,584 employees) are participants 
in self-funded plans. Based on data from the 2022 Census of 
Governments (https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html), there are 90,887 State and local government 
entities, and according to the 2022 MEPS-IC, 36.2 percent, or 
32,901, 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 (8,581,584 / 32,901) = 
260.8. Since HHS also estimates that there is one beneficiary for 
each plan participant on average, the average number of participants 
and beneficiaries per self-funded non-Federal governmental plan is 
(260.8 x 2) = 521.7.
    \207\ This estimate is calculated as follows: 230 self-funded 
non-Federal governmental plans that have elected to opt out of the 
requirements under MHPAEA x approximately 521.7 participants and 
beneficiaries for each self-funded non-Federal governmental plan on 
average = 119,991.
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    HHS solicited 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. Although HHS did not receive comments on the estimated

[[Page 77665]]

number of self-funded non-Federal governmental plans or the estimated 
number of plan participants and beneficiaries that would be affected by 
the implementation of this provision, many commenters indicated that 
hundreds of thousands of public employees and their family members have 
been denied the critical MHPAEA protections due to the election option 
for self-funded non-Federal governmental plans to opt out of 
requirements under MHPAEA. Another commenter indicated that the ability 
to opt out of requirements under MHPAEA has compromised the health and 
well-being of State and local government employees, such as teachers, 
firefighters, and civil servants across the country. HHS agrees that a 
significant number of individuals will be impacted by the CAA, 2023 
provision that sunsets the MHPAEA opt-out election and that these 
regulatory amendments will ultimately increase access to mental health 
and substance use disorder services by requiring self-funded non-
Federal governmental plans that had previously opted out to come into 
compliance with the requirements under MHPAEA.
5.3. Participants, Beneficiaries, and Enrollees Receiving Mental Health 
and Substance Use Disorder Treatment
    There are approximately 56,984,000 participants and 50,407,000 
beneficiaries in ERISA-covered group health plans with 50 or more 
participants,\208\ approximately 17,483,000 participants and 
approximately 14,854,000 beneficiaries in non-Federal governmental 
plans with 50 or more participants,\209\ approximately 10,258,000 
participants and 8,629,000 beneficiaries in ERISA covered, non-
grandfathered, fully insured health plans with less than 50 
participants,\210\ and approximately 12,000,000 individual health 
insurance coverage policyholders (with approximately 16,000,000 total 
enrollees).\211\
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    \208\ 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 56,983,874 
participants and 50,407,439 beneficiaries in ERISA-covered group 
health plans with 50 or more participants. Estimates are based on 
the Departments' tabulations of the March 2022 Current Population 
Survey (CPS) Auxiliary Data (https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data).
    \209\ 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 17,482,879 
participants in non-Federal governmental plans with 50 or more 
participants. Estimates are based on the Departments' tabulations of 
the March 2022 CPS Auxiliary Data (https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data).
    \210\ The Departments estimate that there are 12,212,484 
participants and 10,272,985 beneficiaries in fully insured, private-
sector health plans with less than 50 participants based on the 
Departments' tabulations of the March 2022 CPS Auxiliary Data 
(https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data). 
Assuming, based on KFF assumptions that 84 percent of participant 
and beneficiaries are in non-grandfathered plans (KFF, 2020 Employer 
Health Benefits Survey (Oct. 8, 2020), https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf), 
this will translate into an estimated 10,258,487 participants and 
8,629,307 beneficiaries in fully insured, private-sector, non-
grandfathered plans with less than 50 participants.
    \211\ Based on MLR reports submitted by issuers for the 2022 
reporting year, the number of policyholders in individual health 
insurance coverage offered in the individual market is approximately 
12 million and the number of enrollees was approximately 16,000,000. 
CMS, Medical Loss Ratio Data and System Resources (2022), https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
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    Since the enactment of MHPAEA, participants have increasingly 
utilized behavioral health services through their health coverage. 
Between 2007 and 2017, private insurance claim lines for behavioral 
health diagnoses increased by 320 percent.\212\ 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.\213\ In 2020, 41 million Americans who were 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.\214\ A 
2022 survey by SAMHSA indicated that among adults aged 18 or older, 
23.1 percent (or 59.3 million people) had any mental illness and 6.0 
percent (or 15.4 million people) had serious mental illness in the past 
year. The same survey also indicated that among individuals aged 12 or 
older, 17.3 percent (or 48.7 million people) had a substance use 
disorder in the past year, and of those only 14.9 percent (7.3 million 
people) received treatment for substance use disorder in the past 
year.\215\
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    \212\ Robin Gelburd, 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.
    \213\ Paul Fronstin & 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 (Mar. 10, 2022), https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_555_mentalhealth-10mar22.pdf?sfvrsn=aec3b2f_2.
    \214\ AHIP, How Employer-Provided Coverage Improves Access to 
Mental Health Support (May 2022), https://www.ahip.org/documents/202205-CaW_MentalHealth-v03.pdf.
    \215\ SAMHSA, Key Substance Use and Mental Health Indicators in 
the United States: Results from the 2022 National Survey on Drug Use 
and Health, pp. 33, 51-52 (Nov. 2023), https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
---------------------------------------------------------------------------

    The COVID-19 public health emergency (PHE) exacerbated the need for 
mental health and substance use disorder treatments. 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 in 2023, even as the pandemic receded from its 
peak, approximately 3 in 10 adults were still reporting symptoms of 
anxiety and depression.\216\ The pandemic likewise negatively impacted 
the mental health of children and adolescents, worsening reported rates 
of anxiety or depression which, in the 5 years preceding the pandemic, 
had already increased by 29 percent and 27 percent, respectively.\217\
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    \216\ Nirmita Panchal, Heather Saunders, Robin Rudowitz, & 
Cynthia Cox, The Implications of COVID-19 for Mental Health and 
Substance Use, KFF Issue Brief (Mar. 20, 2023), https://www.kff.org/coronavirus-covid-19/issue-brief/the-implications-of-covid-19-for-mental-health-and-substance-use/.
    \217\ Kristen Figas, Theodoros V. Giannouchos, & Elizabeth 
Crouch, Child and Adolescent Anxiety and Depression Prior to and 
During the COVID-19 Pandemic in the United States, 24 Child 
Psychiatry & Human Development pp. 1-11 (2023).
---------------------------------------------------------------------------

    The pandemic may have long-term effects on mental health and 
substance use disorders, suggesting that the number of individuals 
affected by expanding access through their health plans will only 
continue to grow. 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.\218\ Another 2022 study examined the mental health outcomes 
of COVID-19 survivors during the 12 months following their infection 
and found that COVID-19 survivors reported a high prevalence of 
depression, anxiety, and post-traumatic stress disorder at both the 6- 
and 12-months follow-up, indicating that the pandemic has long-term 
adverse mental health impacts on

[[Page 77666]]

COVID-19 survivors.\219\ 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.\220\
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    \218\ Yan Xie, Evan Xu, & Ziyad Al-Aly, Risks of Mental Health 
Outcomes in People with Covid-19: Cohort Study, 376 The BMJ (2022), 
https://www.bmj.com/content/376/bmj-2021-068993.
    \219\ Mario G. Mazza, Mariagrazia Palladini, Rebecca De Lorenzo, 
Beatrice Bravi, Sara Poletti, Roberto Furlan, Fabio Ciceri, Patrizia 
Rovere-Querini, & Francesco Benedetti, One-Year Mental Health 
Outcomes in a Cohort of COVID-19 Survivors, 145 Journal of 
Psychiatric Research pp. 118-124 (2022).
    \220\ Sean Warwicker, Denise Sant, Adrian Richard, Jake Cutajar, 
Annalise Bellizzi, Gertrude Micallef, Daniel Refalo, Liberato 
Camilleri, & Anton Grech, A Retrospective Longitudinal Analysis of 
Mental Health Admissions: Measuring the Fallout of the Pandemic, 
20(2) International Journal of Environmental Research and Public 
Health p. 1194 (2023).
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6. Studies Examining the Impact of MHPAEA and State Parity Laws
6.1. Research Examining the Impact of State Parity Laws
6.1.1. Research Finding State Parity Laws Increase the Utilization of 
Mental Health and Substance Use Disorder Care
    Research has found mixed evidence on the impact of State parity 
laws prior to the implementation of MHPAEA. While the specifics of the 
State-level programs might be different from MHPAEA, this research can 
nonetheless provide important context and suggestive evidence for how 
modifications to parity policies such as the MHPAEA program \221\ might 
impact healthcare demand and quality. While some studies did not 
identify a significant change in costs or usage of behavioral health 
treatments following the passage of State parity laws, others found 
that State parity laws increased the utilization of mental health care 
and substance use disorder care among populations at risk.
---------------------------------------------------------------------------

    \221\ The ``MHPAEA program'' refers to the MHPAEA statute, as 
amended, implementing regulations, and subsequent guidance, as 
discussed in section IV.3.
---------------------------------------------------------------------------

    For example, a 2006 study evaluated changes in mental health care 
utilization before and after States implemented parity laws, comparing 
them with States that did not enact such laws in the same year 
controlling for State and year fixed effects. Using data from the 2001, 
2002, and 2003 NSDUH, the study categorized individuals with individual 
or employer-sponsored health insurance by their level of mental and 
emotional distress during their most challenging month in the past year 
and found that State parity laws increased the likelihood of using any 
mental health care in the past year by up to 1.2 percentage points for 
individuals with lower distress levels and up to 1.8 percentage points 
for those with moderate distress levels. However, it is important to 
note that the study did not find a statistically significant effect on 
the mental health care utilization for individuals with severe distress 
levels. The authors noted that this group had already been more likely 
to use mental health care even before the State parity laws were 
implemented, suggesting they may have sought such care regardless of 
these laws.\222\
---------------------------------------------------------------------------

    \222\ Katherine M. Harris, Christopher Carpenter, & Yuhua Bao, 
The Effects of State Parity Laws on the Use of Mental Health Care, 
44(6) Medical Care pp. 499-505 (2006).
---------------------------------------------------------------------------

    Similarly, a 2008 study examined whether State parity laws affect 
mental health care utilization differently among low-income individuals 
and those with poor mental health conditions. To examine these effects, 
the study used pooled cross-sectional data from the National Survey of 
America's Families conducted in 1997, 1999, and 2001 and found that 
employees of small firms were more likely to use mental health and 
substance use disorder care after the implementation of State parity 
laws. While the study found no effect of parity for low-income adults 
for all employers, when limiting the sample to small employers, the 
study found that parity was associated with a 5-percentage-point 
increase in the probability of low-income individuals using mental 
health services. The study also found a large increase among those with 
poor mental health conditions employed by small employers, although 
this finding is only significant at a 10-percent significance level. 
The study did not find an effect for individuals with poor mental 
health for medium or large employers. The authors attributed these 
inconclusive results to the small sample size; therefore, the findings 
in this study should be interpreted with caution.\223\
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    \223\ Susan H. Busch & Colleen L. Barry, New Evidence on the 
Effects of State Mental Health Mandates, INQUIRY: The Journal of 
Health Care Organization, 45(3) Provision, and Financing pp. 308-322 
(2008).
---------------------------------------------------------------------------

    Additionally, a 2013 study examined the effect of State parity laws 
on substance use disorder treatment using national survey data from 
2000 to 2008 using State and year fixed effects to compare non-parity 
States to parity States prior to the implementation of MHPAEA. The 
authors reported that the baseline substance use disorder treatment 
rate before State parity laws were enacted was 1.40 percentage points 
in all specialty substance use disorder treatment facilities and 1.10 
percentage points in facilities accepting private insurance. Relative 
to these baseline rates, this study found that the implementation of 
any parity law increased the treatment rate by 9 percent in all 
specialty substance use disorder treatment facilities and by 15 percent 
in all treatment facilities accepting private insurance. When 
controlling for the comprehensiveness of the State parity law, the 
study found that full parity \224\ and parity-if-offered \225\ 
increased the substance use disorder treatment rate in all facilities 
by 13 percent and 8 percent, and by 21 percent and 10 percent in those 
accepting private insurance, respectively; States with partial parity 
\226\ did not have a significant effect on the substance use disorder 
treatment rates. The study conducted sensitivity analyses for 
facilities not accepting private insurance and found no difference in 
the treatment rates attributable to parity, suggesting that the effect 
of parity on the treatment rate is primarily driven by the increased 
treatment rate among the target population.\227\
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    \224\ The study defined ``full parity'' as ``requiring SUD 
[substance use disorder] coverage to be offered and offered on par 
with the comparable medical/surgical coverage in all aspects of cost 
sharing and treatment limitations.''
    \225\ The study defined ``parity-if-offered'' as ``not requiring 
SUD coverage to be offered, but if offered, it should be on par with 
the comparable medical/surgical coverage in all aspects of cost 
sharing and treatment limitations.''
    \226\ The study defined ``partial parity'' as ``requiring SUD 
coverage to be offered, allows for discrepancies between SUD 
coverage and comparable medical/surgical coverage in some aspects of 
cost sharing and treatment limitations.''
    \227\ Hefei Wen, Janet R. Cummings, Jason M. Hockenberry, Laura 
M. Gaydos, & Benjamin G. Druss, State Parity Laws and Access to 
Treatment for Substance Use Disorder in the United States: 
Implications for Federal Parity Legislation, 70(12) JAMA Psychiatry 
pp. 1355-1362 (2013).
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6.1.2. Research Finding State Parity Laws Have Other Positive Effects
    Other studies have found that State parity laws have positive 
effects that extend beyond the use of mental health care. For example, 
a 2013 study comparing suicide rates in States with and without parity 
laws during two distinct periods: 1990 to 1997 and 1998 to 2004, the 
period when the majority of States (22 out of 29) had implemented 
parity laws. The study found that State parity laws were associated 
with a 5-percent decrease in suicide rates, even after subjecting the 
analysis to several robustness checks.\228\
---------------------------------------------------------------------------

    \228\ Matthew Lang, The Impact of Mental Health Insurance Laws 
on State Suicide Rates, 22(1) Health Economics pp. 73-88 (2013).
---------------------------------------------------------------------------

    Similarly, a 2022 study examined how State parity laws affected 
suicide rates and educational outcomes among college-level students. 
Utilizing survey

[[Page 77667]]

and administrative data spanning from 1998 to 2008, the study employed 
a difference-in-differences model and found that State parity laws 
reduced the suicide rates, increased college grade point averages, and 
reduced the likelihood of college-level students reporting any poor 
mental health days. However, the study did not find evidence that State 
parity laws affect the likelihood of disenrolling from college. These 
findings remain consistent even after subjecting the analysis to 
several robustness checks. The authors acknowledged some limitations in 
the study. Specifically, the reported number of poor mental health days 
reported is based on self-assessment, rather than on clinical measures. 
There is also a possibility of underreporting due to the stigma 
associated with mental health.\229\
---------------------------------------------------------------------------

    \229\ Keisha T. Solomon & Kabir Dasgupta, State Mental Health 
Insurance Parity Laws and College Educational Outcomes, 86 Journal 
of Health Economics (2022).
---------------------------------------------------------------------------

    Finally, a 2015 study examined the effect of State parity laws on 
individuals aged 25 to 64 with moderate levels of distress.\230\ Using 
individual-level data from the National Health Interview Survey (1997 
to 2001) and the Medical Expenditure Panel Survey (1998 to 2003), the 
study employed a triple-difference model and found a statistically 
significant increase in employment, weekly wages, and the number of 
hours worked following the passage of parity. The authors noted that 
the results do not indicate a shift in the labor demand curve, but 
rather an increase in the productivity of workers with moderate levels 
of distress.\231\
---------------------------------------------------------------------------

    \230\ The author defines ``moderately distressed individuals'' 
based on their reported levels of distress in the National Health 
Interview Survey. The authors categorized ``distress'' as follows: 
scores below 1 indicate no distress, 1 to 5 indicate low distress, 6 
to 11 indicate moderate distress, and 12 or above indicate severe 
distress.
    \231\ Martin Andersen, Heterogeneity and the Effect of Mental 
Health Parity Mandates on the Labor Market, 43 Journal of Health 
Economics (2015).
---------------------------------------------------------------------------

    Although the previous three studies suggest mental health outcomes 
may improve following the initiation of State parity policies, it is 
not clear from this research the mechanism driving any outcome 
improvements. Given a lack of data in both studies, the authors cannot 
directly show that State parity laws increase mental healthcare 
utilization. The causal impact of these policies, including whether 
parity would increase mental healthcare utilization, which would in 
turn improve health outcomes such as the suicide rate, can therefore 
not be directly ascertained. Absent any utilization increases, it is 
possible that parity policies could improve the quality of care itself 
without additional demand, but further research is needed to answer how 
specifically parity laws affect downstream health outcomes.
6.1.3. Research Finding State Parity Laws Have Statistically 
Insignificant Effects
    In contrast, some studies have found that State parity laws did not 
significantly improve access to mental health and substance use 
disorder care. For instance, a 2000 study focused on patients with 
mental health needs examined the impact of State parity laws on their 
insurance coverage, with varying specifications which defined this as 
insurance status, insurance generosity, and perceived access to care. 
Using national survey data from 1996 to 1998, the study found no 
statistically significant impact on insurance coverage or access to 
care for patients with mental health needs following the passage of 
State parity laws. The authors attributed this finding to several 
limitations of the study, including a relatively small sample size 
which limited the narrowness of State parity laws in terms of impact 
types of insurance coverage, and the significant number of individuals 
with mental health or substance use disorders who do not have health 
insurance coverage. Most significantly, while the study examined the 
impact of parity laws on access to insurance and care, it was not 
limited to behavioral health care and so the impact on those 
interventions may not have been statistically significantly 
captured.\232\
---------------------------------------------------------------------------

    \232\ Roland Sturm, State Parity Legislation and Changes in 
Health Insurance and Perceived Access to Care Among Individuals with 
Mental Illness: 1996-1998, 3(4) The Journal of Mental Health Policy 
and Economics pp. 209-213 (2000).
---------------------------------------------------------------------------

    Furthermore, a 2013 study examined how State parity laws affected 
access to mental health care services for privately insured children 
and youths aged three to 17 with ASD. Using national survey data from 
2005 to 2006 and adjusting for potential selection bias of States that 
enacted parity legislation, the study did not find evidence that State 
parity laws increased the utilization of mental health services for 
children with ASD. The authors suggested that differences in the 
availability of services, therapies, and treatments across States could 
explain this lack of impact, as these children may not benefit from the 
same protections and service access afforded to children with other 
mental health conditions under State parity laws. Additionally, the 
authors acknowledged limitations in their analysis, noting that the 
study did not provide information on the implementation of State parity 
laws. They cautioned that measurement errors could arise due to the 
potential delayed effects associated with varying implementation 
timelines of the State parity laws.\233\
---------------------------------------------------------------------------

    \233\ Lucy A. Bilaver & Neil Jordan, Impact of State Mental 
Health Parity Laws on Access to Autism Services, 64(10) Psychiatric 
Services pp. 967-973 (2013).
---------------------------------------------------------------------------

6.2. Research Examining the Impact of MHPAEA on Utilization
    Several studies have investigated the effect MHPAEA had on 
utilization of treatment for mental health conditions or substance use 
disorders. In general, the studies have found either a small or no 
effect on utilization after the implementation of MHPAEA.
    For instance, a 2014 study analyzed pooled data from seven Federal 
Employees Health Benefits (FEHB) plans, four of which contracted with 
carve-out plans \234\ before and after parity implementation, two 
implemented carve-out plans when parity took effect, and one was not a 
carve-out plan. The authors looked at annual utilization, including 
psychotherapy visits, medication management visits, inpatient mental 
health or substance use disorder days, and mental health of substance 
use disorder prescription fills, for three target diagnoses: bipolar 
disorder, major depression, and adjustment disorder. Using a difference 
in differences model, the authors found a 12-percent statistically 
significant decrease in annual psychotherapy utilization for 
individuals diagnosed with adjustment disorders, and a statistically 
significant decrease in out-of-pocket spending for enrollees across all 
three diagnostic categories (ranging from $78 to $86) following parity 
implementation, and found no significant change for all other metrics. 
The authors opine that the observed decline in psychotherapy 
utilization may be related to the Office of Personnel Management's 
encouragement that FEHB plans utilize benefit management techniques to 
control spending increases following parity implementation.\235\
---------------------------------------------------------------------------

    \234\ Carve-out plans are defined as plans that only administer 
behavioral health benefits. (See Sarah A. Friedman, Francisca 
Azocar, Haiyong Xu, & Susan L. Ettner, The Mental Health Parity and 
Addiction Equity Act (MHPAEA) Evaluation Study: Did Parity 
Differentially Affect Substance Use Disorder and Mental Health 
Benefits Offered by Behavioral Healthcare Carve-Out and Carve-In 
Plans, 190 Drug and Alcohol Dependence pp. 151-158 (2018).)
    \235\ Alisa Busch, Frank Yoon, Colleen Barry, Banessa Azzone, 
Sharone-Lisa Normand, Howard Goldman, & Haiden Huskamp, The Effects 
of Parity on Mental Health and Substance Use Disorder Spending and 
Utilization: Does Diagnosis Matter? 172(2) American Journal of 
Psychiatry pp. 180-187 (Feb. 2013).

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[[Page 77668]]

    Along the same lines, a 2016 study used an interrupted time series 
model to investigate the effect of MHPAEA on the probability of 
specialty behavioral health treatment, levels of utilization, and 
expenditures for enrollees aged 27 to 64 in group health plans between 
2008 and 2013, with Optum carve-outs. The authors focused on the 
following outcomes: expenditures (insurer and patient), number of 
outpatient visits (assessment/diagnostic evaluation, individual 
psychotherapy, family psychotherapy, and medication management), and 
number of days of care (structure outpatient, day treatment, 
residential care, and acute inpatient care). In the post-parity period, 
2011 to 2013, the effect of parity differed by type of care: the 
probability of using any assessment/diagnostic evaluation, medication 
management, of family psychotherapy visits decreased, while the 
probability of using structure outpatient care and inpatient care 
increased. Under multiple specifications and sensitivity tests, the 
authors found that parity had ``modest to no effect on service use.'' 
Though they did find modest evidence that costs shifted from patient to 
health plans.\236\
---------------------------------------------------------------------------

    \236\ Susan Ettner, Jessica Harwood, Amber Thalmayer, Michael 
Ong, Haiyong Xu, Michael Bresolin, Kenneth Wells, Chi-Hong Tseng, & 
Francisca Azocar, The Mental Health Parity and Addiction Equity Act 
Evaluation Study: Impact on Specialty Behavioral Health Utilization 
and Expenditures Among ``Carve-Out'' Enrollees, 50 Journal of Health 
Economics pp. 131-143 (2016).
---------------------------------------------------------------------------

    Similarly, a 2019 study looked at insurance claims of enrollees 
under age 65 with continuous enrollment in a large group, employer-
sponsored fully insured health plan between January 2005 and September 
2015 to analyze whether parity implementation was associated with 
utilization and spending changes in behavioral health services compared 
to medical/surgical services. Parity had a positive but small, 
statistically significant impact on the share of enrollees that used 
any outpatient substance use disorder services. Specifically, parity 
increased the percentage of enrollees that used any outpatient 
substance use disorder services by 0.023 percentage points in the first 
year following the implementation of MHPAEA and 0.068 percentage points 
by the end of 2015 relative to pre-MHPAEA levels. The authors also 
found that parity led to an increase in the average frequency of 
monthly services per user for both mental health and substance use 
disorder services, at a rate of 0.05 services per user for mental 
health services and 0.054 services per user for substance use disorder 
services. This implies that people receiving services received more 
services, on average.\237\
---------------------------------------------------------------------------

    \237\ Noah Mulvaney-Day, Brent Gibbons, Shums Alikhan, & Mustafa 
Karakus, Mental Health Parity and Addiction Equity Act and the Use 
of Outpatient Behavioral Health Services in the United States, 2005-
2016, 109(3) American Journal of Public Health pp. 190-196 (2019).
---------------------------------------------------------------------------

6.3. Research Examining the Impact of MHPAEA on Spending
    Research has found mixed evidence on the impact of MHPAEA on 
spending. Some studies did not identify a change in out-of-pocket 
spending following the passage of MHPAEA, whereas others found that 
MHPAEA increased out-of-pocket spending on substance use disorder care.
    For instance, a 2017 study examined whether MHPAEA increased 
behavioral health expenditures and utilization among a population with 
substance use disorders. Using Optum's claims and eligibility data from 
2008 to 2013, the authors compared the utilization and expenditures for 
adults with alcohol or drug use disorders across several periods: pre-
parity (2008 to 2009), transition period (2010),\238\ and post-parity 
period (2011 to 2013). They found that for carve-out plans managed by 
Optum, MHPAEA was associated with modest increases in total spending, 
plan spending, and patient out-of-pocket spending, as well as 
outpatient and inpatient utilization. Although the increases were 
mostly small in magnitude, they were evident across different types of 
care, potentially indicating small improvements in the accessibility to 
various substance use disorder treatments.\239\ The authors note that 
these results are similar to other studies, which used the same data 
when examining adults in carve-in plans and carve-out plans.\240\
---------------------------------------------------------------------------

    \238\ The study defined the ``transition'' period as ``when 
good-faith efforts at compliance with respect to coinsurance, 
copayments, combined medical-behavioral health deductibles, and 
quantitative treatment limits went into effect for plans renewing on 
a calendar-year basis.''
    \239\ Sarah Friedman, Haiyong Xu, Jessica M. Harwood, Francisca 
Azocar, Brian Hurley & Susan L. Ettner, The Mental Health Parity and 
Addiction Equity Act Evaluation Study: Impact on Specialty 
Behavioral Healthcare Utilization and Spending Among Enrollees with 
Substance Use Disorders, 80 Journal of Substance Abuse Treatment pp. 
67-78 (2017).
    \240\ Harwood, Jessica M., Francisca Azocar, Amber Thalmayer, 
Haiyong Xu, Michael K. Ong, Chi-Hong Tseng, Kenneth B. Wells, Sarah 
Friedman, & Susan L. Ettner, The Mental Health Parity and Addiction 
Equity Act Evaluation Study: Impact on Specialty Behavioral Health 
Care Utilization And Spending Among Carve-In Enrollees, 55(2) 
Medical Care pp. 164-172 (2017); and Susan L. Ettner, Jessica M. 
Harwood, Amber Thalmayer, Michael K. Ong, Haiyong Xu, Michael J. 
Bresolin, Kenneth B. Wells, Chi-Hong Tseng, & Francisca Azocar, The 
Mental Health Parity and Addiction Equity Act Evaluation Study: 
Impact on Specialty Behavioral Health Utilization and Expenditures 
Among Carve-Out Enrollees, 50 Journal of Health Economics pp. 131-
143 (2016).
---------------------------------------------------------------------------

    Additionally, a 2015 study examined whether MHPAEA was associated 
with changes in the out-of-network services for substance use disorder 
services. Using a 2007 to 2012 longitudinal, commercial claims database 
and employing an interrupted time-series design to analyze these 
effects, the study found that MHPAEA was associated with an increased 
probability of using out-of-network services at a rate of 0.0024 
service users per month, an increased number of out-of-network out-
patient visits at a rate of 0.0016 service users per month, and an 
increased average total spending on out-of-network services by $49.81 
per user per month, though it was found to have no effect on out-of-
pocket spending. This result would represent a shift in expenses borne 
by the insurer, which might or might not be passed through to the 
insured through higher premiums, but the study lacked the data to 
assess this possibility. The authors acknowledged that the study was 
not able to examine the adequacy of substance use disorder provider 
networks, which may have influenced enrollees pursuit of out-of-network 
care.\241\
---------------------------------------------------------------------------

    \241\ Emma E. McGinty, Susan H. Busch, Elizabeth A. Stuart, 
Haiden A. Huskamp, Teresa B. Gibson, Howard H. Goldman, & Colleen L. 
Barry, Federal Parity Law Associated with Increased Probability of 
Using Out-Of-Network Substance Use Disorder Treatment Services, 
34(8) Health Affairs pp. 1331-1339 (2015).
---------------------------------------------------------------------------

    Finally, a 2014 study examined the impact of MHPAEA on the 
utilization and spending of substance use disorder treatments. Using 
2009 to 2010 administrative claims data from Aetna insurance, the study 
compared changes in outcomes among health plan enrollees one year 
before (2009) and one year after (2010) the implementation of MHPAEA, 
compared to enrollees covered by State parity laws in place prior to 
MHPAEA. The study found the MHPAEA was associated with a modest 
increase in spending on substance use disorder treatments ($9.99 per 
health plan enrollee), but did not find significant changes in 
treatment initiation,\242\ treatment engagement,\243\ or out-of-pocket 
spending. The authors acknowledged that these findings may not be 
generalizable to other insurance or population contexts, since the 
study

[[Page 77669]]

evaluated the effects of parity on individuals insured by a single 
health insurer in 10 States with pre-existing State parity laws. 
Moreover, the study examined only the first year following MHPAEA's 
effective date, which may not have fully captured its 
implementation.\244\ As discussed in section IV.2.2, the Departments 
have published regulations and extensive guidance to facilitate the 
implementation and enforcement of MHPAEA.
---------------------------------------------------------------------------

    \242\ The study defined ``treatment initiation'' as the ``share 
of enrollees with a new episode of SUD treatment who initiated 
treatment within 14 days of their initial diagnosis.''
    \243\ The study defined ``treatment engagement'' as the ``share 
of enrollees with a new episode of SUD treatment who receive at 
least two SUD services within 30 days of their initial diagnosis.''
    \244\ Susan H. Busch, Andrew J. Epstein, Michael O. Harhay, 
David A. Fiellin, Hyong Un, Deane Leader Jr, & Colleen L. Barry, The 
Effects of Federal Parity on Substance Use Disorder Treatment, 20(1) 
The American Journal of Managed Care (2014).
---------------------------------------------------------------------------

7. Benefits
    The Departments expect that these final rules will improve the 
quality of the comparative analyses performed and documented by plans 
and issuers required by MHPAEA, as amended by the CAA, 2021; help plans 
and issuers better understand and fulfill their obligations under 
MHPAEA; and promote greater clarity regarding differences in access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits. By specifying more details on how to perform 
and document NQTL comparative analyses, the Departments expect 
improvements in plan and issuer compliance with the requirements for 
imposing NQTLs under MHPAEA, and by doing so, increased access for 
participants, beneficiaries and enrollees to mental health and 
substance use disorder services.
    Thus, these final rules will generate the following economic and 
societal benefits for participants, beneficiaries, and enrollees:
     improved understanding of and compliance with MHPAEA by 
plans and issuers, resulting in better frameworks for regulators, 
plans, and issuers to determine whether plans and issuers are complying 
with MHPAEA with respect to NQTLs applicable to coverage of mental 
health and substance use disorder benefits,
     greater access and utilization of mental health and 
substance use disorder services in response to a reduction in barriers 
to mental health and substance use disorder coverage (the greater 
utilization being a cost of the rule), resulting in better health 
outcomes among those with mental health conditions or substance use 
disorders, and
     reduced adverse impacts on the families, friends, 
caregivers, and coworkers of people who suffer from untreated or under 
treated mental health conditions or substance use disorders based on 
their improved access to treatment.
    This analysis provides a mainly qualitative discussion of the 
benefits associated with these final rules, as the Departments do not 
have the data necessary to quantify the likely benefits associated with 
the additional guidance and its impact on ensuring better compliance 
with the rules related to NQTLs and access to mental health and 
substance use disorder benefits. Where possible, however, the 
Departments have provided estimates to illustrate some of the benefits 
of these final rules. The illustrative calculations address overlapping 
phenomena and thus are not summed due to the noteworthy potential for 
double-counting (moreover, for only a subset of the illustrated 
benefits have the associated treatment costs been quantified).
    In addition, the Departments have identified several transfers that 
will occur due to this rulemaking, such as decreases in out-of-pocket 
spending and increases in premiums. These transfers are discussed in 
section IV.9 of this regulatory impact analysis.
    The Departments requested comments and data in the proposed rules 
related to how the Departments might quantify these benefits. While one 
commenter stated that the Departments had not quantified the benefits 
of the proposal, they did not provide any data or recommendations on 
how these benefits could be quantified. Another commenter suggested 
that the Congressional Budget Office's (CBO) cost estimate \245\ of the 
CAA, 2021 may help the Departments to quantify the benefits of the 
proposal. However, the CBO report primarily focuses on the program cost 
of CAA, 2021, rather than addressing the specific impact of the 
additional requirements for documenting comparative analyses, and 
therefore the Departments are not able to utilize it for quantifying 
the benefits of these final rules.
---------------------------------------------------------------------------

    \245\ See CBO, Summary Estimate for Divisions M Through FF, H.R. 
133, Consolidated Appropriations Act, 2021 (Pub. L. 116-260), as 
Enacted on December 27, 2020 (Jan. 14, 2021), https://www.cbo.gov/system/files/2021-01/PL_116-260_Summary.pdf.
---------------------------------------------------------------------------

7.1. Improved Understanding of and Compliance With MHPAEA by Plans and 
Issuers
    As noted earlier, the 2022 MHPAEA Report to Congress \246\ found 
that none of the comparative analyses reviewed by the Departments under 
the first year of the CAA, 2021, contained sufficient information and 
documentation from plans and issuers upon initial receipt and nearly 
all were similarly deficient for the 2023 MHPAEA Comparative Analysis 
Report to Congress.\247\ As a result, the Departments had to make 
numerous requests for additional information. This process is costly 
for plans, issuers, and the Departments, and undermines the 
effectiveness of MHPAEA.
---------------------------------------------------------------------------

    \246\ 2022 MHPAEA Report to Congress, 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.
    \247\ 2023 MHPAEA Comparative Analysis Report to Congress, 
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------

    These final rules will clarify and strengthen the obligations of 
plans and issuers under MHPAEA, thus promoting compliance, by:
     placing renewed focus on the elimination of more 
restrictive barriers to access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits,
     standardizing the definitions associated with the parity 
analysis for NQTLs applicable to 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 evaluation requirements 
of the NQTL comparative analyses.
    These final rules will help parties better understand what plans 
and issuers need to do to comply with MHPAEA, reduce uncertainty about 
compliance status, and help plans and issuers better identify areas 
they need to improve upon as well as reduce the need to revise analyses 
upon the Departments identifying non-compliance. In the course of 
implementing these final rules, the Departments anticipate that parties 
will adjust their policies and procedures in order to come into 
compliance and offer better coverage of mental health and substance use 
benefits to participants, beneficiaries, and enrollees.
    Many commenters supported modifying existing definitions and adding 
new ones to the MHPAEA regulations, particularly for terms such as 
``medical/surgical benefits,'' ``mental health benefits,'' and 
``substance use disorder benefits.'' Commenters stated that these 
definitions would significantly improve clarity for plans and issuers. 
One commenter stated the proposal would clearly specify how mental 
health and substance use disorder benefits must be defined for MHPAEA 
compliance purposes, minimize situations where

[[Page 77670]]

contradictions with State guidelines limit protections under MHPAEA, 
and ensure that plans appropriately classify mental health and 
substance use disorder benefits and medical/surgical benefits. The 
Departments acknowledge the supportive comments and agree that 
modifying and adding definitions, particularly for key terms like 
``medical/surgical benefits,'' ``mental health benefits,'' and 
``substance use disorder benefits,'' will enhance clarity and ensure 
consistent application of the MHPAEA requirements across plans and 
issuers, and have done so in these final rules.
    Commenters also expressed support for clarifying the application of 
MHPAEA's requirements to NQTLs. One commenter stated that the proposal 
provides more specificity for plans and issuers to assess their NQTLs 
applicable to mental health or substance use disorder benefits, and the 
information that must be included in a comparative analysis of NQTLs 
applicable to mental health and substance use disorder benefits and 
medical/surgical benefits. The commenter further stated the proposal 
reduces uncertainty for all parties, while providing greater clarity 
for consumers and other stakeholders to assess whether an NQTL is 
compliant with MHPAEA. Additionally, the commenter stated that the 
proposal provides greater clarity for insurers and patients and helps 
State insurance regulators better enforce existing regulations. The 
Departments acknowledge the supportive comments and agree that the 
final rules provide clarity to the statutory requirements for the 
regulated community and other interested parties.
    However, some commenters expressed concern regarding whether 
certain policies and procedures would now be prohibited under MHPAEA, 
as interpreted through the proposed rules, if finalized. One commenter, 
in objecting to the proposed mathematical substantially all and 
predominant tests, stated that the most significant cost is not in 
conducting the comparative analysis, but rather in the additional 
expenses incurred should plans and issuers no longer be able to utilize 
common medical management techniques that improve cost and quality 
outcomes, such as prior authorization and concurrent review.
    As stated earlier in this preamble, the Departments are not 
finalizing the proposed mathematical test for applying the 
substantially all and predominant tests in these final rules. These 
final rules also do not eliminate the use of prior authorization or 
other medical management NQTLs applicable to both mental health and 
substance use disorder benefits and medical/surgical benefits. However, 
NQTLs applicable to mental health and substance use disorder benefits 
and medical/surgical benefits must be designed and applied in 
compliance with MHPAEA's parity requirements. Moreover, as discussed 
earlier in this preamble, the Departments anticipate that these final 
rules will promote changes in network composition and medical 
management techniques that result in more robust mental health and 
substance use disorder provider networks, as well as fewer and less 
restrictive prior authorization requirements for individuals seeking 
mental health and substance use disorder treatment. While this could 
increase costs in some cases, there are potential offsetting benefits 
in other cases for the reduction in the use of medical management 
techniques.
7.2. Greater Access to Mental Health and Substance Use Disorder 
Treatments
    By improving plan and issuer understanding of the requirements 
under MHPAEA and clarifying how comparative analyses must be performed 
and documented, these final rules will improve compliance. 
Specifically, this will ensure compliance with the design and 
application requirements and the relevant data evaluation requirements 
so that NQTLs applied to mental health and substance use disorder 
benefits are no more restrictive than the predominant limitation 
applicable to substantially all medical/surgical benefits. The 
Departments are of the view that this will, in turn, expand access to 
and utilization of mental health and substance use disorder services. 
These final rules will have the greatest direct benefits for 
individuals who currently forego treatments or cannot access 
specialized care for a mental health condition or substance use 
disorder because their plan or coverage imposes barriers to accessing 
benefits for coverage of these services that are greater than the 
barriers for accessing medical/surgical services.
    The Departments do not have sufficient data to estimate how many 
participants, beneficiaries, and enrollees will receive treatment, or 
more appropriate treatment, as a result of these final rules. However, 
research has demonstrated that participants, beneficiaries, and 
enrollees experienced increased access to mental health and substance 
use disorder treatments following the implementation of MHPAEA. Drawing 
on these studies, the Departments expect that this rulemaking, in 
further improving compliance with MHPAEA, will result in significant 
improvements in access to mental health and substance use disorder 
care.
    For example, a 2018 study examined how MHPAEA affected the coverage 
of commercial health plans in the United States. The study found that 
between 2010 \248\ and 2014, 68 percent of insurance products had 
expanded behavioral health coverage, and among plans that expanded 
services, 96 percent reported it was in part because of parity 
requirements.\249\ Further, a 2017 study examined the prevalence of 
behavioral health quantitative treatment limitations in large group 
health plans that utilized carve-out and carve-in services of a single 
service provider. While prior to implementation of MHPAEA, quantitative 
treatment limitations existed, following its implementation virtually 
all of those plans had eliminated quantitative treatment 
limitations.\250\ A 2019 study of claims data from both a pre-parity 
(January 2005 through December 2010) and post-parity period (January 
2011 through September 2015), found that while MHPAEA did not 
appreciably increase the share of participants utilizing any outpatient 
mental health services, it did increase the frequency of use and total 
utilization of outpatient mental health and substance use disorder 
services of participants already receiving these services.\251\ 
Moreover, a 2020 study of MHPAEA, using 2007 and 2011 to 2012 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\
---------------------------------------------------------------------------

    \248\ The effective date for MHPAEA for calendar year plans is 
January 1, 2010. See CMS, The Mental Health Parity and Addiction 
Equity Act of 2008 (MHPAEA) (2010).
    \249\ Dominic Hodgkin, Constance M. Horgan, Maureen T. Stewart, 
Amity E. Quinn, Timothy B. Creedon, Sharon Reif, & Deborah W. 
Garnick, Federal Parity and Access to Behavioral Health Care in 
Private Health Plans, 69(4) Psychiatric Services pp. 396-402 (2018).
    \250\ Thalmayer, Amber Gayle, Sarah A. Friedman, Francisca 
Azocar, Jessica M. Harwood, & Susan L. Ettner, The Mental Health 
Parity and Addiction Equity Act (MHPAEA) Evaluation Study: Impact on 
Quantitative Treatment Limits, 68(5) Psychiatric Services pp. 435-
442 (2017).
    \251\ Norah Mulvaney-Day, Brent J. Gibbons, Shums Alikhan, & 
Mustafa Karakus, Mental Health Parity and Addiction Equity Act and 
the Use of Outpatient Behavioral Health Services in the United 
States, 2005-2016, 109(S3) American Journal of Public Health pp. 
S190-S196 (2019).
    \252\ Xiaoxue Li & 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), 47(1) The Journal of Behavioral Health Services & Research 
pp. 38-53 (2020).

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[[Page 77671]]

    These final rules will directly benefit individuals who are 
currently enrolled in a plan with narrower networks, with regard to 
mental health and substance use disorder benefits compared to the 
networks for medical/surgical benefits, which prevent participants, 
beneficiaries, and enrollees from being able to access care from in-
network providers and receive the benefits they need. A 2017 study of 
ACA Marketplace provider networks 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.\253\ A 2023 secret shopper study conducted by the 
Senate Committee on Finance contacted 10 providers from directories of 
12 plans, making a total of 120 calls. The study found that more than 
80 percent of mental health providers contacted were either 
unreachable, not in-network, or not accepting new patients.\254\
---------------------------------------------------------------------------

    \253\ Jane M. Zhu, Yuehan Zhang, & Daniel Polsky, Networks in 
ACA Marketplaces are Narrower for Mental Health Care than for 
Primary Care, 36(9) Health Affairs pp. 1624-1631 (Sept. 2017).
    \254\ Senate Committee on Finance Majority, Majority Study 
Findings: Medicare Advantage Plan Directories Haunted by Ghost 
Networks (2023), https://www.finance.senate.gov/imo/media/doc/050323%20Ghost%20Network%20Hearing%20-%20Secret%20Shopper%20Study%20Report.pdf.
---------------------------------------------------------------------------

    Ghost or phantom networks--collections of providers and facilities 
that are listed as being within a plan's or issuer's network but, in 
fact, are not available to participants, beneficiaries, and enrollees 
for treatment on an in-network basis--make it difficult for 
participants to find in-network providers.\255\ One 2020 national 
survey of privately insured individuals that received mental health 
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.\256\
---------------------------------------------------------------------------

    \255\ GAO, Mental Health Care: Access Challenges for Covered 
Consumers and Relevant Federal Efforts, GAO-22-104597 (Mar. 2022), 
https://www.gao.gov/assets/gao-22-104597.pdf.
    \256\ Susan H. Busch & Kelly A. Kyanko, Incorrect Provider 
Directories Associated with Out-of-Network Mental Health Care and 
Outpatient Surprise Bills, 39(6) Health Affairs pp. 975-983 (June 
2020).
---------------------------------------------------------------------------

    In response to the Departments' proposal, numerous commenters 
stated that they believed the proposed rules would benefit patients, 
specifically by improving access to mental health and substance use 
disorder treatments. Several commenters stated the proposed rules would 
ensure more equitable access to care by addressing burdensome 
administrative practices, such as NQTLs and other utilization 
management techniques, which negatively impact patient access to mental 
health and substance use disorder benefits. Additionally, many other 
commenters suggested that the enhanced clarity and transparency 
provided by the proposed rules would alleviate administrative burdens 
and, as such, help to streamline access to behavioral health care. The 
Departments acknowledge these supportive comments and agree that the 
final rules will increase access to mental health and substance use 
disorder treatments.
    Given those concerns highlighted by commenters regarding challenges 
related to accessing mental health substance use disorder benefits, the 
final rules particularly highlight parity in NQTLs related to network 
composition as an area that requires improvement. By requiring plans 
and issuers to collect and evaluate relevant data on provider networks, 
including for network composition NQTLs, the final rules will help to 
ensure that individuals have more equitable access to in-network 
providers that are available to provide care for mental health 
conditions and substance use disorders. Additionally, by ensuring that 
plans and issuers collect and evaluate data related to NQTLs for 
network composition for mental health and substance use disorder 
benefits and medical/surgical benefits, and as necessary address 
material differences in access between these benefits, the Departments 
expect that the final rules will improve the ability of participants, 
beneficiaries, and enrollees to access available in-network mental 
health and substance use disorder providers. Thus, the final rules will 
reduce barriers to accessing mental health and substance use disorder 
care.
    This discussion focuses on the benefits for participants, 
beneficiaries, and enrollees who were previously prevented from 
receiving mental health or substance use disorder treatment. For a 
discussion of the effects on participants, beneficiaries, and enrollees 
who were previously paying out-of-pocket for treatment, refer to 
section IV.9.1 of this regulatory impact analysis pertaining to 
transfers.
    The implementation of the CAA, 2023 provision that sunsets the 
MHPAEA opt-out election is expected to reduce financial and non-
financial barriers to accessing mental health and substance use 
disorder treatment for participants and beneficiaries of self-funded 
non-Federal governmental plans that elected to opt out of requirements 
under MHPAEA. This is expected to result in increased access to mental 
health and substance use disorder care and, as discussed in more detail 
in the section IV.7.3, lead to better health outcomes for plan 
participants and beneficiaries who need mental health or substance use 
disorder services.
7.3. Better Health Outcomes Among Those With Mental Health Conditions 
and Substance Use Disorders
    The Departments are of the view that by ensuring parity in medical 
management techniques and other NQTLs imposed by plans and issuers, the 
final rules will reduce barriers for participants, beneficiaries, and 
enrollees seeking mental health and substance use disorder care. As 
discussed later in this regulatory impact analysis, the removal of 
barriers preventing individuals from accessing mental health and 
substance use disorder treatment on par with medical/surgical treatment 
will in turn produce better patient outcomes, including potentially 
lives saved.
    Research has demonstrated that MHPAEA has already had a positive 
effect on improving access to treatment. A 2016 study examining the 
initial effects of MHPAEA found that following implementation, prior 
authorization requirements were less common for behavioral health care 
services than in previous years.\257\ Further, removal of treatment 
limitations has had significant beneficial impacts in the mental health 
and substance use disorder space. A 2013 study, which analyzed changes 
in suicide rates by age groups before and after State parity laws were 
enacted, found that, controlling for State-specific time trends, 
enactment of parity laws was associated with a 5-percent decrease in 
suicides.\258\ It is worth noting, however, that State parity laws do 
not apply to most self-funded employer-sponsored health coverage, which 
comprise a large portion of the population in States affected by these 
final rules. As such, the impact of the laws in that study may have 
been somewhat dampened. For a more detailed description of this study, 
see section IV.6.1.
---------------------------------------------------------------------------

    \257\ Constance M. Horgan, Dominic Hodgkin, Maureen T. Stewart, 
Amity Quinn, Elizabeth L. Merrick, Sharon Reif, Deborah W. Garnick, 
& Timothy B. Creedon, Health Plans' Early Response to Federal Parity 
Legislation for Mental Health and Addiction Services, 67(2) 
Psychiatric Services pp. 162-168 (2016).
    \258\ Matthew Lang, The Impact of Mental Health Insurance Laws 
on State Suicide Rates, 22(1) Health Economics, pp. 73-88 (2013).
---------------------------------------------------------------------------

    If, as the Departments expect, these final rules similarly increase 
access to mental health and substance use

[[Page 77672]]

disorder care, the potential benefits could be significant. Using the 
suicide fatality rate for adults in 2021 from the Centers for Disease 
Control and Prevention (CDC) of approximately 14.1 per 100,000 persons 
\259\ and the 2020 Agency for Healthcare Research and Quality youth 
suicide fatality rate of approximately 6.3 per 100,000,\260\ and 
applying these rates to the numbers of individuals 12 years old and 
older with private health insurance,\261\ suggests approximately 22,200 
suicide deaths annually for adults \262\ and 979 suicide deaths 
annually for children 12-17 years old.\263\ For illustrative purposes, 
the Departments assume that these final rules would have roughly 40 
percent of the impact of the Lang study, or a 2-percent reduction of 
fatalities.\264\ As such, the Departments estimate that the final rules 
could help prevent 444 adult \265\ and 20 youth \266\ fatalities from 
suicide annually. Using the 2023 estimate of the value of a statistical 
life (VSL) developed by the U.S. Department of Transportation (DOT), 
$13.2 million,267 268 this would translate into benefits of 
$6.11 billion annually.269 270 The Departments recognize the 
uncertainty in the production of VSL benefit estimates. This 
uncertainty arises from a variety of assumptions that are key to the 
VSL estimate, such as the underlying demographic characteristics of the 
affected population or the differential willingness-to-pay for 
statistically equivalent but qualitatively different risks.\271\ To 
account for potential sensitivity arising from such uncertainty, the 
Departments have conducted a sensitivity analysis of these benefits 
and, following guidance on VSL sensitivity analysis,\272\ produced a 
lower and upper estimate of the VSL of approximately $5.3 million and 
$18.5 million, respectively.\273\ Utilizing this range of estimates, 
the Departments accordingly estimate the value of the benefits of 
reduced mortality arising from increased mental health treatment 
utilization at between $2.5 billion and $8.6 billion annually.\274\
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    \259\ CDC, National Center for Health Statistics, Provisional 
Estimates of Suicide by Demographic Characteristics: United States, 
2022, Report No. 34 (Nov. 2023), https://www.cdc.gov/nchs/data/vsrr/vsrr034.pdf.
    \260\ Agency for Healthcare Research and Quality, 2022 National 
Healthcare Quality and Disparities Report, Child and Adolescent 
Mental Health (Oct. 2022), https://www.ncbi.nlm.nih.gov/books/NBK587174/.
    \261\ Based on the Departments' tabulations of adults with non-
Federal employer-sponsored insurance (ESI) and/or private health 
insurance (157.4 million) and the number of children 12-17 with non-
Federal ESI and/or private health insurance (15.5 million) off the 
March 2022 CPS Auxiliary Data (https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data).
    \262\ The estimate is calculated as follows: 157,443,601 
participants with commercial health insurance x 0.014-percent adult 
suicide fatality = 22,200 adult suicide fatalities.
    \263\ The estimate is calculated as follows: 15,541,261 children 
aged 12-17 with private health insurance x 0.0063-percent suicide 
fatalities = 979 fatalities.
    \264\ This estimate of a 2-percent reduction is based on the 
estimate of 5 percent previously cited, revised downward by 60 
percent to account for the indirect impact of the final rule on 
access, compared to the initial introduction of mental health parity 
laws. See Matthew Lang, The Impact of Mental Health Insurance Laws 
on State Suicide Rates, 22(1) Health Economics, pp. 73-88 (2013).
    \265\ The estimate is calculated as follows: 22,200 fatalities 
from suicide x 2-percent reduction in suicides = 444 fatalities 
prevented.
    \266\ The estimate is calculated as follows: 979 fatalities from 
suicide x 2-percent reduction in suicides = 20 fatalities prevented.
    \267\ DOT, Departmental Guidance on Valuation of a Statistical 
Life in Economic Analysis, effective May 7, 2024, https://www.transportation.gov/office-policy/transportation-policy/revised-departmental-guidance-on-valuation-of-a-statistical-life-in-economic-analysis.
    \268\ The VSL utilized by the Departments in this analysis is 
one of several VSLs estimated by Federal agencies, all of which vary 
slightly in their estimated VSL. The HHS VSL in 2024 is $13.1 
million. More information on the HHS VSL can be found in HHS 
Standard Values for Regulatory Analysis, 2024 (Jan. 25, 2024) at 
https://aspe.hhs.gov/sites/default/files/documents/cd2a1348ea0777b1aa918089e4965b8c/standard-ria-values.pdf.
    \269\ This estimate is calculated as follows: 444 adult 
fatalities prevented + 20 youth fatalities prevented x $13,200,000 
VSL = $6,124,800,000.
    \270\ Some methodological approaches to the VSL apply a 
distinct, and often higher, value to children. While the Departments 
do not utilize such an approach here, they recognize this estimate 
may undervalue the true benefits as the final rules' effects include 
a risk reduction of fatality to minor children.
    \271\ Individuals express a different willingness to pay to 
reduce the fatality risk of some deaths (those with a perceived 
associated morbidity, such as cancer) more than others (such as car 
accidents), though the risks may be equivalent. DOT guidance on the 
VSL suggests utilizing a single, nationwide value that does not 
adjust the VSL based on the nature of the risk or the underlying 
characteristics of the affected population but encourages a 
sensitivity analysis to reflect such uncertainty.
    \272\ For more information on the VSL guidance utilized, see the 
DOT's Revised Departmental Guidance on Valuation of a Statistical 
Life in Economic Analysis, https://www.transportation.gov/office-policy/transportation-policy/revised-departmental-guidance-on-valuation-of-a-statistical-life-in-economic-analysis.
    \273\ The lower and upper bounds are estimated as 40 percent 
below and above the central estimate of $13,200,000, per DOT 
guidance on conducting a sensitivity analysis for a VSL estimate.
    \274\ These estimates are calculated as: The lower VSL estimate 
of $5,280,000 x 464 fatalities prevented = $2,447,665,113. The lower 
VSL estimate of $18,480,000 x 464 fatalities prevented = 
$8,566,827,999.
---------------------------------------------------------------------------

    These benefits further illustrate the value of receiving treatment 
earlier and the harms of delaying treatment. While 75 percent of mental 
illness onsets before age 25, individuals between age 18 and 25 have a 
considerably higher prevalence of serious mental illness \275\ than any 
other age group but the lowest rate of mental health 
treatment.276 277 Moreover, research suggesting that early 
symptom onset is associated with elevated risk for comorbid mental 
health disorders, as well as worsening health outcomes, illustrates the 
critical need for early mental health interventions and treatment 
access.278 279 However, the majority of adolescents with a 
mental health condition do not receive treatment.\280\ One review of 
recent changes in mental health treatment noted that ``young people 
typically demonstrate a need for care prior to reaching the threshold 
for a traditional

[[Page 77673]]

major psychiatric diagnosis where distress, functional impairment and 
warning signs . . . of mental illness are present, making early 
intervention at this time point crucial to preventing or reducing the 
severity of a full-threshold disorder.'' \281\ Further, this review 
noted that early intervention is key for reducing ``premature death, 
social isolation, poor functioning and reduced educational and 
vocational productivity.'' In recent years, research has driven an 
increased interest in early intervention services for younger 
individuals.\282\
---------------------------------------------------------------------------

    \275\ Serious mental illness is defined as a ``mental, 
behavioral, or emotional disorder resulting in serious functional 
impairment, which substantially interferes with or limits one or 
more major life activities.'' (See National Institute of Health, 
Mental Illness, https://www.nimh.nih.gov/health/statistics/mental-illness)
    \276\ Peter J. Uhlhaas, Christopher G. Davey, Urvakhsh Meherwan 
Mehta, Jai Shah, John Torous, Nicholas B. Allen, Shelli Avenevoli, 
Tolulope Bella-Awusah, Andrew Chanen, Eric Y. H. Chen, Christoph U. 
Correll, Kim Q. Do, Helen L. Fisher, Sophia Frangou, Ian B. Hickie, 
Matcheri S. Keshavan, Kerstin Konrad, Francis S. Lee, Cindy H. Liu, 
Beatriz Luna, Patrick D. McGorry, Andreas Meyer-Lindenberg, Merete 
Nordentoft, Dost [Ouml]ng[uuml]r, George C. Patton, 
Tom[aacute][scaron] Paus, Ulrich Reininghaus, Akira Sawa, Michael 
Schoenbaum, Gunter Schumann, Vinod H. Srihari, Ezra Susser, Swapna 
K. Verma, T. Wilson Woo, Lawrence H. Yang, Alison R. Yung & Stephen 
J. Wood, Towards a Youth Mental Health Paradigm: A Perspective and 
Roadmap, Molecular Psychiatry 28, 3171-3181 (2023).
    \277\ SAMHSA, Key Substance Use and Mental Health Indicators in 
the United States: Results from the 2022 National Survey on Drug Use 
and Health (2023), https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
    \278\ Ronald C. Kessler, Patricia Berglund, Olga Demler, Robert 
Jin, Kathleen R. Merikangas, & Ellen E. Walters, Lifetime Prevalence 
and Age-of-Onset Distributions of DSM-IV Disorders in the National 
Comorbidity Survey Replication, 62(6) Arch Gen Psychiatry pp. 593-
602 (2005).
    \279\ Peter J. Uhlhaas, Christopher G. Davey, Urvakhsh Meherwan 
Mehta, Jai Shah, John Torous, Nicholas B. Allen, Shelli Avenevoli, 
Tolulope Bella-Awusah, Andrew Chanen, Eric Y.H. Chen, Christoph U. 
Correll, Kim Q. Do, Helen L. Fisher, Sophia Frangou, Ian B. Hickie, 
Matcheri S. Keshavan, Kerstin Konrad, Francis S. Lee, Cindy H. Liu, 
Beatriz Luna, Patrick D. McGorry, Andreas Meyer-Lindenberg, Merete 
Nordentoft, Dost [Ouml]ng[uuml]r, George C. Patton, 
Tom[aacute][scaron] Paus, Ulrich Reininghaus, Akira Sawa, Michael 
Schoenbaum, Gunter Schumann, Vinod H. Srihari, Ezra Susser, Swapna 
K. Verma, T. Wilson Woo, Lawrence H. Yang, Alison R. Yung & Stephen 
J. Wood, Towards a Youth Mental Health Paradigm: A Perspective and 
Roadmap, Molecular Psychiatry 28, 3171-3181 (2023).
    \280\ Kathleen Ries Merikangas, Jian-ping He, Marcy E. Burstein, 
Joel Swendsen, Shelli Avenevoli, Brady Case, Katholiki Georgiades, 
Leanne Heaton, Sonja Swanson, & Mark Olfson, Service Utilization for 
Lifetime Mental Disorders in U.S. Adolescents: Results of the 
National Comorbidity Survey Adolescent Supplement, 50(1) Journal of 
the American Academy of Child Adolescent Psychiatry, pp. 32-45 
(2011), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4408275.
    \281\ Patrick D. McGorry & Christina Mei, Early Intervention in 
Youth Mental Health: Progress and Future Directions, 21(4) Evidence 
Based Mental Health pp. 182-184 (2018).
    \282\ Ibid.
---------------------------------------------------------------------------

    Mental health research often evaluates the benefits of mental 
health care in terms of a quality-adjusted life year (QALY), an 
assessment metric that evaluates the changes to a person's quality of 
life arising from an intervention. According to the National Institute 
for Health and Care Excellence, one QALY ``is equal to 1 year of life 
in perfect health.'' \283\ In 2015 New York City launched a program 
called ThriveNYC, which included 54 initiatives to improve mental 
health, including additional screening and collaborative care. The 
study found that, on average, a 20-year-old who received these 
interventions would see an increase of 0.38 QALYs (representing a 
change in quality of life, with no estimation in this study of changes 
to length of life) relative to those who did not receive these 
interventions.\284\
---------------------------------------------------------------------------

    \283\ National Institute of Health and Care Excellence, 
Glossary, https://www.nice.org.uk/glossary.
    \284\ Boshen Jiao, Zohn Rosen, Martine Bellanger, Gary Belkin, & 
Peter Muennig, The Cost-Effectiveness of PHQ Screening and 
Collaborative Care for Depression in New York City, PLoS One 
12(8):e0184210 (Aug. 31, 2017), https://pubmed.ncbi.nlm.nih.gov/28859154/.
---------------------------------------------------------------------------

    Another study compared the cost effectiveness of early intervention 
to standard care for the treatment of first-episode psychosis, finding 
that from a societal perspective (that is, quality of life, educational 
attainment, and gainful employment), early intervention resulted in 
higher discounted QALYs and lower costs than standard care. While 
acknowledging that earlier interventions result in higher lifetime 
costs than the standard care perspective, the authors still found early 
intervention to be cost effective.\285\
---------------------------------------------------------------------------

    \285\ Saadia Sediqzadah, Allison Portnoy, Jane J. Kim, Matcheri 
Keshavan, & Ankur Pandya, Cost-Effectiveness of Early Intervention 
in Psychosis: A Modeling Study, 73(9) Psychiatric Services pp. 961-
1080 (2022).
---------------------------------------------------------------------------

    The Departments do not anticipate the benefits to be exclusive to 
prevented suicides. The final rules are also expected to increase 
access to and utilization of behavioral health services and substance 
use disorder services.\286\ The 2022 NSDUH from SAMHSA indicates that 
1.4 percent of adults with private health insurance reported having an 
OUD in the past year, while only 29 percent of those individuals 
indicated receiving treatment for OUD in the same year.\287\ A 2017 
study utilizing claims and eligibility data from nearly 6 million 
enrollees found that parity resulted in a 17 percent increase in use of 
OUD treatment services, which illustrates a strong, positive 
relationship between parity and the utilization of behavioral health 
services.\288\ As discussed in section IV.6.1.3, there have been 
findings of positive or no impact of MHPAEA on the utilization of 
mental health and substance use disorder services. For illustrative 
purposes, the Departments assume that these final rules would have 
roughly 40 percent of the impact of the 2017 study, or an approximately 
7 percent increase in OUD treatment service utilization.\289\ This 
would result in approximately 43,000 additional individuals receiving 
OUD treatment each year.\290\ Considerable research has demonstrated 
the efficacy of treatment for 
OUD,291 292 293 294 295 296 297 including several recent 
studies that have observed the reduction of both fatal and non-fatal 
overdoses for people diagnosed with OUD after receiving treatment. For 
example, an 18-month observational study of multiple cohorts of people 
receiving OUD treatments across the United States between 2017 and 2021 
found that following outpatient treatment for OUD, the number of 
patient overdoses, arrests, and drug-related hospitalizations were all 
reduced by over 50 percent.\298\ Similarly, a 2024 retrospective study 
of opioid overdose fatalities found that individuals who recently 
received treatment for OUD experienced approximately 34 percent to 38 
percent fewer overdose deaths compared to those who did not receive 
treatment.\299\

[[Page 77674]]

A 2021 study funded by the National Institute on Drug Abuse (NIDA) 
found that, across a nationally representative cohort of individuals 
with OUD, common treatments for OUD were associated with a reduction in 
the number of overdoses by 11 to 21 percent, with an average reduction 
of 16 percent across all treatment types.\300\ This study assessed the 
effects of all three FDA-approved medications for OUD in various 
combinations with and without the most common treatments 
(psychotherapy, contingency management, and overdose education and 
naloxone distribution).\301\ Utilizing life tables, clinical data, and 
relevant literature on treatment outcomes, the study produced a dynamic 
compartmental model to analyze the effects of medications and 
treatments on overdoses and mortality. While it is limited by the scope 
and availability of relevant secondary data, the model employs 
parameters, robustness checks, and sensitivity analysis that 
sufficiently validate the empirical model.
---------------------------------------------------------------------------

    \286\ Constance M. Horgan, Dominic Hodgkin, Maureen T. Stewart, 
Amity Quinn, Elizabeth L. Merrick, Sharon Reif, Deborah W. Garnick, 
& Timothy B. Creedon, Health Plans Early Response to Federal Parity 
Legislation for Mental Health and Addiction Services, 62(2) 
Psychiatric Services pp. 162-168 (2016).
    \287\ SAMHSA, Center for Behavioral Health Statistics and 
Quality, National Survey on Drug Use and Health, 2021 and 2022, 
https://www.samhsa.gov/data/data-we-collect/nsduh-national-survey-drug-use-and-health.
    \288\ Sarah Friedman, Haiyong Xu, Jessica M. Harwood, Francisca 
Azocar, Brian Hurley, & Susan L. Ettner, The Mental Health Parity 
and Addiction Equity Act Evaluation Study: Impact on Specialty 
Behavioral Healthcare Utilization and Spending Among Enrollees with 
Substance Use Disorders, 80 Journal of Substance Abuse Treatment pp. 
67-78 (2017).
    \289\ This estimate of a 7 percent reduction is based on the 
estimate of 17 percent previously cited, revised downward by 60 
percent to account for the indirect impact of expanded parity 
associated with these final rules. See Sarah Friedman, Haiyong Xu, 
Jessica M. Harwood, Francisca Azocar, Brian Hurley, & Susan L. 
Ettner, The Mental Health Parity and Addiction Equity Act Evaluation 
Study: Impact on Specialty Behavioral Healthcare Utilization and 
Spending Among Enrollees with Substance Use Disorders, 80 Journal of 
Substance Abuse Treatment pp. 67-78 (2017).
    \290\ This estimate is calculated as follows: 157,443,601 adult 
participants with private health insurance x 1.4 percent indicate 
OUD in past year = 2,125,489 adults with private health insurance 
and OUD. Then, 2,125,489 x 29 percent receiving treatment = 616,817 
adults with OUD and private health insurance receiving treatment 
annually. Lastly, 616,817 x 6.98 percent increase in adults with 
private health insurance receiving treatment = 43,054 additional 
adults receiving treatment for OUD annually.
    \291\ SAMHSA, Medications for Opioid Use Disorder: For 
Healthcare and Addiction Professionals, Policymakers, Patients, and 
Families (2021), https://store.samhsa.gov/sites/default/files/pep21-02-01-002.pdf.
    \292\ National Academies of Sciences, Engineering, and Medicine, 
Medications for Opioid Use Disorder Save Lives (2019), Washington, 
DC: The National Academies Press.
    \293\ Nisha Nataraj, S. Michaela Rikard, Kun Zhang, Xinyi Jiang, 
Gery P. Guy Jr, Ketra Rice, Christine L. Mattson, R. Matthew 
Gladden, Desiree M. Mustaquim, Zachary N. Illg, Puja Seth, Rita K. 
Noonan, & Jan L. Losby, Public Health Interventions and Overdose-
Related Outcomes Among Persons with Opioid Use Disorder, 7(4) JAMA 
Network Open (2024).
    \294\ Nora D. Volkow, Thomas R. Frieden, Pamela S. Hyde, & 
Stephen S. Cha, Medication-Assisted Therapies--Tackling the Opioid 
Overdose Epidemic, 370(22) New England Journal of Medicine (2014), 
https://www.nejm.org/doi/full/10.1056/NEJMp1402780.
    \295\ Robert P. Schwartz, Jan Gryczynski, Kevin E. O'Grady, 
Joshua M. Sharfstein, Gregory Warren, Yngvild Olsen, Shannon G. 
Mitchell, & Jerome H. Jaffe, Opioid Agonist Treatments and Heroin 
Overdose Deaths in Baltimore, Maryland, 1995-2009, 103(5) American 
Journal of Public Health pp. 917-922 (2013), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3670653.
    \296\ SAMHSA, TIPS 63: Medications for Opioid Use Disorder 
(2021), https://store.samhsa.gov/sites/default/files/pep21-02-01-002.pdf.
    \297\ National Academies of Sciences, Engineering, and Medicine, 
Medications for Opioid Use Disorder Save Lives, Washington, DC: The 
National Academies Press (2019), https://doi.org/10.17226/25310.
    \298\ Jill A. Dever, Marci F. Hertz, Laura J. Dunlap, John S. 
Richardson, Sara Beth Wolicki, Bradley B. Biggers, Mark J. Edlund, 
Michele K. Bohm, Didier Turcios, Xinyi Jiang, Hong Zhou, Mary E. 
Evans, Gery P. Guy, Jr., The Medications for Opioid Use Disorder 
Study: Methods and Initial Outcomes from an 18-Month Study of 
Patients in Treatment for Opioid Use Disorder, Public Health Reports 
pp. 1-10 (2024), https://pubmed.ncbi.nlm.nih.gov/38268479/.
    \299\ Robert Heimer, Anne C. Black, Hsiuju Lin, Lauretta E. 
Grau, David A. Fiellin, Benjamin A. Howell, Kathryn Hawk, Gail 
D'Onofrio, & William C. Becker, Receipt of Opioid Use Disorder 
Treatment Prior to Fatal Overdoses and Comparison to No Treatment in 
Connecticut, 2016-2017, Drug and Alcohol Dependence (2024), https://pubmed.ncbi.nlm.nih.gov/38043226/.
    \300\ The Departments averaged the reduction in overdoses 
arising from four treatment outcomes against the baseline of no 
treatment: Medicated-Assisted Treatment (MAT) only, MAT in addition 
to Contingency Management (CM), MAT in addition to Psychotherapy 
(PT), as well as MAT in addition to both CM and PT. (See Michael 
Fairley, Keith Humphreys, Vilija R. Joyce, Mark Bounthavong, Jodie 
Trafton, Ann Combs, Elizabeth M. Oliva, Jeremy D. Goldhaber-Fiebert, 
Steven M. Asch, Margaret L. Brandeau, & Douglas K. Owens, Cost-
Effectiveness of Treatments for Opioid Use Disorder, 78(7) JAMA 
Psychiatry pp. 767-777 (2021), https://pubmed.ncbi.nlm.nih.gov/33787832/.)
    \301\ Outcomes related to overdose education and naloxone 
distribution were not used in estimating the impacts of OUD 
treatment in the final rule, as naloxone is a common over-the-
counter product not intended to treat OUD, but rather reverse an 
opioid overdose. While it may help to reduce overdoses and OUD-
related fatalities, it is not a ``treatment'' per se and as such, is 
not considered when estimating the benefits of treatment.
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    To illustrate the potential impact of these final rules, the 
Departments employ this lower estimate of a 16 percent reduction in 
overdoses following treatment, and estimate that increased treatment 
for expanded OUD access and utilization could result in the prevention 
of approximately 730 non-fatal overdoses each year.302 303 
Utilizing data from the CDC estimating the average medical and non-
medical cost of non-fatal overdoses,\304\ the Departments estimate the 
benefits of these reduced non-fatal overdoses at $16.4 million 
annually.305 306 307
---------------------------------------------------------------------------

    \302\ This estimate is calculated as follows: 43,054 additional 
adults receiving treatment for OUD x (10,860 per 100,000 non-fatal 
overdose rate for those with OUD) = 4,676 non-fatal overdoses. 4,676 
non-fatal overdoses x 15.6 percent reduction = 730 non-fatal 
overdoses prevented.
    \303\ The Departments utilized the nonfatal overdose rate 
calculated for 2023 to produce these estimates. Specifically, this 
calculation was derived from the data supplement, eTable 9, as 
(1,927,706 non-fatal overdoses in 2023 / (16,072,360 individuals 
with OUD in 2023 + 1,677,988 individuals receiving medication for 
OUD)) x 100,000 = 10,860 per 100,000 non-fatal overdose rate for 
those with OUD. (See Nisha S. Nataraj, Michaela Rikard, Kun Zhang, 
Xinyi Jiang, Gery P. Guy, Ketra Rice, Christine L. Mattson, Matthew 
Gladden, Desiree M. Mustaquim, Zachary N. Illg, Puja Seth, Rita K. 
Noonan, & Jan L. Losby, Public Health Interventions and Overdose-
Related Outcomes Among Persons with Opioid Use Disorder, Supplement 
1, eTable 9, 7(4) Substance Use and Addiction (2024).)
    \304\ Non-medical costs of non-fatal overdoses are derived from 
work loss costs and monetized quality-adjusted life loss per injury. 
Medical costs of non-fatal overdoses are derived from healthcare 
provider payments that include inpatient, outpatient, and outpatient 
drug costs.
    \305\ Cora Peterson, Ketra L. Rice, Dionne D. Williams, & Robert 
Thomas, WISQARS Cost of Injury for Public Health Research and 
Practice, 29(2) Injury Prevention (Nov. 2022).
    \306\ The average cost of non-fatal overdose requiring 
hospitalization = $19,256 average associated QALY non-medical cost 
per hospitalization + $33,026 average associated medical cost per 
hospitalization = $52,282 per non-fatal overdose hospitalization. 
The average cost of non-fatal overdose requiring only treatment and 
release = $3,254 average associated QALY non-medical cost per 
treatment and release + $9,614 associated medical cost per treatment 
and release = $12,868 per non-fatal overdose requiring only 
treatment and release. (See Cora Peterson, Ketra L. Rice, Dionne D. 
Williams, & Robert Thomas, WISQARS Cost of Injury for Public Health 
Research and Practice, 29(2) Injury Prevention (Nov. 2022).
    \307\ The estimate is calculated as follows: 730 non-fatal 
overdoses prevented x 24.36 percent overdose hospitalization rate = 
178 non-fatal overdose hospitalizations prevented. $52,282 per non-
fatal overdose hospitalization x 178 non-fatal overdose 
hospitalizations prevented = $9,304,598. Additionally, 730 non-fatal 
overdoses x 75.64 percent overdose treatment and release rate = 552 
non-fatal overdose treatment and releases prevented. $12,868 per 
non-fatal overdose requiring treatment and release x 552 non-fatal 
overdoses requiring treatment and release = $7,109,073. As such, the 
total benefit estimate related to non-fatal overdoses is calculated 
as: $9,304,598 + $7,109,073 = $16,413,761.
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    The benefits of individuals diagnosed with an OUD receiving 
treatment may go beyond the benefit of reduced harms from overdoses. 
Mortality data of individuals diagnosed with an OUD indicate overdoses 
comprise approximately half of fatalities for such individuals, who are 
increasingly at risk of death from infectious disease, common co-morbid 
conditions such as liver or heart disease, accidental deaths, suicide, 
and other physical traumas.\308\ Research indicates that individuals 
with an OUD that are receiving treatment, while still at increased risk 
from all-cause mortality compared to the general population, may 
experience a reduced risk of mortality after receiving treatment for 
their OUD condition.309 310 One study found that mortality 
rates were 35 percent lower for individuals that received treatment for 
OUD than for those who did not receive treatment.311 312 
This retrospective cohort study used expansive, linked public health, 
medical, and vital statistics data from a single State to establish a 
robust population cohort of individuals with OUD for which mortality 
was the observed outcome over approximately 45,000 person-years 
following an initial detox episode. While a potential limitation of 
observational studies is the presence of confounding variables 
distorting measured outcomes, the breadth of the data being utilized, 
which included data from insurance claims and extensive medical 
histories, limit this concern. The findings of the study, indicating a 
high all-cause and overdose-related mortality rate for individuals with 
OUD and resultant decline following treatment, are consistent with 
other research findings and, as an observational cohort study, 
represent a high level of evidence.313 314
---------------------------------------------------------------------------

    \308\ Elizabeth Evans, Libo Li, Jeong Min, David Huang, Darren 
Urada, Lei Liu, Yih-Ing Hser, & Bohdan Nosyk, Mortality Among 
Individuals Accessing Pharmacological Treatment for Opioid 
Dependence in California, 2006-2010, Addiction 110(6): 996-1005 
(June 2015).
    \309\ Marc Larochelle, Dana Bernson, Thomas Land, Thomas Stopka, 
Na Wang, Ziming Xuan, Sarah Bagley, Jane Liebschutz, Alexander 
Walley, Medication for Opioid Use Disorder After Nonfatal Opioid 
Overdose and Association with Mortality: A Cohort Study, Ann Intern 
Med 169(3): 137-145 (2018), https://pubmed.ncbi.nlm.nih.gov/29913516/ 29913516/.
    \310\ Yih-Ing Hser, Larissa J. Mooney, Andrew J. Saxon, Karen 
Miotto, Douglas S. Bell, Yuhui Zhu, Di Liang, and David Huang, High 
Mortality among Patients with Opioid Use Disorder in a Large 
Healthcare System, J Addict Med 11(4): 315-319 (2017), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5930020/.
    \311\ The reduction in all-cause mortality was calculated as the 
change in the crude mortality rate per 100 person-years from 1.94 
(for those not receiving any treatment) to 1.27 (for those receiving 
either MOUD treatment, inpatient treatment, or both). Thus, the 
percentage change in the rates from 1.94 per 100 person-years to 
1.27 per 100 person-years is approximately 35 percent.
    \312\ Alexander Walley, Sara Lodi, Yijing Li, Dana Bernson, 
Hermik Babakhanlou-Chase, Thomas Land, & Marc R. Larochelle, 
Association Between Mortality Rates and Medication and Residential 
Treatment After Inpatient Medically Managed Opioid Withdrawal: A 
Cohort Analysis, 115(8) Addiction pp. 1496-1508 (Aug. 2020).
    \313\ Marc Larochelle, Dana Bernson, Thomas Land, Thomas Stopka, 
Na Wang, Ziming Xuan, Sarah Bagley, Jane Liebschutz, Alexander 
Walley, Medication for Opioid Use Disorder After Nonfatal Opioid 
Overdose and Association with Mortality: A Cohort Study, Ann Intern 
Med 169(3): 137-145 (2018), https://pubmed.ncbi.nlm.nih.gov/29913516/ 29913516/.
    \314\ Yih-Ing Hser, Larissa J. Mooney, Andrew J. Saxon, Karen 
Miotto, Douglas S. Bell, Yuhui Zhu, Di Liang, and David Huang, High 
Mortality among Patients with Opioid Use Disorder in a Large 
Healthcare System, J Addict Med 11(4): 315-319 (2017), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5930020/.

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[[Page 77675]]

    Employing this estimate of an approximately 35 percent reduction in 
fatalities following treatment to illustrate the potential impact of 
these final rules, the Departments estimate that increased treatment 
for expanded OUD access and utilization could result in the prevention 
of approximately 702 fatalities from all causes in persons receiving 
treatment for OUD each year.\315\ The Departments have utilized the 
VSL, as with their estimate of the value of prevented suicides, to 
estimate the benefits of reduced mortality arising from increased OUD 
treatment utilization at $9.3 billion annually.\316\ As discussed 
earlier in this section, the Departments recognize some uncertainty in 
the production of VSL benefit estimates.\317\ To account for potential 
sensitivity arising from such uncertainty, the Departments have 
conducted a sensitivity analysis of these benefits and, following 
guidance on VSL sensitivity analysis,\318\ produced a lower and upper 
estimate of the VSL of approximately $5.3 million and $18.5 million, 
respectively.\319\ Utilizing this range of estimates, the Departments 
accordingly estimate the value of the benefits of reduced mortality 
arising from increased OUD treatment utilization at between $3.7 
billion and $13.0 billion annually.\320\
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    \315\ This estimate is calculated as: 43,054 additional 
beneficiaries receiving treatment for OUD x 4.70 crude mortality 
rate per 100 person-years for OUD = 2,024 expected fatalities in the 
absence of treatment. Adjusting the crude mortality rate downward 
34.7 percent to 3.07 following treatment for this group, the 
expected fatalities would be estimated as 43,054 additional 
beneficiaries receiving treatment for OUD x 3.07 crude mortality 
rate per 100 person-years for OUD = 1,322 expected fatalities 
following treatment. As such, the Departments estimate the prevented 
fatalities from all causes arising from OUD treatment to be: 2,024-
1,322 = 702 prevented fatalities.
    \316\ This estimate is calculated as: the value of a statistical 
life of $13,200,000 x 702 prevented fatalities = $9,269,545,489.
    \317\ Individuals express a different willingness to pay to 
reduce the fatality risk of some deaths (those with a perceived 
associated morbidity, such as cancer) more than others (such as car 
accidents), though the risks may be equivalent. DOT guidance on the 
VSL suggests utilizing a single, nationwide value that does not 
adjust the VSL based on the nature of the risk or the underlying 
characteristics of the affected population but encourages a 
sensitivity analysis to reflect such uncertainty.
    \318\ For more information on the VSL guidance utilized, see The 
DOT's Revised Departmental Guidance on Valuation of a Statistical 
Life in Economic Analysis, https://www.transportation.gov/office-policy/transportation-policy/revised-departmental-guidance-on-valuation-of-a-statistical-life-in-economic-analysis.
    \319\ The lower and upper bounds are estimated as 40 percent 
below and above the central estimate of $13,200,000, per DOT 
guidance on conducting a sensitivity analysis for a VSL estimate.
    \320\ These estimates are calculated as: The lower VSL estimate 
of $5,280,000 x 702 fatalities prevented = $3,707,818,196. The lower 
VSL estimate of $18,480,000 x 702 fatalities prevented = 
$12,977,363,685.
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    Mental health and substance use disorders do not always occur in 
isolation, but are commonly co-occurring conditions, as individuals 
with substance use disorders are more likely to experience a mental 
health condition than the general population and nearly half of adults 
with serious mental illness also have a substance use disorder.\321\ 
Such co-occurring conditions can significantly exacerbate the severity 
of symptoms as well as negative health outcomes related to these 
conditions.\322\ Additionally, individuals with mental health 
conditions and substance use disorders are known to commonly experience 
physical co-morbidities that can significantly impact overall health 
and quality of life. A 2011 study indicated that over 68 percent of 
adults with a mental health disorder reported a comorbid medical 
disorder while 29 percent indicated they had another comorbid mental 
health condition.\323\ Human immunodeficiency virus (HIV), hepatitis, 
and diabetes are all more prevalent among those with substance use 
disorders or mental health conditions than the general population, 
while such physical or other mental comorbid conditions are more likely 
to be adversely impacted by poor disease management and treatment 
adherence when co-occurring with a mental health condition or substance 
use disorder.324 325 326 327 328 329 A 2022 study observing 
the presence of comorbid conditions for inpatient hospitalizations 
found that 81 percent of hospitalizations for a mental health condition 
or substance use disorder had a co-morbid condition.\330\ The study 
also found that co-morbid conditions were associated with a longer 
hospitalization period, a higher cost per hospitalization, as well as 
increased mortality during hospitalization.\331\
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    \321\ SAMHSA, Key Substance Use and Mental Health Indicators in 
the United States: Results from the 2022 National Survey on Drug Use 
and Health (Nov. 2023), https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
    \322\ Beth Han, Wilson Compton, Carlos Blanco, & Lisa Colpe, 
Prevalence, Treatment, and Unmet Treatment Needs of US Adults with 
Mental Health and Substance Use Disorders, 36(10) Health Affairs pp. 
1739-1747 (2017), https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2017.0584.
    \323\ Benjamin Druss & Elizabeth Walker, Mental Disorders and 
Medical Comorbidity, Research Synthesis Report No. 21, Robert Wood 
Johnson Foundation (Feb. 2011), https://up2riverside.org/wp-content/uploads/2024/04/medicalcomorbidity.pdf.
    \324\ Elizabeth C. Verna, Aaron Schluger, & Robert S. Brown Jr., 
Opioid Epidemic and Liver Disease, 1(3) JHEP Report pp. 240-255 
(Sept. 2019), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7001546/pdf/main.pdf.
    \325\ T. Jake Liang & John W. Ward, Hepatitis C in Injection-
Drug Users--A Hidden Danger of the Opioid Epidemic, 378(13) New 
England Journal of Medicine pp. 1169-1171 (Mar. 2018), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5993680/pdf/nihms972424.pdf.
    \326\ Alain K. Koyama, A. Hora, Kai McKeever Bullard, Stephen R. 
Benoit, Shichao Tang, & Pyone Cho, State-Specific Prevalence of 
Depression Among Adults With and Without Diabetes--United States, 
2011-2019, 20(70) Preventing Chronic Disease (Aug. 2023), https://www.cdc.gov/pcd/issues/2023/pdf/22_0407.pdf.
    \327\ United Nations Office on Drugs and Crime, Comorbidities in 
Drug Use Disorders (Mar. 2022), https://www.unodc.org/documents/drug-prevention-and-treatment/UNODC_Comorbidities_in_drug_use_disorders.pdf.
    \328\ National Institute on Drug Abuse, Common Comorbidities 
with Substance Use Disorders Research Report (Apr. 2020), https://www.ncbi.nlm.nih.gov/books/NBK571451/.
    \329\ Stephen Magura, Andrew Rosenblum, & Chunki Fong, Factors 
Associated with medication Adherence among Psychiatric Outpatients 
at Substance Abuse Risk, Open Addict J. (4), 58-64 (Nov. 2011), 
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3526017/.
    \330\ Pamela Owens, Lan Liang, Marguerite Barrett, and Kathryn 
Fingar, Comorbidities Associated with Adult Inpatient Stays, 2019. 
Agency for Healthcare Research and Quality, Healthcare Cost and 
Utilization Project, Statistical Brief #303 (Dec. 2022).
    \331\ Pamela Owens, Lan Liang, Marguerite Barrett, and Kathryn 
Fingar, Comorbidities Associated with Adult Inpatient Stays, 2019. 
Agency for Healthcare Research and Quality, Healthcare Cost and 
Utilization Project, Statistical Brief #303 (Dec. 2022).
---------------------------------------------------------------------------

    As mental health conditions and substance use disorders can make 
preventing, managing, and treating physical comorbidities difficult, 
improvements in mental health and substance use disorder outcomes may 
also improve overall physical health outcomes and lower healthcare 
costs for participants.332 333 Data from Evernorth Health 
Services, a subsidiary of Cigna, indicates that accessing mental health 
and substance use disorder services can result in considerable cost 
savings for patients diagnosed with a mental health condition and 
substance use disorder concern, producing a reported cost savings of 
between $1,134 to $3,321 per person over the first 27 months

[[Page 77676]]

following diagnosis.\334\ Similarly, a 2012 study of patients with a 
mental health condition and comorbid physical health condition found 
that treating the underlying mental health condition yielded 
significant improvements in the comorbid physical conditions, resulting 
in increased positive health outcomes and lower long-term healthcare 
costs.\335\ The Departments, in evaluating the impacts of these final 
rules, anticipate that, by prohibiting inequitable barriers to 
coverage, the estimated improvements in mental health conditions and 
substance use disorders will help reduce the severity of comorbid 
conditions, improve related health outcomes for participants, 
beneficiaries, and enrollees, and as such, represent a substantial, but 
potentially unquantified, benefit.
---------------------------------------------------------------------------

    \332\ United Nations Office on Drugs and Crime, Comorbidities in 
Drug Use Disorders (Mar. 2022), https://www.unodc.org/documents/drug-prevention-andtreatment/UNODC_Comorbidities_in_drug_use_disorders.pdf.
    \333\ Wayne Katon, Joan Russo, Elizabeth H.B. Lin, Julie 
Schmittdiel, Paul Ciechanowski, Evette Ludman, Do Peterson, Bessie 
Young, & Michael Von Korff, Cost-Effectiveness of a Multi-Condition 
Collaborative Care Intervention: A Randomized Controlled Trial, 
69(5) Archives of General Psychiatry (May 2012), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3840955/pdf/nihms521136.pdf.
    \334\ Evernorth Health Services, Behavioral Health Care 
Significantly Lowers Medical Care Costs (Jan. 2023), https://www.evernorth.com/behavioral-health-study.
    \335\ Wayne Katon, Joan Russo, Elizabeth H.B. Lin, Julie 
Schmittdiel, Paul Ciechanowski, Evette Ludman, Do Peterson, Bessie 
Young, & Michael Von Korff, Cost-Effectiveness of a Multi-Condition 
Collaborative Care Intervention: A Randomized Controlled Trial, 
69(5) Archives of General Psychiatry (May 2012), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3840955/pdf/nihms521136.pdf.
---------------------------------------------------------------------------

7.4. Reduced Adverse Impacts on the Families, Friends, Caregivers, and 
Coworkers of People Who Suffer From Untreated or Poorly Managed Mental 
Health Conditions and Substance Use Disorders
    These final rules will help employees, caregivers and their 
families meet their mental health and substance use disorder care 
needs, and thus, may improve the productivity and resulting earnings of 
workers dealing with mental health conditions and substance use 
disorder. Among adults with any mental health condition in 2022, only 
50.6 percent received treatment.\336\ Moreover, while 19.4 percent of 
NSDUH respondents 12 and older were classified as needing substance use 
disorder treatment in 2022, only 4.6 percent of respondents 12 and 
older indicated that they received treatment that year.\337\ One survey 
found that more than 85 percent of individuals that did not receive 
their needed mental health or substance use care reported negative 
impacts, including personal relationship issues, job issues and 
performing poorly or dropping out of school.\338\
---------------------------------------------------------------------------

    \336\ SAMHSA, Key Substance Use and Mental Health Indicators in 
the United States: Results from the 2022 National Survey on Drug Use 
and Health, Figure 62, p. 61 (Nov. 2023), https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
    \337\ SAMHSA, Key Substance Use and Mental Health Indicators in 
the United States: Results from the 2022 National Survey on Drug Use 
and Health, Figures 54 and 55, pp. 50-51 (Nov. 2023). https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
    \338\ 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.
---------------------------------------------------------------------------

    The economic impact of untreated mental health conditions and 
substance use disorders can be significant. A 2021 study of claims data 
for large, self-funded health plans looked at the economic burden 
attributable to major depressive disorder, including the direct costs 
associated with treatment, suicide-related costs, and workplace costs, 
between 2010 and 2018. During that period, overall economic burden of 
adults with a major depressive disorder increased 37.9 percent (from 
$236.6 billion to $326.2 billion). While part of the cost increase can 
be attributed to a 12.9 percent increase in the number of adults with 
major depressive disorders, direct costs became a smaller share of the 
total costs, with workplaces costs, defined as missed work (due to 
injury/illness, discretionary time off and disability) and lower 
productivity while at work, constituting 61 percent of the costs in 
2018 and increasing from $48.3 billion in 2010 to $70.8 billion in 
2018.\339\ 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.\340\ A 2023 study critically reviewed 38 studies on the 
relationship between mental health and lost productivity, and found 
that poor mental health was associated with increased presenteeism 
\341\ and absenteeism.\342\
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    \339\ Paul E. Greenberg, Andree-Anne Fournier, Tammy Sisitsky, 
Mark Simes, Richard Berman, Sarah H. Koenigsberg, & Ronald C. 
Kessler, The Economic Burden of Adults with Major Depressive 
Disorder in the United States (2010 and 2018), 39(6) 
Pharmacoeconomics pp. 653-665 (2021).
    \340\ Martin Andersen, Heterogeneity and the Effect of Mental 
Health Parity Mandates on the Labor Market, 43 Journal of Health 
Economics (2015).
    \341\ The study defined ``presenteeism'' as ``decreased 
productivity at work.''
    \342\ Claire de Oliveira, Makeila Saka, Lauren Bone, & Rowena 
Jacobs, The Role of Mental Health on Workplace Productivity: A 
Critical Review of the Literature, 21(2) Applied Health Economics 
and Health Policy pp. 167-193 (2023).
---------------------------------------------------------------------------

    These final rules will also have significant indirect impacts on 
families, friends, caregivers, and coworkers with untreated or poorly 
managed mental health conditions and substance use disorders, as well 
as society at large. By prohibiting inequitable barriers to coverage 
and thereby increasing access to mental health and substance use 
disorder services, these final rules will lead to more people receiving 
treatment, reducing the burden on family members and other support 
systems. For example, this includes untreated maternal mental health 
conditions, which can lead to a reduced ability to work, increased risk 
of suicide, increased use of public services, and worse maternal and 
child health. A 2022 study of the cost of maternal mental health 
conditions to Texas women and their children projected costs for the 
2019 birth cohort from the time of conception through 5 years 
postpartum to total $2.2 billion.\343\ Untreated maternal mental health 
conditions include untreated perinatal mood and anxiety disorders, 
which have been found to account for approximately $48 million in 
societal costs in Vermont for the average annual birth cohort from 
conception through 5 years postpartum, including $12.5 million in 
productivity loss and $9.4 million in non-obstetric health 
expenditures.\344\
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    \343\ Caroline Margiotta, Jessica Gao, So O'Neil, Divya Vohra, & 
Kara Zivin, The Economic Impact of Untreated Maternal Mental Health 
Conditions in Texas, 22(700) BMC Pregnancy Childbirth (2022).
    \344\ Isabel Platt, Emma Pendl-Robinson, Eric Dehus, So O'Neil, 
Divya Vohra, Kara Zivin, Michael Kenny & 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.
---------------------------------------------------------------------------

    The cost in missed productivity for workers with fair or poor 
mental health due to unplanned absences was estimated as $47.6 billion 
annually in 2022.\345\ 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.\346\ 
Finally, a 2021 study estimated that the societal costs of untreated 
OUD was approximately $1.02 trillion in 2017, which includes $35 
billion in health care costs and $92 billion in lost productivity.\347\
---------------------------------------------------------------------------

    \345\ Dan Witters & Sangeeta Agrawal, The Economic Cost of Poor 
Employee Mental Health, Gallup Workplace (Dec. 13, 2022), https://www.gallup.com/workplace/404174/economic-cost-poor-employee-mental-health.aspx?version=print.
    \346\ Donghoon Lee, Yeonil Kim, & Beth Devine, Spillover Effects 
of Mental Health Disorders on Family Members' Health-related Quality 
of Life: Evidence from a US Sample, 42(1) Medical Decision Making 
pp. 80-93 (2022).
    \347\ Curtis Florence, Feijun Luo, & Ketra Rice, The Economic 
Burden of Opioid Use Disorder and Fatal Opioid Overdose in the 
United States, 2017, 218 Drug and Alcohol Dependence (2021).

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[[Page 77677]]

    These final rules are expected to improve access to and utilization 
of mental health and substance use disorder services by removing 
barriers to access to mental health and substance use disorder benefits 
caused by NQTLs. By enhancing treatment for these conditions and 
disorders, these final rules will likely result in reduced productivity 
loss or missed workdays for individuals suffering from mental health 
conditions or substance use disorders. Furthermore, the improved 
management and treatment of these conditions and disorders will 
potentially lead to reduced adverse impacts on the families, friends, 
and coworkers of those affected, as untreated or poorly managed mental 
health conditions and substance use disorders can have significant 
spillover effects on an individual's personal and professional lives.
8. Costs
    These final rules aim to promote access to mental health and 
substance use disorder benefits by clarifying how plans and issuers 
must ensure that their plans and coverage are designed, as written and 
in operation, to comply with MHPAEA's parity requirements for mental 
health and substance use disorder benefits and medical/surgical 
benefits, and allowing them to more easily identify changes needed to 
bring their plans and coverage into compliance. The Departments 
acknowledge that plans and issuers, in revising their approach to 
performing and documenting their already required comparative analyses, 
will incur additional costs. Moreover, by removing some of the barriers 
to access to mental health and substance use disorder treatments caused 
by existing NQTLs, the Departments expect increased utilization of 
mental health and substance use disorder services, which will also 
increase costs. This collection of costs would appropriately be 
included in any comparison with the benefits described, and in some 
cases illustratively quantified, elsewhere in this regulatory impact 
analysis.
    It is notable that the Departments are clarifying existing 
requirements, and only the cost burden limited to those additional 
content elements outlined in these final rules is a key topic discussed 
in the following sections.
8.1. Comment Summary
    In response to the proposal, many commenters expressed concern that 
the Departments underestimated the burden of collecting the required 
data, the burden required in conducting the proposed mathematical 
substantially all and predominant tests, the number of NQTLs that would 
need to be analyzed for each plan and issuer, and the amount of time 
that it would take to conduct those analyses. Commenters stated that in 
order to comply with the proposed rules, plans and issuers would need 
to purchase new data systems and hire additional staff or contractors. 
One commenter further stated that existing systems to provide mental 
health and substance use disorder benefits, such as carve out plans, 
would be eliminated under the proposed rule, as vendors would not be 
able to build networks of mental health and substance use disorder 
providers in alignment with networks of medical/surgical providers, as 
required under the proposed special rule for network composition.
    Several commenters questioned the Departments' assumptions related 
to the number of NQTLs for which plans and issuers would need to 
produce comparative analyses. While the Departments assumed that 
issuers would impose twice as many NQTLs as plans, several commenters 
did not think the number of NQTLs would vary between plans and issuers. 
Commenters also argued that the number of NQTLs that plans and issuers 
would need to analyze would be roughly twice the Departments' proposed 
assumption for issuers, 16 NQTLs rather than 8, based on the 
Departments' descriptions of types of NQTLs listed in the proposed 
rule. Consistent with the explanation earlier in this preamble, the 
Departments note that they do not intend to provide an exhaustive list 
of NQTLs. Plans and issuers may be analyzing a fewer or greater number 
of NQTLs than the number of NQTLs listed in the illustrative, non-
exhaustive list in these final rules.
    Commenters also questioned the amount of time that it would take to 
conduct the NQTL comparative analyses under the proposal. While the 
Departments assumed that the plans and issuers preparing their own 
comparative analyses would incur an incremental burden of 10 hours per 
NQTL in the first year and 4 hours per NQTL in subsequent years, 
several commenters thought this was an underestimate. For instance, one 
commenter stated that it currently takes a team of subject matter 
experts, compliance officials, a project manager, and attorneys or 
consultants 60 hours in the first year and 12 hours in subsequent years 
to produce NQTL comparative analyses as required under the CAA, 2021 
and current guidance. The commenter suggested that the added 
requirements for the comparative analysis under these final rules could 
require at least an additional 60 hours per NQTL.
    Another commenter estimated that the cost to issuers of fully 
insured plans to conduct the comparative analyses for all NQTLs is 
approximately between $200,000 and $300,000 (200 to 300 external 
attorney or consultant hours in addition to several hundred in-house 
staff hours). The commenter also reported that for large, self-funded 
plans, while issuers and TPAs prepare and distribute baseline 
comparative analysis, plans would still need to customize the 
comparative analysis. The commenter estimated that the cost for large 
self-funded plans to customize the comparative analysis and request 
additional information and data for all NQTLs is approximately between 
$50,000 and $150,000 (100 to 200 external attorney or consultant hours 
in addition to in-house staff work). The Departments are not clear 
whether these suggested costs represent current expenditures or 
projections of the added requirements for the comparative analyses. The 
commenter further stated that time and cost estimates for plans with 
behavioral carve-out vendors should be higher.
    In preparing these final rules, the Departments have considered 
these comments and have clarified the requirements and reevaluated 
their estimates as appropriate. The specific adjustments to the 
estimates are discussed in section IV.8.4 of this regulatory impact 
analysis.
8.2. Commenters' Cost Estimates
    As discussed earlier in this regulatory impact analysis, commenters 
questioned the Departments' assumptions related to the number of NQTLs 
imposed by plans and issuers on mental health and substance use 
disorder benefits and medical/surgical benefits, and the amount of time 
that it would take to conduct the additional requirements for producing 
comparative analyses and analyzing data, beyond what was required in 
CAA, 2021. The Departments have reviewed these comments, which include 
estimates made by those commenters, on the expected additional costs to 
prepare NQTL comparative analyses under the proposed rules. While these 
comments are helpful to understand the cost implications of the final 
rules and how they differ from the proposal, the Departments disagree 
with some of the inputs and underlying assumptions of these cost 
estimates and use different assumptions in section IV.8.4 of this 
regulatory impact analysis. The

[[Page 77678]]

commenters' cost estimates do, however, demonstrate a possible upper 
bound on the costs associated with these final rules.
8.2.1. Association for Behavioral Health and Wellness
    The Departments considered estimates and assumptions regarding the 
costs to prepare the NQTL comparative analyses under the proposed rules 
made by the Association for Behavioral Health and Wellness (ABHW). ABHW 
reports that the amendments would require plans and issuers to analyze 
15 NQTLs on average. They also reported that it currently takes a team 
of subject matter experts, compliance officials, a project manager, and 
attorneys or consultants 60 hours to prepare each comparative analysis 
for a typical NQTL as required under the CAA, 2021 and current 
guidance. Thus, ABHW estimates that a comparable burden (60 hours per 
NQTL) is needed to review and revise the analyses under the updated 
requirements in the first year. In addition, they also estimate it 
would require 12 hours in each subsequent year to produce the 
comparative analyses. For the purpose of this calculation, the 
Departments have estimated a composite wage rate of $167.48, which 
consist of attorneys, actuaries, and data analysts.\348\ Based on these 
assumptions, and the Departments' estimates of affected entities, this 
would result in a cost burden of $984.8 million in the first year and 
$197 million in subsequent years, resulting in a 3-year average cost 
burden of $459.6 million. See Table 3 for more details.
---------------------------------------------------------------------------

    \348\ The wage rate of an attorney, actuary, and data analyst 
is, respectively, $165.71, $177.11, and $159.61. (Internal DOL 
calculation based on 2024 labor cost data. For a description of 
DOL's methodology for calculating wage rates, see EBSA, Labor Cost 
Inputs Used in the Employee Benefits Security Administration, Office 
of Policy and Research's Regulatory Impact Analyses and Paperwork 
Reduction Act Burden Calculations (June 2019), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.) The composite wage rate is 
estimated in the following manner: [$165.71 x (1 / 3) + $159.61 x (1 
/ 3) + $177.61 x (1 / 3) = $167.48].
---------------------------------------------------------------------------

    ABHW also suggested that issuers and plans would need to hire at 
least three full-time equivalent new staff members to help with the 
proposed relevant data evaluation requirements. This additional cost 
was not included in their cost estimates.

Table 3--Incremental Cost To Prepare the Comparative Analyses Based on the Association for Behavioral Health and
                                             Wellness's Assumptions
----------------------------------------------------------------------------------------------------------------
                                              Number of    Number of
                                 Number of    NQTLs per    hours per     Total hour     Hourly         Cost
                                  entities      entity        NQTL         burden        wage
                                        (A)          (B)          (C)     (A x B x C)       (D)  (A x B x C x D)
----------------------------------------------------------------------------------------------------------------
                                                   First Year
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance             1,467           15           60       1,320,300   $167.48     $221,123,844
 company/State combinations)..
TPAs..........................          205           15           60         184,500    167.48       30,900,060
Self-funded plans with more             709           15           60         638,100    167.48      106,868,988
 than 500 participants that
 will conduct a comparative
 analysis themselves..........
Self-funded plans with more           4,076           15           30       1,834,200    167.48      307,191,816
 than 500 participants that
 will receive a generic
 comparative analysis from TPA
 or service providers, and
 will then customize it.......
Self-funded non-Federal                 505           15           60         454,500    167.48       76,119,660
 governmental plans with more
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded non-Federal               2,906           15           30       1,307,700    167.48      219,013,596
 governmental plans with more
 than 500 participants that
 will initially receive
 generic comparative analyses
 from TPAs or service
 providers, and will then
 customize it.................
Plan MEWAs that are not fully           132           15           60         118,800    167.48       19,896,624
 insured......................
Non-plan MEWAs that are not              21           15           60          18,900    167.48        3,165,372
 fully insured................
                               ---------------------------------------------------------------------------------
    First-year Total..........       10,021           15  ...........       5,877,000  ........      984,279,960
----------------------------------------------------------------------------------------------------------------
                                                Subsequent Years
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance             1,467           15           12         264,060    167.48       44,224,769
 company/State combinations)..
TPAs..........................          205           15           12          36,900    167.48        6,180,012
Self-funded plans with more             709           15           12         127,620    167.48       21,373,798
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded plans with more           4,076           15            6         366,840    167.48       61,438,363
 than 500 participants that
 will receive a generic
 comparative analysis from
 TPAs or service providers,
 and will then customize it...
Self-funded non-Federal                 505           15           12          90,900    167.48       15,223,932
 governmental plans with more
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded non-Federal               2,906           15            6         261,540    167.48       43,802,719
 governmental plans with more
 than 500 participants that
 will initially receive
 generic comparative analyses
 from TPAs or service
 providers, and will then
 customize it.................
Plan MEWAs that are not fully           132           15           12          23,760    167.48        3,979,325
 insured......................
Non-plan MEWAs that are not              21           15           12           3,780    167.48          633,074
 fully insured................
                               ---------------------------------------------------------------------------------
    Subsequent Years Total....       10,021           15  ...........       1,175,400  ........      196,855,992
                               ---------------------------------------------------------------------------------
        Total (3-year average)       10,021           15  ...........       2,742,600  ........      459,330,648
----------------------------------------------------------------------------------------------------------------

    The Departments conducted a sensitivity analysis of the assumption 
that 50 percent of self-funded plans and another 50 percent of self-
funded non-Federal governmental plans with more than 500 participants 
will receive a generic comparative analysis from TPAs or service 
providers, which they will then need to customize. For every 10-
percentage-point increase or decrease in the number of self-funded 
plans and self-funded non-Federal governmental

[[Page 77679]]

plans with more than 500 participants that need to customize 
documentation received from TPAs or service providers, the cost would 
increase or decrease by $24.6 million.\349\
---------------------------------------------------------------------------

    \349\ The Departments estimate the 10-percentage-point 
incremental cost by adding the total cost of self-funded plans and 
self-funded non-Federal governmental plans that will receive a 
generic comparative analysis from issuers, TPAs, or service 
providers and will then customize it (found in Table 3) in the first 
year and subsequent years, creating a 3-year average cost, and then 
multiplying the 3-year average cost by 10 percent.
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8.2.2. Blue Cross Blue Shield Association
    The Blue Cross Blue Shield Association (BCBSA) asked the 
Departments to specifically quantify the costs of preparing additional 
comparative analysis beyond the four priority NQTLs outlined in FAQs 
Part 45. BCBSA stated that based on the number of NQTLs identified in 
the regulation, and the additional NQTLs identified in the preamble, 
the proposed rules would require plans and issuers to prepare 
comparative analyses for at least 17 NQTLs (7 from the preamble, and 10 
from the regulation, counting those related to network composition as 3 
separate NQTLs), all with the associated documentation and outcomes 
data.
    BCBSA estimated that the cost of issuers of fully insured plans to 
conduct the comparative analyses for all NQTLs would range between 
$200,000 and $300,000. BCBSA also estimated the cost for large self-
funded plans that receive a generic comparative analysis from the 
issuer, which they then need to customize and request additional 
information and data for all NQTLs referenced in the proposal, is 
between $50,000 and $150,000. BCBSA did not explain if these cost 
estimates were for all years or were applicable to just the first year. 
Based on BCBSA's assumptions, and the Departments' estimates of 
affected entities, this will result in a lower bound cost of $957.4 
million and an upper bound cost of $2 billion. See Table 4 for more 
details.

     Table 4--Annual Costs To Conduct the Comparative Analyses for all NQTLs Based on Blue Cross Blue Shield
                                            Association's Assumptions
----------------------------------------------------------------------------------------------------------------
                                                   Lower bound                     Upper bound
                                     Number of      cost per       Total lower      cost per       Total upper
                                      entities       entity        bound cost        entity         bound cost
                                            (A)             (B)         (A x B)             (C)          (A x C)
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance company/        1,467        $200,000    $293,400,000        $300,000     $440,100,000
 State combinations)..............
TPAs..............................          205         200,000      41,000,000         300,000       61,500,000
Self-funded plans with more than            709         200,000     141,800,000         300,000      212,700,000
 500 participants that will
 conduct the comparative analysis
 themselves.......................
Self-funded plans with more than          4,076          50,000     203,800,000         150,000      611,400,000
 500 participants that will
 receive a generic comparative
 analysis from TPAs or service
 providers, and will then
 customize it.....................
Self-funded non-Federal                     505         200,000     101,000,000         300,000      151,500,000
 governmental plans with more than
 500 participants that will
 conduct the comparative analysis
 themselves.......................
Self-funded non-Federal                   2,906          50,000     145,300,000         150,000      435,900,000
 governmental plans with more than
 500 participants that will
 initially receive generic
 comparative analyses from TPAs or
 service providers, and will then
 customize it.....................
Plan MEWAs that are not fully               132         200,000      26,400,000         300,000       39,600,000
 insured..........................
Non-plan MEWAs that are not fully            21         200,000       4,200,000         300,000        6,300,000
 insured..........................
                                   -----------------------------------------------------------------------------
    Total.........................       10,021  ..............     956,900,000  ..............    1,959,000,000
----------------------------------------------------------------------------------------------------------------

    The Departments conducted a sensitivity analysis of the assumption 
that 50 percent of self-funded plans and another 50 percent of self-
funded non-Federal governmental plans with more than 500 participants 
will receive a generic comparative analysis from the issuer, and will 
then customize it. For every 10-percentage-point increase or decrease 
in the number of self-funded plans and self-funded non-Federal 
governmental plans with more than 500 participants that need to 
customize documentation received from TPAs or service providers, the 
cost would increase or decrease by $34.9 million in the total lower 
bound cost \350\ and $104.7 million in the total upper bound cost.\351\
---------------------------------------------------------------------------

    \350\ The Departments estimate the 10-percentage-point 
incremental cost in the lower bound by adding the total lower bound 
cost of self-funded plans and self-funded non-Federal governmental 
plans that will initially receive a generic comparative analysis 
from issuers, TPAs, or service providers and will then customize it 
(found in Table 4) and then multiplying the sum by 10 percent.
    \351\ The Departments estimate the 10-percentage-point 
incremental cost in the upper bound adding the total upper bound 
cost of self-funded plans and self-funded non-Federal governmental 
plans that will initially receive a generic comparative analysis 
from issuers, TPAs, or service providers and will then customize it 
(found in Table 4) and then multiplying the sum by 10 percent.
---------------------------------------------------------------------------

8.3. Final Amendments to the Existing MHPAEA Regulations (26 CFR 
54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136)
    As part of these final rules, the Departments have added new 
definitions, amended existing definitions, and clarified and added new 
requirements for NQTLs imposed with respect to mental health or 
substance use disorder benefits. For example, as discussed earlier in 
this preamble, the final rules clarify that any condition or disorder 
defined by the plan or coverage as being or as not being a mental 
health condition or a substance use disorder must be defined consistent 
with generally recognized independent standards of current medical 
practice. To be consistent with those generally recognized independent 
standards of current medical practice, these final rules state that 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 definition of ``substance use disorder benefits'' 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

[[Page 77680]]

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.
    Under these final rules, plans and issuers are required to collect 
and evaluate relevant data in a manner reasonably designed to assess 
the impact of the NQTL on relevant outcomes related to access to mental 
health and substance use disorder benefits and medical/surgical 
benefits. In addition, these final rules require plans and issuers to 
determine whether the relevant data reflect material differences in 
access to mental health or substance use disorder benefits as compared 
to medical/surgical benefits and take reasonable action, as necessary 
to address such differences to ensure compliance, in operation, with 26 
CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). 
Relevant data for all NQTLs could include, as appropriate, but are not 
limited to, the number and percentage of claims denials and any other 
data relevant to the NQTL required by State law or private 
accreditation standards. Additionally, for NQTLs related to network 
composition, relevant data could include, as appropriate, but are 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 (for comparable services 
and as benchmarked to a reference standard).
    The proposed rules would have required plans and issuers to apply 
the proposed mathematical substantially all and predominant tests to 
each NQTL applicable to mental health or substance use disorder 
benefits and medical/surgical benefits. As discussed earlier in this 
preamble, the Departments decline to finalize the proposed mathematical 
tests for applying the substantially all and predominant tests in these 
final rules. However, plans and issuers are required to collect and 
evaluate relevant data for NQTLs applicable to mental health and 
substance use disorder benefits and medical/surgical benefits under 
these final rules. For NQTLs related to network composition, plans and 
issuers must collect and evaluate relevant data in a manner reasonably 
designed to assess the aggregate impact of all such NQTLs on relevant 
outcomes related to access to mental health and substance use disorder 
benefits and medical/surgical benefits. Under these final rules, the 
Departments may specify the type, form, and manner for the relevant 
data evaluation requirement in future guidance, but for some plans and 
issuers already subject to existing data requirements under MHPAEA, 
Federal transparency rules,\352\ and State law and private 
accreditation standards, some of the additional data burden associated 
with this rulemaking will be mitigated.
---------------------------------------------------------------------------

    \352\ 85 FR 72158 (Nov. 12, 2020).
---------------------------------------------------------------------------

    These final rules could cause plans and issuers to revise their 
policies and procedures to remove or modify NQTLs in response to the 
Departments' clarifications and examples. Requirements such as covering 
meaningful benefits for mental health conditions and substance use 
disorders (determined in comparison to the benefits provided for 
medical conditions and surgical procedures); assessing whether the 
relevant data evaluated suggest that the NQTL contributes to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits; and not using or 
taking the steps necessary to correct, cure, or supplement the 
information, evidence, sources, or standards used to inform a factor or 
evidentiary standard that would have been biased or not objective in 
the absence of such steps could also cause plans and issuers to revise 
their policies and procedures.
    For example, a 2016 study examined how private health plans 
responded to the 2010 interim final rules implementing MHPAEA and found 
that the majority of plans had eliminated quantitative treatment 
limitations referred to as ``special annual limits'' related to 
behavioral health treatments. The percentage of health insurance 
products with such 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 such limits on substance 
use disorder treatments (from 26 percent in 2009 to 3 percent in 
2010).\353\ A 2019 study of claims data from both a pre-parity (January 
2005 through December 2010) and post-parity period (January 2011 
through September 2015), found that while MHPAEA did not appreciably 
increase the share of participants utilizing any outpatient mental 
health services, it did increase the frequency of use and total 
utilization of outpatient mental health and substance use disorder 
services of participants already receiving these services.\354\
---------------------------------------------------------------------------

    \353\ Constance M. Horgan, Dominic Hodgkin, Maureen T. Stewart, 
Amity Quinn, Elizabeth L. Merrick, Sharon Reif, Deborah W. Garnick, 
& Timothy B. Creedon, Health Plans' Early Response to Federal Parity 
Legislation for Mental Health and Addiction Services, 67(2) 
Psychiatric Services pp. 162-168 (2016).
    \354\ Norah Mulvaney-Day, Brent J. Gibbons, Shums Alikhan, & 
Mustafa Karakus, Mental Health Parity and Addiction Equity Act and 
the Use of Outpatient Behavioral Health Services in the United 
States, 2005-2016, 109(S3) Am J Public Health pp. S190-S196 (2019).
---------------------------------------------------------------------------

    Plans and issuers could incur costs to implement changes associated 
with revising coverage and plan provisions to ensure that they comply 
with the requirements of these final rules or ceasing the imposition of 
an NQTL as directed by the Departments or an applicable State authority 
after a final determination of noncompliance under Code section 
9812(a)(8), ERISA section 712(a)(8), or PHS Act section 2726(a)(8), or 
26 CFR 54.9812-2, 29 CFR 2590.712-1, or 45 CFR 146.137, which might 
result in increased costs from expanded utilization of mental health 
and substance use disorder services. Recent data suggests that mental 
health and substance use disorder services account for a small portion 
of total health care expenditures, representing just 8.4 percent of all 
expenses in 2021 for individuals with private insurance.\355\ The 
Departments face uncertainty in quantifying these costs and did not 
receive public comments containing data or information to inform these 
estimates. As such, the Departments cannot estimate the potential 
increase in utilization and which services might see the largest 
increase in utilization.
---------------------------------------------------------------------------

    \355\ Agency for Healthcare Research and Quality, Medical 
Expenditure Panel Survey, Total Expenditures ($) in Millions by 
Condition, United States, 2016 to 2021, https://datatools.ahrq.gov/meps-hc?tab=medical-conditions‐=17.
---------------------------------------------------------------------------

8.3.1. Mitigation in Utilization Costs From Telehealth Expansion
    As discussed in section 2 of this regulatory impact analysis, 
individuals seeking mental health or substance use disorder treatment 
often face barriers preventing them from accessing care, such as 
inadequate networks. Telehealth is one method of care that has the 
potential to improve access to treatment for mental health conditions 
or substance use disorders, particularly as research has documented 
that it can be as effective as in-person treatment,\356\

[[Page 77681]]

particularly when the treatment is provided through video instead of 
audio-only.\357\ These final rules require plans and issuers to collect 
and evaluate relevant data and, where the relevant data suggest that 
the NQTL contributes to material differences in access to mental health 
and substance use disorder benefits as compared to medical/surgical 
benefits in a classification, to take reasonable action, as necessary, 
to address the material differences to ensure compliance, in operation, 
with 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 
146.136(c)(4). One potential reasonable action a plan or issuer could 
take to address material differences in access with respect to relevant 
data for NQTLs related to network composition may include expanding the 
availability of telehealth arrangements to mitigate any overall mental 
health and substance use disorder provider shortages in a geographic 
area.
---------------------------------------------------------------------------

    \356\ For example, the following studies found that telehealth 
treatment was as effective as in-person treatment:
    David Turgoose, Rachel Ashwick, & Dominic Murphy, Systematic 
Review of Lessons Learned from Delivering Tele-therapy to Veterans 
with Post-traumatic Stress Disorder, 24(9) Journal of Telemedicine 
and Telecare pp. 575-585 (2018); Nyssa Z. Bulkes, Kaley Davis, Brian 
Kay, & Bradley C. Riemann, Comparing Efficacy of Telehealth to In-
Person Mental Health Care in Intensive-Treatment-Seeking Adults, 145 
Journal of Psychiatric Research pp. 347-352 (2022); Jaime Moreno-
Chaparro, Eliana I. Parra Esquivel, Angy Lucia Santos Quintero, 
Laura Paez, Sandra Martinez Quinto, Bayron Esteven Rojas Barrios, 
Juan Felipe Samudio, & Karol Madeline Romero Villareal, Telehealth 
Interventions Aimed at Parents and Caregivers of Children Living in 
Rural Settings: A Systematic Review, Child Care in Practice pp. 1-24 
(2022); Lori Uscher-Pines, Lauren E. Riedel, Ateev Mehrotra, Sherri 
Rose, Alisa B. Busch, & Haiden A. Huskamp, Many Clinicians Implement 
Digital Equity Strategies to Treat Opioid Use Disorder: Study 
Examines Clinicians' Use of Telehealth and Digital Equity Strategies 
to Treat Opioid Use Disorder, 42(2) Health Affairs pp. 182-186 
(2023).
    \357\ Some studies have found that a majority of clinicians and 
patients do not prefer audio-only telehealth to in-person care, 
implying that many of the benefits tied to telehealth are 
specifically for telehealth with video. For example:
    Lori Uscher-Pines, Lauren E. Riedel, Ateev Mehrotra, Sherri 
Rose, Alisa B. Busch, & Haiden A. Huskamp, Many Clinicians Implement 
Digital Equity Strategies to Treat Opioid Use Disorder: Study 
Examines Clinicians' Use of Telehealth and Digital Equity Strategies 
to Treat Opioid Use Disorder, 42(2) Health Affairs pp. 182-186 
(2023); Gillian K. SteelFisher, Caitlin L. McMurtry, Hannah 
Caporello, Keri M. Lubell, Lisa M. Koonin, Antonio J. Neri, Eran N. 
Ben-Porath, Ateev Mehrotra, Ericka McGowan, Laura C. Espino, & 
Michael L. Barnett, Video Telemedicine Experiences in COVID-19 Were 
Positive, but Physicians and Patients Prefer In-Person Care for The 
Future: Study Examines Patient and Physician Opinion of Telemedicine 
Experiences During COVID-19, 42(4) Health Affairs pp. 575-584 
(2023).
---------------------------------------------------------------------------

    The COVID-19 pandemic sparked increased demand for health care 
services, including behavioral health services delivered remotely. 
While in February 2020 telehealth claims accounted for only around 1 
percent of claims pertaining to mental health or substance use disorder 
benefits, by April 2020 they accounted for over 50 percent of the 
claims and still accounted for approximately 40 percent of claims at 
the end of 2021.\358\ The expansion was significantly aided by the 
Departments issuing guidance providing time-limited Federal 
flexibilities for private health plans to expand access to telehealth, 
which specifically included coverage of treatment for mental health 
conditions and substance use disorders. These Federal flexibilities 
included ``allowing midyear plan design changes to increase telehealth 
coverage,'' ``allowing certain employers to offer coverage only for 
services provided via telehealth and other remote care services,'' and 
``allowing telehealth coverage pre-deductible'' for catastrophic plans 
and for health savings account-qualified high deductible health 
plans.\359\
---------------------------------------------------------------------------

    \358\ Norah Mulvaney-Day, David Dean, Jr., Kay Miller, & Jessica 
Camacho-Cook, Trends in Use of Telehealth for Behavioral Health Care 
During the COVID-19 Pandemic: Considerations for Payers and 
Employers, 36(7) American Journal of Health Promotion pp. 1237-1241 
(2022).
    \359\ Congressional Research Service, Federal Telehealth 
Flexibilities in Private Health Insurance During the COVID-19 Public 
Health Emergency: In Brief (2023), https://crsreports.congress.gov/product/pdf/R/R47424.
---------------------------------------------------------------------------

    While the COVID-19 PHE ended on May 11, 2023,\360\ many of the 
telehealth flexibilities it allowed were extended under the CAA, 2023 
through December 31, 2024.\361\ Additionally, Medicare has permanently 
adopted policies allowing patients to receive behavioral and mental 
care through telehealth within their homes,\362\ and a survey of States 
indicated that, for Medicaid, ``all or most expansions of behavior 
health providers and/or services allowed for telehealth would be 
maintained after the public emergency.'' \363\ For private plans, 
access to telehealth for mental health and substance use disorder care 
will depend on plan design.
---------------------------------------------------------------------------

    \360\ Executive Office of the President, Statement of 
Administration Policy (Jan. 30, 2023), https://www.whitehouse.gov/wp-content/uploads/2023/01/SAP-H.R.-382-H.J.-Res.-7.pdf.
    \361\ Public Law 117-328 (Dec. 29, 2022).
    \362\ HHS, Telehealth Policy Changes After the COVID-19 Public 
Health Emergency (Dec. 19, 2023), https://telehealth.hhs.gov/providers/telehealth-policy/policy-changes-after-the-covid-19-public-health-emergency#temporary-medicare-changes-through-december-31,-2024.
    \363\ Madeline Guth, Telehealth Delivery of Behavioral Health 
Care in Medicaid: Findings from a Survey of State Medicaid Programs, 
KFF (Jan. 2023), https://www.kff.org/mental-health/issue-brief/telehealth-delivery-of-behavioral-health-care-in-medicaid-findings-from-a-survey-of-state-medicaid-programs/.
---------------------------------------------------------------------------

    By nature, telehealth makes accessing treatment for mental health 
conditions and substance use disorders more convenient for many 
patients, particularly for those who do not have the ability, time, or 
means to travel to an appointment or who need care from a provider that 
specializes in a particular treatment that is not available in their 
geographic area. Despite observing similar levels of mental illness and 
psychiatric disorders in urban residents, one research paper remarked 
that rural residents face ``challenges accessing care systems due to 
geographic isolation, reduced access to and engagement with appropriate 
providers, lower socioeconomic status, generally lower levels of 
educational attainment, as well as reluctance to seek help due to 
discrimination and stigma.'' \364\ An analysis of 2021 outpatient 
visits reported that 55 percent of patients in rural areas relied on 
telehealth for outpatient mental health and substance use services 
compared to 35 percent in urban areas.\365\ Given that 73.3 million 
people in the United States live in a geographic area designated as a 
mental health professional shortage area, of which 24.4 million resided 
in a rural area, telehealth is likely to continue to be a necessary 
means to offset provider network limitations in these areas.\366\
---------------------------------------------------------------------------

    \364\ Dawn A. Morales, Crystal L. Barksdale, & Andrea C. Beckel-
Mitchener, A Call to Action to Address Rural Mental Health 
Disparities, 4 Journal of Clinical and Translational Science pp. 
463-467 (2020).
    \365\ Justin Lo, Matthew Rae, Krutika Amin, Cynthia Cox, Nirmita 
Panchal, & Benjamin F. Miller, Telehealth Has Played an Outsized 
Role Meeting Mental Health Needs During the COVID-19 Pandemic, KFF 
Issue Brief (Mar. 15, 2022), https://www.kff.org/mental-health/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/.
    \366\ HHS, Health Resources and Services Administration, Bureau 
of Health Workforce, Designated Health Professional Shortage Areas: 
Second Quarter of Fiscal year 2024 Designated HPSA Quarterly Summary 
(Mar. 2024), https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport.
---------------------------------------------------------------------------

    As with rural populations, many underserved racial, ethnic, 
cultural minorities, and individuals with disabilities face barriers to 
receiving treatment for mental health conditions and substance use 
disorders. These barriers may include language, stigma, or finding a 
therapist that understands their situation. While important in many 
areas of health care, many underserved populations prefer to receive 
treatment for mental health conditions and substance use disorders 
specifically from a provider with an understanding of their cultural 
background. A 2022 study found that there was an overall increase in 
the use and willingness to use video telehealth during the pandemic, 
with the highest levels of increase being seen among Black adults and 
adults with lower educational attainment. Certain communities became 
more willing to use telehealth, since many patients had their first 
telehealth experience with their trusted health care provider during 
the pandemic and their positive

[[Page 77682]]

experiences eliminated their concerns with telehealth, such as concerns 
related to privacy or to the level of engagement of a provider through 
telehealth.\367\
---------------------------------------------------------------------------

    \367\ Shira H. Fischer, Zachary Predmore, Elizabeth Roth, Lori 
Uscher-Pines, Matthew Baird, & Joshua Breslau, Use of and 
Willingness to Use Video Telehealth Through the COVID-19 Pandemic: 
Study Examines the Use of and the Willingness to Use Video 
Telehealth During the COVID-19 Pandemic, 41(11) Health Affairs pp. 
1645-1651 (2022).
---------------------------------------------------------------------------

    In addition to expanding access, telehealth has also been found to 
improve the retention of patients receiving mental health and substance 
use disorder care. A 2023 retrospective cohort study of treatment-
seeking patients enrolled in a substance use disorder treatment program 
in Ohio found that ``[p]atients who received services through 
telehealth with video in the initial 14 days of diagnosis had a lower 
hazard of dropout, compared to patients receiving solely in-person 
services.'' Moreover, when compared to in-person care, patients 
receiving services through either video or telephone were more likely 
to have higher treatment engagement, which was defined as ``initiating 
treatment and completing at least two treatment visits within 34 days 
of the initiation visit.'' \368\
---------------------------------------------------------------------------

    \368\ Danielle M. Gainer, Celeste Wong, Jared A. Embree, Nina 
Sardesh, Amna Amin, & Natalie Lester, Effects of Telehealth on 
Dropout and Retention in Care Among Treatment-Seeking Individuals 
with Substance Use Disorder: A Retrospective Cohort Study, 58(4) 
Substance Use & Misuse pp. 481-490 (2023).
---------------------------------------------------------------------------

    Research has demonstrated that telehealth for medical appointments 
saves patients time and money.\369\ A 2021 study focused specifically 
on the travel cost savings associated with using tele-mental health 
services in a pediatric outpatient psychology clinic. The study found 
that patients experienced a median of 132 miles saved by not travelling 
to an in-person session, which translated to a median 3.5 hours saved 
not travelling to an in-person session and a median cost savings of $22 
per session over the course of the telehealth treatment.\370\ The 
benefits of telehealth are particularly relevant for mental health and 
substance use disorder treatment because treatment often requires 
frequent sessions or appointments.
---------------------------------------------------------------------------

    \369\ Studies finding that telehealth has decreased travel 
expenses include: Josephine C. Jacobs, Jiaqi Hu, Cindie Slightam, 
Amy Gregory, & Donna M. Zulman, Virtual Savings: Patient-Reported 
Time and Money Savings from a VA National Telehealth Tablet 
Initiative, 26(8) Telemedicine and e-Health 1178-1183 (2020); Navjit 
W. Dullet, Estella M. Geraghty, Taylor Kaufman, Jamie L. Kissee, 
Jesse King, Madan Dharmar, Anthony C. Smith, & James P. Marci, 
Impact of a University-Based Outpatient Telemedicine Program on Time 
Savings, Travel Costs, and Environmental Pollutants, 20(4) Value in 
Health pp. 542-546 (2017).
    \370\ William S. Frye, Lauren Gardner, & Jazmine S. Mateus, 
Utilising Telemental Health in a Paediatric Outpatient Psychology 
Clinic: Therapeutic Alliance and Outcomes, 22(2) Counselling and 
Psychotherapy Research pp. 322-330 (2022).
---------------------------------------------------------------------------

    It is important to note that, while telehealth may improve access, 
it is not a perfect solution. For instance, it has limitations in 
certain segments of the population, such as individuals with limited 
English proficiency \371\ or without access to computers or the 
internet.\372\ Additionally, many individuals may prefer in-person care 
over telehealth. A survey published in 2023 showed that while patients 
have differing preferences for in-person care or telehealth, many are 
not able to find care that fits their preferences. Of the respondents 
receiving therapy, less than half were able to select whether they 
received in-person care or telehealth.\373\ Further, interviews 
conducted with respondents found that while many patients appreciate 
the convenience of telehealth, others expressed concern about the 
rapport between the patient and provider during telehealth. The authors 
cautioned that while telehealth is an attractive way to expand access 
to mental health care for much of the population, telehealth may not 
alone be sufficient for all individuals or conditions.\374\ Therefore, 
while telehealth may contribute significantly to the alleviation of 
mental health and substance use disorder provider shortages, it may not 
be a viable alternative for everyone.
---------------------------------------------------------------------------

    \371\ Jorge A. Rodriguez, Altaf Saadi, Lee H. Schwamm, David W. 
Bates, & Lipika Sama, Disparities in Telehealth Use Among California 
Patients with Limited English Proficiency, 40(3) Health Affairs pp. 
487-495 (2021).
    \372\ United States Census Bureau, Computer and internet Use in 
the United States: 2018 (2021), https://www.census.gov/newsroom/press-releases/2021/computer-internet-use.html.
    \373\ The survey found that 30.6 percent of respondents were 
working with providers who only offered in-person care or 
telehealth, while 24.4 percent of respondents were working with 
providers who offered both modalities but chose for the patient.
    \374\ Jessica Sousa, Andrew Smith, Jessica Richard, Maya 
Rabinowitz, Pushpa Raja, Ateev Mehrotra, Alisa B. Busch, Haiden A. 
Huskamp, & Lori Uscher-Pines, Choosing or Losing in Behavioral 
Health: A Study of Patients' Experiences Selecting Telehealth Versus 
In-Person Care, 42(9) Health Affairs pp 1275-1282 (2023).
---------------------------------------------------------------------------

8.4. New Regulations (26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 
146.137 and 146.180)
    These final rules set forth content 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 and applicable State authorities upon request. Under 
these final rules, the Departments outlined the elements that a 
comparative analysis must include for each NQTL (in addition to the 
requirements to include a written list of all NQTLs imposed under the 
plan or coverage). They include, as described in more detail earlier in 
this preamble:
     A description of the NQTL,
     Identification and definition of the factors used to 
design or apply the NQTL,
     A description of how factors are used in the design and 
application of the NQTL,
     A demonstration of comparability and stringency, as 
written,
     A demonstration of comparability and stringency, in 
operation, and
     Findings and conclusions.
    However, because these elements are already required under the CAA, 
2021, the cost of these final rules is more limited than the full cost 
of generating a comparative analysis. For instance, plans and issuers 
are already required under the CAA, 2021 to provide a description of 
the specific plan or coverage terms or other relevant terms regarding 
the NQTLs that applies to such plan or coverage, and a description of 
all the mental health and substance use disorder benefits and medical 
or surgical benefits to which each such term applies in each respective 
benefit classification.\375\ Similarly, plans and issuers are already 
required to identify the factors used to determine that the NQTLs will 
apply to mental health or substance use disorder benefits and medical 
or surgical benefits,\376\ and the evidentiary standards used for the 
factors identified, when applicable, provided that every 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 or surgical benefits.\377\
---------------------------------------------------------------------------

    \375\ Code section 9812(a)(8)(A)(i), ERISA section 
712(a)(8)(A)(i), and PHS Act section 2726(a)(8)(A)(i).
    \376\ Code section 9812(a)(8)(A)(ii), ERISA section 
712(a)(8)(A)(ii), and PHS Act section 2726(a)(8)(A)(ii).
    \377\ Code section 9812(a)(8)(A)(iii), ERISA section 
712(a)(8)(A)(iii), and PHS Act section 2726(a)(8)(A)(iii).

---------------------------------------------------------------------------

[[Page 77683]]

Moreover, the CAA, 2021 requires that the comparative analyses 
demonstrate that the processes, strategies, evidentiary standards, and 
other factors used to apply NQTLs to mental health and 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 or surgical benefits in the benefits classification,\378\ as 
well as 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.\379\
---------------------------------------------------------------------------

    \378\ Code section 9812(a)(8)(A)(iv), ERISA section 
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
    \379\ Code section 9812(a)(8)(A)(v), ERISA section 
712(a)(8)(A)(v), and PHS Act section 2726(a)(8)(A)(v).
---------------------------------------------------------------------------

    In their comparative analyses, plans and issuers must describe each 
NQTL and identify and define all the factors and evidentiary standards 
used to design or apply the NQTL. The plan or issuer also must describe 
how the factors identified are used in the design and application of 
the NQTL, and evaluate whether 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 with respect to medical/
surgical benefits, both as written and in operation. The explanation of 
how the plan or issuer evaluates compliance, in operation, with MHPAEA 
must identify the relevant data collected and evaluated, and document 
the outcomes that resulted from the application of the NQTL to mental 
health or substance use disorder benefits and medical/surgical 
benefits. In limited circumstances where relevant data is temporarily 
unavailable for a newly imposed NQTL, the comparative analysis must 
include a detailed explanation of the lack of relevant data, the basis 
for the plan's or issuer's conclusion that there is a lack of relevant 
data, and when and how the data will become available and be collected 
and analyzed. Additionally, in rare instances where no data exists that 
can reasonably assess any relevant impact of an NQTL on relevant 
outcomes related to access to mental health and substance use disorder 
benefits and medical/surgical benefits, the plan or issuer must provide 
a reasoned justification as to the basis for the conclusion that there 
are no data that can reasonably assess the NQTL's impact, an 
explanation of why the nature of the NQTL prevents the plan or issuer 
from reasonably measuring its impact, an explanation of what data was 
considered and rejected, and documentation of any additional safeguards 
or protocols used to ensure that the NQTL complies with MHPAEA. In the 
instances where there is a temporary data lag for a newly imposed NQTL 
or no data exists that can reasonably assess any relevant impact of an 
NQTL, providing this justification for the temporary data lag is likely 
to be less expensive than the estimated burden for doing an analysis 
when there is data. However, as explained earlier in this preamble, the 
Departments are of the view that nearly all NQTLs will have some 
relevant data to collect and evaluate; therefore, the Departments 
estimate the burden as if every plan and issuer performs the data 
analysis.
    These final rules require additional specificity with regard to the 
findings and conclusion of the comparative analysis. While these final 
rules provide specificity for how a plan or issuer must comply with the 
comparative analysis requirements, they are primarily providing 
additional clarification and requirements with respect to the statutory 
content elements of a comparative analysis outlined in the CAA, 2021, 
so that plans and issuers can perform and document sufficient 
comparative analyses.
    Additionally, for ERISA plans, these final rules also require the 
comparative analysis to include a certification by one or more named 
fiduciaries that they have engaged in a prudent process to select one 
or more qualified service providers to perform and document a 
comparative analysis in connection with the imposition of any NQTLs 
that apply to mental health and substance use disorder benefits under 
the plan in accordance with applicable law and regulations, and have 
satisfied their duty to monitor those service providers as required 
under part 4 of ERISA with respect to the performance and documentation 
of such comparative analysis. The cost to provide the certification is 
included in the cost estimates to prepare the comparative analysis.
    In the proposed rules, the Departments estimated that, on average, 
plans would need to analyze four separate NQTLs and issuers would need 
to analyze eight NQTLs to satisfy the comparative analysis 
requirements.\380\ The Departments further estimated that 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. 
Once the comparative analyses are performed and documented, the 
Departments noted that plans and 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, as well as medical/surgical benefits. 
In subsequent years, the Departments estimated that plans and issuers 
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.
---------------------------------------------------------------------------

    \380\ The Departments generally identify a unique NQTL based on 
whether a specific plan or issuer has defined the NQTL using 
different factors or evidentiary standards than other NQTLs. For 
example, if a plan applies an identical prior authorization 
requirement NQTL to four different benefit classifications, or to 
four different benefit package options in the same plan, the 
Departments would consider the NQTL as just one ``unique'' NQTL, 
even though it is technically four separate NQTLs. When a 
comparative analysis request is sent to an issuer with identical 
NQTLs that apply to many fully insured plans, the Departments 
similarly count the NQTL as one unique NQTL, even though there are 
technically many separate NQTLs for the different plans. The 
Departments acknowledge that if they instead counted each NQTL 
separately by benefit classification, plan, and product, 
irrespective of whether the NQTLs are administered in the same way 
in these different contexts, then the number of NQTLs would be 
substantially larger. This distinction may explain why the 
Departments' estimate of NQTLs was lower than that of commenters.
---------------------------------------------------------------------------

    In response to commenters' concerns that the Departments 
underestimated the number of NQTLs that each plan or issuer would need 
to provide comparative analyses for, and that plans and issuers would 
on average have the same number of NQTLs, the Department have revised 
their assumptions to 10 NQTLs for both plans and issuers. While one 
commenter suggested the average number of NQTLs should be more than 15 
at a minimum, and another commenter noted that the proposal and 
guidance referenced at least 17 NQTLs, the Departments note that the 
number of NQTLs vary by issuer and plans and that most will not 
incorporate every NQTL listed in the proposal and the guidance (while 
some plans and issuers might incorporate others not listed). Taking 
into account the Departments' experience and comments received, the 
Departments assume 10 NQTLs but present a sensitivity analysis using 15 
NQTLs.

[[Page 77684]]

    The Departments assume that the incremental costs to collect the 
data and review and revise the comparative analyses will require 60 
hours per NQTL in the first year and 12 hours per NQTL in subsequent 
years. For plan sponsors that receive a generic comparative analysis 
from a TPA that will require customizing to suit the plan's specific 
needs, the Departments assume that it will take 30 hours per NQTL in 
the first year and 6 hours per NQTL in subsequent years. While plans 
and issuers can use other professionals to fulfill their requirements, 
for purposes of developing the wage estimate, the Departments assume 
that it will take a team of data analysts, actuaries, and attorneys to 
collect the data and prepare the comparative analyses, and have 
estimated a composite wage rate of $167.48.\381\ See Table 5 for 
calculations and burden totals.
---------------------------------------------------------------------------

    \381\ The wage rate of an attorney, actuary, and data analyst 
is, respectively, $165.71, $177.11, and $159.61. (Internal DOL 
calculation based on 2024 labor cost data. For a description of 
DOL's methodology for calculating wage rates, see EBSA, Labor Cost 
Inputs Used in the Employee Benefits Security Administration, Office 
of Policy and Research's Regulatory Impact Analyses and Paperwork 
Reduction Act Burden Calculations (June 2019), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.) The composite wage rate is 
estimated in the following manner: [$165.71 x (1 / 3) + $159.61 x (1 
/ 3) x $177.61 x (1 / 3) = $167.48].
---------------------------------------------------------------------------

    The Departments conducted a sensitivity analysis of the assumption 
that plans and issuers would each analyze 10 NQTLs. If the Departments 
assume that plans and issuers analyze 15 NQTLs, the cost burden would 
increase by $328.1 million in the first year and $65.6 million in the 
subsequent years, resulting in a 3-year average cost increase of $153.1 
million.

         Table 5--Incremental Cost To Fulfill the Data Requirements and Prepare the Comparative Analyses
----------------------------------------------------------------------------------------------------------------
                                                           Number of
                                                           hours per
                                 Number of    Number of     NQTL for     Total hour     Hourly
                                  entities    NQTLs per     data and       burden        wage          Cost
                                                entity    comparative
                                                            analysis
                                        (A)          (B)          (C)     (A x B x C)       (D)  (A x B x C x D)
----------------------------------------------------------------------------------------------------------------
                                                   First Year
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance             1,467           10           60         880,200   $167.48     $147,415,896
 company/State combinations)..
TPAs..........................          205           10           60         123,000    167.48       20,600,040
Self-funded plans with more             709           10           60         425,400    167.48       71,245,992
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded plans with more           4,076           10           30       1,222,800    167.48      204,794,544
 than 500 participants that
 will receive generic
 comparative analyses from
 TPAs or service providers,
 and will then customize it...
Self-funded non-Federal                 505           10           60         303,000    167.48       50,746,440
 governmental plans with more
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded non-Federal               2,906           10           30         871,800    167.48      146,009,064
 governmental plans with more
 than 500 participants that
 will initially receive
 generic comparative analyses
 from TPAs or service
 providers, and will then
 customize it.................
Plan MEWAs that are not fully           132           10           60          79,200    167.48       13,264,416
 insured......................
Non-plan MEWAs that are not              21           10           60          12,600    167.48        2,110,248
 fully insured................
                               ---------------------------------------------------------------------------------
    First-year Total..........       10,021  ...........  ...........       3,918,000  ........      656,186,640
----------------------------------------------------------------------------------------------------------------
                                                Subsequent Years
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance             1,467           10           12         176,040    167.48       29,483,179
 company/State combinations)..
TPAs..........................          205           10           12          24,600    167.48        4,120,008
Self-funded plans with more             709           10           12          85,080    167.48       14,249,198
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded plans with more           4,076           10            6         244,560    167.48       40,958,909
 than 500 participants that
 will receive generic
 comparative analyses from
 TPAs or service providers,
 and will then customize it...
Self-funded non-Federal                 505           10           12          60,600    167.48       10,149,288
 governmental plans with more
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded non-Federal               2,906           10            6         174,360    167.48       29,201,813
 governmental plans with more
 than 500 participants that
 will initially receive
 generic comparative analyses
 from TPAs or service
 providers, and will then
 customize it.................
Plan MEWAs that are not fully           132           10           12          15,840    167.48        2,652,883
 insured......................
Non-plan MEWAs that are not              21           10            6           2,520    167.48          422,050
 fully insured................
                               ---------------------------------------------------------------------------------
    Subsequent Years Total....       10,021  ...........  ...........         783,600  ........      131,237,328
                               ---------------------------------------------------------------------------------
        Total (3-year average)       10,021  ...........  ...........       1,828,400  ........      306,220,432
----------------------------------------------------------------------------------------------------------------

    Additionally, plans and issuers must make the comparative analyses 
and other applicable information required by the CAA, 2021 available 
upon request to participants, beneficiaries, and enrollees in all non-
grandfathered group health plans and non-grandfathered group or 
individual health insurance coverage (including a provider or other 
person acting as a participant's, beneficiary's, or enrollee's 
authorized representative) in connection with an adverse benefit 
determination, as well as to participants and beneficiaries in plans 
subject to ERISA. The Departments estimate that on average each plan or 
issuer will receive one request annually and that plans and issuers 
will annually incur a burden of 5 minutes for a clerical worker to 
prepare and send the comparative analyses to each requesting 
participant or beneficiary. The Departments received comments 
suggesting that this

[[Page 77685]]

underestimated the demand for these analyses as well as the cost to 
produce them. However, after reviewing data on the number of appealed 
mental health or substance use disorder claims per year, which serves 
as a proxy for when participants or beneficiaries would request an 
analysis, the Departments are of the view that this estimate is 
appropriate. Moreover, because plans and issuers are already 
responsible for preparing these analyses, the only cost associated with 
providing them are the clerical ones outlined earlier in this preamble. 
See Table 6 for calculations and burdens totaling the cost to prepare 
the analysis.\382\
---------------------------------------------------------------------------

    \382\ In Table 6, the number of ERISA-covered group health plans 
is calculated in the following manner: 410,581 ERISA-covered group 
health plans with 50 or more participants + 1,718,935 ERISA-covered 
fully insured, non-grandfathered plans with less than 50 
participants = 2,129,516.

                   Table 6--Costs To Prepare the Comparative Analysis Upon Participant Request
----------------------------------------------------------------------------------------------------------------
                                              Number of    Number of
                                 Number of    NQTLs per    hours per     Total hour     Hourly         Cost
                                  entities      entity        NQTL         burden        wage
                                        (A)          (B)          (C)     (A x B x C)       (D)  (A x B x C x D)
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance             1,467            1       0.0833             122    $65.99           $8,051
 company/State combinations)..
ERISA-covered group health        2,129,516            1       0.0833         177,460     65.99       11,710,585
 plans........................
Non-Federal governmental plans       90,887            1       0.0833           7,574     65.99          499,808
Plan MEWAs that are not fully           132            1       0.0833              11     65.99              726
 insured......................
Non-plan MEWAs that are not              21            1       0.0833               2     65.99              132
 fully insured................
                               ---------------------------------------------------------------------------------
    Annual Total..............    2,222,023  ...........  ...........         185,169  ........       12,219,302
----------------------------------------------------------------------------------------------------------------

    The Departments further assume that 58.3 percent of requests will 
be delivered electronically, resulting in a de minimis cost.\383\ The 
remaining 41.7 percent of requests will be mailed, at a cost of $2.79 
each.\384\ See Table 7 for calculations and burden totaling the cost to 
distribute the analysis.
---------------------------------------------------------------------------

    \383\ According to data from the National Telecommunications and 
Information Agency (NTIA), 37.4 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 31.4 percent receiving electronic disclosure at work). 
Additionally, the NTIA reports that 44.1 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 26.9 percent receiving 
electronic disclosure outside of work). Combining the 31.4 percent 
who will receive electronic disclosure at work with the 26.9 percent 
who will receive electronic disclosure outside of work produces a 
total of 58.3 percent who will receive electronic disclosure 
overall. See Quantria Strategies, Improving Outcomes with Electronic 
Delivery of Retirement Plan Documents (June 2015), https://www.sparkinstitute.org/content-files/improving_outcomes_with_electronic_delivery_of_retirement_plan_documents.pdf. See also Pew Research Center, 51% of U.S. Adults Bank 
Online (Aug. 2013), https://www.pewresearch.org/internet/wp-content/uploads/sites/9/media/Files/Reports/2013/PIP_OnlineBanking.pdf. See 
also NTIA, NTIA Data Explorer (June 2024), https://www.ntia.gov/data/explorer.
    \384\ The postage for a first-class mail large envelope is $2.04 
and the material cost is $0.05 per page. Thus, $2.04 + ($0.05 x 15 
pages) = $2.79.

          Table 7--Costs To Distribute the Comparative Analysis Upon Participant or Beneficiary Request
----------------------------------------------------------------------------------------------------------------
                                                                  Paper and
                                     Number of     Estimated    printing cost   Mailing            Cost
                                      entities    page length    (per page)      cost
                                            (A)           (B)             (C)       (D)  [(A x B x C) + (A x D)]
                                                                                                  x 41.7 percent
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance company/        1,467            15           $0.05     $2.04                   $1,603
 State combinations)..............
ERISA-covered Group Health Plans..    2,129,516            15            0.05      2.04                2,326,581
Non-Federal Governmental Plans....       90,887            15            0.05      2.04                  105,741
Plan MEWAs that are not fully               132            15            0.05      2.04                      144
 insured..........................
Non-plan MEWAs that are not fully            21            15            0.05      2.04                       23
 insured..........................
                                   -----------------------------------------------------------------------------
    Annual Total..................    2,222,023  ............  ..............  ........                2,585,169
----------------------------------------------------------------------------------------------------------------


[[Page 77686]]

    Finally, these final rules require that group health plans and 
health insurance issuers offering group or individual health insurance 
coverage must make comparative analyses available upon request to the 
Departments or an applicable State authority. The CAA, 2021 requires 
the Departments to collect no fewer than 20 comparative analyses per 
year, but it also provides that the Departments 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 Departments determine appropriate. Based on prior 
experience and current funding, DOL and HHS expect to each request 20 
comparative analyses each year. To provide the Departments with their 
comparative analyses and associated documentation, the Departments 
estimate, based on internal discussion, that it will take a total of 5 
hours for plans, with 1 hour for a general or operations manager and 4 
hours for a business operations specialist. See Table 8 for 
calculations and burden totals.

                           Table 8--Costs of Providing Comparative Analyses for Audits
----------------------------------------------------------------------------------------------------------------
                                                  Number of   Hour burden   Total hour   Hourly
                                                   entities    per entity     burden      wage         Cost
                                                         (A)          (B)      (A x B)       (C)     (A x B x C)
----------------------------------------------------------------------------------------------------------------
General Operations Manager (Requested by HHS)..           20            1           20   $137.67          $2,753
Business Operations Specialist (Requested by              20            4           80    114.36           9,149
 HHS)..........................................
General Operations Manager (Requested by DOL)..           20            1           20    137.67           2,753
Business Operations Specialist (Requested by              20            4           80    114.36           9,149
 DOL)..........................................
                                                ----------------------------------------------------------------
    Total......................................           40  ...........          200  ........          23,804
----------------------------------------------------------------------------------------------------------------

    In the first year, group health plans and issuers will need time to 
familiarize themselves with these final rules to ensure that their 
comparative analyses comply with all applicable requirements. The 
Departments assume that on average it will require 6.5 hours for an 
attorney to review these final rules.\385\ See Table 9 for calculations 
and burden totals.
---------------------------------------------------------------------------

    \385\ The reading time is calculated based on an average 250 
words per minute reading rate.

                                     Table 9--Costs for Rule Familiarization
----------------------------------------------------------------------------------------------------------------
                                             Number of
                                Number of    NQTLs per   Hour burden    Total hour      Hourly         Cost
                                 entities      entity     per entity      burden         wage
                                       (A)          (B)          (C)     (A x B x C)        (D)  (A x B x C x D)
----------------------------------------------------------------------------------------------------------------
                                                   First Year
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance            1,467            1          6.5           9,536    $165.71       $1,580,211
 company/State combinations).
TPAs.........................          205            1          6.5           1,333     165.71          220,891
Self-funded plans with more            709            1          6.5           4,609     165.71          763,757
 than 500 participants that
 will conduct the comparative
 analysis themselves.........
Self-funded plans with more          4,076            1          6.5          26,494     165.71        4,390,321
 than 500 participants that
 will receive generic
 comparative analyses from
 TPAs or service providers,
 and will then customize it..
Self-funded non-Federal                505            1          6.5           3,283     165.71          544,026
 governmental plans with more
 than 500 participants that
 will conduct the comparative
 analysis themselves.........
Self-funded non-Federal              2,906            1          6.5          18,889     165.71        3,130,096
 governmental plans with more
 than 500 participants that
 will initially receive
 generic comparative analyses
 from TPAs or service
 providers, and will then
 customize it................
Plan MEWAs that are not fully          132            1          6.5             858     165.71          142,179
 insured.....................
Non-plan MEWAs that are not             21            1          6.5             137     165.71           22,702
 fully insured...............
                              ----------------------------------------------------------------------------------
    First-year Total.........       10,021  ...........  ...........          65,139  .........       10,794,184
----------------------------------------------------------------------------------------------------------------

    According to the 2022 National Health Expenditure Data, the total 
contribution of private employers to health insurance premiums is 
$592.2 billion. The total contribution of State and local employers to 
health insurance premiums is $194.5 billion.\386\ The total health 
expenditure on the individual market is $93.9 billion.\387\ In the 
first year, the cost to comply with these final rules is estimated to 
be approximately $681.8 million,\388\ which represents 0.08 percent of 
total premiums in these markets. In subsequent years, the cost to 
comply with these final rules is estimated to be approximately $146.1 
million,\389\ which represents 0.02

[[Page 77687]]

percent of total premiums in these markets.
---------------------------------------------------------------------------

    \386\ CMS, National Health Expenditure Data, NHE Tables--Table 
24, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalhealthaccountshistorical.
    \387\ CMS, National Health Expenditure Data, NHE Tables--Table 
21, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalhealthaccountshistorical.
    \388\ The cost is estimated as follows: $656.2 million for 
collecting the data and preparing the comparative analyses + $10.8 
million for reviewing the final rules and amendments + $12.2 million 
to prepare the comparative analyses upon request of participants and 
beneficiaries + $2.6 million to distribute the comparative analyses 
to participants and beneficiaries + $0.02 million for audit of 
comparative analyses = $681.8 million.
    \389\ The cost is estimated as follows: $131.2 million for 
collecting the data and preparing the comparative analyses + $12.2 
million for preparing the comparative analyses upon request of 
participants and beneficiaries + $2.6 million to distribute the 
comparative analyses to participants and beneficiaries + $0.02 
million for audit of comparative analyses = $146.1 million.
---------------------------------------------------------------------------

    In the proposed rules, HHS assumed 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 offered mental health and substance use disorder benefits, 
but that many of these plans might not be complying with MHPAEA. HHS 
assumed that plans would incur costs to come into compliance and noted 
that, in particular, some plans might 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. HHS also noted that plans that have 
opted out of requirements under MHPAEA would also need to conduct NQTL 
comparative analyses if they were not already doing so. HHS solicited 
comments on the potential costs to these plans to come into compliance 
with MHPAEA. Although the Departments received comments on the 
potential underestimation of costs related to NQTL comparative analysis 
requirements (refer to section IV.8.1 of this regulatory impact 
analysis for further discussion), HHS did not receive any comments 
specific to the costs associated with coming into compliance for self-
funded non-Federal governmental plans. As such, HHS is unable to 
estimate the 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 are expected to vary from plan to plan.
    HHS estimates that the regulatory amendments to implement a 
provision of the CAA, 2023 that sunsets the election option for 
sponsors of self-funded non-Federal governmental plans to opt out of 
requirements under MHPAEA eliminates the need for sponsors to submit a 
notice to the Federal Government regarding their plan's opt-out 
election, as long as the sponsors do not elect to permissibly opt out 
of other requirements. HHS estimates that sponsors of 185 plans will no 
longer submit a notice to the Federal Government regarding their plan's 
opt-out election. This is estimated to generate a total cost savings of 
approximately $11,783 for plans (as discussed later in section V.2.5 of 
the Paperwork Reduction Act analysis for HHS), and cost savings of 
approximately $5,200 for the Federal Government as HHS will no longer 
have to process the opt-out notices previously submitted by these 
plans.
8.5. Illustration of Cost Increases for Plans and Issuers
    As discussed in the benefits section, the Departments estimate that 
the final rules will increase access and subsequently the utilization 
or frequency of use of behavioral health services. The Departments also 
recognize that increased service utilization will likely increase costs 
for plans. These costs will likely differ significantly by the type of 
condition and the type of treatment. The analysis that follows provides 
an illustration of potential increases in costs for plans associated 
with depression and substance use disorder treatments.
    Increasing access to mental health services is estimated to result 
in a significant reduction in suicides, as enumerated in section 
IV.7.2. While many mental health conditions and substance use disorders 
may increase the risk of suicide, suicide itself is an outcome that may 
or may not be tied directly to mental health conditions or substance 
use disorders. As such, it is difficult to directly tie the decrease in 
suicides discussed in section IV.7.2 to increased costs.
    However, the most common mental health condition among those who 
attempt suicide, as well as one of the most highly prevalent mental 
health conditions in the United States, is depressive 
disorder.390 391 Research indicates that individuals with 
major depressive disorder are at an elevated risk of suicide and that 
approximately two-thirds have contemplated suicide.\392\ Furthermore, 
major depressive disorder was the most common comorbid condition in a 
study of U.S. suicides, followed by substance use disorder.\393\ 
Individuals with major depressive disorder and another comorbid 
condition (such as a substance use disorder or anxiety disorder) are at 
even greater risk of suicide.\394\ Data from the 2022 NSDUH indicates 
that approximately 8 percent of individuals who have private health 
insurance experienced a major depressive episode in the past year, of 
whom 64 percent received treatment for depression.\395\
---------------------------------------------------------------------------

    \390\ Jan Fawcett, The Neurological Basis of Suicide (2012).
    \391\ Ronald C. Kessler, Patricia Berglund, Olga Demler, Robert 
Jin, Kathleen R. Merikangas, & Ellen E. Walters, Lifetime Prevalence 
and Age-of-Onset Distributions of DSM-IV Disorders in the National 
Comorbidity Survey Replication, 62(6) Arch Gen Psychiatry pp. 593-
602 (2005).
    \392\ Navneet Bains & Sara Abdijadid, Major Depressive Disorder 
(2023).
    \393\ Ian Rockett, Rockett, Ian RH, Shuhui Wang, Yinjuan Lian, & 
Steven Stack, Suicide[hyphen]Associated Comorbidity Among US Males 
and Females: A Multiple Cause-of-Death Analysis, 13(5) Injury 
Prevention pp. 311-315 (2007).
    \394\ Navneet Bains & Sara Abdijadid, Major Depressive Disorder 
(2023).
    \395\ SAMHSA, 2022 National Survey on Drug Use and Health (Nov. 
2023), https://www.samhsa.gov/data/report/2022-nsduh-detailed-tables.

 Table 10--Number of People Diagnosed With a Major Depressive Episode in
                              the Past Year
------------------------------------------------------------------------
                                           2021               2022
------------------------------------------------------------------------
Total:
    All Ages......................         21,553,000         22,475,000
    With Private Health Insurance.         11,750,000         12,551,000
Receiving Treatment for
 Depression:
    All Ages......................         12,932,000         14,088,000
    With Private Health Insurance.          7,540,000          8,240,000
Not Receiving Treatment for
 Depression:
    All Ages......................          8,621,000          8,387,000
    With Private Health Insurance.          4,210,000          4,311,000
------------------------------------------------------------------------
SAMHSA, 2022 National Survey on Drug Use and Health (Nov. 2023), https://www.samhsa.gov/data/report/2022-nsduh-detailed-tables.

    As discussed in Section 6.1.3, MHPAEA has been found to have mixed 
effects on the utilization of mental health services. A 2019 study 
found that, outside of substance use disorder, MHPAEA was not 
associated with an

[[Page 77688]]

increase in new utilization of behavioral healthcare. However, the 
authors did find an increase in the average frequency of monthly 
outpatient services per user.\396\ Critically, increased frequency of 
mental health and OUD treatment utilization have both been associated 
with decreasing risks of mortality from suicide and 
OUD.397 398
---------------------------------------------------------------------------

    \396\ Noah Mulvaney-Day, Brent Gibbons, Shums Alikhan, & Mustafa 
Karakus, Mental Health Parity and Addiction Equity Act and the Use 
of Outpatient Behavioral Health Services in the United States, 2005-
2016, 109(3) American Journal of Public Health pp. 190-196 (2019).
    \397\ Brian K. Ahmedani, Joslyn Westphal, Kirsti Autio, Farah 
Elsiss, Edward L. Peterson, Arne Beck, Beth E. Waitzfelder, Rebecca 
C. Rossom, Ashli A. Owen-Smith, Frances Lynch, Christine Y. Lu, 
Cathrine Frank, Deepak Prabhakar, Jordan M. Braciszewski, Lisa R. 
Miller-Matero, Hsueh-Han Yeh, Yong Hu, Riddhi Doshi, Stephen C. 
Waring, & Gregory E. Simon, Variation in Patterns of Health Care 
Before Suicide: A Population Case-Control Study, 127 Prev Med. 
(2019), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6744956/.
    \398\ Elizabeth Evans, Libo Li, Jeong Min, David Huang, Darren 
Urada, Lei Liu, Yih-Ing Hser, & Bohdan Nosyk, Mortality Among 
Individuals Accessing Pharmacological Treatment for Opioid 
Dependence in California, 2006--2010, 110(6) Addiction pp. 996-1005 
(2015), https://pubmed.ncbi.nlm.nih.gov/25644938/.
---------------------------------------------------------------------------

    The 2019 study also found that the average insurer cost for members 
receiving treatment increased following the passage of MHPAEA. 
According to the study, in September 2015, the last month of data 
considered, MHPAEA was associated with an average insurer cost increase 
of $16.17 for each member receiving treatment for mental health per 
month.\399\
---------------------------------------------------------------------------

    \399\ This is calculated by applying the coefficient estimates 
found in Table 2 of the study that denote the average monthly 
insurer spending per service user. The study includes 129 months of 
data, of which 57 are in the post-period. For month 57, the cost is 
estimated to be $86.64 absent MHPAEA and $102.81 with the 
implementation of MHPAEA. The study estimates that insurer spending 
per service user will continue to increase over time. However, this 
linear trend was established within the sample. The Department 
hesitates to extrapolate the linear trend outside of the sample. 
Additionally, the study does not include overall significant or 
joint significant tests of this regression. (See Noah Mulvaney-Day, 
Brent Gibbons, Shums Alikhan, & Mustafa Karakus, Mental Health 
Parity and Addiction Equity Act and the Use of Outpatient Behavioral 
Health Services in the United States, 2005-2016, 109(3) American 
Journal of Public Health pp. 190-196 (2019).)
---------------------------------------------------------------------------

    For the purposes of this analysis, it is helpful to consider this 
measurement in terms of the increased cost per member with depression, 
regardless of treatment status. To estimate a per-member cost, 
regardless of treatment status, the Departments scaled the estimate by 
the proportion of individuals who had a major depressive episode in 
2015, with private insurance, and who received treatment for 
depression. Applying these assumptions, the Departments estimate that 
in 2015, MHPAEA was associated with a $11.15 increase in average 
monthly insurer spending per member with depression.\400\
---------------------------------------------------------------------------

    \400\ In 2015, 9,257,000 individuals with private insurance had 
a major depressive episode, of which 6,381,000 received treatment 
for depression. (See SAMHSA, Results from the 2015 National Survey 
on Drug use and Health: Detailed Tables (Sept. 2016), https://www.samhsa.gov/data/sites/default/files/NSDUH-DetTabs-2015/NSDUH-DetTabs-2015/NSDUH-DetTabs-2015.pdf.) This represents approximately 
69 percent. As such, the Departments estimate the per-member cost 
increase as: $16.17 per member receiving treatment x 69 percent of 
members with depression receiving treatment = $11.15 per member with 
depression (regardless of treatment status).
---------------------------------------------------------------------------

    The Departments do not have data on per-member per-month costs 
associated with a major depressive illness alone. Based on a 2018 
Milliman report, the Departments estimate that the 2015 per-member per-
month behavioral healthcare cost \401\--including behavioral inpatient, 
outpatient, professional, and prescription drug costs--was $225.10 for 
someone with a serious and persistent mental illness and $116.59 on 
average for someone with any mental illness.\402\ Milliman defines a 
serious and persistent mental illness as someone treated for bipolar 
disorder, major depression, paranoid and other psychotic disorder, or 
schizoaffective disorder. As costs to treat bipolar disorder, psychotic 
disorder, and schizoaffective disorder are likely higher than costs to 
treat major depression, on average, the Departments are of the view 
that the per-member per-month costs represent an overestimate for costs 
to treat major depression. Similarly, the Departments expect that the 
per-member per-month costs to treatment someone with any mental illness 
likely represent an underestimate due to factors such as 
underdiagnosis, comorbidities, and delayed treatments. Additionally, 
the per-member per-month costs may not fully capture indirect costs or 
the cost of out-of-network care, further suggesting that the total 
costs of adequately treating mental illness are likely higher. As such, 
the Departments are of the view that these two measures create a 
reasonable range with regard to major depression.
---------------------------------------------------------------------------

    \401\ This cost estimate is calculated from costs incurred by 
both the participant and the insurer, similar to expenditures used 
elsewhere in this analysis, such as the Medical Expenditure Panel 
Survey Household Component (MEPS-HC).
    \402\ Melek (2018) uses 2015 claims data and apply annual cost 
trends to estimate 2017 values. The report states that they use an 
annual cost trend of 10 percent to behavioral health care and 12 
percent to behavioral prescription costs. For someone with a serious 
and persistent mental illness, the report estimates that the per-
member per-month cost was $119.00 for behavioral health care (i.e. 
behavioral inpatient, outpatient, professional care) and $159.00 for 
behavioral prescriptions, resulting in a total cost of $178.00. The 
weighted average per-member per-month cost of having any mental 
illness, the report estimates a cost of $55.08 for behavioral health 
care and $89.14 for behavioral prescriptions, resulting in a total 
of $142.22. Discounting the behavioral health care and behavioral 
prescription costs by the respective annual cost trend, results in 
an estimate of a per-member per-month cost of $225.10 for someone 
with a serious and persistent mental illness and $116.59 on average 
for someone with any mental illness. (See Stephen Melek, Douglas 
Norris, Jordan Paulus, Katherine Matthews, Alexandra Weaver, & 
Stoddard Davenport, Potential Economic Impact of Integrated Medical-
Behavioral Healthcare, Milliman Research Report (Jan. 2018))
---------------------------------------------------------------------------

    Based on this analysis, the estimated $11.15 increase in monthly 
insurer spending per-member with depression accounts for 5.0 percent of 
the per-member per-month costs for someone with a serious and 
persistent mental illness or 9.6 percent of the average cost for 
someone with any mental illness. In 2021, total expenditures for 
private insurance were $981.2 billion, while total expenditures for 
private insurance for depression were $21.0 billion.\403\ For 
illustrative purposes, if it is assumed that the increase in costs 
associated with MHPAEA had accounted for between 5.0 percent and 9.6 
percent of private insurance expenditures for depression in 2021, this 
would account for between $1.0 billion and $2.0 billion of total 
expenditures for private insurance for depression.\404\
---------------------------------------------------------------------------

    \403\ Agency for Healthcare Research and Quality, Total 
Expenditures ($) in Millions by Condition and Source of Payment, 
United States, 2021, Medical Expenditure Panel Survey.
    \404\ This is estimated as: $21.02 billion x 5.0 percent (9.6 
percent) = $1.0 billion ($2.0 billion).
---------------------------------------------------------------------------

    In their estimate of benefits associated with the prevention of 
suicide fatalities and reduced mortality from the utilization of OUD 
treatments, the Departments assumed that the effect of these final 
rules would be approximately 40 percent of the initial impact from 
MHPAEA. For consistency, applying this proportion to the estimated 
costs, the Departments estimate that these final rules would be 
associated with an increase cost for treatment related to depression 
for private insurers of between $0.42 billion and $0.80 billion in 2021 
dollars or $0.43 billion and $0.84 billion in 2023 dollars.\405\
---------------------------------------------------------------------------

    \405\ The estimates in 2023 dollars are estimated using the 
Consumer Price Index (CPI) medical care cost.
---------------------------------------------------------------------------

    It is important to note that the benefits estimated in section 
IV.7.2 and these cost estimates do not necessarily capture the same 
segment. The benefits related to more frequent treatment of depression 
are more expansive than the estimated benefits in section IV.7.2 that 
only focus on suicide prevention. On the other hand, treatment for 
other types

[[Page 77689]]

of mental health conditions or substance use disorders may also 
contribute to the decreased prevalence of suicides, the cost of which 
is not considered in this illustration.
    Additionally, the Departments estimate that the final rules will 
increase the utilization of substance use disorder services 
(specifically, OUD), resulting in significant benefits arising from 
decreased mortality related to substance use disorders. These benefits 
would arise from approximately 40,000 additional individuals receiving 
treatment each year. As recent research indicates that cost of 
treatment for OUD is approximately $13,500, the Departments estimate 
that the increased service utilization for OUD would result in an 
additional cost of approximately $579 million 
annually.406 407 408
---------------------------------------------------------------------------

    \406\ Mengyao Li, Cora Peterson, Likang Xu, Christina A. Mikosz, 
& Feijun Luo, Medical Costs of Substance Use Disorders in the US 
Employer-Sponsored Insurance Population, 6(1) JAMA Netw Open (2023), 
https://pubmed.ncbi.nlm.nih.gov/36692881/.
    \407\ The OUD treatment cost estimate of $11,871 has been 
adjusted using the CPI for medical care cost to 2023 dollars. See 
Mengyao Li, Cora Peterson, Likang Xu, Christina A. Mikosz, & Feijun 
Luo, Medical Costs of Substance Use Disorders in the US Employer-
Sponsored Insurance Population, 6(1) JAMA Netw Open (2023), https://pubmed.ncbi.nlm.nih.gov/36692881/.
    \408\ $13,448 OUD treatment cost x 43,054 additional persons 
receiving treatment = $578,990,192.
---------------------------------------------------------------------------

9. Transfers
    Achieving parity in coverage of mental health and substance use 
disorder benefits has the potential to change the spending patterns of 
plans and issuers, increase premiums and contributions, 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 final rules will result in:
     transfers from plans and issuers to participants, 
beneficiaries, and enrollees caused by lower out-of-pocket spending;
     transfers from participants, beneficiaries, and enrollees 
to plans and issuers caused by higher premiums; and
     transfers between primary care providers and mental health 
and substance use disorder providers for the treatment of mental health 
and substance use disorders resulting from the anticipated shift of 
participants, beneficiaries, and enrollees choosing to obtain such 
treatment from a specialist instead of a primary care provider.
    The following sections are primarily qualitative discussions of 
transfers that the Departments expect to occur due to these final 
rules. Where possible, the Departments have referenced studies with 
quantitative results that help indicate the potential magnitude of 
these transfers. The Departments requested comment or data in the 
proposal on how large these transfers might be but did not receive any 
comments.
9.1. Transfers From Plans and Issuers to Participants, Beneficiaries, 
and Enrollees Caused by Lower Out-of-Pocket Spending
    As discussed in section IV.7.2 of this regulatory impact analysis, 
these final rules are expected to increase access to mental health and 
substance use disorder treatments by improving plan and issuer 
compliance with the requirements under MHPAEA. This will help ensure 
that NQTLs are no more restrictive for mental health and substance use 
disorder benefits than the predominant limitations applicable to 
substantially all medical/surgical benefits. For individuals who were 
previously prevented from accessing care because it was not covered by 
their plan or coverage in a manner that violated these final rules, 
improved access to treatment is a benefit. However, for individuals who 
previously resorted to out-of-network treatment, expanded coverage of 
treatment--resulting in more access to in-network providers or 
facilities--will result in a transfer from plans and issuers to 
participants, beneficiaries, and enrollees.
    Currently, it is more common for individuals to rely on out-of-
network care for mental health and substance use disorder treatment 
than for medical/surgical treatment. One study found that patients 
received out-of-network care 3.5 times more often for behavioral health 
clinician office visits than for medical and surgical clinician office 
visits (13.4 percent vs. 3.8 percent). Further, the study found that 
when comparing specialist care, patients received out-of-network care 
8.9 times more often for psychiatrist office visits (15.3 percent vs. 
1.7 percent) and 10.6 times more often for psychologist office visits 
(18.2 percent vs. 1.7 percent) than for medical and surgical specialist 
physicians.\409\
---------------------------------------------------------------------------

    \409\ Tami L. Mark & William Parish, Behavioral Health Parity--
Pervasive Disparities in Access to In-Network Care Continue, RTI 
International (Apr. 2024), https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf.
---------------------------------------------------------------------------

    Receiving out-of-network treatment is costly, and research has 
found that mental health parity decreases out-of-pocket spending on 
treatment. For example, a 2013 study that examined the impact of the 
2001 parity directive in the FEHB Program found that annual out-of-
pocket spending for FEHB enrollees diagnosed with bipolar disorder, 
major depression, or adjustment disorder decreased by between $78 and 
$86, roughly between 11 percent and 18 percent of average total out-of-
pocket spending for enrollees with one of these diagnoses, as compared 
to before the parity directive.\410\
---------------------------------------------------------------------------

    \410\ Before the parity directive, average out-of-pocket 
spending was $787 for someone with bipolar disorder, $563 for 
someone with major depression, and $428 for someone with adjustment 
disorder. See Alisa B. Busch, Frank Yoon, Colleen L. Barry, Vanessa 
Azzone, Sharon-Lise T. Normand, Howard H. Goldman, & Haiden A. 
Huskamp, The Effects of Parity on Mental Health and Substance Use 
Disorder Spending and Utilization: Does Diagnosis Matter?, 170(2) 
The American Journal of Psychiatry p. 180 (2013).
---------------------------------------------------------------------------

    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 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 at 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.\411\
---------------------------------------------------------------------------

    \411\ Alene Kennedy-Hendricks, Andrew J. Epstein, Elizabeth A. 
Stuart, Rebecca L. Haffajee, Emma E. McGinty, Alisa B. Busch, Haiden 
A. Huskamp, & Colleen L. Barry, Federal Parity and Spending for 
Mental Illness, 142(2) Pediatrics (2018).
---------------------------------------------------------------------------

    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.\412\ Additionally, a 2017 study that examined expenditures of 
patients receiving behavioral health treatment following the 
implementation of MHPAEA found that the out-of-pocket expenditure for

[[Page 77690]]

patients had decreased and the total expenditure for health plans had 
increased, with no significant impact on health care utilization, 
suggesting that the costs had shifted from patients to health 
plans.\413\
---------------------------------------------------------------------------

    \412\ Rebecca L. Haffajee, Michelle M. Mello, Fang Zhang, Alisa 
B. Busch, Alan M. Zaslavsky, & J. Frank Wharam, Association of 
Federal Mental Health Parity Legislation with Health Care Use and 
Spending Among High Utilizers of Services, 57(4) Medical Care p. 
245.
    \413\ Susan L. Ettner, Jessica M. Harwood, Amber Thalmayer, 
Michael K. Ong, Haiyong Xu, Michael J. Bresolin, Kenneth B. Wells, 
Chi-Hong Tseng, & Francisca Azocar, The Mental Health Parity and 
Addiction Equity Act Evaluation Study: Impact on Specialty 
Behavioral Health Utilization and Expenditures Among ``Carve-Out'' 
Enrollees, 50 Journal of Health Economics pp. 131-143 (2016).
---------------------------------------------------------------------------

    According to the 2019 MEPS-HC, private insurance covered $33.87 
billion of expenditures for treatment of mental health disorders among 
adults ages 18 and older \414\ while all individuals paid $15.62 
billion out-of-pocket.\415\ As discussed throughout this analysis, 
there are many reasons someone might seek care out-of-network or pay 
out-of-pocket for treatment, such as limited coverage from the issuer 
or plan, difficulty finding a network provider, or long wait times to 
see an in-network provider. The Departments acknowledge that these 
final rules will not address all the reasons that individuals pay out-
of-pocket for treatment, and there is significant uncertainty in how 
these final rules will affect out-of-network spending.
---------------------------------------------------------------------------

    \414\ As defined in the MEPS-HC, mental disorders include 
anxiety, depression, bipolar disorder, schizophrenia, obsessive-
compulsive disorder, attention-deficit and/or hyperactivity 
disorder, substance use disorder, and other mental and 
neurodevelopmental illnesses.
    \415\ Anita Soni, Healthcare Expenditures for Treatment of 
Mental Disorders: Estimates for Adults Ages 18 and Older, U.S. 
Civilian Noninstitutionalized Population, 2019, Agency for 
Healthcare Research and Quality, Statistical Brief #539 (Feb. 2022), 
https://meps.ahrq.gov/data_files/publications/st539/stat539.pdf.
---------------------------------------------------------------------------

    Accordingly, the Departments do not know what proportion of total 
out-of-pocket spending experienced in the past will be covered by group 
health plans and health insurance coverage following the applicability 
of these final rules. However, to illustrate the potential scale of 
transfers from participants, beneficiaries, and enrollees to plans 
under this rulemaking, the Departments reference a 2020 study of in-
network versus out-of-network psychotherapy employer-sponsored 
insurance claims which found in-network cost sharing was, on average, 
$24.41 less that out-of-network cost-sharing for psychotherapy 
claims.\416\ Utilizing tabulations from the MEPS-HC on events, such as 
office and outpatient visits for mental, behavioral, or neurological 
conditions, there were 530.7 million of these medical events in 2021 
for individuals 65 and under with private insurance.\417\ Applying the 
initial out-of-network rates of 13.4 percent from the Marsh and Parish 
paper would translate into 71.1 million out-of-network claims, which is 
9 percentage points higher for mental health and substance use 
disorders than for medical/surgical treatments.\418\ It is assumed 
that, under these final rules, the out-of-network utilization rates for 
mental health and substance use disorder benefits fall by just 10 
percent to 12.1 percent of claims, this would still represent a 
transfer from plans and issuers to participants and beneficiaries of 
$168.4 million annually in lower cost-sharing.\419\
---------------------------------------------------------------------------

    \416\ Nicole M. Benson & Zirui Song, Prices and Cost Sharing for 
Psychotherapy In Network Versus Out Of Network in the United States, 
39(7) Health Affairs pp. 1210-1218 (2020).
    \417\ Agency for Healthcare Research and Quality, Number of 
Events in Thousands by Condition and Insurance Coverage, United 
States, 2021, Medical Expenditure Panel Survey, https://datatools.ahrq.gov/meps-hc?tab=medical-conditions&-=17.
    \418\ Tami L. Mark & William Parish, Behavioral Health Parity--
Pervasive Disparities in Access to In-Network Care Continue, RTI 
International (Apr. 2024), https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf.
    \419\ This estimate is calculated as follows: 530.7 million 
medical events x change in share that are out-of-network (13.4 
percent - 12.1 percent) x $24.41 = $168.4 million.
---------------------------------------------------------------------------

9.2. Transfers From Participants, Beneficiaries, and Enrollees to Plans 
and Issuers Caused by Higher Premiums
    These final 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, these final rules might cause plans and issuers to increase 
premiums and change cost-sharing requirements (for example, by raising 
deductibles) to offset these costs. Similarly, plans and issuers might 
reduce the number of NQTLs employed and increase premiums in order to 
offset the costs of participants, beneficiaries, and enrollees 
utilizing more mental health and substance use disorder benefits.
    Many studies attempt to isolate the changes in health costs 
associated with implementing parity requirements. One 2005 study by the 
Society of Actuaries on State mental health parity laws found that 
``overall health care costs increased minimally and in some cases were 
even reduced.'' \420\ As discussed earlier in section IV.8 of this 
regulatory impact analysis, by removing some of the barriers to access 
to mental health and substance use disorder treatments caused by 
existing NQTLs, the Departments expect that the final rules will result 
in increased utilization of mental health and substance use disorder 
services, which could increase costs, including premiums. However, as 
discussed in section IV.7.3 of this regulatory impact analysis, better 
access to mental health and substance use disorder services can lead to 
better health outcomes and prevent costly interventions, which may 
reduce overall health care costs and premiums in the long-term. Thus, 
the Departments anticipate that these final rules will have a minimal 
impact on premiums, but there may be instances in which plans and 
issuers may impose higher premiums.
---------------------------------------------------------------------------

    \420\ Steve Melek, 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.
---------------------------------------------------------------------------

    The Departments requested comments or data on this transfer in the 
proposal. A few commenters stated that the proposal would hinder the 
ability of plans to utilize common medical management techniques that 
improve cost and quality outcomes, such as prior authorization. As a 
result, commenters stated there would be an increase in premiums for 
participants, beneficiaries, and enrollees. However, as discussed 
previously, these final rules do not finalize the substantially all and 
predominant mathematical tests for NQTLs as proposed. The final rules 
also do not eliminate the use of prior authorization or other medical 
management, but the Departments emphasize that they must be designed 
and applied in parity as required by law.
9.3. Transfers Between Primary Care Providers and Mental Health and 
Substance Use Disorder Providers
    These final rules may result in a transfer from primary care 
providers to mental health and substance use disorder providers. More 
specifically, with improved in-network access to mental health and 
substance use disorder providers, patients may be more likely to seek 
treatment from a behavioral health specialist rather than a primary 
care provider.
    For example, 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,

[[Page 77691]]

psychiatrists, and psychologists,'' leading to a shift in the use of 
nonphysician specialists and away from generalist physicians.\421\ 
Further, a 2020 study compared mental health outpatient visits of 
adults in the period between 2008 and 2011 to the period between 2012 
and 2015 using data from the MEPS-HC. Between the two time periods, the 
study found that the percentage of adults who visited only primary care 
non-physicians, such as physician assistants and nurse practitioners, 
increased by about 4 percent, whereas the percentage of adults who 
visited only primary care physicians decreased by about 2 percent.\422\ 
The findings of these papers suggest that the final rules may lead to a 
slight shift in the use of nonphysician specialists, and away from 
generalist physicians.
---------------------------------------------------------------------------

    \421\ John K. McConnell, Samuel HN Gast, & Bentson H. McFarland, 
The Effect of Comprehensive Behavioral Health Parity on Choice of 
Provider, 50(6) Medical Care p. 527.
    \422\ The study did not find a statistically significant change 
in visits to specialty mental health providers. See Hayley D. 
Germack, Coleman Drake, Julie M. Donohue, Ezra Golberstein, & Susan 
H. Busch, National Trends in Outpatient Mental Health Service Use 
Among Adults Between 2008 and 2015, 71 Psychiatric Services 11 pp. 
1127-1135 (2020).
---------------------------------------------------------------------------

9.4. 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 rules implementing the CAA, 2023 provision 
that sunsets the MHPAEA opt-out election for self-funded non-Federal 
governmental plans will have similar effects as the other provisions 
examined in this section IV.9 of the regulatory impact analysis. These 
final rules are generally expected to 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 will lead to lower out-of-pocket 
costs for plan participants and beneficiaries who receive mental health 
or substance use disorder services, which will be a transfer from self-
funded non-Federal governmental plans to participants and 
beneficiaries.
    On the other hand, as noted in section IV.8.2 of this regulatory 
impact analysis, if the final rules 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 may 
increase, which may cause in the number of claims submitted, the number 
of claims paid, and the overall costs incurred by plans to also 
increase. This, in turn, might lead to higher contributions 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 the societal cost presented in section IV.8 of 
this regulatory impact analysis (and who bears it).
10. Uncertainty
    It is unclear what percentage of plans and issuers impose greater 
burdens on mental health and substance use disorder benefits than on 
medical/surgical benefits. This frequency may differ among small and 
large plans and issuers. The Departments' experience in enforcing 
MHPAEA shows that plans and issuers are not in full compliance with 
MHPAEA, although the extent across all plans and issuers is not known. 
As documented in the fiscal year (FY) 2022 MHPAEA Enforcement Fact 
Sheet, DOL closed investigations on 145 health plans, with 86 of them 
subject to MHPAEA, in fiscal year 2022. Of these closed investigations, 
EBSA cited 18 MHPAEA violations in 11 investigations.\423\
---------------------------------------------------------------------------

    \423\ EBSA, FY 2022 MHPAEA Enforcement Fact Sheet, https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2022.
---------------------------------------------------------------------------

    One commenter stated that the new requirements of the comparative 
analyses would require plans to make significant changes to their 
benefits design and NQTL compliance structure, which could result in 
more restrictions on medical/surgical benefits and/or higher premiums. 
The commenter did not provide any data or evidence. The Departments 
note that there is no evidence from previous parity requirements that 
such actions led to the implementation of new NQTLs, particularly to 
medical/surgical benefits, and impacted cost sharing, medical 
management provisions, or medical/surgical coverage.
    There is also the possibility that some plans and issuers will stop 
offering mental health and substance use disorder benefits. In 2010, 2 
percent of employers reported discontinuing their coverage of both 
mental health and substance use disorder treatments or only substance 
use disorder treatments since MHPAEA was passed.\424\ Nevertheless, as 
discussed in section IV.9.1 of this regulatory impact analysis, the 
Departments anticipate that these final rules will expand the level of 
coverage for mental health and substance use disorder benefits, which 
will result in reduced out-of-pocket spending for plan participants, 
beneficiaries, and enrollees.
---------------------------------------------------------------------------

    \424\ GAO, Mental Health and Substance Use: Employers' Insurance 
Coverage Maintained or Enhanced Since Parity Act, but Effect of 
Coverage on Enrollees Varied, GAO-12-63 (Nov. 2011), https://www.gao.gov/assets/gao-12-63.pdf.
---------------------------------------------------------------------------

    Another commenter also stated that the proposed rules would largely 
eliminate behavioral health carve-out vendors as a business model, 
because such vendors would not be able to build networks in complete 
alignment with medical/surgical disorder networks, as required under 
the proposed network composition NQTL rule. In response, the 
Departments note that similar claims--that MHPAEA would eliminate 
behavioral health carve-outs--were made when MHPAEA was first enacted 
in 2008. Furthermore, studies have found that the number of carve-out 
plans have increased since the enactment of MHPAEA. A 2016 study 
examined the impact of MHPAEA on carve-out plans and found that MHPAEA 
``led to a proliferation of plans and heterogeneity in benefit design 
in the post-parity period among employer groups choosing to retain the 
carve-out model for their behavioral health coverage.'' The study also 
found no evidence that carve-out plans dropped coverage altogether for 
behavioral health treatments.\425\ A 2020 study also observing the 
impact of MHPAEA on carve-out plans found that ``post-MHPAEA, the 
number of carve-out plans increased relative to carve-ins'' and that 
MHPAEA was associated with lower copayments and out-of-network 
coinsurance for emergency room and outpatient services. The findings 
suggest that MHPAEA led to more generous benefits for carve-out plans. 
However, the authors also noted an increase in deductibles and in-
network outpatient coinsurance, suggesting that some patients 
experienced higher out-of-pocket costs.\426\ Nevertheless, these 
studies suggest that the purported issues referenced by commenters were 
surmountable.
---------------------------------------------------------------------------

    \425\ Susan L. Ettner, Jessica M. Harwood, Amber Thalmayer, 
Michael K. Ong, Haiyong Xu, & Michael J. Bresolin, The Mental Health 
Parity and Addiction Equity Act Evaluation Study: Impact on 
Specialty Behavioral Health Utilization and Expenditures among 
``Carve-Out'' Enrollees, 50 Journal of Health Economics pp. 131-143 
(2016), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5127782.
    \426\ Sarah Friedman, Haiyong Xu, Francisca Azocar, & Susan L. 
Ettner, Carve-out Plan Financial Requirements Associated with 
National Behavioral Health Parity, 55(6) Health Services Research 
pp. 924-931 (2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7704471/.
---------------------------------------------------------------------------

    Additionally, the Departments note that they are not finalizing the 
proposed

[[Page 77692]]

special rule for NQTLs related to network composition, and are instead 
including language in these final rules to explain how plans and 
issuers are expected to comply with the relevant data evaluation 
requirements with respect to those NQTLs. Under these final rules, 
material differences in access to mental health and substance use 
disorder benefits as compared to medical/surgical benefits (including 
for NQTLs related to network composition) will not be treated as a 
violation; instead, plans and issuers must take reasonable action, as 
necessary, to address any material differences in access to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits, and document those actions in their comparative 
analyses.
    Further, there may be some possible societal spillover effects 
which may occur as a result of these final rules such as improving 
public safety in the long-term from an increase in access to mental 
health and substance use disorder treatments. For example, a 2017 study 
examined the effect of State parity laws for substance use disorder 
treatments on fatal traffic accidents and found that enactment of State 
parity laws were associated with reduced annual total traffic fatality 
rates from 4.1 percent to 5.4 percent.\427\ Furthermore, a 2021 study 
which examined the impact of State parity laws on crime between 1994 
and 2010 found that the enactment of State parity laws was associated 
with a reduction of violent crimes by 5 percent to 7 percent and that 
the resulting lower crime rates were associated with an annual savings 
of $3 billion.\428\ These studies suggest that the benefits of these 
final rules may go beyond the listed benefits discussed in this 
regulatory impact analysis.
---------------------------------------------------------------------------

    \427\ Ioana Popovici, Johanna Catherine Maclean, & Michael T. 
French, The Effects of Health Insurance Parity Laws for Substance 
Use Disorder Treatment on Traffic Fatalities: Evidence of Unintended 
Benefits, National Bureau of Economic Research (2017), https://www.nber.org/system/files/working_papers/w23388/revisions/w23388.rev0.pdf?sy=388.
    \428\ Keshob Sharma, Do Mental Health Parity Laws Reduce Crime?, 
working paper (Nov. 14, 2021).
---------------------------------------------------------------------------

    The Departments face uncertainty in estimating the magnitude of 
savings for participants, beneficiaries, and enrollees. The Departments 
requested comments and data in the proposal related to how the 
Departments may quantify the impact in out-of-pocket spending from 
these rules, but did not receive any comments.
    Additionally, HHS is unable to precisely forecast how many 
participants and beneficiaries will be affected by the 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 opt-out 
filings. See section IV.5.3 of this regulatory impact analysis for 
further discussion on the affected participants and beneficiaries.
    It is possible that some self-funded non-Federal governmental plans 
will stop offering mental health and substance use disorder benefits in 
response to the final rules. 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 provision, to ensure that financial requirements and 
treatment limitations applicable to mental health and substance use 
disorder benefits comply with MHPAEA and its implementing regulations. 
HHS anticipates that this is a less likely outcome of these amendments.
    HHS solicited 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 solicited 
comments on the potential number of participants and beneficiaries that 
might be affected by these potential plan changes. HHS did not receive 
any comments that provided this information.
11. Alternatives
    In addition to the regulatory approach outlined in these final 
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 earlier in 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 before designing and applying NQTLs, in a manner that 
is consistent with MHPAEA's fundamental purpose. While the Departments 
have seen some improvements in response to their reviews of plans' and 
issuers' comparative analyses under the CAA, 2021 requirements, they 
have primarily seen a great deal of confusion about the application of 
the current regulation to NQTLs and about the parity obligation 
generally. Based on the experience with plans' and issuers' attempts to 
comply with the existing regulations and guidance and the CAA, 2021, 
the Departments have concluded that the existing MHPAEA regulations 
failed to sufficiently focus attention on the obligation to ensure that 
NQTLs, and associated processes, strategies, evidentiary standards, and 
other factors avoid placing disparate burdens on participants', 
beneficiaries', and enrollees' access to mental health and substance 
use disorder benefits as compared to medical/surgical benefits. 
Accordingly, the Departments are of the view that these final rules 
will 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 designing and applying NQTLs and 
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 as written, 
in operation, 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 will improve the review of 
plans' and issuers' policies and processes, and improved parity 
outcomes for participants, beneficiaries, and enrollees.
12. Conclusion
    The Departments expect that these final rules will 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 final 
rules will 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

[[Page 77693]]

ultimately result in better health outcomes among those with mental 
health conditions and substance use disorders.

V. Paperwork Reduction Act

1. Paperwork Reduction Act--Departments of Labor and the Treasury

    In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 
U.S.C. 3506(c)(2)(A)), the Departments solicited comments concerning 
the information collection requests (ICRs) included in the proposed 
rules. At the same time, the Departments also submitted ICRs to OMB, in 
accordance with 44 U.S.C. 3507(d).
    The Departments received comments that specifically addressed the 
paperwork burden analysis of the ICRs contained in the proposed rules. 
Many commenters expressed concern that the Departments underestimated 
the burden of collecting the required data, the burden required in 
conducting the substantially all and predominant variation analysis, 
the number of NQTLs that would need to be analyzed for each plan and 
issuer, and the amount of time that it would take to conduct those 
analyses. The Departments reviewed these public comments in developing 
the paperwork burden analysis discussed here.
    The changes made by these final rules affect the existing OMB 
control number, 1210-0138. A copy of the ICR for OMB Control Number 
1210-0138 may be obtained by contacting the PRA addressee listed in the 
following sentence or at www.RegInfo.gov. For additional information 
contact, U.S. Department of Labor, Employee Benefits Security 
Administration, Office of Research and Analysis, Attention: PRA 
Officer, 200 Constitution Avenue NW, Room N-5718, Washington, DC 20210; 
or send to [email protected].
1.1. Final Amendments to Existing MHPAEA Regulations (26 CFR 54.9812-1; 
29 CFR 2590.712)
    These final rules add new definitions, amend existing definitions, 
specify new requirements related to NQTLs, including by prohibiting 
discriminatory factors and evidentiary standards, amend existing 
examples illustrating the rules for NQTLs, and add new examples 
illustrating the rules for NQTLs, providing clarity to interested 
parties. The final rules also specify that the way a plan or issuer 
defines mental health benefits, substance use disorder benefits, and 
medical/surgical benefits must be consistent with generally recognized 
independent standards of current medical practice and add more 
specificity as to what conditions or disorders plans and issuers must 
treat as mental health conditions, substance use disorders, and medical 
conditions and surgical procedures. The final rules also require that 
plans and issuers provide meaningful benefits for covered mental health 
conditions or substance use disorders in each classification in which 
meaningful medical/surgical benefits are provided. Additionally, these 
final rules require plans and issuers to collect and evaluate relevant 
data in a manner reasonably designed to assess the impact of the NQTL 
on relevant outcomes related to access to mental health and substance 
use disorder benefits and medical/surgical benefits. Where the relevant 
data suggest that the NQTL contributes to material differences in 
access to mental health and substance use disorder benefits as compared 
to medical/surgical benefits in a classification, plans and issuers are 
required to take reasonable action, as necessary, to address the 
material differences to ensure compliance, in operation, with 26 CFR 
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). These 
final rules provide guidance for how to comply with the relevant data 
evaluation requirements in limited circumstances where data is 
initially and temporarily unavailable for new and newly imposed NQTLs 
and where no data exists that can reasonably measure any relevant 
impact of the NQTL on relevant outcomes related to access to mental 
health and substance use disorder benefits and medical/surgical 
benefits. In those instances, the plan or issuer must include specific 
information in their comparative analyses, as explained earlier in this 
preamble. However, as explained earlier in this preamble, the 
Departments are of the view that nearly all NQTLs will have some 
relevant data to collect and evaluate; therefore, the Departments 
estimate the burden as if every plan and issuer performs the data 
analysis.
1.2. New Regulation (26 CFR 54.9812-2; 29 CFR 2590.712-1)
    These final 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.
    For the purpose of this analysis, it is assumed that health 
insurance issuers will 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 will fulfill the 
requirements for the vast majority of self-funded group health plans.
1.3. Burden Estimates for Final Rules Requirements
    The final rules will affect self-funded plans and MEWAs. The 
Departments estimate that 709 self-funded plans with 500 or more 
participants will prepare the comparative analysis and data themselves. 
The Departments also estimate that 4,076 self-funded plans with 500 or 
more participants will receive a generic comparative analysis from 
their TPA or other service provider, which they will subsequently 
customize to suit their specific needs. Finally, the Departments 
estimate that 132 plan MEWAs and 21 non-plan MEWAs that are not fully 
insured will provide assistance to plans in collecting and analyzing 
the data, and generating the comparative analyses. For more information 
on how the number of each type of entity is estimated, please refer to 
the Affected Entities section of the regulatory impact analysis.
    Non-grandfathered, fully insured ERISA plans with less than 50 
participants that are subject to MHPAEA under the EHB requirements of 
the ACA 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 in States that substantially fail to enforce 
MHPAEA's requirements and therefore is accounting for this portion of 
the burden in its analysis, in addition to the burden related to non-
Federal governmental plans. Accordingly, this analysis considers only 
the burden associated with ERISA self-funded group health plans, which 
are under the jurisdiction of the DOL and the Treasury.
    These final rules require that a plan or issuer perform and 
document a comparative analysis of each NQTL applicable to mental 
health and substance use disorder benefits. In the proposed rules, the 
Departments estimated that, on average, plans would need to analyze 
four separate NQTLs and issuers would need to analyze eight NQTLs to 
satisfy their additional comparative analysis requirements. The 
Departments further estimated that plans and issuers preparing their 
own comparative analyses would incur a burden of 20 hours per NQTL in 
the first year, with 4 hours for a general or

[[Page 77694]]

operations manager to review the requirements and outline the changes 
needed for the comparative analyses and 16 hours for a business 
operations specialist to prepare the comparative analyses. Once the 
comparative analyses are performed and documented, the Departments 
estimated that plans and 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 as well as medical and surgical benefits. In 
subsequent years, the Departments estimated plans would incur a burden 
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 response to commenters' concerns that the Departments 
underestimated the number of NQTLs that each plan or issuer would need 
to create comparative analyses for, and that plans and issuers would on 
average have the same number NQTLs, the Departments have revised their 
assumptions to 10 NQTLs for both plans and issuers. One commenter 
proposed the average number of NQTLs should be more than 15 at a 
minimum, while another noted that there were at least 15 NQTLs 
referenced in the proposed rules and other guidance. However, given 
that the number of NQTLs vary by issuer and plan, that most plans will 
not have every NQTL referenced in the proposed rules and other guidance 
(although some might have more), and that NQTLs can be counted as an 
umbrella group, the Departments assume 10 NQTLs.
    The Departments assume that collecting the data, and reviewing and 
revising the comparative analyses would require 60 hours per NQTL in 
the first year and 12 hours per NQTL in subsequent years. For plans 
that receive a generic comparative analysis that will require 
customizing to suit the plan's specific needs, the Departments assume 
that it will take 30 hours per NQTL in the first year and 6 hours per 
NQTL in subsequent years. While plans and issuers can use other 
professionals to fulfill their requirements, for purposes of developing 
the wage estimate, the Departments assume that it will take a team of 
data analysts, actuaries, and attorneys to collect the data and prepare 
the comparative analyses and have estimated a composite wage rate of 
$167.48.\429\ See Table 11 for calculations and burden totals.
---------------------------------------------------------------------------

    \429\ The wage rate of an attorney, actuary, and data analyst 
is, respectively, $165.71, $177.11, and $159.61. (Internal DOL 
calculation based on 2024 labor cost data. For a description of 
DOL's methodology for calculating wage rates, see EBSA, Labor Cost 
Inputs Used in the Employee Benefits Security Administration, Office 
of Policy and Research's Regulatory Impact Analyses and Paperwork 
Reduction Act Burden Calculations (June 2019), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.) The composite wage rate is 
estimated in the following manner: [$165.71 x (1 / 3) + $159.61 x (1 
/ 3) x $177.61 x (1 / 3) = $167.48].

           Table 11--Hour Burden to Fulfill the Data Requirements and Prepare the Comparative Analyses
----------------------------------------------------------------------------------------------------------------
                                                           Number of
                                                           hours per
                                 Number of    Number of     NQTL for     Total hour     Hourly   Equivalent cost
                                  entities    NQTLs per     data and       burden        wage     of hour burden
                                                entity    comparative
                                                            analysis
                                        (A)          (B)          (C)     (A x B x C)       (D)   E (A x B x C x
                                                                                                              D)
----------------------------------------------------------------------------------------------------------------
                                                   First Year
----------------------------------------------------------------------------------------------------------------
TPAs..........................          103           10           60          61,800   $167.48      $10,350,264
Self-funded plans with more             709           10           60         425,400    167.48       71,245,992
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded plans with more           4,076           10           30       1,222,800    167.48      204,794,544
 than 500 participants that
 will receive generic
 comparative analyses from
 TPAs or service providers,
 and will then customize it...
Plan MEWAs that are not fully           132           10           60          79,200    167.48       13,264,416
 insured......................
Non-plan MEWAs that are not              21           10           60          12,600    167.48        2,110,248
 fully insured................
                               ---------------------------------------------------------------------------------
    First-year Total..........        5,041  ...........  ...........       1,801,800  ........      301,765,464
----------------------------------------------------------------------------------------------------------------
                                                Subsequent Years
----------------------------------------------------------------------------------------------------------------
TPAs..........................          103           10           12          12,360    167.48        2,070,053
Self-funded plans with more             709           10           12          85,080    167.48       14,249,198
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded plans with more           4,076           10            6         244,560    167.48       40,958,909
 than 500 participants that
 will receive generic
 comparative analyses from
 TPAs or service providers,
 and will then customize it...
Plan MEWAs that are not fully           132           10           12          15,840    167.48        2,652,883
 insured......................
Non-plan MEWAs that are not              21           10           12           2,520    167.48          422,050
 fully insured................
                               ---------------------------------------------------------------------------------
    Subsequent Years Total....        5,041  ...........  ...........         360,360  ........       60,353,093
                               ---------------------------------------------------------------------------------
        Total (3-year average)        5,041  ...........  ...........         840,840  ........      140,823,883
----------------------------------------------------------------------------------------------------------------

    These final rules also require that group health plans offering 
group health insurance coverage must make a comparative analysis 
available upon request by the Departments. The CAA, 2021 requires the 
Departments to collect no fewer than 20 comparative analyses per year, 
but it also provides that the Departments 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 Departments determine appropriate. Based on its prior 
experience and current funding, DOL expects to request 20 comparative 
analyses each year. See Table 12 for calculations and burden totals.

[[Page 77695]]

    These final rules also require plans and issuers to make the 
comparative analyses and other applicable information required by the 
CAA, 2021 available upon request to participants, beneficiaries, and 
enrollees in all non-grandfathered group health plans and non-
grandfathered group or individual health insurance coverage (including 
a provider or other person acting as a participant's, beneficiary's, or 
enrollee's authorized representative) in connection with an adverse 
benefit determination, as well as to participants and beneficiaries in 
plans subject to ERISA. The Departments estimate that each plan will 
receive one request per covered health plan annually and that plans 
will annually incur a burden of 5 minutes for a clerical worker to 
prepare and send the comparative analyses to each requesting 
participant or beneficiary. DOL also assumes that 58.3 percent of 
requests will be delivered electronically, resulting in a de minimis 
cost.\430\ The remaining 41.7 percent of requests will be mailed at a 
cost of $2.79.\431\ See Table 12 for calculations and burden totals.
---------------------------------------------------------------------------

    \430\ According to data from NTIA, 37.4 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 31.4 percent receiving electronic disclosure at work). 
Additionally, the NTIA reports that 44.1 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 26.9 percent receiving 
electronic disclosure outside of work). Combining the 31.4 percent 
who will receive electronic disclosure at work with the 26.9 percent 
who will receive electronic disclosure outside of work produces a 
total of 58.3 percent who will receive electronic disclosure 
overall.
    \431\ The postage for a first-class mail large envelope letter 
is $2.04 and the material cost is $0.05 per page. Thus, $2.04 + 
($0.05 x 15 pages) = $2.79.
---------------------------------------------------------------------------

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 6-year retention requirement. For these 
reasons, the Departments estimate a minimal additional burden. The 
Departments estimate that, on average, any additional recordkeeping 
requirements will take clerical personnel 5 minutes annually. See Table 
12 for calculations and burden totals.

                                                  Table 12--Hour and Cost Burden of Other Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Number of     Total                   Hour        Mailing
                                                                Number of    hours per      hour      Wage     equivalent of   cost per    Cost burden
                                                                 response    responses     burden     rate      cost burden    response
                                                                       (A)          (B)    (A x B)       (C)     (A x B x C)        (D)    (A x D x 41.7
                                                                                                                                                percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Business operations specialists prepare comparative analysis            20            1         20    137.67           2,753          0                0
 for audits..................................................
General operation managers prepare comparative analysis for             20            4         80    114.36           9,149          0                0
 audits......................................................
Clerical workers prepare and distribute comparative analyses     2,129,516        0.083    177,460     65.99      11,710,585       2.79        2,477,543
 upon participant request....................................
Clerical workers maintain recordkeeping......................    2,129,516        0.083    177,460     65.99      11,710,585          0                0
                                                              ------------------------------------------------------------------------------------------
    Total....................................................    2,129,536  ...........    355,020  ........      23,433,073  .........        2,477,543
--------------------------------------------------------------------------------------------------------------------------------------------------------

1.5. Overall Summary
    In summary, the total burden associated with these final rules has 
a 3-year average hour burden of 1,195,860 hours with an equivalent cost 
of $164,256,956 and a cost burden of $2,477,543.
    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: 123,1752.
    Estimated Number of Annual Responses: 123,1752.
    Frequency of Response: Annual.
    Estimated Total Annual Burden Hours: 1,195,860 (597,930 for DOL, 
597,930 for Treasury).
    Estimated Total Annual Burden Cost: $2,477,543 ($1,238,771 for DOL, 
$1,238,771 for Treasury).

2. Paperwork Reduction Act--Department of HHS

    In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 
U.S.C. 3506(c)(2)(A)), the Department solicited comments concerning the 
ICRs included in the proposed rules. At the same time, the Departments 
also submitted ICRs to OMB, in accordance with 44 U.S.C. 3507(d).
    The Departments received comments that specifically addressed the 
paperwork burden analysis of the ICRs contained in the proposed rules. 
Many commenters expressed concern that the Departments underestimated 
the burden of collecting the required data, the burden of conducting 
the substantially all and predominant variation analysis, the number of 
NQTLs that would need to be analyzed for each plan and issuer, and the 
amount of time that it would take to conduct those analyses. The 
Departments reviewed these public comments in developing the paperwork 
burden analysis discussed here.
    The changes made by these final rules affect the existing OMB 
control number, 0938-1393. HHS will update the information collection 
to account for the burden related to the provisions in these final 
rules.
2.1. Final Amendments to Existing MHPAEA Regulations (45 CFR 146.136)
    The amendments to the existing MHPAEA regulations in these final 
rules add new definitions, amend existing definitions, clarify the 
rules for NQTLs, including by prohibiting discriminatory factors and 
evidentiary standards, amend existing examples illustrating the rules 
for NQTLs, and add new examples illustrating the rules for NQTLs, 
providing clarity to the regulated community. The amendments also 
clarify that whether a condition or disorder is defined by the plan or 
issuer as being a mental health condition or a substance use disorder 
for purposes of

[[Page 77696]]

MHPAEA must be consistent with generally recognized independent 
standards of current medical practice. The final rules also require 
that plans and issuers provide meaningful benefits for covered mental 
health conditions or substance use disorders in each classification in 
which meaningful medical/surgical benefits are provided.
    These final rules also require plans and issuers to collect and 
evaluate relevant data in a manner reasonably designed to assess the 
impact of the NQTL on relevant outcomes related to access to mental 
health and substance use disorder benefits and medical/surgical 
benefits. Relevant data for the majority of NQTLs could include, as 
appropriate, but are not limited to, the number and percentage of 
claims denials and any other data relevant to the NQTL required by 
State law or private accreditation standards. Additionally, relevant 
data for NQTLs related to network composition could include, as 
appropriate, but are 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 (for comparable services and as benchmarked to a 
reference standard).
2.2. New Regulations (45 CFR 146.137)
    These final rules set forth 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 an 
applicable State authority upon request.
    These final rules provide guidance for how to comply with the 
relevant data evaluation requirements in limited circumstances where 
data is initially and temporarily unavailable for new and newly imposed 
NQTLs and where no data exists that can reasonably measure any relevant 
impact of the NQTL on relevant outcomes related to access to mental 
health and substance use disorder benefits and medical/surgical 
benefits. In those instances, the plan or issuer must include specific 
information in their comparative analyses, as explained earlier in this 
preamble. In such instances, providing this justification is likely to 
be less expensive than the estimated burden for doing an analysis when 
there is data. However, as explained earlier in this preamble, the 
Departments are of the view that nearly all NQTLs will have some 
relevant data to collect and evaluate; therefore, the Departments 
estimate the burden as if every plan and issuer performs the data 
analysis.
    As discussed 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. HHS is therefore accounting for this portion of the burden 
in its analysis, in addition to accounting for the burden on sponsors 
of self-funded non-Federal governmental plans.
2.3. Burden Estimates for Final Requirements
    These final rules will affect issuers, TPAs, and self-funded non-
Federal governmental plans. Health insurance issuers offering 
individual or group health insurance coverage usually have multiple 
products offered in multiple States. HHS estimates a total of 479 
health insurance companies offering individual or group health 
insurance coverage nationwide, with a total of 1,467 issuers (health 
insurance company/State combinations). In addition, there are an 
estimated 205 TPAs that provide services to group health plans, 
particularly for self-funded plans where TPAs often establish provider 
networks and adjudicate claims, which will be impacted by these final 
rules. Furthermore, sponsors of self-funded non-Federal governmental 
plans will be affected by these final rules. HHS estimates that out of 
the estimated 32,901 self-funded non-Federal governmental plans, 505 
self-funded non-Federal governmental plans with 500 or more 
participants will prepare the comparative analysis and data themselves, 
and 2,906 self-funded non-Federal governmental plans with 500 or more 
participants will receive a generic comparative analysis from their 
TPA, which they will subsequently customize to suit their specific 
needs. For more information on how the number of each type of entity is 
estimated, please refer to section IV.5.2 of the regulatory impact 
analysis.
    These final rules require that a plan or issuer perform and 
document a comparative analysis of each NQTL applicable to mental 
health and substance use disorder benefits. In the proposed rules, the 
Departments estimated that, on average, plans would need to analyze 
four separate NQTLs and issuers would need to analyze eight NQTLs to 
satisfy their additional comparative analysis requirements. The 
Departments further estimated that plans and issuers preparing their 
own comparative analyses would incur a burden of 20 hours per NQTL in 
the first year, with 4 hours for a general or operations manager to 
review the requirements and outline the changes needed for the 
comparative analyses and 16 hours for a business operations specialist 
to prepare the comparative analyses. Once the comparative analyses are 
performed and documented, plans and 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, as well as medical and surgical 
benefits. In subsequent years, the Departments estimated plans would 
incur a burden 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 response to commenters' concerns that the Departments 
underestimated the number of NQTLs that each plan or issuer would need 
to create comparative analyses for, and that plans and issuers would on 
average have the same number NQTLs, the Departments have revised their 
assumptions to 10 NQTLs for both plans and issuers. One commenter 
proposed the average number of NQTLs should be more than 15 at a 
minimum, while another noted that there were at least 15 NQTLs 
referenced in the proposed rules and other guidance. However, because 
the number of NQTLs varies by issuer and plan, most plans will not have 
every NQTL referenced in the rules or guidance (although some might use 
more), and NQTLs can be counted as an umbrella group, the Departments 
assume 10 NQTLs.
    The Departments assume that collecting the data, and reviewing and 
revising the comparative analyses will require 60 hours per NQTL in the 
first year and 12 hours per NQTL in subsequent years. For plan sponsors 
that receive a generic comparative analysis from a TPA that will 
require customizing to suit the plan's specific needs, the Departments 
assume that it will take 30 hours per NQTL in the first year and 6 
hours per NQTL in subsequent years. While plans and issuers can use 
other professionals to fulfill their requirements, for purposes of 
developing the wage estimate, the Departments assume that it will take 
a team of data analysts, actuaries, and attorneys to collect the data 
and prepare the comparative analyses, and have estimated a composite 
wage rate of

[[Page 77697]]

$167.48.\432\ See Table 13 for calculations and burden totals.
---------------------------------------------------------------------------

    \432\ The wage rate of an attorney, actuary, and data analyst 
is, respectively, $165.71, $177.11, and $159.61. (Internal DOL 
calculation based on 2024 labor cost data. For a description of 
DOL's methodology for calculating wage rates, see EBSA, Labor Cost 
Inputs Used in the Employee Benefits Security Administration, Office 
of Policy and Research's Regulatory Impact Analyses and Paperwork 
Reduction Act Burden Calculations (June 2019), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.) The composite wage rate is 
estimated in the following manner: [$165.71 x (1 / 3) + $159.61 x (1 
/ 3) x $177.61 x (1 / 3) = $167.48].

           Table 13--Hour Burden to Fulfill the Data Requirements and Prepare the Comparative Analyses
----------------------------------------------------------------------------------------------------------------
                                                           Number of
                                                           hours per
                                 Number of    Number of     NQTL for     Total hour     Hourly   Equivalent cost
                                  entities    NQTLs per     data and       burden        wage     of hour burden
                                                entity    comparative
                                                            analysis
                                        (A)          (B)          (C)     (A x B x C)       (D)   E (A x B x C x
                                                                                                              D)
----------------------------------------------------------------------------------------------------------------
                                                   First Year
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance             1,467           10           60         880,200   $167.48     $147,415,896
 company/State combinations)..
TPAs..........................          103           10           60          61,800    167.48       10,350,264
Self-funded non-Federal                 505           10           60         303,000    167.48       50,746,440
 governmental plans with more
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded non-Federal               2,906           10           30         871,800    167.48      146,009,064
 governmental plans with more
 than 500 participants that
 will receive a generic
 comparative analysis from
 TPAs or service providers,
 and will then customize it...
                               ---------------------------------------------------------------------------------
    First-year Total..........        4,981  ...........  ...........       2,116,800  ........      354,521,664
----------------------------------------------------------------------------------------------------------------
                                                Subsequent Years
----------------------------------------------------------------------------------------------------------------
Issuers.......................        1,467           10           12         176,040    167.48       29,483,179
TPAs..........................          103           10           12          12,360    167.48        2,070,053
Self-funded non-Federal                 505           10           12          60,600    167.48       10,149,288
 governmental plans with more
 than 500 participants that
 will conduct the comparative
 analysis themselves..........
Self-funded non-Federal               2,906           10            6         174,360    167.48       29,201,813
 governmental plans with more
 than 500 participants that
 will receive a generic
 comparative analysis from
 TPAs or service providers,
 and will then customize it...
                               ---------------------------------------------------------------------------------
    Subsequent Years Total....        4,981  ...........  ...........         423,360  ........       70,904,333
                               ---------------------------------------------------------------------------------
        Total (3-year average)        4,981  ...........  ...........         987,840  ........      165,443,443
----------------------------------------------------------------------------------------------------------------

    These final rules require that plans or issuers make their 
comparative analyses available upon request to the Departments. The 
CAA, 2021 requires the Departments to collect not fewer than 20 
comparative analyses per year, but it also provides that the 
Departments shall request that a 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 Departments determine appropriate. HHS 
expects to request at least 20 comparative analyses each year. See 
Table 14 for calculations and burden totals.
    These final rules also require plans and issuers to make the 
comparative analyses and other applicable information required by the 
CAA, 2021 available upon request to participants, beneficiaries, and 
enrollees in all non-grandfathered group health plans and non-
grandfathered group or individual health insurance coverage (including 
a provider or other person acting as a participant's, beneficiary's, or 
enrollee's authorized representative) in connection with an adverse 
benefit determination, as well as to participants and beneficiaries in 
plans subject to ERISA. HHS estimates that each non-Federal 
governmental plan and each issuer will receive one request annually and 
that plans and issuers will 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. HHS also assumes that 
58.3 percent of requests will be delivered electronically, resulting in 
a de minimis cost.\433\ The remaining 41.7 percent of requests will be 
mailed.\434\ The annual cost burden to mail the comparative analyses to 
the participants and beneficiaries will therefore be approximately 
$107,500. See Table 14 for calculations and burden totals.
---------------------------------------------------------------------------

    \433\ According to data from NTIA, 37.4 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 31.4 percent receiving electronic disclosure at work). 
Additionally, the NTIA reports that 44.1 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 26.9 percent receiving 
electronic disclosure outside of work). Combining the 31.4 percent 
who will receive electronic disclosure at work with the 26.9 percent 
who will receive electronic disclosure outside of work produces a 
total of 58.3 percent who will receive electronic disclosure 
overall.
    \434\ The postage for a first-class mail large envelope is $2.04 
and the material cost is $0.05 per page. Thus, $2.04 + ($0.05 x 15 
pages) = $2.79.
---------------------------------------------------------------------------

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 final rules. HHS estimates that 
each non-Federal governmental plan and issuer will annually incur a 
burden of 5 minutes, on average. See Table 14 for calculations and 
burden totals.
    HHS will revise the information collection approved under OMB 
Control

[[Page 77698]]

Number 0938-1393 to account for this burden.\435\
---------------------------------------------------------------------------

    \435\ CMS-10773, Non-Quantitative Treatment Limitation Analyses 
and Compliance Under MHPAEA.

                                                  Table 14--Hour and Cost Burden of Other Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Number of     Total                   Hour        Mailing
                                                                Number of    hours per      hour      Wage     equivalent of   cost per    Cost burden
                                                                responses     response     burden     rate      cost burden    response
                                                                       (A)          (B)    (A x B)       (C)     (A x B x C)        (D)    (A x D x 41.7
                                                                                                                                                percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Business operations specialists prepare comparative analysis            20            4         80   $114.36          $9,149         $0               $0
 for audits..................................................
General operation managers prepare comparative analysis for             20            1         20    137.67           2,753          0                0
 audits......................................................
Clerical workers prepare comparative analyses upon                  92,354        0.083      7,696     65.99         507,859       2.79          107,477
 participant request.........................................
Clerical workers maintain recordkeeping......................       92,354        0.083      7,696     65.99         507,859          0                0
                                                              ------------------------------------------------------------------------------------------
    Total....................................................       92,374  ...........     15,492  ........       1,027,620  .........          107,477
--------------------------------------------------------------------------------------------------------------------------------------------------------

2.5. ICRs Regarding the Self-Funded Non-Federal Governmental Plan Opt-
Out Provisions (45 CFR 146.180)
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 regulatory amendments to implement a provision in the CAA, 2023 
that sunsets the election option for sponsors of self-funded non-
Federal governmental plans to opt out of requirements under MHPAEA 
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.\436\ HHS estimates that sponsors of 185 plans will no 
longer need to submit a notice to the Federal Government regarding 
their plan's opt-out election. HHS estimates that for each self-funded 
non-Federal governmental plan whose sponsor has elected to opt out of 
the requirements, a compensation and benefits manager will need 15 
minutes annually to fill out and electronically submit the model 
notification form to HHS.\437\ See Table 14 for calculations and cost 
savings.
---------------------------------------------------------------------------

    \436\ 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).
    \437\ This includes the time required by the individual signing 
the certification to conduct a thorough review of the election 
contents.
---------------------------------------------------------------------------

    These amendments also generate cost savings for the Federal 
Government, as HHS will 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 labor rate for the employee 
who completes this task, which includes the locality pay adjustment for 
the area of Washington-Baltimore-Arlington, and the cost of fringe 
benefits and other indirect costs, is $113.04 per hour for a GS-13, 
step 1 employee.\438\ HHS estimates that on average it takes an HHS 
employee 15 minutes to process an opt-out notice submitted by a plan 
sponsor. See Table 15 for calculations and cost savings.
---------------------------------------------------------------------------

    \438\ See Office of Personnel Management, 2024 General Schedule 
(GS) Locality Pay Tables, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2024/DCB_h.pdf.
---------------------------------------------------------------------------

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 regulatory amendments to implement the provision in the CAA, 
2023 that sunsets the election option for sponsors of self-funded non-
Federal governmental plans to opt out of requirements under MHPAEA 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. HHS estimates that sponsors of 185 plans 
will no longer need to prepare and disseminate an opt-out notice to 
plan participants. HHS estimates that for each self-funded non-Federal 
governmental plan whose sponsor has elected to opt out of the 
requirements under MHPAEA, an administrative assistant will need 15 
minutes to develop and update the HHS standardized disclosure statement 
annually. Further, self-funded non-Federal governmental plan sponsors 
will no longer be required to print and mail the opt-out notice to plan 
participants and will therefore no longer incur costs associated with 
this requirement. As noted earlier in section IV.5.2 of the regulatory 
impact analysis, HHS estimates that there are approximately 261 
participants in each self-funded non-Federal governmental plan, and 
therefore approximately 48,285 notices \439\ will no longer have to be 
printed and mailed. See Table 15 for calculations and cost savings.
---------------------------------------------------------------------------

    \439\ This estimate is calculated as follows: 185 plans x 261 
participants per plan on average = 48,285 notices in total.
---------------------------------------------------------------------------

    The burden related to HIPAA opt-outs is currently approved under 
OMB Control Number 0938-0702.\440\ HHS will update the information 
collection to account for this burden reduction.
---------------------------------------------------------------------------

    \440\ CMS-10430, Information Collection Requirements for 
Compliance with Individual and Group Market Reforms under Title 
XXVII of the Public Health Service Act.

[[Page 77699]]



                  Table 15--Cost Savings of Preparing and Distributing Opt-Out Election Notice
----------------------------------------------------------------------------------------------------------------
                                               Number of                               Mailing
                                  Number of    hours per    Total hour   Wage rate     cost per    Cost savings
                                  responses      entity       burden                   response
                                         (A)          (B)      (A x B)          (C)          (D)  (A x B x C) or
                                                                                                         (A x D)
----------------------------------------------------------------------------------------------------------------
General operation managers               185         0.25           46      $131.14  ...........          $6,032
 preparing and processing of
 opt-out election notice to
 Federal Government............
Clerical workers preparing and           185         0.25           46        42.58  ...........           1,959
 processing of opt-out election
 notice to plan participants...
Clerical workers distributing         48,285  ...........  ...........  ...........        $0.05           2,414
 opt-out election notice to
 plan participants.............
                                --------------------------------------------------------------------------------
    Total......................       48,470  ...........           92  ...........  ...........          10,405
----------------------------------------------------------------------------------------------------------------

2.6. Overall Summary
    In summary, the total new burden imposed by these final rules 
regarding NQTL comparative analyses and compliance, has a 3-year 
average hour burden of approximately 1,003,332 hours with an equivalent 
cost of approximately $166,471,063 and a total cost burden of 
approximately $107,447. The final amendments to implement the CAA, 2023 
provision that sunsets the MHPAEA opt-out election for sponsors of 
self-funded non-Federal governmental plans will result in an annual 
burden reduction of approximately 92 hours with an equivalent annual 
cost savings of approximately $7,991 and total cost savings of 
approximately $10,405.
    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: 92,457.
    Estimated Number of Annual Responses: 189,709.
    Frequency of Response: Annual.
    Estimated Total Annual Burden Hours: 1,003,332.
    Estimated Total Annual Burden Cost: $107,447.
    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: ($2,414).

    Note:  Numbers in parentheses denote a burden reduction.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \441\ 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 and are likely to have a significant economic impact on a 
substantial number of small entities. Unless the head of an agency 
determines that a final rule is not likely to have a significant 
economic impact on a substantial number of small entities, section 604 
\442\ of the RFA requires the agency to present a final regulatory 
flexibility analysis of these final rules.
---------------------------------------------------------------------------

    \441\ 5 U.S.C. 601 et seq. (1980).
    \442\ 5 U.S.C. 604 (1980).
---------------------------------------------------------------------------

    The Departments certify that these final rules will not have a 
significant impact on a substantial number of small entities. The 
Departments have prepared the following justification for this 
determination.

1. Need for and Objectives of the Rule

    As documented in the 2022 MHPAEA Report to Congress and the 2023 
MHPAEA Comparative Analysis Report to Congress,\443\ the Departments 
found that none of the NQTL comparative analyses they reviewed upon 
initial receipt contained sufficient information and documentation.
---------------------------------------------------------------------------

    \443\ 2022 MHPAEA Report to Congress, 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 Comparative Analysis Report to 
Congress, www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------

    These final rules clarify existing definitions, add new definitions 
of key terms, 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 final rules also clarify 
that plan and issuer definitions of conditions or disorders as mental 
health conditions and substance use disorders must be consistent with 
generally recognized independent standards of current medical practice 
and add more specificity as to what plans and issuers must treat as 
mental health conditions or substance use disorders. The final rules 
also require that plans and issuers must provide meaningful benefits 
for covered mental health conditions or substance use disorders in each 
such classification in which medical/surgical benefits are provided. 
These final rules also require plans and issuers to 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. Relevant data for the 
majority of NQTLs could include, as appropriate, but are not limited 
to, the number and percentage of claims denials and any other data 
relevant to the NQTL as required by State law or private accreditation 
standards. Additionally, for NQTLs related to network composition, 
relevant data could include, as appropriate, but are 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 (for comparable services and as 
benchmarked to a reference standard). Under these final rules, the 
Departments may specify the type, form, and manner for the relevant 
data evaluation requirements in future guidance, which will allow the 
Departments to adjust the data requirements as needed to account for 
enforcement experience and industry trends.
    These final rules also set more specific content requirements for

[[Page 77700]]

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.
    The Departments expect that these final rules will result in plans 
and issuers having a better understanding of the MHPAEA requirements 
for NQTLs. These final rules will also improve the manner in which 
parity is measured, compared, and demonstrated by plans and issuers. 
The Departments are of the view that these final rules will improve the 
compliance of plans and issuers with these requirements, resulting in 
greater parity in access to benefits for mental health conditions and 
substance use disorders as compared with medical/surgical benefits, as 
intended by MHPAEA.
    Additionally, in these final rules, HHS finalizes regulatory 
amendments to implement a provision in the CAA, 2023 that sunsets the 
election option for sponsors of self-funded non-Federal governmental 
plans to opt out of requirements under MHPAEA. HHS is of the view that 
these regulatory amendments will ultimately increase access to mental 
health and substance use disorder services, and increase parity of 
benefits for such services as compared to benefits for medical/surgical 
services by requiring self-funded non-Federal governmental plans that 
had previously opted out to come into compliance with the requirements 
under MHPAEA.

2. Affected Small Entities

    For purposes of analysis under the RFA, the Departments consider 
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 of Labor may also provide for 
exemptions or simplified annual reporting and disclosure for welfare 
benefit plans. Under 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 are of the view that 
assessing the impact of these final 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 the definition of small business based on size 
standards (revenue or number of employees) issued by the Small Business 
Administration (SBA) under the Small Business Act.
    As discussed in section IV.5.2 of the regulatory impact analysis, 
these final rules will affect nearly all small ERISA-covered group 
health plans, including fully insured group health plans and self-
funded group health plans, as well as small health insurance issuers 
and non-Federal governmental plans. The Departments estimate that these 
final rules will affect approximately 106,000 fully insured plans with 
50 to 100 participants,\444\ and approximately 1,719,000 fully insured, 
non-grandfathered plans with less than 50 participants.\445\
---------------------------------------------------------------------------

    \444\ The Departments estimate that there are 140,998 ERISA-
covered group health plans with 50 to 100 participants based on the 
MEPS-IC and the 2020 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 these same data. Thus, the 
Departments have calculated the number of fully insured plans with 
50 to 100 participants in the following manner: 140,998 ERISA-
covered group health plans with 50 to 100 participants x 75 percent 
= 105,749.
    \445\ The Departments estimate that there are 2,465,483 ERISA-
covered group health plans with less than 50 participants based on 
data from the 2022 MEPS-IC and the 2020 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 2022 MEPS-IC. The 2020 KFF 
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 percent 
(100 percent-16 percent). KFF, 2020 Employer Health Benefits Survey 
(Oct. 8, 2020), 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: 2,465,483 small 
ERISA-covered group health plans x 83 percent x 84 percent = 
1,718,935.
---------------------------------------------------------------------------

    The Departments also estimate that approximately 25,300 self-funded 
plans with less than 100 participants will be affected by these final 
rules.\446\ Additionally, the Departments estimate that approximately 
18,000 self-funded non-Federal governmental plans with less than 100 
participants will also be affected by these final rules.\447\ The 
Departments assume that these small, self-funded plans will receive 
assistance with the comparative analyses and data requirements from 
TPAs or other service providers involved with the plan. Due to many 
small plans using identical insurance products, these small plans are 
not expected to be significantly impacted as costs are spread across 
many small plans.
---------------------------------------------------------------------------

    \446\ Estimates based on the 2021 Form 5500 data.
    \447\ Based on the 2022 Census of Governments, there are 90,887 
non-Federal governmental plans. Based on the 2022 MEPS-IC, the 
Departments estimate that 36.2 percent of non-Federal governmental 
plans are self-funded Thus, 90,887 plans x 36.2 percent = 32,901 
self-funded non-Federal governmental plans. Based on the 2021 Form 
5500 data, the Departments estimate that 54.6 percent of self-funded 
health plans with less than 100 participants have filed the Form 
5500. The Departments use the percent of self-funded health plans 
with less than 100 participants that have filed a Form 5500 as a 
proxy for the percent of self-funded non-Federal governmental plans 
with less than 100 participants. Thus, 32,901 self-funded non-
Federal governmental plans x 54.6 percent = 17,964 self-funded non-
Federal governmental plans with less than 100 participants.
---------------------------------------------------------------------------

    As discussed in section IV.5.1 of the regulatory impact analysis, 
these final rules will also affect health insurance issuers. The 
Departments estimate that these final rules will affect 479 health 
insurance companies nationwide that provide mental health and substance 
use disorder benefits in the group and individual health insurance 
markets, with a total of 1,467 issuers (health insurance company/State 
combinations).\448\
---------------------------------------------------------------------------

    \448\ The Departments' estimate of the number of health 
insurance issuers are based on MLR reports submitted by issuers for 
the 2022 reporting year. CMS, Medical Loss Ratio Data and System 
Resources (2022), https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
---------------------------------------------------------------------------

    Health insurance companies 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.\449\ The Departments 
expect that few, if any, health insurance companies underwriting health 
insurance policies fall below these size thresholds. Based on data from 
MLR annual report submissions for the 2022 MLR reporting year, 
approximately 87 out of 487 health insurance companies (of which 479 
are impacted by these final rules) had total premium revenue of $47 
million or less.\450\ However, it should be noted that at least 76 
percent of these small companies belong to larger holding groups that 
may not be small, and many,

[[Page 77701]]

if not all, of these companies are likely to have non-health lines of 
business that would result in their revenues exceeding $47 million.
---------------------------------------------------------------------------

    \449\ SBA, Table of Size Standards, https://www.sba.gov/document/support--table-size-standards, as of March 2023.
    \450\ CMS, Medical Loss Ratio Data and System Resources (2022), 
https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------

    The amendments to implement the CAA, 2023 provision that sunsets 
the MHPAEA opt-out election will affect sponsors of self-funded non-
Federal governmental plans, some of which might be small entities. As 
noted in section IV.8.4 of the regulatory impact analysis, 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 solicited comments in the proposal on the number of small 
entities that would be impacted by the implementation of the sunset 
provision and the potential effects on small entities. HHS did not 
receive any comments on these estimates.
2.1. Amendments to Existing MHPAEA Regulation (26 CFR 54.9812-1, 29 CFR 
2590.712, and 45 CFR 146.136)
    These final rules clarify existing definitions, add new 
definitions, generally ensure that the NQTLs applicable to mental 
health and substance use disorder benefits are generally no more 
restrictive than the predominant NQTLs applied to substantially all 
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. These final rules 
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 add more 
specificity as to what plans and issuers must define as mental health 
conditions or substance use disorders. The final rules also require 
that plans and issuers must provide meaningful benefits for covered 
mental health conditions or substance use disorders in each 
classification in which medical/surgical benefits are provided. These 
final rules also require plans and issuers to collect and evaluate 
relevant data and include an analysis of the data as part of each 
comparative analysis. The Departments are of the view that plans and 
issuers will incur costs in collecting, preparing, and analyzing the 
data.
    The Departments are of the view that the final 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 services 
may see the largest increase in utilization.
2.2. New Regulations (26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 
146.137 and 146.180)
    These final rules codify existing guidance, set more specific 
content requirements for comparative analyses required by the CAA, 
2021, and outline the timeframes and process for plans and issuers to 
provide their comparative analyses to the Departments upon request. 
Participants and beneficiaries in ERISA plans may also request a copy 
of comparative analyses at any time, and all participants, 
beneficiaries, and enrollees may request a comparative analysis in 
connection with an adverse benefit determination. Additionally, in 
these final rules, HHS finalizes 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 TPAs, MEWAs, 
issuers, and self-funded group health plans, most if not all of which 
are large entities, will conduct the comparative analysis themselves 
will incur an incremental per-entity cost of approximately $101,600 
associated with these final rules. The Departments also estimate an 
incremental per-entity cost of $51,300 in the first year for self-
funded group health plans that will receive a generic comparative 
analysis from their TPA or other service provider and subsequently will 
customize to suit their specific needs.
    In the subsequent years, the Departments estimate that TPAs, MEWAs, 
issuers, and self-funded group health plans that will conduct the 
comparative analysis themselves, will incur an incremental per-entity 
cost of approximately $20,100 associated with these final rules and 
amendments. The Departments also estimate an incremental per-entity 
cost of $10,100 in subsequent years for self-funded group health plans 
that will receive a generic comparative analysis from their TPA or 
other service provider and subsequently will customize it to suit their 
specific needs.
    The Departments note that these per-entity costs are average costs, 
and these costs are expected to vary by plan or issuer depending on the 
number of NQTL analyses performed.

3. Comment Summary

    In the proposal, commenters expressed concerns that the Departments 
underestimated the burden of collecting the required data and 
performing the comparative analyses. One commenter stated that small 
plans lack access to aggregated claims data. The same commenter 
suggested that the proposal was burdensome, since it required 
information that was beyond the possession of small plans. The 
commenter contended that small employers may decide to stop offering 
health coverage altogether in favor of having their employees purchase 
their own individual health insurance coverage through the ACA 
Exchange, stating that the penalties under the ACA for employers not 
offering coverage may be preferable compared to the costly requirements 
under the proposal. The Departments note that there are no such 
penalties that apply to small employers. The commenter also did not 
provide any data or evidence.
    Another commenter stated that there is a limited market of vendors 
for conducting the comparative analyses, mentioning that these services 
could cost upwards of $100,000. The same commenter expressed concern 
that the proposal's comparative analysis requirements would 
disproportionately consume the health benefits budget of plan sponsors, 
potentially causing small employers to discontinue offering mental 
health and substance use disorder benefits. The Departments note that 
while there is a possibility that some plans and issuers will stop 
offering mental health and substance use disorder benefits, the 
Departments anticipate that these final rules will expand the level of 
coverage for mental health and substance use disorder benefits, which 
will result in reduced out-of-pocket spending for plan participants, 
beneficiaries, and enrollees. The Departments also note that the 
commenter did not cite any data or evidence.
    Furthermore, another commenter was concerned that the proposal 
would disrupt the operations of plans, by forcing plans to change their 
network composition and eliminate the use of common medical management 
techniques. The same commenter stated that the burden would fall on 
small plans, since they may have insufficient resources to cope with 
this unanticipated cost burden. The commenter did not provide any data 
or evidence to support these assertions. As discussed earlier in this 
preamble, these final rules do not eliminate the use of prior 
authorization or other medical

[[Page 77702]]

management techniques, but emphasize that they must be developed and 
used in parity as required by law.
    Finally, the Departments did not receive any comments from the 
Chief Counsel for Advocacy of SBA.

4. Duplicate, Overlapping, or Relevant Federal Rules

    There are no duplicate, overlapping, or relevant Federal rules.

VII. Special Analyses--Department of the Treasury

    Under the Memorandum of Agreement, Review of Treasury Regulations 
under Executive Order 12866 (June 9, 2023), tax regulatory actions 
issued by the Internal Revenue Service (IRS) are not subject to the 
requirements of section 6 of Executive Order 12866, as amended. 
Therefore, a regulatory impact analysis is not required. As required by 
section 7805(f) of the Code, these regulations were submitted to the 
Chief Counsel for Advocacy of SBA for comment on their impact on small 
business.

VIII. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
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 one year by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector.\451\ For purposes of the UMRA, this rulemaking is 
expected to have such an impact. For the purposes of this rulemaking, 
the regulatory impact analysis shall meet the UMRA obligations.
---------------------------------------------------------------------------

    \451\ 2 U.S.C. 1501 et seq. (1995).
---------------------------------------------------------------------------

IX. 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.\452\ 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 final 
rules.
---------------------------------------------------------------------------

    \452\ Federalism, 64 FR 153 (Aug. 4, 1999).
---------------------------------------------------------------------------

    In the Departments' view, these final rules have federalism 
implications because they will 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 final rules could also have federalism implications 
because the Departments remove the reference to State guidelines in the 
definitions of medical/surgical benefits, mental health benefits, and 
substance use disorder benefits, and amend these definitions to provide 
that any condition or procedure defined by the plan or coverage as 
being or not being a mental health condition or substance use disorder, 
respectively, must be defined to be consistent with generally 
recognized independent standards of current medical practice, which for 
purposes of these final rules are all conditions or disorders under the 
relevant chapters of the ICD or DSM. Finally, these final rules have 
federalism implications because the implementation of the CAA, 2023 
provision that sunsets the election option for sponsors of self-funded 
non-Federal governmental plans to opt out of requirements under MHPAEA 
will require State and local government sponsors of self-funded non-
Federal governmental 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 Conf. Rep. No. 104-736, pg. 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 final 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.

X. Congressional Review Act

    In accordance with Subtitle E of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (also known as the Congressional 
Review Act, 5 U.S.C. 801 et seq.), OIRA has determined that this rule 
meets the criteria set forth in 5 U.S.C. 804(2). Accordingly, a report 
containing a copy of the rule along with other specified information 
has been submitted to each House of the Congress and to the Comptroller 
General.

List of Subjects

26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

29 CFR Part 2590

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

[[Page 77703]]

and recordkeeping requirements, Sex discrimination.

Douglas W. O'Donnell,
Deputy Commissioner, Internal Revenue Service.
Aviva Aron-Dine,
Acting Assistant Secretary (Tax Policy), Department of the Treasury.
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

26 CFR Part 54

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

PART 54--PENSION EXCISE TAXES

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

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


0
Par. 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), (c)(2)(ii)(A) 
introductory text, (c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
0
d. In paragraph (c)(3)(iii), adding introductory text;
0
e. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4), 
(d)(3), (e)(4), and (i)(1); and
0
f. 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 
aggregate 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 in the same classification, 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 or substance use disorder 
benefits under the plan than they impose on access to medical/surgical 
benefits in the same classification of 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 as of November 22, 
2024, is the Diagnostic and Statistical Manual of Mental Disorders, 
Fifth Edition, Text Revision published in March 2022. A subsequent 
version of the DSM published after November 22, 2024, will be 
considered the most current version beginning on the first day of the 
plan year that is one year after the date the subsequent version is 
published.
    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 as of November 22, 
2024, is the International Classification of Diseases, 10th Revision, 
Clinical Modification adopted for the period beginning on October 1, 
2015. Any subsequent version of the ICD adopted through 45 CFR 162.1002 
after November 22, 2024, will be considered the most current version 
beginning on the first day of the plan year that is one year after the 
date the subsequent version is adopted.
    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

[[Page 77704]]

preceding sentence, any condition or procedure defined by the plan 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 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. Examples of 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 that are used to determine when and how a participant or 
beneficiary may access certain services; and the development and 
approval of a treatment plan used in a concurrent review process to 
determine whether a specific request should be granted or denied. 
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 the degree of 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; the method of determining whether and how to deviate from 
generally accepted standards of care in concurrent reviews; the 
selection of information deemed reasonably necessary to make medical 
necessity determinations; reliance on treatment guidelines or 
guidelines provided by third-party organizations in the design of a 
nonquantitative treatment limitation; and rationales used in selecting 
and adopting certain threshold amounts to apply a nonquantitative 
treatment limitation, professional standards and protocols to determine 
utilization management standards, and fee schedules used to determine 
provider reimbursement rates, used as part of a nonquantitative 
treatment limitation. Strategies also include the method of creating 
and determining the 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 methods for making 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 (such as 
standards related to network composition), which otherwise limit the 
scope or duration of benefits for treatment under a plan. (See 
paragraph (c)(4)(ii) 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

[[Page 77705]]

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)(ii) 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 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), it must provide meaningful 
benefits for that mental health condition or substance use disorder in 
every classification in which medical/surgical benefits are provided. 
For purposes of this paragraph (c)(2)(ii)(A), whether the benefits 
provided are meaningful benefits is determined in comparison to the 
benefits provided for medical conditions and surgical procedures in the 
classification and requires, at a minimum, coverage of benefits for 
that condition or disorder in each classification in which the plan 
provides benefits for one or more medical conditions or surgical 
procedures. A plan does not provide meaningful benefits under this 
paragraph (c)(2)(ii)(A) unless it provides benefits for a core 
treatment for that condition or disorder in each classification in 
which the plan provides benefits for a core treatment for one or more 
medical conditions or surgical procedures. For purposes of this 
paragraph (c)(2)(ii)(A), a core treatment for a condition or disorder 
is a standard treatment or course of treatment, therapy, service, or 
intervention indicated by generally recognized independent standards of 
current medical practice. If there is no core treatment for a covered 
mental health condition or substance use disorder with respect to a 
classification, the plan is not required to provide benefits for a core 
treatment for such condition or disorder in that classification (but 
must provide benefits for such condition or disorder in every 
classification in which medical/surgical benefits are provided). 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) Examples. The rules of this paragraph (c)(2)(ii) 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. With regard to the examples in this paragraph 
(c)(2)(ii)(C), references to any particular core treatment are included 
for illustrative purposes only. Plans must consult generally recognized 
independent standards of current medical practice to determine the 
applicable core treatment, therapy, service, or intervention for any 
covered condition or disorder.

    (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 covers treatment for autism 
spectrum disorder (ASD), a mental health condition, and covers 
outpatient, out-of-network developmental

[[Page 77706]]

screenings for ASD but excludes all other benefits for outpatient 
treatment for ASD, including applied behavior analysis (ABA) 
therapy, when provided on an out-of-network basis. The plan 
generally covers the full range of outpatient treatments (including 
core treatments) and treatment settings for medical conditions and 
surgical procedures when provided on an out-of-network basis. Under 
the generally recognized independent standards of current medical 
practice consulted by the plan, developmental screenings alone do 
not constitute a core treatment for ASD.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5), 
the plan violates the rules of this paragraph (c)(2)(ii). Although 
the plan covers benefits for ASD, in the outpatient, out-of-network 
classification, it only covers developmental screenings, so it does 
not cover a core treatment for ASD in the classification. Because 
the plan generally covers the full range of medical/surgical 
benefits including a core treatment for one or more medical 
conditions or surgical procedures in the classification, it fails to 
provide meaningful benefits for treatment of ASD in the 
classification.
    (6) Example 6--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(5) of this section (Example 5), except that the plan 
is an HMO that does not cover the full range of medical/surgical 
benefits, including a core treatment for any medical conditions or 
surgical procedures in the outpatient, out-of-network classification 
(except as required under Code sections 9816 and 9817), but covers 
benefits for medical conditions and surgical procedures in the 
inpatient, in-network; outpatient, in-network; emergency care; and 
prescription drug classifications.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
Because the plan does not provide meaningful benefits, including for 
a core treatment for any medical condition or surgical procedure in 
the outpatient, out-of-network classification (except as required 
under Code sections 9816 and 9817), the plan is not required to 
provide meaningful benefits for any mental health conditions or 
substance use disorders in that classification. Nevertheless, the 
plan must provide meaningful benefits for each mental health 
condition and substance use disorder for which the plan provides 
benefits in every classification in which meaningful medical/
surgical benefits are provided, as required under paragraph 
(c)(2)(ii)(A) of this section. This example does not address whether 
the plan has complied with other applicable requirements of this 
section in excluding coverage of ABA therapy in the outpatient, out-
of-network classification.
    (7) Example 7--(i) Facts. A plan provides extensive benefits, 
including for core treatments for many medical conditions and 
surgical procedures in the outpatient, in-network classification, 
including nutrition counseling for diabetes and obesity. The plan 
also generally covers diagnosis and treatment for eating disorders, 
which are mental health conditions, including coverage for nutrition 
counseling to treat eating disorders in the outpatient, in-network 
classification. Nutrition counseling is a core treatment for eating 
disorders, in accordance with generally recognized independent 
standards of current medical practice consulted by the plan.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(7) (Example 7), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
The coverage of diagnosis and treatment for eating disorders, 
including nutrition counseling, in the outpatient, in-network 
classification results in the plan providing meaningful benefits for 
the treatment of eating disorders in the classification, as 
determined in comparison to the benefits provided for medical 
conditions or surgical procedures in the classification.
    (8) Example 8--(i) Facts. A plan provides extensive benefits for 
the core treatments for many medical conditions and surgical 
procedures in the outpatient, in-network and prescription drug 
classifications. The plan provides coverage for diagnosis and 
treatment for opioid use disorder, a substance use disorder, in the 
outpatient, in-network classification, by covering counseling and 
behavioral therapies and, in the prescription drug classification, 
by covering medications to treat opioid use disorder (MOUD). 
Counseling and behavioral therapies and MOUD, in combination, are 
one of the core treatments for opioid use disorder, in accordance 
with generally recognized independent standards of current medical 
practice consulted by the plan.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(8) (Example 8), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
The coverage of counseling and behavioral therapies and MOUD, in 
combination, in the outpatient, in-network classification and 
prescription drug classification, respectively, results in the plan 
providing meaningful benefits for the treatment of opioid use 
disorder in the outpatient, in-network and prescription drug 
classifications.

    (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. The rules of this paragraph 
(c)(3)(i)(D) 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,

[[Page 77707]]

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     N/A............  12.5% (100x/800x)...  56.25% (450x/800x)..  12.5% (100x/800x)..  18.75% (150x/800x).
 level.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (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 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).

[[Page 77708]]



                                      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 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. Consistent with 
paragraph (a)(1) of this section, a group health plan may not impose 
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 that applies to substantially all 
medical/surgical benefits in the same classification. For purposes of 
this paragraph (c)(4), a nonquantitative treatment limitation is more 
restrictive than the predominant nonquantitative treatment limitation 
that applies to substantially all medical/surgical benefits in the same 
classification if the plan fails to meet the requirements of paragraph 
(c)(4)(i) or (iii) of this section. In such a case, the plan will be 
considered to violate Code section 9812(a)(3)(A)(ii), and the 
nonquantitative treatment limitation may not be imposed by the plan 
with respect to mental health or substance use disorder benefits in the 
classification.
    (i) Requirements related to design and application of a 
nonquantitative treatment limitation--(A) In general. 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)(i)(A) of this section, a plan may not rely upon 
discriminatory factors or evidentiary standards to design a 
nonquantitative treatment limitation to be imposed on mental health or 
substance use disorder benefits. A factor or evidentiary standard is 
discriminatory if the information, evidence, sources, or standards on 
which the factor or evidentiary standard are based are biased or not 
objective in a manner that discriminates against mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits.
    (1) Information, evidence, sources, or standards are considered to 
be biased or not objective in a manner that discriminates against 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits if, based on all the relevant facts and 
circumstances, the information, evidence, sources, or standards 
systematically disfavor access or are specifically designed to disfavor 
access to mental health or substance use disorder benefits as compared 
to medical/surgical benefits. For purposes of this paragraph 
(c)(4)(i)(B)(1), relevant facts and circumstances may include, but are 
not limited to, the reliability of the source of the information, 
evidence, sources, or standards, including any underlying data; the 
independence of the information, evidence, sources, and standards 
relied upon; the analyses and methodologies employed to select the 
information and the consistency of their application; and any known 
safeguards deployed to prevent reliance on skewed data or metrics. 
Information, evidence,

[[Page 77709]]

sources, or standards are not considered biased or not objective for 
this purpose if the plan has taken the steps necessary to correct, 
cure, or supplement any information, evidence, sources, or standards 
that would have been biased or not objective in the absence of such 
steps.
    (2) For purposes of this paragraph (c)(4)(i)(B), historical plan 
data or other historical information from a time when the plan was not 
subject to Code section 9812 or was not in compliance with Code section 
9812 are considered to be biased or not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits, if the historical plan data 
or other historical information systematically disfavor access or are 
specifically designed to disfavor access to mental health or substance 
use disorder benefits as compared to medical/surgical benefits, and the 
plan has not taken the steps necessary to correct, cure, or supplement 
the data or information.
    (3) For purposes of this paragraph (c)(4)(i)(B), generally 
recognized independent professional medical or clinical standards and 
carefully circumscribed measures reasonably and appropriately designed 
to detect or prevent and prove fraud and abuse that minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits are not information, evidence, sources, or 
standards that are biased or not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits. However, plans must comply 
with the other requirements in this paragraph (c)(4), as applicable, 
with respect to such standards or measures that are used as the basis 
for a factor or evidentiary standard used to design or apply a 
nonquantitative treatment limitation.
    (ii) 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.
    (iii) Required use of outcomes data--(A) In general. To ensure that 
a nonquantitative treatment limitation applicable to mental health or 
substance use disorder benefits in a classification, in operation, is 
no more restrictive than the predominant nonquantitative treatment 
limitation applied to substantially all medical/surgical benefits in 
the classification, a plan must collect and evaluate relevant data in a 
manner reasonably designed to assess the impact of the nonquantitative 
treatment limitation on relevant outcomes related to access to mental 
health and substance use disorder benefits and medical/surgical 
benefits and carefully consider the impact as part of the plan's 
evaluation. As part of its evaluation, the plan may not disregard 
relevant outcomes data that it knows or reasonably should know suggest 
that a nonquantitative treatment limitation is associated with material 
differences in access to mental health or substance use disorder 
benefits as compared to medical/surgical benefits. The Secretary, 
jointly with the Secretary 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)(iii)(A).
    (1) Relevant data generally. For purposes of this paragraph 
(c)(4)(iii)(A), relevant data could include, as appropriate, but are 
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) Relevant data for nonquantitative treatment limitations related 
to network composition. In addition to the relevant data set forth in 
paragraph (c)(4)(iii)(A)(1) of this section, relevant data for 
nonquantitative treatment limitations related to network composition 
could include, as appropriate, but are 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 (for comparable services and as 
benchmarked to a reference standard).
    (3) Unavailability of data. (i) If a plan newly imposes a 
nonquantitative treatment limitation for which relevant data is 
initially temporarily unavailable and the plan therefore cannot comply 
with this paragraph (c)(4)(iii)(A), the plan must include in its 
comparative analysis, as required under Sec.  54.9812-2(c)(5)(i)(C), a 
detailed explanation of the lack of relevant data, the basis for the 
plan's conclusion that there is a lack of relevant data, and when and 
how the data will become available and be collected and analyzed. Such 
a plan also must comply with this paragraph (c)(4)(iii)(A) as soon as 
practicable once relevant data becomes available.
    (ii) If a plan imposes a nonquantitative treatment limitation for 
which no data exist that can reasonably assess any relevant impact of 
the nonquantitative treatment limitation on relevant outcomes related 
to access to mental health and substance use disorder benefits and 
medical/surgical benefits, the plan must include in its comparative 
analysis, as required under Sec.  54.9812-2(c)(5)(i)(D), a reasoned 
justification as to the basis for the conclusion that there are no data 
that can reasonably assess the nonquantitative treatment limitation's 
impact, why the nature of the nonquantitative treatment limitation 
prevents the plan from reasonably measuring its impact, an explanation 
of what data was considered and rejected, and documentation of any 
additional safeguards or protocols used to ensure the nonquantitative 
treatment limitation complies with this section. If a plan becomes 
aware of data that can reasonably assess any relevant impact of the 
nonquantitative treatment limitation, the plan must comply with this 
paragraph (c)(4)(iii)(A) as soon as practicable.
    (iii) Consistent with paragraph (a)(1) of this section, paragraphs

[[Page 77710]]

(c)(4)(iii)(A)(3)(i) and (ii) of this section shall only apply in very 
limited circumstances and, where applicable, shall be construed 
narrowly.
    (B) Material differences. To the extent the relevant data evaluated 
under paragraph (c)(4)(iii)(A) of this section suggest that the 
nonquantitative treatment limitation contributes to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits in a classification, 
such differences will be considered a strong indicator that the plan 
violates this paragraph (c)(4).
    (1) Where the relevant data suggest that the nonquantitative 
treatment limitation contributes to material differences in access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits in a classification, the plan must take 
reasonable action, as necessary, to address the material differences to 
ensure compliance, in operation, with this paragraph (c)(4) and must 
document the actions that have been or are being taken by the plan to 
address material differences in access to mental health or substance 
use disorder benefits, as compared to medical/surgical benefits, as 
required by Sec.  54.9812-2(c)(5)(iv).
    (2) For purposes of this paragraph (c)(4)(iii)(B), relevant data 
are considered to suggest that the nonquantitative treatment limitation 
contributes to material differences in access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits if, based on all relevant facts and circumstances, and taking 
into account the considerations outlined in this paragraph 
(c)(4)(iii)(B)(2), the difference in the data suggests that the 
nonquantitative treatment limitation is likely to have a negative 
impact on access to mental health or substance use disorder benefits as 
compared to medical/surgical benefits.
    (i) Relevant facts and circumstances, for purposes of this 
paragraph (c)(4)(iii)(B)(2), may include, but are not limited to, the 
terms of the nonquantitative treatment limitation at issue, the quality 
or limitations of the data, causal explanations and analyses, evidence 
as to the recurring or non-recurring nature of the results, and the 
magnitude of any disparities.
    (ii) Differences in access to mental health or substance use 
disorder benefits attributable to generally recognized independent 
professional medical or clinical standards or carefully circumscribed 
measures reasonably and appropriately designed to detect or prevent and 
prove fraud and abuse that minimize the negative impact on access to 
appropriate mental health and substance use disorder benefits, which 
are used as the basis for a factor or evidentiary standard used to 
design or apply a nonquantitative treatment limitation, are not 
considered to be material for purposes of this paragraph 
(c)(4)(iii)(B). To the extent a plan attributes any differences in 
access to the application of such standards or measures, the plan must 
explain the bases for that conclusion in the documentation prepared 
under Sec.  54.9812-2(c)(5)(iv)(A).
    (C) Nonquantitative treatment limitations related to network 
composition. For purposes of applying paragraph (c)(4)(iii)(A) of this 
section with respect to nonquantitative treatment limitations related 
to network composition, a plan must collect and evaluate relevant data 
in a manner reasonably designed to assess the aggregate impact of all 
such nonquantitative treatment limitations on access to mental health 
and substance use disorder benefits and medical/surgical benefits. 
Examples of possible actions that a plan could take to comply with the 
requirement under paragraph (c)(4)(iii)(B)(1) of this section to take 
reasonable action, as necessary, to address any material differences in 
access with respect to nonquantitative treatment limitations related to 
network composition, to ensure compliance with this paragraph (c)(4), 
include, but are not limited to:
    (1) Strengthening efforts to recruit and encourage a broad range of 
available mental health and substance use disorder providers and 
facilities to join the plan's network of providers, including taking 
actions to increase compensation or other inducements, streamline 
credentialing processes, or contact providers reimbursed for items and 
services provided on an out-of-network basis to offer participation in 
the network;
    (2) Expanding the availability of telehealth arrangements to 
mitigate any overall mental health and substance use disorder provider 
shortages in a geographic area;
    (3) Providing additional outreach and assistance to participants 
and beneficiaries enrolled in the plan to assist them in finding 
available in-network mental health and substance use disorder providers 
and facilities; and
    (4) Ensuring that provider directories are accurate and reliable.
    (iv) 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.
    (v) Effect of final determination of noncompliance under Sec.  
54.9812-2. (A) If a group health plan receives a final determination 
from the Secretary that the plan is not in compliance with the 
requirements of Code section 9812(a)(8) or 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 with respect to mental health or substance use disorder 
benefits in the relevant classification, unless and until the plan 
demonstrates to the Secretary compliance with the requirements of this 
section or takes appropriate action to remedy the violation.
    (B) A determination by the Secretary of whether to require 
cessation of a nonquantitative treatment limitation under this 
paragraph (c)(4)(v) will be based on an evaluation of the relevant 
facts and circumstances involved in the specific final determination 
and the nature of the underlying nonquantitative treatment limitation 
and will take into account the interest of plan participants and 
beneficiaries and feedback from the plan.
    (vi) 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.

    (A) Example 1 (not comparable and more stringent factors for 
reimbursement rate methodology, in operation)--(1) Facts. A plan's 
reimbursement rate methodology for outpatient, in-network providers 
is based on a variety of factors. 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 are based on 
a combination of factors, such as the nature of the service, 
duration of the service, intensity and specialization of training, 
provider licensure and type, number of providers qualified to 
provide the service in a given geographic area, and market need 
(demand). In operation, the plan utilizes an additional strategy to 
further reduce reimbursement rates for mental health and substance 
use disorder non-physician providers from those

[[Page 77711]]

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)(vi)(A) (Example 1), the 
plan violates the rules of this paragraph (c)(4). 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 of mental health and substance use 
disorder services by the same percentage for every CPT code but does 
not apply the same reductions to non-physician providers of medical/
surgical services from the rate for physician providers of medical/
surgical services, in operation, the factors used in designing and 
applying the nonquantitative treatment limitation to mental health 
and substance use disorder benefits in the outpatient, in-network 
classification are not comparable to, and are applied more 
stringently than, the factors used in designing and applying the 
limitation with respect to medical/surgical benefits in the same 
classification. As a result, the nonquantitative treatment 
limitation with respect to mental health or substance use disorder 
benefits in the outpatient, in-network classification is more 
restrictive than the predominant nonquantitative treatment 
limitation that applies to substantially all medical/surgical 
benefits in the same classification.
    (B) Example 2 (strategy for exclusion for experimental or 
investigative treatment more stringently applied to ABA therapy in 
operation)--(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, as experimental, a 
treatment or procedure when no professionally recognized treatment 
guidelines include the treatment or procedure as a clinically 
appropriate standard 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 as one intervention to treat certain children with ASD.
    (2) Conclusion. In this paragraph (c)(4)(vi)(B) (Example 2), the 
plan violates the rules of this paragraph (c)(4). As written, the 
plan excludes coverage of 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 as including the treatment or procedure at 
issue, and fewer than two randomized controlled trials are available 
to support the treatment's use with respect to the given condition 
or procedure. However, in operation, the plan deviates from this 
strategy with respect to ABA therapy because more than one 
professionally recognized treatment guideline defines clinically 
appropriate standards of care for ASD as including ABA therapy to 
treat certain children with ASD and more than two randomized 
controlled trials are available to support the use of ABA therapy to 
treat certain children with ASD. Therefore, in operation, the 
strategy used to design the nonquantitative treatment limitation for 
benefits for the treatment of ASD, which is a mental health 
condition, in the outpatient, in-network classification is not 
comparable to, and is applied more stringently than, the strategy 
used to design the nonquantitative treatment limitation for medical/
surgical benefits in the same classification. As a result, the 
nonquantitative treatment limitation with respect to mental health 
or substance use disorder benefits in the outpatient, in-network 
classification is more restrictive than the predominant 
nonquantitative treatment limitation that applies to substantially 
all medical/surgical benefits in the same classification.
    (C) Example 3 (step therapy protocol with exception for severe 
or irreversible consequences, discriminatory factor)--(1) Facts. A 
plan's written terms include a step therapy protocol that requires 
participants and beneficiaries who are prescribed certain drugs to 
try and fail a generic or preferred brand name drug before the plan 
will cover the drug originally prescribed by a participant's or 
beneficiary's attending provider. The plan provides an exception to 
this protocol that was developed solely based on a methodology 
developed by an external third-party organization. The third-party 
organization's methodology, which is not based on a generally 
recognized independent professional medical or clinical standard, 
identifies instances in which a delay in treatment with a drug 
prescribed for a medical condition or surgical procedure could 
result in either severe or irreversible consequences. However, with 
respect to a drug prescribed for a mental health condition or a 
substance use disorder, the third-party organization's methodology 
only identifies instances in which a delay in treatment could result 
in both severe and irreversible consequences, and the plan does not 
take any steps to correct, cure, or supplement the methodology.
    (2) Conclusion. In this paragraph (c)(4)(vi)(C) (Example 3), the 
plan violates the rules of paragraph (c)(4)(i)(B) of this section. 
The source upon which the factor used to apply the step therapy 
protocol is based is biased or not objective in a manner that 
discriminates against mental health or substance use disorder 
benefits as compared to medical/surgical benefits because it 
addresses instances in which a delay in treatment with a drug 
prescribed for a medical condition or surgical procedure could 
result in either severe or irreversible consequences, but only 
addresses instances in which a delay in treatment with a drug 
prescribed for a mental health condition or substance use disorder 
could result in both severe and irreversible consequences, and the 
plan fails to take the steps necessary to correct, cure, or 
supplement the methodology so that it is not biased and is 
objective. Based on the relevant facts and circumstances, this 
source systematically disfavors access or is specifically designed 
to disfavor access to mental health or substance use disorder 
benefits as compared to medical/surgical benefits. Therefore, the 
factor used to apply the step therapy protocol is discriminatory for 
purposes of determining comparability and stringency under paragraph 
(c)(4)(i)(A) of this section, and may not be relied upon by the 
plan.
    (D) Example 4 (use of historical plan data and plan steps to 
correct, cure, or supplement)--(1) Facts. A plan's methodology for 
calculating provider reimbursement rates relies only on historical 
plan data on total plan spending for each specialty, divided between 
mental health and substance use disorder providers and medical/
surgical providers, from a time when the plan was not subject to 
Code section 9812. The plan has used these historical plan data for 
many years to establish base reimbursement rates in all provider 
specialties for which it provides medical/surgical, mental health, 
and substance use disorder benefits in the inpatient, in-network 
classification. In evaluating the use of these historical plan data 
in the design of the methodology for calculating provider 
reimbursement rates, the plan determined, based on all the relevant 
facts and circumstances, that the historical plan data 
systematically disfavor access or are specifically designed to 
disfavor access to mental health or substance use disorder benefits 
as compared to medical/surgical benefits. To ensure this information 
about historical reimbursement rates is not biased and is objective, 
the plan supplements its methodology to develop the base 
reimbursement rates for mental health and substance use disorder 
providers in accordance with additional information, evidence, 
sources, and standards that reflect the increased demand for mental 
health and substance use disorder benefits in the inpatient, in-
network classification and to attract sufficient mental health and 
substance use disorder providers to the network, so that the 
relevant facts and circumstances indicate the supplemented 
information, evidence, sources, or standards do not systematically 
disfavor access and are not specifically designed to disfavor access 
to mental health and substance use disorder benefits as compared to 
medical/surgical benefits.
    (2) Conclusion. In this paragraph (c)(4)(vi)(D) (Example 4), the 
plan does not violate the rules of paragraph (c)(4)(i)(B) of this 
section with respect to the plan's methodology for calculating 
provider reimbursement rates in the inpatient, in-network 
classification. The relevant facts and circumstances indicate that 
the plan's use of only historical plan data to design its 
methodology for calculating provider reimbursement rates in the 
inpatient, in-network classification would otherwise be

[[Page 77712]]

considered to be biased or not objective in a manner that 
discriminates against mental health or substance use disorder 
benefits as compared to medical/surgical benefits under paragraph 
(c)(4)(i)(B)(2) of this section, since the historical data 
systematically disfavor access or are specifically designed to 
disfavor access to mental health or substance use disorder benefits 
as compared to medical/surgical benefits. However, the plan took the 
steps necessary to supplement the information, evidence, sources, 
and standards to reasonably reflect the increased demand for mental 
health and substance use disorder benefits in the inpatient, in-
network classification, and adjust the methodology to increase 
reimbursement rates for those benefits, thereby ensuring that the 
information, evidence, sources, and standards relied upon by the 
plan for this purpose are not biased and are objective. Therefore, 
the factors and evidentiary standards used to design the plan's 
methodology for calculating provider reimbursement rates in the 
inpatient, in-network classification are not discriminatory.
    (E) Example 5 (generally recognized independent professional 
medical or clinical standards and more stringent prior authorization 
requirement in operation)--(1) Facts. The provisions of a plan state 
that it relies on, and does not deviate from, generally recognized 
independent professional medical or clinical standards to inform the 
factor used to design prior authorization requirements for both 
medical/surgical and mental health and substance use disorder 
benefits in the prescription drug classification. The 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 for 
treatment of opioid use disorder, every 30 days, which is 
inconsistent with the generally recognized independent professional 
medical standard on which the factor used to design the limitation 
is based. The plan's factor used to design prior authorization 
requirements for medical/surgical benefits in the prescription drug 
classification relies on, and does not deviate from, generally 
recognized independent professional medical or clinical standards.
    (2) Conclusion. In this paragraph (c)(4)(vi)(E) (Example 5), the 
plan violates the rules of this paragraph (c)(4). The American 
Society of Addiction Medicine national practice guidelines on which 
the factor used to design prior authorization requirements for 
substance use disorder benefits is based are generally recognized 
independent professional medical or clinical standards that are not 
considered to be biased or not objective in a manner that 
discriminates against mental health and substance use disorder 
benefits under paragraph (c)(4)(i)(B)(3) of this section. However, 
the plan must comply with other requirements in this paragraph 
(c)(4), as applicable, with respect to such standards or measures 
that are used as the basis for a factor or evidentiary standard used 
to design or apply a nonquantitative treatment limitation. In 
operation, the plan's factor used to design and apply prior 
authorization requirements with respect to substance use disorder 
benefits is not comparable to, and is applied more stringently than, 
the same factor used to design and apply prior authorization 
requirements for medical/surgical benefits, because the factor 
relies on, and does not deviate from, generally recognized 
independent professional medical or clinical standards for medical/
surgical benefits, but deviates from the relevant guidelines for 
substance use disorder benefits. As a result, the nonquantitative 
treatment limitation with respect to substance use disorder benefits 
in the prescription drug classification is more restrictive than the 
predominant nonquantitative treatment limitation that applies to 
substantially all medical/surgical benefits in the same 
classification.
    (F) Example 6 (plan claims no data exist to reasonably assess 
impact of nonquantitative treatment limitation on access; medical 
necessity criteria)--(1) Facts. A plan approves or denies claims for 
mental health and substance use disorder benefits and for medical/
surgical benefits in the inpatient, in-network and outpatient, in-
network classifications based on medical necessity criteria. The 
plan states in its comparative analysis that no data exist that can 
reasonably assess any relevant impact of the medical necessity 
criteria nonquantitative treatment limitation on relevant outcomes 
related to access to mental health or substance use disorder 
benefits as compared to the plan's medical necessity criteria 
nonquantitative treatment limitation's impact on relevant outcomes 
related to access to medical/surgical benefits in the relevant 
classifications, without further explanation.
    (2) Conclusion. In this paragraph (c)(4)(vi)(F) (Example 6), the 
plan violates this paragraph (c)(4). The plan does not comply with 
paragraph (c)(4)(iii)(A)(3)(ii) of this section because the plan did 
not include in its comparative analysis, as required under Sec.  
54.9812-2(c)(5)(i)(D), a reasoned justification as to the basis for 
its conclusion that there are no data that can reasonably assess the 
nonquantitative treatment limitation's impact, an explanation of why 
the nature of the nonquantitative treatment limitation prevents the 
plan from reasonably measuring its impact, an explanation of what 
data was considered and rejected, and documentation of any 
additional safeguards or protocols used to ensure the 
nonquantitative treatment limitation complies with this paragraph 
(c)(4). Data that could reasonably assess the medical necessity 
criteria nonquantitative treatment limitation's impact might 
include, for example, the number and percentage of claims denials, 
or the number and percentage of claims that were approved for a 
lower level of care than the level requested on the initial claim. 
Therefore, because the plan has not collected and evaluated relevant 
data in a manner reasonably designed to assess the impact of the 
nonquantitative treatment limitation on relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits in the relevant classifications, the plan 
violates the requirements of paragraph (c)(4)(iii) of this section, 
and violates the requirements under Sec.  54.9812-2(c)(5)(i)(D) 
because it did not include sufficient information in its comparative 
analysis with respect to the lack of relevant data.
    (G) Example 7 (concurrent review data collection; no material 
difference in access)--(1) Facts. A plan follows a written process 
to apply a concurrent review nonquantitative treatment limitation to 
all medical/surgical benefits and mental health and substance use 
disorder benefits within the inpatient, in-network classification. 
Under this 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. The plan collects relevant data, including the 
number of referrals to second-level review, and the number of 
denials of claims for medical/surgical benefits and mental health 
and substance use disorder benefits subject to concurrent review as 
compared to the total number of claims subject to concurrent review, 
in the inpatient, in-network classification. The plan also collects 
and evaluates the number of denied claims for medical/surgical 
benefits and mental health and substance use disorder benefits that 
are overturned on appeal in the inpatient, in-network 
classification. The plan evaluates the relevant data and determines 
that, based on the relevant facts and circumstances, the data do not 
suggest that the concurrent review nonquantitative treatment 
limitation contributes to material differences in access to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits in the classification Upon requesting the plan's 
comparative analysis for the concurrent review nonquantitative 
treatment limitation and reviewing the relevant data, the Secretary 
does not request additional data and agrees that the data do not 
suggest material differences in access.
    (2) Conclusion. In this paragraph (c)(4)(vi)(G) (Example 7), the 
plan does not violate the rules of paragraph (c)(4)(iii) of this 
section. The plan collected and evaluated relevant data in a manner 
reasonably designed to assess the impact of the nonquantitative 
treatment limitation on relevant outcomes related to access to 
mental health and substance use disorder benefits and medical/
surgical benefits and considered the impact as part of its 
evaluation. Because the relevant data evaluated do not suggest that 
the nonquantitative treatment limitation contributes to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits in the inpatient, 
in-network classification, under paragraph (c)(4)(iii)(B) of this 
section, there is no strong indicator that the plan violates this 
paragraph (c)(4).

[[Page 77713]]

    (H) Example 8 (material difference in access for prior 
authorization requirement with reasonable action)--(1) Facts. A plan 
requires prior authorization 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. The plan collects and evaluates relevant data in a manner 
reasonably designed to assess the impact of the prior authorization 
requirement on relevant outcomes related to access to mental health 
and substance use disorder benefits and medical/surgical benefits in 
the inpatient, in-network classification. The plan's written process 
for prior authorization states that the plan approves inpatient, in-
network benefits for medical conditions and surgical procedures and 
mental health and substance use disorder benefits 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. Approvals for 
mental health and substance use disorder benefits are most commonly 
given only for 1 day, after which a treatment plan must be submitted 
by the patient's attending provider and approved by the plan. The 
relevant data show that approvals for 7 days are most common for 
medical conditions and surgical procedures under this plan. Based on 
all the relevant facts and circumstances, the difference in the 
relevant data suggests that the nonquantitative treatment limitation 
is likely to have a negative impact on access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits. Therefore, the data suggest that the nonquantitative 
treatment limitation contributes to material differences in access. 
To address these material differences in access, the plan consults 
more recent medical guidelines to update the factors that inform its 
medical necessity nonquantitative treatment limitations. Based on 
this review, the plan modifies the limitation so that inpatient, in-
network prior authorization requests for mental health or substance 
use disorder benefits are approved for similar periods to what is 
approved for medical/surgical benefits. The plan includes 
documentation of this action as part of its comparative analysis.
    (2) Conclusion. In this paragraph (c)(4)(vi)(H) (Example 8), the 
plan does not violate the rules of paragraph (c)(4)(iii) of this 
section. While relevant data for the plan's prior authorization 
requirements suggested that the nonquantitative treatment limitation 
contributes to material differences in access to mental health and 
substance use disorder benefits as compared to inpatient, in-network 
medical/surgical benefits under paragraph (c)(4)(iii)(B) of this 
section, the plan has taken reasonable action, as necessary, to 
ensure compliance, in operation, with this paragraph (c)(4) by 
updating the factors that inform its prior authorization 
nonquantitative treatment limitation for inpatient, in-network 
mental health and substance use disorder benefits so that these 
benefits are approved for similar periods to what is approved for 
medical/surgical benefits. The plan also documents its action taken 
to address material differences in access to inpatient, in-network 
benefits as required by paragraph (c)(4)(iii)(B)(1) of this section.
    (I) Example 9 (differences attributable to 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 factors and evidentiary 
standards used to design and apply the medical management 
requirement rely on independent professional medical or clinical 
standards that are generally recognized by health care providers and 
facilities in relevant clinical specialties. 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. 
The plan collects and evaluates relevant data in a manner reasonably 
designed to assess the impact of the medical management 
nonquantitative treatment limitation on relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits, and considers the impact as part of the 
plan's evaluation, as required by paragraph (c)(4)(iii)(A) of this 
section. 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. The plan correctly 
determines that these differences in access are attributable to the 
generally recognized independent professional medical or clinical 
standards used as the basis for the factors and evidentiary 
standards used to design or apply the limitation and adequately 
explains the bases for that conclusion as part of its comparative 
analysis.
    (2) Conclusion. In this paragraph (c)(4)(vi)(I) (Example 9), the 
plan does not violate the rules of this paragraph (c)(4). Generally 
recognized independent professional medical or clinical standards of 
care are not considered to be information, evidence, sources, or 
standards that are biased and not objective in a manner that 
discriminates against mental health or substance use disorder 
benefits as compared to medical/surgical benefits, and the plan 
otherwise complies with the requirements in paragraph (c)(4)(i) of 
this section. Additionally, the plan does not violate paragraph 
(c)(4)(iii) of this section because it has collected and evaluated 
relevant data, the differences in access are attributable to the 
generally recognized independent professional medical or clinical 
standards that are used as the basis for the factors and evidentiary 
standards used to design or apply the medical management 
nonquantitative treatment limitation, and the plan explains the 
bases for this conclusion in its comparative analysis. As a result, 
the nonquantitative treatment limitation with respect to mental 
health or substance use disorder benefits in the inpatient, out-of-
network classification is no more restrictive than the predominant 
nonquantitative treatment limitation that applies to substantially 
all medical/surgical benefits in the same classification.
    (J) Example 10 (material differences in access for standards for 
provider admission to a network with reasonable action)--(1) Facts. 
A plan applies nonquantitative treatment limitations related to 
network composition in the inpatient, in-network and outpatient, 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 processes, 
strategies, evidentiary standards, and other factors used in 
designing and applying the nonquantitative treatment limitations 
related to network composition for 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)(i) of this 
section. In order to ensure, in operation, that the nonquantitative 
treatment limitations are no more restrictive than the predominant 
nonquantitative treatment limitations applied to substantially all 
medical/surgical benefits in the classification, the plan collects 
and evaluates relevant data in a manner reasonably designed to 
assess the aggregate impact of all the nonquantitative treatment 
limitations related to network composition on relevant outcomes 
related to 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 evaluation. The plan 
considers relevant data that is known, or reasonably should be 
known, including 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 (for comparable services and 
benchmarked to a reference standard, as appropriate); and in-network 
and out-of-network utilization rates (including data related to the 
dollar value and number of provider claims submissions). The plan 
determines that the relevant data suggest that the nonquantitative 
treatment limitations in the aggregate contribute to material 
differences in access to mental health and substance use disorder 
benefits compared to medical/surgical benefits in the 
classifications because, based on all the relevant facts and 
circumstances, the

[[Page 77714]]

differences in the data suggest that the nonquantitative treatment 
limitations related to network composition are likely to have a 
negative impact on access to mental health or substance use disorder 
benefits as compared to medical/surgical benefits. The plan takes 
reasonable actions, as necessary, to address the material 
differences in access, to ensure compliance, in operation, with this 
paragraph (c)(4), by strengthening its efforts to recruit and 
encourage a broad range of available providers and facilities to 
join the plan's network of providers, including by taking actions to 
increase compensation and other inducements, streamline 
credentialing processes, contact providers reimbursed for items and 
services provided on an out-of-network basis to offer participation 
in the network, and develop a process to monitor the effects of such 
efforts; expanding the availability of telehealth arrangements to 
mitigate overall provider shortages in certain geographic areas; 
providing additional outreach and assistance to participants and 
beneficiaries enrolled in the plan to assist them in finding 
available in-network providers and facilities; and ensuring that the 
plan's provider directories are accurate and reliable. The plan 
documents the efforts that it has taken to address the material 
differences in access that the data revealed, and the plan includes 
the documentation as part of its comparative analysis submission.
    (2) Conclusion. In this paragraph (c)(4)(vi)(J) (Example 10), 
the plan does not violate the rules of this paragraph (c)(4). The 
plan's nonquantitative treatment limitations related to network 
composition comply with the rules of paragraph (c)(4)(i) of this 
section. Additionally, the plan collects and evaluates relevant 
data, as required under paragraph (c)(4)(iii)(A) of this section, in 
a manner reasonably designed to assess the aggregate impact of all 
such nonquantitative treatment limitations on relevant outcomes 
related to access to mental health and substance use disorder 
benefits and medical/surgical benefits, as required under paragraph 
(c)(4)(iii)(C) of this section. While the data suggest that the 
nonquantitative treatment limitations contribute to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits, the plan has 
taken reasonable action, as necessary, to ensure compliance with 
this paragraph (c)(4). The plan also documents the actions that have 
been and are being taken by the plan to address material differences 
as required by Sec.  54.9812-21(c)(5)(iv). As a result, the network 
composition nonquantitative treatment limitations with respect to 
mental health or substance use disorder benefits in the inpatient, 
in-network and outpatient, in-network classifications are no more 
restrictive than the predominant nonquantitative treatment 
limitations that apply to substantially all medical/surgical 
benefits in the same classifications.
    (K) Example 11 (separate EAP exhaustion treatment limitation 
applicable only to mental health or substance use disorder 
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)(vi)(K) (Example 11), 
the requirement that limits 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)(4). 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)(iv) 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 exclusion for treatment in a 
residential facility applicable only to mental health and substance 
use disorder benefits)--(1) Facts. A plan generally covers 
inpatient, in-network and inpatient, out-of-network treatment 
without any limitations on setting, including skilled nursing 
facilities and rehabilitation hospitals, provided other medical 
necessity standards are satisfied. The plan has an exclusion for 
treatment at residential facilities, 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)(vi)(L) (Example 12), 
the plan violates the rules of paragraph (c)(4)(iv) of this section. 
The exclusion of treatment at residential facilities 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 because the 
plan does not apply a comparable exclusion with respect to any 
medical/surgical benefits in the same benefit classification.
    (M) Example 13 (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 the 
plan's exclusion of mental health and substance use disorder 
benefits for failure to complete a course of treatment in the 
inpatient, in-network classification under Sec.  54.9812-2(d), the 
plan submits a comparative analysis for the nonquantitative 
treatment limitation. After review of the comparative analysis, as 
well as additional information submitted by the plan after the 
Secretary determines that the plan has not submitted sufficient 
information to be responsive to the request, 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 inpatient, in-network 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. Under 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. However, the 
corrective action plan does not alter or eliminate the exclusion or 
alter the processes, strategies, evidentiary standards, and other 
factors used in designing and applying the exclusion. Moreover, the 
additional comparative analysis still does not include sufficient 
information. The Secretary then determines that the additional 
comparative analyses do not demonstrate compliance with the 
requirements of this paragraph (c)(4). Accordingly, the plan 
receives a final determination of noncompliance with Code section 
9812(a)(8) and Sec.  54.9812-2 from the Secretary, which concludes 
that the plan did not demonstrate compliance through the comparative 
analysis process. After considering the relevant facts and 
circumstances, and considering the interests of plan participants 
and beneficiaries, as well as feedback from the plan, the Secretary 
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 exclusion of benefits for failure 
to complete a course of treatment in the inpatient, in-network 
classification.
    (2) Conclusion. In this paragraph (c)(4)(vi)(M) (Example 13), by 
continuing to impose the exclusion of mental health and substance 
use disorder benefits for failure to complete a course of treatment 
in the inpatient, in-network classification after the Secretary 
directs the plan not to impose this nonquantitative treatment 
limitation, the plan violates the requirements of paragraph 
(c)(4)(v) of this section.
* * * * *
     * * *
    (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,

[[Page 77715]]

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.  54.9815-2719 set forth rules 
regarding claims and appeals, including the right of claimants (or 
their authorized representative) who have received 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 that is required to provide 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 at 45 CFR 146.136 and 146.137 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--
    (i) This section applies to group health plans on the first day of 
the first plan year beginning on or after January 1, 2025, except that 
the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and 
(c)(4)(iii) of this section apply on the first day of the first plan 
year beginning on or after January 1, 2026.
    (ii) Until the applicability date in paragraph (i)(1)(i) of this 
section, plans are required to continue to comply with 26 CFR 54.9812-
1, revised as of April 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
Par. 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.
    (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 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; and
    (iii) A description of which benefits are included in each 
classification set forth in Sec.  54.9812-1(c)(2)(ii)(A).
    (2) Identification and definition of the factors and evidentiary 
standards 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 every factor considered or relied upon, 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;
    (B) A description of each evidentiary standard used to design or 
apply each

[[Page 77716]]

factor (and the source of each evidentiary standard) identified under 
paragraph (c)(2)(i) of this section; and
    (C) A description of any steps the plan has taken to correct, cure, 
or supplement any information, evidence, sources, or standards that 
would otherwise have been considered biased or not objective under 
Sec.  54.9812-1(c)(4)(i)(B)(1) in the absence of such steps.
    (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 under 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 
designations 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 deviations or variations 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 deviations 
or variations.
    (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 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 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 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 reasons for any deviations or variations 
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 deviations or variations, 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, 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 evaluates whether, 
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;

[[Page 77717]]

    (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;
    (C) With respect to a nonquantitative treatment limitation for 
which relevant data is temporarily unavailable as described in Sec.  
54.9812-1(c)(4)(iii)(A)(3)(i), a detailed explanation of the lack of 
relevant data, the basis for the plan's conclusion that there is a lack 
of relevant data, and when and how the data will become available and 
be collected and analyzed; and
    (D) With respect to a nonquantitative treatment limitation for 
which no data exist that can reasonably assess any relevant impact of 
the nonquantitative treatment limitation on relevant outcomes related 
to access to mental health and substance use disorder benefits and 
medical/surgical benefits as described in Sec.  54.9812-
1(c)(4)(iii)(A)(3)(ii), a reasoned justification as to the basis for 
the conclusion that there are no data that can reasonably assess the 
nonquantitative treatment limitation's impact, an explanation of why 
the nature of the nonquantitative treatment limitation prevents the 
plan from reasonably measuring its impact, an explanation of what data 
was considered and rejected, and documentation of any additional 
safeguards or protocols used to ensure that the nonquantitative 
treatment limitation complies with Sec.  54.9812-1(c)(4);
    (ii) Identification of the relevant data collected and evaluated, 
as required under Sec.  54.9812-1(c)(4)(iii)(A);
    (iii) Documentation 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:
    (A) The evaluation of relevant data as required under Sec.  
54.9812-1(c)(4)(iii)(A); and
    (B) A reasoned justification and analysis that explains why the 
plan concluded that any differences in the relevant data do or do not 
suggest the nonquantitative treatment limitation contributes to 
material differences in access to mental health or substance use 
disorder benefits as compared to medical/surgical benefits, in 
accordance with Sec.  54.9812-1(c)(4)(iii)(B)(2);
    (iv) A detailed explanation of any material differences in access 
demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of 
this section, including:
    (A) A reasoned explanation of any material differences in access 
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 (including any considerations beyond a plan's 
control that contribute to the existence of material differences) and a 
detailed explanation of the bases for concluding that material 
differences are not attributable to differences in the comparability or 
relative stringency of the nonquantitative treatment limitation; and
    (B) To the extent differences in access to mental health or 
substance use disorder benefits are attributable to generally 
recognized independent professional medical or clinical standards or 
carefully circumscribed measures reasonably and appropriately designed 
to detect or prevent and prove fraud and abuse that minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits, and such standards or measures are used as the 
basis for a factor or evidentiary standard used to design or apply a 
nonquantitative treatment limitation, documentation explaining how any 
such differences are attributable to those standards or measures, as 
required in Sec.  54.9812-1(c)(4)(iii)(B)(2)(ii); and
    (v) A discussion of the actions that have been or are being taken 
by the plan to address any material differences in access to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits, including the actions the plan has taken or is 
taking under Sec.  54.9812-1(c)(4)(iii)(B)(1) to address material 
differences to comply, in operation, with Sec.  54.9812-1(c)(4), 
including, as applicable:
    (A) A reasoned explanation of any material differences in access to 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits that persist despite reasonable actions that 
have been or are being taken; and
    (B) For a plan designing and applying one or more nonquantitative 
treatment limitations related to network composition, a discussion of 
the actions that have been or are being taken to address material 
differences in access to in-network mental health and substance use 
disorder benefits as compared to in-network medical/surgical benefits, 
including those listed in Sec.  54.9812-1(c)(4)(iii)(C).
    (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 or is 
not (or might or might not be) in compliance with the requirements of 
Sec.  54.9812-1(c)(4), including any additional 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 not otherwise discussed in the comparative analysis;
    (iv) The date the analysis is completed 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 
the 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 determine whether 
the

[[Page 77718]]

comparative analysis required in paragraph (b) of this section complies 
with paragraph (c) of this section or whether the plan complies with 
Sec.  54.9812-1(c)(4), 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). 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 initial determination by 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 (c) of this section that 
demonstrate compliance with Sec.  54.9812-1(c)(4), not 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 business days of receipt of the final 
determination of noncompliance, and the plan must 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 timeframe.
    (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 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 submitted or 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 Sec.  54.9812-1(c)(4) or this section, 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 concurred with those actions; 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 (including 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), on the first day of the 
first plan year beginning on or after January 1, 2025, except the 
requirements of paragraphs (c)(2)(ii)(C), (c)(5)(i)(C) and (D), and 
(c)(5)(ii) through (v) of this section apply on the first day of the 
first plan year beginning on or after January 1, 2026.
    (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 
amends 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;

[[Page 77719]]

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), (c)(2)(ii)(A) 
introductory text, (c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
0
d. In paragraph (c)(3)(iii), adding introductory text;
0
e. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4), 
(d)(3), (e)(4), and (i)(1); and
0
f. Adding paragraph (j).
    The revisions and additions read as follows:


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 aggregate 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 in the same classification, 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 or substance use disorder 
benefits under the plan or coverage than they impose on access to 
medical/surgical benefits in the same classification of 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 as of November 22, 
2024, is the Diagnostic and Statistical Manual of Mental Disorders, 
Fifth Edition, Text Revision published in March 2022. A subsequent 
version of the DSM published after November 22, 2024, will be 
considered the most current version beginning on the first day of the 
plan year that is one year after the date the subsequent version is 
published.
    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 as of November 22, 
2024, is the International Classification of Diseases, 10th Revision, 
Clinical Modification adopted for the period beginning on October 1, 
2015. Any subsequent version of the ICD adopted through 45 CFR 162.1002 
after November 22, 2024, will be considered the most current version 
beginning on the first day of the plan year that is one year after the 
date the subsequent version is adopted.
    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

[[Page 77720]]

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. 
Examples of 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 that are used to determine when and how 
a participant or beneficiary may access certain services; and the 
development and approval of a treatment plan used in a concurrent 
review process to determine whether a specific request should be 
granted or denied. 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 the degree of 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; the method of determining whether and how to deviate from 
generally accepted standards of care in concurrent reviews; the 
selection of information deemed reasonably necessary to make medical 
necessity determinations; reliance on treatment guidelines or 
guidelines provided by third-party organizations in the design of a 
nonquantitative treatment limitation; and rationales used in selecting 
and adopting certain threshold amounts to apply a nonquantitative 
treatment limitation, professional standards and protocols to determine 
utilization management standards, and fee schedules used to determine 
provider reimbursement rates, used as part of a nonquantitative 
treatment limitation. Strategies also include the method of creating 
and determining the 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 or issuer's 
methods for making 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 (such as 
standards related to network composition), which otherwise limit the 
scope or duration of benefits for treatment under a plan or coverage. 
(See paragraph (c)(4)(ii) 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

[[Page 77721]]

include annual, episode, and lifetime day and visit limits. See 
paragraph (c)(4)(ii) 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), 
it must provide meaningful benefits for that mental health condition or 
substance use disorder in every classification in which medical/
surgical benefits are provided. For purposes of this paragraph 
(c)(2)(ii)(A), whether the benefits provided are meaningful benefits is 
determined in comparison to the benefits provided for medical 
conditions and surgical procedures in the classification and requires, 
at a minimum, coverage of benefits for that condition or disorder in 
each classification in which the plan (or coverage) provides benefits 
for one or more medical conditions or surgical procedures. A plan (or 
coverage) does not provide meaningful benefits under this paragraph 
(c)(2)(ii)(A) unless it provides benefits for a core treatment for that 
condition or disorder in each classification in which the plan (or 
coverage) provides benefits for a core treatment for one or more 
medical conditions or surgical procedures. For purposes of this 
paragraph (c)(2)(ii)(A), a core treatment for a condition or disorder 
is a standard treatment or course of treatment, therapy, service, or 
intervention indicated by generally recognized independent standards of 
current medical practice. If there is no core treatment for a covered 
mental health condition or substance use disorder with respect to a 
classification, the plan (or coverage) is not required to provide 
benefits for a core treatment for such condition or disorder in that 
classification (but must provide benefits for such condition or 
disorder in every classification in which medical/surgical benefits are 
provided). 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) Examples. The rules of this paragraph (c)(2)(ii) 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. With regard to the examples in this paragraph 
(c)(2)(ii)(C), references to any particular core treatment are included 
for illustrative purposes only. Plans and issuers must consult 
generally recognized independent standards of current medical practice 
to determine the applicable core treatment, therapy, service, or 
intervention for any covered condition or disorder.

    (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 covers treatment for autism 
spectrum disorder (ASD), a mental health condition, and covers 
outpatient, out-of-network developmental

[[Page 77722]]

screenings for ASD but excludes all other benefits for outpatient 
treatment for ASD, including applied behavior analysis (ABA) 
therapy, when provided on an out-of-network basis. The plan 
generally covers the full range of outpatient treatments (including 
core treatments) and treatment settings for medical conditions and 
surgical procedures when provided on an out-of-network basis. Under 
the generally recognized independent standards of current medical 
practice consulted by the plan, developmental screenings alone do 
not constitute a core treatment for ASD.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5), 
the plan violates the rules of this paragraph (c)(2)(ii). Although 
the plan covers benefits for ASD in the outpatient, out-of-network 
classification, it only covers developmental screenings, so it does 
not cover a core treatment for ASD in the classification. Because 
the plan generally covers the full range of medical/surgical 
benefits, including a core treatment for one or more medical 
conditions or surgical procedures in the classification, it fails to 
provide meaningful benefits for treatment of ASD in the 
classification.
    (6) Example 6--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(5) of this section (Example 5), except that the plan 
is an HMO that does not cover the full range of medical/surgical 
benefits, including a core treatment for any medical conditions or 
surgical procedures in the outpatient, out-of-network classification 
(except as required under ERISA sections 716 and 717), but covers 
benefits for medical conditions and surgical procedures in the 
inpatient, in-network; outpatient, in-network; emergency care; and 
prescription drug classifications.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
Because the plan does not provide meaningful benefits, including for 
a core treatment for any medical condition or surgical procedure in 
the outpatient, out-of-network classification (except as required 
under ERISA sections 716 and 717), the plan is not required to 
provide meaningful benefits for any mental health conditions or 
substance use disorders in that classification. Nevertheless, the 
plan must provide meaningful benefits for each mental health 
condition and substance use disorder for which the plan provides 
benefits in every classification in which meaningful medical/
surgical benefits are provided as required under paragraph 
(c)(2)(ii)(A) of this section. This example does not address whether 
the plan has complied with other applicable requirements of this 
section in excluding coverage of ABA therapy in the outpatient, out-
of-network classification.
    (7) Example 7--(i) Facts. A plan provides extensive benefits, 
including for core treatments for many medical conditions and 
surgical procedures in the outpatient, in-network classification, 
including nutrition counseling for diabetes and obesity. The plan 
also generally covers diagnosis and treatment for eating disorders, 
which are mental health conditions, including coverage for nutrition 
counseling to treat eating disorders in the outpatient, in-network 
classification. Nutrition counseling is a core treatment for eating 
disorders, in accordance with generally recognized independent 
standards of current medical practice consulted by the plan.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(7) (Example 7), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
The coverage of diagnosis and treatment for eating disorders, 
including nutrition counseling, in the outpatient, in-network 
classification results in the plan providing meaningful benefits for 
the treatment of eating disorders in the classification, as 
determined in comparison to the benefits provided for medical 
conditions or surgical procedures in the classification.
    (8) Example 8--(i) Facts. A plan provides extensive benefits for 
the core treatments for many medical conditions and surgical 
procedures in the outpatient, in-network and prescription drug 
classifications. The plan provides coverage for diagnosis and 
treatment for opioid use disorder, a substance use disorder, in the 
outpatient, in-network classification, by covering counseling and 
behavioral therapies and, in the prescription drug classification, 
by covering medications to treat opioid use disorder (MOUD). 
Counseling and behavioral therapies and MOUD, in combination, are 
one of the core treatments for opioid use disorder, in accordance 
with generally recognized independent standards of current medical 
practice consulted by the plan.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(8) (Example 8), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
The coverage of counseling and behavioral therapies and MOUD, in 
combination, in the outpatient, in-network classification and 
prescription drug classification, respectively, results in the plan 
providing meaningful benefits for the treatment of opioid use 
disorder in the outpatient, in-network and prescription drug 
classifications.

    (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. The rules of this paragraph 
(c)(3)(i)(D) 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

[[Page 77723]]

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     N/A............  12.5% (100x/800x)...  56.25% (450x/800x)..  12.5% (100x/800x)..  18.75% (150x/800x).
 level.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (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 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).

[[Page 77724]]



                                      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.
    (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. Consistent with 
paragraph (a)(1) 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 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 that applies 
to substantially all medical/surgical benefits in the same 
classification. For purposes of this paragraph (c)(4), a 
nonquantitative treatment limitation is more restrictive than the 
predominant nonquantitative treatment limitation that applies to 
substantially all medical/surgical benefits in the same classification 
if the plan or issuer fails to meet the requirements of paragraph 
(c)(4)(i) or (iii) of this section. In such a case, the plan (or health 
insurance coverage) will be considered to violate ERISA section 
712(a)(3)(A)(ii), and the nonquantitative treatment limitation may not 
be imposed by the plan (or health insurance coverage) with respect to 
mental health or substance use disorder benefits in the classification.
    (i) Requirements related to design and application of a 
nonquantitative treatment limitation--(A) In general. A plan (or health 
insurance coverage) 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)(i)(A) of this section, a plan (or health 
insurance coverage) may not rely upon discriminatory factors or 
evidentiary standards to design a nonquantitative treatment limitation 
to be imposed on mental health or substance use disorder benefits. A 
factor or evidentiary standard is discriminatory if the information, 
evidence, sources, or standards on which the factor or evidentiary 
standard are based are biased or not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits.
    (1) Information, evidence, sources, or standards are considered to 
be biased or not objective in a manner that discriminates against 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits if, based on all the relevant facts and 
circumstances, the information, evidence, sources, or standards 
systematically disfavor access or are specifically designed to disfavor 
access to mental health or substance use disorder benefits as compared 
to medical/surgical benefits. For purposes of this paragraph 
(c)(4)(i)(B)(1), relevant facts and circumstances may include, but are 
not limited to, the reliability of the source of the information, 
evidence, sources, or standards, including any underlying data; the 
independence of the information, evidence, sources, and

[[Page 77725]]

standards relied upon; the analyses and methodologies employed to 
select the information and the consistency of their application; and 
any known safeguards deployed to prevent reliance on skewed data or 
metrics. Information, evidence, sources, or standards are not 
considered biased or not objective for this purpose if the plan or 
issuer has taken the steps necessary to correct, cure, or supplement 
any information, evidence, sources, or standards that would have been 
biased or not objective in the absence of such steps.
    (2) For purposes of this paragraph (c)(4)(i)(B), historical plan 
data or other historical information from a time when the plan or 
coverage was not subject to ERISA section 712 or was not in compliance 
with ERISA section 712 are considered to be biased or not objective in 
a manner that discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits, if the 
historical plan data or other historical information systematically 
disfavor access or are specifically designed to disfavor access to 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits, and the plan or issuer has not taken the 
steps necessary to correct, cure, or supplement the data or 
information.
    (3) For purposes of this paragraph (c)(4)(i)(B), generally 
recognized independent professional medical or clinical standards and 
carefully circumscribed measures reasonably and appropriately designed 
to detect or prevent and prove fraud and abuse that minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits are not information, evidence, sources, or 
standards that are biased or not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits. However, plans and issuers 
must comply with the other requirements in this paragraph (c)(4), as 
applicable, with respect to such standards or measures that are used as 
the basis for a factor or evidentiary standard used to design or apply 
a nonquantitative treatment limitation.
    (ii) 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.
    (iii) Required use of outcomes data--(A) In general. To ensure that 
a nonquantitative treatment limitation applicable to mental health or 
substance use disorder benefits in a classification, in operation, is 
no more restrictive than the predominant nonquantitative treatment 
limitation applied to substantially all medical/surgical benefits in 
the classification, 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 relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits and carefully consider the impact as part of 
the plan's or issuer's evaluation. As part of its evaluation, the plan 
or issuer may not disregard relevant outcomes data that it knows or 
reasonably should know suggest that a nonquantitative treatment 
limitation is associated with material differences in access to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits. 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)(iii)(A).
    (1) Relevant data generally. For purposes of this paragraph 
(c)(4)(iii)(A), relevant data could include, as appropriate, but are 
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) Relevant data for nonquantitative treatment limitations related 
to network composition. In addition to the relevant data set forth in 
paragraph (c)(4)(iii)(A)(1) of this section, relevant data for 
nonquantitative treatment limitations related to network composition 
could include, as appropriate, but are 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 (for comparable services and as 
benchmarked to a reference standard).
    (3) Unavailability of data. (i) If a plan or issuer newly imposes a 
nonquantitative treatment limitation for which relevant data is 
initially temporarily unavailable and the plan or issuer therefore 
cannot comply with this paragraph (c)(4)(iii)(A), the plan or issuer 
must include in its comparative analysis, as required under Sec.  
2590.712-1(c)(5)(i)(C), a detailed explanation of the lack of relevant 
data, the basis for the plan's or issuer's conclusion that there is a 
lack of relevant data, and when and how the data will become available 
and be collected and analyzed. Such a plan or issuer also must comply 
with this paragraph (c)(4)(iii)(A) as soon as practicable once relevant 
data becomes available.
    (ii) If a plan or issuer imposes a nonquantitative treatment 
limitation for which no data exist that can reasonably assess any 
relevant impact of the nonquantitative treatment limitation on relevant 
outcomes related to access to mental health and substance use disorder 
benefits and medical/surgical benefits, the plan or issuer must include 
in its comparative analysis, as required under Sec.  2590.712-
1(c)(5)(i)(D), a reasoned justification as to the basis for the 
conclusion that there are no data that can reasonably assess the 
nonquantitative treatment limitation's impact, why the nature of the 
nonquantitative treatment limitation prevents the plan or issuer from 
reasonably measuring its impact, an explanation of what data was

[[Page 77726]]

considered and rejected, and documentation of any additional safeguards 
or protocols used to ensure the nonquantitative treatment limitation 
complies with this section. If a plan or issuer becomes aware of data 
that can reasonably assess any relevant impact of the nonquantitative 
treatment limitation, the plan or issuer must comply with this 
paragraph (c)(4)(iii)(A) as soon as practicable.
    (iii) Consistent with paragraph (a)(1) of this section, paragraphs 
(c)(4)(iii)(A)(3)(i) and (ii) of this section shall only apply in very 
limited circumstances and, where applicable, shall be construed 
narrowly.
    (B) Material differences. To the extent the relevant data evaluated 
under paragraph (c)(4)(iii)(A) of this section suggest that the 
nonquantitative treatment limitation contributes to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits in a classification, 
such differences will be considered a strong indicator that the plan or 
issuer violates this paragraph (c)(4).
    (1) Where the relevant data suggest that the nonquantitative 
treatment limitation contributes to material differences in access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits in a classification, the plan or issuer must 
take reasonable action, as necessary, to address the material 
differences to ensure compliance, in operation, with this paragraph 
(c)(4) and must document the actions that have been or are being taken 
by the plan or issuer to address material differences in access to 
mental health or substance use disorder benefits, as compared to 
medical/surgical benefits, as required by Sec.  2590.712-1(c)(5)(iv).
    (2) For purposes of this paragraph (c)(4)(iii)(B), relevant data 
are considered to suggest that the nonquantitative treatment limitation 
contributes to material differences in access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits if, based on all relevant facts and circumstances, and taking 
into account the considerations outlined in this paragraph 
(c)(4)(iii)(B)(2), the difference in the data suggests that the 
nonquantitative treatment limitation is likely to have a negative 
impact on access to mental health or substance use disorder benefits as 
compared to medical/surgical benefits.
    (i) Relevant facts and circumstances, for purposes of this 
paragraph (c)(4)(iii)(B)(2), may include, but are not limited to, the 
terms of the nonquantitative treatment limitation at issue, the quality 
or limitations of the data, causal explanations and analyses, evidence 
as to the recurring or non-recurring nature of the results, and the 
magnitude of any disparities.
    (ii) Differences in access to mental health or substance use 
disorder benefits attributable to generally recognized independent 
professional medical or clinical standards or carefully circumscribed 
measures reasonably and appropriately designed to detect or prevent and 
prove fraud and abuse that minimize the negative impact on access to 
appropriate mental health and substance use disorder benefits, which 
are used as the basis for a factor or evidentiary standard used to 
design or apply a nonquantitative treatment limitation, are not 
considered to be material for purposes of this paragraph 
(c)(4)(iii)(B). To the extent a plan or issuer attributes any 
differences in access to the application of such standards or measures, 
the plan or issuer must explain the bases for that conclusion in the 
documentation prepared under Sec.  2590.712-1(c)(5)(iv)(A).
    (C) Nonquantitative treatment limitations related to network 
composition. For purposes of applying paragraph (c)(4)(iii)(A) of this 
section with respect to nonquantitative treatment limitations related 
to network composition, a plan or issuer must collect and evaluate 
relevant data in a manner reasonably designed to assess the aggregate 
impact of all such nonquantitative treatment limitations on access to 
mental health and substance use disorder benefits and medical/surgical 
benefits. Examples of possible actions that a plan or issuer could take 
to comply with the requirement under paragraph (c)(4)(iii)(B)(1) of 
this section to take reasonable action, as necessary, to address any 
material differences in access with respect to nonquantitative 
treatment limitations related to network composition, to ensure 
compliance with this paragraph (c)(4), include, but are not limited to:
    (1) Strengthening efforts to recruit and encourage a broad range of 
available mental health and substance use disorder providers and 
facilities to join the plan's or issuer's network of providers, 
including taking actions to increase compensation or other inducements, 
streamline credentialing processes, or contact providers reimbursed for 
items and services provided on an out-of-network basis to offer 
participation in the network;
    (2) Expanding the availability of telehealth arrangements to 
mitigate any overall mental health and substance use disorder provider 
shortages in a geographic area;
    (3) Providing additional outreach and assistance to participants 
and beneficiaries enrolled in the plan or coverage to assist them in 
finding available in-network mental health and substance use disorder 
providers and facilities; and
    (4) Ensuring that provider directories are accurate and reliable.
    (iv) 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.
    (v) Effect of final determination of noncompliance under Sec.  
2590.712-1. (A) If a group health plan (or health insurance issuer 
offering coverage in connection with a group health plan) receives a 
final determination from the Secretary that the plan or issuer is not 
in compliance with the requirements of ERISA section 712(a)(8) or 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 with respect to mental health or 
substance use disorder benefits in the relevant classification, 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.
    (B) A determination by the Secretary of whether to require 
cessation of a nonquantitative treatment limitation under this 
paragraph (c)(4)(v) will be based on an evaluation of the relevant 
facts and circumstances involved in the specific final determination 
and the nature of the underlying nonquantitative treatment limitation 
and will take into account the interest of plan participants and 
beneficiaries and feedback from the plan or issuer.
    (vi) 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.


[[Page 77727]]


    (A) Example 1 (not comparable and more stringent factors for 
reimbursement rate methodology, in operation)--(1) Facts. A plan's 
reimbursement rate methodology for outpatient, in-network providers 
is based on a variety of factors. 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 are based on 
a combination of factors, such as the nature of the service, 
duration of the service, intensity and specialization of training, 
provider licensure and type, number of providers qualified to 
provide the service in a given geographic area, and market need 
(demand). In operation, the plan utilizes an additional strategy to 
further reduce reimbursement rates for mental health and substance 
use disorder non-physician providers from those 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)(vi)(A) (Example 1), the 
plan violates the rules of this paragraph (c)(4). 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 of mental health and substance use 
disorder services by the same percentage for every CPT code but does 
not apply the same reductions to non-physician providers of medical/
surgical services from the rate for physician providers of medical/
surgical services, in operation, the factors used in designing and 
applying the nonquantitative treatment limitation to mental health 
and substance use disorder benefits in the outpatient, in-network 
classification are not comparable to, and are applied more 
stringently than, the factors used in designing and applying the 
limitation with respect to medical/surgical benefits in the same 
classification. As a result, the nonquantitative treatment 
limitation with respect to mental health or substance use disorder 
benefits in the outpatient, in-network classification is more 
restrictive than the predominant nonquantitative treatment 
limitation that applies to substantially all medical/surgical 
benefits in the same classification.
    (B) Example 2 (strategy for exclusion for experimental or 
investigative treatment more stringently applied to ABA therapy in 
operation)--(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, as experimental, a 
treatment or procedure when no professionally recognized treatment 
guidelines include the treatment or procedure as a clinically 
appropriate standard 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 as one intervention to treat certain children with ASD.
    (2) Conclusion. In this paragraph (c)(4)(vi)(B) (Example 2), the 
plan violates the rules of this paragraph (c)(4). As written, the 
plan excludes coverage of 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 as including the treatment or procedure at 
issue, and fewer than two randomized controlled trials are available 
to support the treatment's use with respect to the given condition 
or procedure. However, in operation, the plan deviates from this 
strategy with respect to ABA therapy because more than one 
professionally recognized treatment guideline defines clinically 
appropriate standards of care for ASD as including ABA therapy to 
treat certain children with ASD and more than two randomized 
controlled trials are available to support the use of ABA therapy to 
treat certain children with ASD. Therefore, in operation, the 
strategy used to design the nonquantitative treatment limitation for 
benefits for the treatment of ASD, which is a mental health 
condition, in the outpatient, in-network classification is not 
comparable to, and is applied more stringently than, the strategy 
used to design the nonquantitative treatment limitation for medical/
surgical benefits in the same classification. As a result, the 
nonquantitative treatment limitation with respect to mental health 
or substance use disorder benefits in the outpatient, in-network 
classification is more restrictive than the predominant 
nonquantitative treatment limitation that applies to substantially 
all medical/surgical benefits in the same classification.
    (C) Example 3 (step therapy protocol with exception for severe 
or irreversible consequences, discriminatory factor)--(1) Facts. A 
plan's written terms include a step therapy protocol that requires 
participants and beneficiaries who are prescribed certain drugs to 
try and fail a generic or preferred brand name drug before the plan 
will cover the drug originally prescribed by a participant's or 
beneficiary's attending provider. The plan provides an exception to 
this protocol that was developed solely based on a methodology 
developed by an external third-party organization. The third-party 
organization's methodology, which is not based on a generally 
recognized independent professional medical or clinical standard, 
identifies instances in which a delay in treatment with a drug 
prescribed for a medical condition or surgical procedure could 
result in either severe or irreversible consequences. However, with 
respect to a drug prescribed for a mental health condition or a 
substance use disorder, the third-party organization's methodology 
only identifies instances in which a delay in treatment could result 
in both severe and irreversible consequences, and the plan does not 
take any steps to correct, cure, or supplement the methodology.
    (2) Conclusion. In this paragraph (c)(4)(vi)(C) (Example 3), the 
plan violates the rules of paragraph (c)(4)(i)(B) of this section. 
The source upon which the factor used to apply the step therapy 
protocol is based is biased or not objective in a manner that 
discriminates against mental health or substance use disorder 
benefits as compared to medical/surgical benefits because it 
addresses instances in which a delay in treatment with a drug 
prescribed for a medical condition or surgical procedure could 
result in either severe or irreversible consequences, but only 
addresses instances in which a delay in treatment with a drug 
prescribed for a mental health condition or substance use disorder 
could result in both severe and irreversible consequences, and the 
plan fails to take the steps necessary to correct, cure, or 
supplement the methodology so that it is not biased and is 
objective. Based on the relevant facts and circumstances, this 
source systematically disfavors access or is specifically designed 
to disfavor access to mental health or substance use disorder 
benefits as compared to medical/surgical benefits. Therefore, the 
factor used to apply the step therapy protocol is discriminatory for 
purposes of determining comparability and stringency under paragraph 
(c)(4)(i)(A) of this section, and may not be relied upon by the 
plan.
    (D) Example 4 (use of historical plan data and plan steps to 
correct, cure, or supplement)--(1) Facts. A plan's methodology for 
calculating provider reimbursement rates relies only on historical 
plan data on total plan spending for each specialty, divided between 
mental health and substance use disorder providers and medical/
surgical providers, from a time when the plan was not subject to 
ERISA section 712. The plan has used these historical plan data for 
many years to establish base reimbursement rates in all provider 
specialties for which it provides medical/surgical, mental health, 
and substance use disorder benefits in the inpatient, in-network 
classification. In evaluating the use of these historical plan data 
in the design of the methodology for calculating provider 
reimbursement rates, the plan determined, based on all the relevant 
facts and circumstances, that the historical plan data 
systematically disfavor access or are specifically designed to 
disfavor access to mental health or substance use disorder benefits 
as compared to medical/surgical benefits. To ensure this information 
about historical reimbursement rates is not biased and is objective, 
the plan supplements its methodology to develop the base 
reimbursement rates for mental health and substance use disorder 
providers in accordance with additional information, evidence, 
sources, and standards that reflect the increased demand for mental 
health and substance use disorder benefits in the inpatient, in-
network classification and to

[[Page 77728]]

attract sufficient mental health and substance use disorder 
providers to the network, so that the relevant facts and 
circumstances indicate the supplemented information, evidence, 
sources, or standards do not systematically disfavor access and are 
not specifically designed to disfavor access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits.
    (2) Conclusion. In this paragraph (c)(4)(vi)(D) (Example 4), the 
plan does not violate the rules of paragraph (c)(4)(i)(B) of this 
section with respect to the plan's methodology for calculating 
provider reimbursement rates in the inpatient, in-network 
classification. The relevant facts and circumstances indicate that 
the plan's use of only historical plan data to design its 
methodology for calculating provider reimbursement rates in the 
inpatient, in-network classification would otherwise be considered 
to be biased or not objective in a manner that discriminates against 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits under paragraph (c)(4)(i)(B)(2) of this 
section, since the historical data systematically disfavor access or 
are specifically designed to disfavor access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits. However, the plan took the steps necessary to supplement 
the information, evidence, sources, and standards to reasonably 
reflect the increased demand for mental health and substance use 
disorder benefits in the inpatient, in-network classification, and 
adjust the methodology to increase reimbursement rates for those 
benefits, thereby ensuring that the information, evidence, sources, 
and standards relied upon by the plan for this purpose are not 
biased and are objective. Therefore, the factors and evidentiary 
standards used to design the plan's methodology for calculating 
provider reimbursement rates in the inpatient, in-network 
classification are not discriminatory.
    (E) Example 5 (generally recognized independent professional 
medical or clinical standards and more stringent prior authorization 
requirement in operation)--(1) Facts. The provisions of a plan state 
that it relies on, and does not deviate from, generally recognized 
independent professional medical or clinical standards to inform the 
factor used to design prior authorization requirements for both 
medical/surgical and mental health and substance use disorder 
benefits in the prescription drug classification. The 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 for 
treatment of opioid use disorder, every 30 days, which is 
inconsistent with the generally recognized independent professional 
medical standard on which the factor used to design the limitation 
is based. The plan's factor used to design prior authorization 
requirements for medical/surgical benefits in the prescription drug 
classification relies on, and does not deviate from, generally 
recognized independent professional medical or clinical standards.
    (2) Conclusion. In this paragraph (c)(4)(vi)(E) (Example 5), the 
plan violates the rules of this paragraph (c)(4). The American 
Society of Addiction Medicine national practice guidelines on which 
the factor used to design prior authorization requirements for 
substance use disorder benefits is based are generally recognized 
independent professional medical or clinical standards that are not 
considered to be biased or not objective in a manner that 
discriminates against mental health and substance use disorder 
benefits under paragraph (c)(4)(i)(B)(3) of this section. However, 
the plan must comply with other requirements in this paragraph 
(c)(4), as applicable, with respect to such standards or measures 
that are used as the basis for a factor or evidentiary standard used 
to design or apply a nonquantitative treatment limitation. In 
operation, the plan's factor used to design and apply prior 
authorization requirements with respect to substance use disorder 
benefits is not comparable to, and is applied more stringently than, 
the same factor used to design and apply prior authorization 
requirements for medical/surgical benefits, because the factor 
relies on, and does not deviate from, generally recognized 
independent professional medical or clinical standards for medical/
surgical benefits, but deviates from the relevant guidelines for 
substance use disorder benefits. As a result, the nonquantitative 
treatment limitation with respect to substance use disorder benefits 
in the prescription drug classification is more restrictive than the 
predominant nonquantitative treatment limitation that applies to 
substantially all medical/surgical benefits in the same 
classification.
    (F) Example 6 (plan claims no data exist to reasonably assess 
impact of nonquantitative treatment limitation on access; medical 
necessity criteria)--(1) Facts. A plan approves or denies claims for 
mental health and substance use disorder benefits and for medical/
surgical benefits in the inpatient, in-network and outpatient, in-
network classifications based on medical necessity criteria. The 
plan states in its comparative analysis that no data exist that can 
reasonably assess any relevant impact of the medical necessity 
criteria nonquantitative treatment limitation on relevant outcomes 
related to access to mental health or substance use disorder 
benefits as compared to the plan's medical necessity criteria 
nonquantitative treatment limitation's impact on relevant outcomes 
related to access to medical/surgical benefits in the relevant 
classifications, without further explanation.
    (2) Conclusion. In this paragraph (c)(4)(vi)(F) (Example 6), the 
plan violates this paragraph (c)(4). The plan does not comply with 
paragraph (c)(4)(iii)(A)(3)(ii) of this section because the plan did 
not include in its comparative analysis, as required under Sec.  
2590.712-1(c)(5)(i)(D), a reasoned justification as to the basis for 
its conclusion that there are no data that can reasonably assess the 
nonquantitative treatment limitation's impact, an explanation of why 
the nature of the nonquantitative treatment limitation prevents the 
plan from reasonably measuring its impact, an explanation of what 
data was considered and rejected, and documentation of any 
additional safeguards or protocols used to ensure the 
nonquantitative treatment limitation complies with this paragraph 
(c)(4). Data that could reasonably assess the medical necessity 
criteria nonquantitative treatment limitation's impact might 
include, for example, the number and percentage of claims denials, 
or the number and percentage of claims that were approved for a 
lower level of care than the level requested on the initial claim. 
Therefore, because the plan has not collected and evaluated relevant 
data in a manner reasonably designed to assess the impact of the 
nonquantitative treatment limitation on relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits in the relevant classifications, the plan 
violates the requirements of paragraph (c)(4)(iii) of this section, 
and violates the requirements under Sec.  2590.712-1(c)(5)(i)(D) 
because it did not include sufficient information in its comparative 
analysis with respect to the lack of relevant data.
    (G) Example 7 (concurrent review data collection; no material 
difference in access)--(1) Facts. A plan follows a written process 
to apply a concurrent review nonquantitative treatment limitation to 
all medical/surgical benefits and mental health and substance use 
disorder benefits within the inpatient, in-network classification. 
Under this 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. The plan collects relevant data, including the 
number of referrals to second-level review, and the number of 
denials of claims for medical/surgical benefits and mental health 
and substance use disorder benefits subject to concurrent review as 
compared to the total number of claims subject to concurrent review, 
in the inpatient, in-network classification. The plan also collects 
and evaluates the number of denied claims for medical/surgical 
benefits and mental health and substance use disorder benefits that 
are overturned on appeal in the inpatient, in-network 
classification. The plan evaluates the relevant data and determines 
that, based on the relevant facts and circumstances, the data do not 
suggest that the concurrent review nonquantitative treatment 
limitation contributes to material differences in access to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits in the classification Upon requesting the plan's 
comparative analysis for the concurrent review nonquantitative 
treatment limitation and reviewing the relevant data, the Secretary 
does not request additional data

[[Page 77729]]

and agrees that the data do not suggest material differences in 
access.
    (2) Conclusion. In this paragraph (c)(4)(vi)(G) (Example 7), the 
plan does not violate the rules of paragraph (c)(4)(iii) of this 
section. The plan collected and evaluated relevant data in a manner 
reasonably designed to assess the impact of the nonquantitative 
treatment limitation on relevant outcomes related to access to 
mental health and substance use disorder benefits and medical/
surgical benefits and considered the impact as part of its 
evaluation. Because the relevant data evaluated do not suggest that 
the nonquantitative treatment limitation contributes to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits in the inpatient, 
in-network classification, under paragraph (c)(4)(iii)(B) of this 
section, there is no strong indicator that the plan violates this 
paragraph (c)(4).
    (H) Example 8 (material difference in access for prior 
authorization requirement with reasonable action)--(1) Facts. A plan 
requires prior authorization 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. The plan collects and evaluates relevant data in a manner 
reasonably designed to assess the impact of the prior authorization 
requirement on relevant outcomes related to access to mental health 
and substance use disorder benefits and medical/surgical benefits in 
the inpatient, in-network classification. The plan's written process 
for prior authorization states that the plan approves inpatient, in-
network benefits for medical conditions and surgical procedures and 
mental health and substance use disorder benefits 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. Approvals for 
mental health and substance use disorder benefits are most commonly 
given only for 1 day, after which a treatment plan must be submitted 
by the patient's attending provider and approved by the plan. The 
relevant data show that approvals for 7 days are most common for 
medical conditions and surgical procedures under this plan. Based on 
all the relevant facts and circumstances, the difference in the 
relevant data suggests that the nonquantitative treatment limitation 
is likely to have a negative impact on access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits. Therefore, the data suggest that the nonquantitative 
treatment limitation contributes to material differences in access. 
To address these material differences in access, the plan consults 
more recent medical guidelines to update the factors that inform its 
medical necessity nonquantitative treatment limitations. Based on 
this review, the plan modifies the limitation so that inpatient, in-
network prior authorization requests for mental health or substance 
use disorder benefits are approved for similar periods to what is 
approved for medical/surgical benefits. The plan includes 
documentation of this action as part of its comparative analysis.
    (2) Conclusion. In this paragraph (c)(4)(vi)(H) (Example 8), the 
plan does not violate the rules of paragraph (c)(4)(iii) of this 
section. While relevant data for the plan's prior authorization 
requirements suggested that the nonquantitative treatment limitation 
contributes to material differences in access to mental health and 
substance use disorder benefits as compared to inpatient, in-network 
medical/surgical benefits under paragraph (c)(4)(iii)(B) of this 
section, the plan has taken reasonable action, as necessary, to 
ensure compliance, in operation, with this paragraph (c)(4) by 
updating the factors that inform its prior authorization 
nonquantitative treatment limitation for inpatient, in-network 
mental health and substance use disorder benefits so that these 
benefits are approved for similar periods to what is approved for 
medical/surgical benefits. The plan also documents its action taken 
to address material differences in access to inpatient, in-network 
benefits as required by paragraph (c)(4)(iii)(B)(1) of this section.
    (I) Example 9 (differences attributable to 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 factors and evidentiary 
standards used to design and apply the medical management 
requirement rely on independent professional medical or clinical 
standards that are generally recognized by health care providers and 
facilities in relevant clinical specialties. 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. 
The plan collects and evaluates relevant data in a manner reasonably 
designed to assess the impact of the medical management 
nonquantitative treatment limitation on relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits, and considers the impact as part of the 
plan's evaluation, as required by paragraph (c)(4)(iii)(A) of this 
section. 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. The plan correctly 
determines that these differences in access are attributable to the 
generally recognized independent professional medical or clinical 
standards used as the basis for the factors and evidentiary 
standards used to design or apply the limitation and adequately 
explains the bases for that conclusion as part of its comparative 
analysis.
    (2) Conclusion. In this paragraph (c)(4)(vi)(I) (Example 9), the 
plan does not violate the rules of this paragraph (c)(4). Generally 
recognized independent professional medical or clinical standards of 
care are not considered to be information, evidence, sources, or 
standards that are biased and not objective in a manner that 
discriminates against mental health or substance use disorder 
benefits as compared to medical/surgical benefits, and the plan 
otherwise complies with the requirements in paragraph (c)(4)(i) of 
this section. Additionally, the plan does not violate paragraph 
(c)(4)(iii) of this section because it has collected and evaluated 
relevant data, the differences in access are attributable to the 
generally recognized independent professional medical or clinical 
standards that are used as the basis for the factors and evidentiary 
standards used to design or apply the medical management 
nonquantitative treatment limitation, and the plan explains the 
bases for this conclusion in its comparative analysis. As a result, 
the nonquantitative treatment limitation with respect to mental 
health or substance use disorder benefits in the inpatient, out-of-
network classification is no more restrictive than the predominant 
nonquantitative treatment limitation that applies to substantially 
all medical/surgical benefits in the same classification.
    (J) Example 10 (material differences in access for standards for 
provider admission to a network with reasonable action)--(1) Facts. 
A plan applies nonquantitative treatment limitations related to 
network composition in the inpatient, in-network and outpatient, 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 processes, 
strategies, evidentiary standards, and other factors used in 
designing and applying the nonquantitative treatment limitations 
related to network composition for 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)(i) of this 
section. In order to ensure, in operation, that the nonquantitative 
treatment limitations are no more restrictive than the predominant 
nonquantitative treatment limitations applied to substantially all 
medical/surgical benefits in the classification, the plan collects 
and evaluates relevant data in a manner reasonably designed to 
assess the aggregate impact of all the nonquantitative treatment 
limitations related to network composition on relevant outcomes 
related to 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 evaluation. The plan 
considers relevant data that is known, or reasonably should be 
known, including metrics relating to the time and distance from

[[Page 77730]]

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 (for comparable services and 
benchmarked to a reference standard, as appropriate); and in-network 
and out-of-network utilization rates (including data related to the 
dollar value and number of provider claims submissions). The plan 
determines that the relevant data suggest that the nonquantitative 
treatment limitations in the aggregate contribute to material 
differences in access to mental health and substance use disorder 
benefits compared to medical/surgical benefits in the 
classifications because, based on all the relevant facts and 
circumstances, the differences in the data suggest that the 
nonquantitative treatment limitations related to network composition 
are likely to have a negative impact on access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits. The plan takes reasonable actions, as necessary, to 
address the material differences in access, to ensure compliance, in 
operation, with this paragraph (c)(4), by strengthening its efforts 
to recruit and encourage a broad range of available providers and 
facilities to join the plan's network of providers, including by 
taking actions to increase compensation and other inducements, 
streamline credentialing processes, contact providers reimbursed for 
items and services provided on an out-of-network basis to offer 
participation in the network, and develop a process to monitor the 
effects of such efforts; expanding the availability of telehealth 
arrangements to mitigate overall provider shortages in certain 
geographic areas; providing additional outreach and assistance to 
participants and beneficiaries enrolled in the plan to assist them 
in finding available in-network providers and facilities; and 
ensuring that the plan's provider directories are accurate and 
reliable. The plan documents the efforts that it has taken to 
address the material differences in access that the data revealed, 
and the plan includes the documentation as part of its comparative 
analysis submission.
    (2) Conclusion. In this paragraph (c)(4)(vi)(J) (Example 10), 
the plan does not violate the rules of this paragraph (c)(4). The 
plan's nonquantitative treatment limitations related to network 
composition comply with the rules of paragraph (c)(4)(i) of this 
section. Additionally, the plan collects and evaluates relevant 
data, as required under paragraph (c)(4)(iii)(A) of this section, in 
a manner reasonably designed to assess the aggregate impact of all 
such nonquantitative treatment limitations on relevant outcomes 
related to access to mental health and substance use disorder 
benefits and medical/surgical benefits, as required under paragraph 
(c)(4)(iii)(C) of this section. While the data suggest that the 
nonquantitative treatment limitations contribute to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits, the plan has 
taken reasonable action, as necessary, to ensure compliance with 
this paragraph (c)(4). The plan also documents the actions that have 
been and are being taken by the plan to address material differences 
as required by Sec.  2590.712-1(c)(5)(iv). As a result, the network 
composition nonquantitative treatment limitations with respect to 
mental health or substance use disorder benefits in the inpatient, 
in-network and outpatient, in-network classifications are no more 
restrictive than the predominant nonquantitative treatment 
limitations that apply to substantially all medical/surgical 
benefits in the same classifications.
    (K) Example 11 (separate EAP exhaustion treatment limitation 
applicable only to mental health or substance use disorder 
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)(vi)(K) (Example 11), 
the requirement that limits 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)(4). 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)(iv) 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 exclusion for treatment in a 
residential facility applicable only to mental health and substance 
use disorder benefits)--(1) Facts. A plan generally covers 
inpatient, in-network and inpatient, out-of-network treatment 
without any limitations on setting, including skilled nursing 
facilities and rehabilitation hospitals, provided other medical 
necessity standards are satisfied. The plan has an exclusion for 
treatment at residential facilities, 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)(vi)(L) (Example 12), 
the plan violates the rules of paragraph (c)(4)(iv) of this section. 
The exclusion of treatment at residential facilities 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 because the 
plan does not apply a comparable exclusion with respect to any 
medical/surgical benefits in the same benefit classification.
    (M) Example 13 (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 the 
plan's exclusion of mental health and substance use disorder 
benefits for failure to complete a course of treatment in the 
inpatient, in-network classification under Sec.  2590.712-1(d), the 
plan submits a comparative analysis for the nonquantitative 
treatment limitation. After review of the comparative analysis, as 
well as additional information submitted by the plan after the 
Secretary determines that the plan has not submitted sufficient 
information to be responsive to the request, 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 inpatient, in-network 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. Under 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. However, the 
corrective action plan does not alter or eliminate the exclusion or 
alter the processes, strategies, evidentiary standards, and other 
factors used in designing and applying the exclusion. Moreover, the 
additional comparative analysis still does not include sufficient 
information. The Secretary then determines that the additional 
comparative analyses do not demonstrate compliance with the 
requirements of this paragraph (c)(4). Accordingly, the plan 
receives a final determination of noncompliance with ERISA section 
712(a)(8) and Sec.  2590.712-1 from the Secretary, which concludes 
that the plan did not demonstrate compliance through the comparative 
analysis process. After considering the relevant facts and 
circumstances, and considering the interests of plan participants 
and beneficiaries, as well as feedback from the plan, the Secretary 
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 exclusion of benefits for failure 
to complete a course of treatment in the inpatient, in-network 
classification.
    (2) Conclusion. In this paragraph (c)(4)(vi)(M) (Example 13), by 
continuing to impose the exclusion of mental health and

[[Page 77731]]

substance use disorder benefits for failure to complete a course of 
treatment in the inpatient, in-network classification after the 
Secretary directs the plan not to impose this nonquantitative 
treatment limitation, the plan violates the requirements of 
paragraph (c)(4)(v) of this section.
* * * * *
    (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) who have received 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 that is required to provide 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 at 45 CFR 146.136 and 146.137 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--
    (i) 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, except that 
the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and 
(c)(4)(iii) of this section apply on the first day of the first plan 
year beginning on or after January 1, 2026.
    (ii) Until the applicability date in paragraph (i)(1)(i) of this 
section, 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 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, which must be provided 
to the named fiduciaries of the plan who are required to include a 
certification as part 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 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

[[Page 77732]]

substance use disorder benefits and which benefits are considered 
medical/surgical benefits; and
    (iii) A description of which benefits are included in each 
classification set forth in Sec.  2590.712(c)(2)(ii)(A).
    (2) Identification and definition of the factors and evidentiary 
standards 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 every factor considered or relied upon, 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;
    (B) A description of each evidentiary standard used to design or 
apply each factor (and the source of each evidentiary standard) 
identified under paragraph (c)(2)(i) of this section; and
    (C) A description of any steps the plan or issuer has taken to 
correct, cure, or supplement any information, evidence, sources, or 
standards that would otherwise have been considered biased or not 
objective under Sec.  2590.712(c)(4)(i)(B)(1) in the absence of such 
steps.
    (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 under 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 
designations 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 deviations or variations 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 
deviations or variations.
    (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 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 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 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 reasons for any deviations or variations 
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 deviations or variations, 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, in 
operation, the processes, strategies, evidentiary standards, or other 
factors used in designing and applying the

[[Page 77733]]

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 evaluates 
whether, 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;
    (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;
    (C) With respect to a nonquantitative treatment limitation for 
which relevant data is temporarily unavailable as described in Sec.  
2590.712(c)(4)(iii)(A)(3)(i), a detailed explanation of the lack of 
relevant data, the basis for the plan's or issuer's conclusion that 
there is a lack of relevant data, and when and how the data will become 
available and be collected and analyzed; and
    (D) With respect to a nonquantitative treatment limitation for 
which no data exist that can reasonably assess any relevant impact of 
the nonquantitative treatment limitation on relevant outcomes related 
to access to mental health and substance use disorder benefits and 
medical/surgical benefits as described in Sec.  
2590.712(c)(4)(iii)(A)(3)(ii), a reasoned justification as to the basis 
for the conclusion that there are no data that can reasonably assess 
the nonquantitative treatment limitation's impact, an explanation of 
why the nature of the nonquantitative treatment limitation prevents the 
plan or issuer from reasonably measuring its impact, an explanation of 
what data was considered and rejected, and documentation of any 
additional safeguards or protocols used to ensure that the 
nonquantitative treatment limitation complies with Sec.  
2590.712(c)(4);
    (ii) Identification of the relevant data collected and evaluated, 
as required under Sec.  2590.712(c)(4)(iii)(A);
    (iii) Documentation 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:
    (A) The evaluation of relevant data as required under Sec.  
2590.712(c)(4)(iii)(A); and
    (B) A reasoned justification and analysis that explains why the 
plan or issuer concluded that any differences in the relevant data do 
or do not suggest the nonquantitative treatment limitation contributes 
to material differences in access to mental health or substance use 
disorder benefits as compared to medical/surgical benefits, in 
accordance with Sec.  2590.712(c)(4)(iii)(B)(2);
    (iv) A detailed explanation of any material differences in access 
demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of 
this section, including:
    (A) A reasoned explanation of any material differences in access 
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 (including any considerations beyond a plan's 
or issuer's control that contribute to the existence of material 
differences) and a detailed explanation of the bases for concluding 
that material differences are not attributable to differences in the 
comparability or relative stringency of the nonquantitative treatment 
limitation; and
    (B) To the extent differences in access to mental health or 
substance use disorder benefits are attributable to generally 
recognized independent professional medical or clinical standards or 
carefully circumscribed measures reasonably and appropriately designed 
to detect or prevent and prove fraud and abuse that minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits, and such standards or measures are used as the 
basis for a factor or evidentiary standard used to design or apply a 
nonquantitative treatment limitation, documentation explaining how any 
such differences are attributable to those standards or measures, as 
required in Sec.  2590.712(c)(4)(iii)(B)(2)(ii); and
    (v) A discussion of the actions that have been or are being taken 
by the plan or issuer to address 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 has 
taken or is taking under Sec.  2590.712(c)(4)(iii)(B)(1) to address 
material differences to comply, in operation, with Sec.  
2590.712(c)(4), including, as applicable:
    (A) A reasoned explanation of any material differences in access to 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits that persist despite reasonable actions that 
have been or are being taken; and
    (B) For a plan or issuer designing and applying one or more 
nonquantitative treatment limitations related to network composition, a 
discussion of the actions that have been or are being taken to address 
material differences in access to in-network mental health and 
substance use disorder benefits as compared to in-network medical/
surgical benefits, including those listed in Sec.  
2590.712(c)(4)(iii)(C).
    (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 or is not (or might or might not be) in compliance with the 
requirements of Sec.  2590.712(c)(4), including any additional 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 not otherwise discussed in the comparative analysis;
    (iv) The date the analysis is completed and the title and 
credentials of all relevant persons who participated

[[Page 77734]]

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 the 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 that they 
have engaged in a prudent process to select one or more qualified 
service providers to perform and document a comparative analysis in 
connection with the imposition of any nonquantitative treatment 
limitations that apply to mental health and substance use disorder 
benefits under the plan in accordance with applicable law and 
regulations, and have satisfied their duty to monitor those service 
providers as required under part 4 of ERISA with respect to the 
performance and documentation of such comparative analysis.
    (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 coverage in connection with 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 or issuer has not submitted sufficient 
information under paragraph (d)(1) of this section for the Secretary to 
determine whether the comparative analysis required in paragraph (b) of 
this section complies with paragraph (c) of this section or whether the 
plan or issuer complies with Sec.  2590.712(c)(4), 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). 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 
initial determination by 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 (c) of this section that demonstrate 
compliance with Sec.  2590.712(c)(4), 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 
business days of receipt of the final determination of noncompliance, 
and the plan or issuer must 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 
timeframe.
    (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 submitted or 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 Sec.  2590.712(c)(4) or this section, 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 concurred with those 
actions; 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 (including a provider or other 
person acting as a participant's or beneficiary's authorized 
representative) who has

[[Page 77735]]

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), on the 
first day of the first plan year beginning on or after January 1, 2025, 
except the requirements of paragraphs (c)(2)(ii)(C), (c)(5)(i)(C) and 
(D), and (c)(5)(ii) through (v) of this section apply on the first day 
of the first plan year beginning on or after January 1, 2026.
    (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 amends 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 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), (c)(2)(ii)(A) 
introductory text, (c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
0
d. In paragraph (c)(3)(iii), adding introductory text;
0
e. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4), 
(d)(3), (e)(4), and (i)(1); and
0
f. 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 aggregate 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 in the same classification, 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 or substance use disorder 
benefits under the plan or coverage than they impose on access to 
medical/surgical benefits in the same classification of benefits. The 
provisions of PHS Act 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 as of November 22, 
2024, is the Diagnostic and Statistical Manual of Mental Disorders, 
Fifth Edition, Text Revision published in March 2022. A subsequent 
version of the DSM published after November 22, 2024, will be 
considered the most current version beginning on the first day of the 
plan year that is one year after the date the subsequent version is 
published.
    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

[[Page 77736]]

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 as of November 
22, 2024, is the International Classification of Diseases, 10th 
Revision, Clinical Modification adopted for the period beginning on 
October 1, 2015. Any subsequent version of the ICD adopted through 
Sec.  162.1002 of this subtitle after November 22, 2024, will be 
considered the most current version beginning on the first day of the 
plan year that is one year after the date the subsequent version is 
adopted.
    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. 
Examples of 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 that are used to determine when and how 
a participant or beneficiary may access certain services; and the 
development and approval of a treatment plan used in a concurrent 
review process to determine whether a specific request should be 
granted or denied. 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 the degree of 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; the method of determining whether and how to deviate from 
generally accepted standards of care in concurrent reviews; the 
selection of information deemed reasonably necessary to make medical 
necessity determinations; reliance on treatment guidelines or 
guidelines provided by third-party organizations in the design of a 
nonquantitative treatment limitation; and rationales used in selecting 
and adopting certain threshold amounts to apply a nonquantitative 
treatment limitation, professional standards and protocols to determine 
utilization management standards, and fee schedules used to determine 
provider reimbursement rates, used as part of a nonquantitative 
treatment limitation. Strategies also include the method of creating 
and determining the 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 or issuer's 
methods for making 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

[[Page 77737]]

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 (such as 
standards related to network composition), which otherwise limit the 
scope or duration of benefits for treatment under a plan or coverage. 
(See paragraph (c)(4)(ii) 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)(ii) 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), 
it must provide meaningful benefits for that mental health condition or 
substance use disorder in every classification in which medical/
surgical benefits are provided. For purposes of this paragraph 
(c)(2)(ii)(A), whether the benefits provided are meaningful benefits is 
determined in comparison to the benefits provided for medical 
conditions and surgical procedures in the classification and requires, 
at a minimum, coverage of benefits for that condition or disorder in 
each classification in which the plan (or coverage) provides benefits 
for one or more medical conditions or surgical procedures. A plan (or 
coverage) does not provide meaningful benefits under this paragraph 
(c)(2)(ii)(A) unless it provides benefits for a core treatment for that 
condition or disorder in each classification in which the plan (or 
coverage) provides benefits for a core treatment for one or more 
medical conditions or surgical procedures. For purposes of this 
paragraph (c)(2)(ii)(A), a core treatment for a condition or disorder 
is a standard treatment or course of treatment, therapy, service, or 
intervention indicated by generally recognized independent standards of 
current medical practice. If there is no core treatment for a covered 
mental health condition or substance use disorder with respect to a 
classification, the plan (or coverage) is not required to provide 
benefits for a core treatment for such condition or disorder in that 
classification (but must provide benefits for such condition or 
disorder in every classification in which medical/surgical benefits are 
provided). 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) Examples. The rules of this paragraph (c)(2)(ii) 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. With regard to the examples in this paragraph 
(c)(2)(ii)(C), references to any particular core treatment are included 
for illustrative purposes only. Plans and issuers must consult 
generally recognized independent standards of current medical practice 
to determine the applicable core treatment, therapy, service, or 
intervention for any covered condition or disorder.
    (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

[[Page 77738]]

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 covers treatment for autism 
spectrum disorder (ASD), a mental health condition, and covers 
outpatient, out-of-network developmental screenings for ASD but 
excludes all other benefits for outpatient treatment for ASD, 
including applied behavior analysis (ABA) therapy, when provided on 
an out-of-network basis. The plan generally covers the full range of 
outpatient treatments (including core treatments) and treatment 
settings for medical conditions and surgical procedures when 
provided on an out-of-network basis. Under the generally recognized 
independent standards of current medical practice consulted by the 
plan, developmental screenings alone do not constitute a core 
treatment for ASD.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5), 
the plan violates the rules of this paragraph (c)(2)(ii). Although 
the plan covers benefits for ASD in the outpatient, out-of-network 
classification, it only covers developmental screenings, so it does 
not cover a core treatment for ASD in the classification. Because 
the plan generally covers the full range of medical/surgical 
benefits, including a core treatment for one or more medical 
conditions or surgical procedures in the classification, it fails to 
provide meaningful benefits for treatment of ASD in the 
classification.
    (6) Example 6--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(5) of this section (Example 5), except that the plan 
is an HMO that does not cover the full range of medical/surgical 
benefits including a core treatment for any medical conditions or 
surgical procedures in the outpatient, out-of-network classification 
(except as required under PHS Act sections 2799A-1 and 2799A-2), but 
covers benefits for medical conditions and surgical procedures in 
the inpatient, in-network; outpatient, in-network; emergency care; 
and prescription drug classifications.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
Because the plan does not provide meaningful benefits including for 
a core treatment for any medical condition or surgical procedure in 
the outpatient, out-of-network classification (except as required 
under PHS Act sections 2799A-1 and 2799A-2), the plan is not 
required to provide meaningful benefits for any mental health 
conditions or substance use disorders in that classification. 
Nevertheless, the plan must provide meaningful benefits for each 
mental health condition and substance use disorder for which the 
plan provides benefits in every classification in which meaningful 
medical/surgical benefits are provided as required under paragraph 
(c)(2)(ii)(A) of this section. This example does not address whether 
the plan has complied with other applicable requirements of this 
section in excluding coverage of ABA therapy in the outpatient, out-
of-network classification.
    (7) Example 7--(i) Facts. A plan provides extensive benefits, 
including for core treatments for many medical conditions and 
surgical procedures in the outpatient, in-network classification, 
including nutrition counseling for diabetes and obesity. The plan 
also generally covers diagnosis and treatment for eating disorders, 
which are mental health conditions, including coverage for nutrition 
counseling to treat eating disorders in the outpatient, in-network 
classification. Nutrition counseling is a core treatment for eating 
disorders, in accordance with generally recognized independent 
standards of current medical practice consulted by the plan.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(7) (Example 7), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
The coverage of diagnosis and treatment for eating disorders, 
including nutrition counseling, in the outpatient, in-network 
classification results in the plan providing meaningful benefits for 
the treatment of eating disorders in the classification, as 
determined in comparison to the benefits provided for medical 
conditions or surgical procedures in the classification.
    (8) Example 8--(i) Facts. A plan provides extensive benefits for 
the core treatments for many medical conditions and surgical 
procedures in the outpatient, in-network and prescription drug 
classifications. The plan provides coverage for diagnosis and 
treatment for opioid use disorder, a substance use disorder, in the 
outpatient, in-network classification, by covering counseling and 
behavioral therapies and, in the prescription drug classification, 
by covering medications to treat opioid use disorder (MOUD). 
Counseling and behavioral therapies and MOUD, in combination, are 
one of the core treatments for opioid use disorder, in accordance 
with generally recognized independent standards of current medical 
practice consulted by the plan.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(8) (Example 8), 
the plan does not violate the rules of this paragraph (c)(2)(ii). 
The coverage of counseling and behavioral therapies and MOUD, in 
combination, in the outpatient, in-network classification and 
prescription drug classification, respectively, results in the plan 
providing meaningful benefits for the treatment of opioid use 
disorder in the outpatient, in-network and prescription drug 
classifications.

    (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

[[Page 77739]]

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. The rules of this paragraph 
(c)(3)(i)(D) 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     N/A............  12.5% (100x/800x)...  56.25% (450x/800x)..  12.5% (100x/800x)..  18.75% (150x/800x).
 level.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (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 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

[[Page 77740]]

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 brand    Specialty drugs.
                                                   name drugs.       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.
    (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. Consistent with 
paragraph (a)(1) 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 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 that applies 
to substantially all medical/surgical benefits in the same 
classification. For purposes of this paragraph (c)(4), a 
nonquantitative treatment limitation is more restrictive than the 
predominant nonquantitative treatment limitation that applies to 
substantially all medical/surgical benefits in the same classification 
if the plan or issuer fails to meet the requirements of paragraph 
(c)(4)(i) or (iii) of this section. In such a case, the plan (or health 
insurance coverage) will be considered to violate PHS Act section 2726 
(a)(3)(A)(ii), and the nonquantitative treatment limitation may not be 
imposed by the plan (or health insurance coverage) with respect to 
mental health or substance use disorder benefits in the classification.
    (i) Requirements related to design and application of a 
nonquantitative treatment limitation--(A) In general. A plan (or health 
insurance coverage) 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,

[[Page 77741]]

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)(i)(A) of this section, a plan (or health 
insurance coverage) may not rely upon discriminatory factors or 
evidentiary standards to design a nonquantitative treatment limitation 
to be imposed on mental health or substance use disorder benefits. A 
factor or evidentiary standard is discriminatory if the information, 
evidence, sources, or standards on which the factor or evidentiary 
standard are based are biased or not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits.
    (1) Information, evidence, sources, or standards are considered to 
be biased or not objective in a manner that discriminates against 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits if, based on all the relevant facts and 
circumstances, the information, evidence, sources, or standards 
systematically disfavor access or are specifically designed to disfavor 
access to mental health or substance use disorder benefits as compared 
to medical/surgical benefits. For purposes of this paragraph 
(c)(4)(i)(B)(1), relevant facts and circumstances may include, but are 
not limited to, the reliability of the source of the information, 
evidence, sources, or standards, including any underlying data; the 
independence of the information, evidence, sources, and standards 
relied upon; the analyses and methodologies employed to select the 
information and the consistency of their application; and any known 
safeguards deployed to prevent reliance on skewed data or metrics. 
Information, evidence, sources, or standards are not considered biased 
or not objective for this purpose if the plan or issuer has taken the 
steps necessary to correct, cure, or supplement any information, 
evidence, sources, or standards that would have been biased or not 
objective in the absence of such steps.
    (2) For purposes of this paragraph (c)(4)(i)(B), historical plan 
data or other historical information from a time when the plan or 
coverage was not subject to PHS Act section 2726 or was not in 
compliance with PHS Act section 2726 are considered to be biased or not 
objective in a manner that discriminates against mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits, if the historical plan data or other historical information 
systematically disfavor access or are specifically designed to disfavor 
access to mental health or substance use disorder benefits as compared 
to medical/surgical benefits, and the plan or issuer has not taken the 
steps necessary to correct, cure, or supplement the data or 
information.
    (3) For purposes of this paragraph (c)(4)(i)(B), generally 
recognized independent professional medical or clinical standards and 
carefully circumscribed measures reasonably and appropriately designed 
to detect or prevent and prove fraud and abuse that minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits are not information, evidence, sources, or 
standards that are biased or not objective in a manner that 
discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits. However, plans and issuers 
must comply with the other requirements in this paragraph (c)(4), as 
applicable, with respect to such standards or measures that are used as 
the basis for a factor or evidentiary standard used to design or apply 
a nonquantitative treatment limitation.
    (ii) 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.
    (iii) Required use of outcomes data--(A) In general. To ensure that 
a nonquantitative treatment limitation applicable to mental health or 
substance use disorder benefits in a classification, in operation, is 
no more restrictive than the predominant nonquantitative treatment 
limitation applied to substantially all medical/surgical benefits in 
the classification, 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 relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits and carefully consider the impact as part of 
the plan's or issuer's evaluation. As part of its evaluation, the plan 
or issuer may not disregard relevant outcomes data that it knows or 
reasonably should know suggest that a nonquantitative treatment 
limitation is associated with material differences in access to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits. 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)(iii)(A).
    (1) Relevant data generally. For purposes of this paragraph 
(c)(4)(iii)(A), relevant data could include, as appropriate, but are 
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) Relevant data for nonquantitative treatment limitations related 
to network composition. In addition to the relevant data set forth in 
paragraph (c)(4)(iii)(A)(1) of this section, relevant data for 
nonquantitative treatment limitations related to network composition 
could include, as appropriate, but are 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

[[Page 77742]]

data, and data on providers accepting new patients), and provider 
reimbursement rates (for comparable services and as benchmarked to a 
reference standard).
    (3) Unavailability of data. (i) If a plan or issuer newly imposes a 
nonquantitative treatment limitation for which relevant data is 
initially temporarily unavailable and the plan or issuer therefore 
cannot comply with this paragraph (c)(4)(iii)(A), the plan or issuer 
must include in its comparative analysis, as required under Sec.  
146.137(c)(5)(i)(C), a detailed explanation of the lack of relevant 
data, the basis for the plan's or issuer's conclusion that there is a 
lack of relevant data, and when and how the data will become available 
and be collected and analyzed. Such a plan or issuer also must comply 
with this paragraph (c)(4)(iii)(A) as soon as practicable once relevant 
data becomes available.
    (ii) If a plan or issuer imposes a nonquantitative treatment 
limitation for which no data exist that can reasonably assess any 
relevant impact of the nonquantitative treatment limitation on relevant 
outcomes related to access to mental health and substance use disorder 
benefits and medical/surgical benefits, the plan or issuer must include 
in its comparative analysis, as required under Sec.  
146.137(c)(5)(i)(D), a reasoned justification as to the basis for the 
conclusion that there are no data that can reasonably assess the 
nonquantitative treatment limitation's impact, why the nature of the 
nonquantitative treatment limitation prevents the plan or issuer from 
reasonably measuring its impact, an explanation of what data was 
considered and rejected, and documentation of any additional safeguards 
or protocols used to ensure the nonquantitative treatment limitation 
complies with this section. If a plan or issuer becomes aware of data 
that can reasonably assess any relevant impact of the nonquantitative 
treatment limitation, the plan or issuer must comply with this 
paragraph (c)(4)(iii)(A) as soon as practicable.
    (iii) Consistent with paragraph (a)(1) of this section, paragraphs 
(c)(4)(iii)(A)(3)(i) and (ii) of this section shall only apply in very 
limited circumstances and, where applicable, shall be construed 
narrowly.
    (B) Material differences. To the extent the relevant data evaluated 
under paragraph (c)(4)(iii)(A) of this section suggest that the 
nonquantitative treatment limitation contributes to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits in a classification, 
such differences will be considered a strong indicator that the plan or 
issuer violates this paragraph (c)(4).
    (1) Where the relevant data suggest that the nonquantitative 
treatment limitation contributes to material differences in access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits in a classification, the plan or issuer must 
take reasonable action, as necessary, to address the material 
differences to ensure compliance, in operation, with this paragraph 
(c)(4) and must document the actions that have been or are being taken 
by the plan or issuer to address material differences in access to 
mental health or substance use disorder benefits, as compared to 
medical/surgical benefits, as required by Sec.  146.137(c)(5)(iv).
    (2) For purposes of this paragraph (c)(4)(iii)(B), relevant data 
are considered to suggest that the nonquantitative treatment limitation 
contributes to material differences in access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits if, based on all relevant facts and circumstances, and taking 
into account the considerations outlined in this paragraph 
(c)(4)(iii)(B)(2), the difference in the data suggests that the 
nonquantitative treatment limitation is likely to have a negative 
impact on access to mental health or substance use disorder benefits as 
compared to medical/surgical benefits.
    (i) Relevant facts and circumstances, for purposes of this 
paragraph (c)(4)(iii)(B)(2), may include, but are not limited to, the 
terms of the nonquantitative treatment limitation at issue, the quality 
or limitations of the data, causal explanations and analyses, evidence 
as to the recurring or non-recurring nature of the results, and the 
magnitude of any disparities.
    (ii) Differences in access to mental health or substance use 
disorder benefits attributable to generally recognized independent 
professional medical or clinical standards or carefully circumscribed 
measures reasonably and appropriately designed to detect or prevent and 
prove fraud and abuse that minimize the negative impact on access to 
appropriate mental health and substance use disorder benefits, which 
are used as the basis for a factor or evidentiary standard used to 
design or apply a nonquantitative treatment limitation, are not 
considered to be material for purposes of this paragraph 
(c)(4)(iii)(B). To the extent a plan or issuer attributes any 
differences in access to the application of such standards or measures, 
the plan or issuer must explain the bases for that conclusion in the 
documentation prepared under Sec.  146.137(c)(5)(iv)(A).
    (C) Nonquantitative treatment limitations related to network 
composition. For purposes of applying paragraph (c)(4)(iii)(A) of this 
section with respect to nonquantitative treatment limitations related 
to network composition, a plan or issuer must collect and evaluate 
relevant data in a manner reasonably designed to assess the aggregate 
impact of all such nonquantitative treatment limitations on access to 
mental health and substance use disorder benefits and medical/surgical 
benefits. Examples of possible actions that a plan or issuer could take 
to comply with the requirement under paragraph (c)(4)(iii)(B)(1) of 
this section to take reasonable action, as necessary, to address any 
material differences in access with respect to nonquantitative 
treatment limitations related to network composition, to ensure 
compliance with this paragraph (c)(4), include, but are not limited to:
    (1) Strengthening efforts to recruit and encourage a broad range of 
available mental health and substance use disorder providers and 
facilities to join the plan's or issuer's network of providers, 
including taking actions to increase compensation or other inducements, 
streamline credentialing processes, or contact providers reimbursed for 
items and services provided on an out-of-network basis to offer 
participation in the network;
    (2) Expanding the availability of telehealth arrangements to 
mitigate any overall mental health and substance use disorder provider 
shortages in a geographic area;
    (3) Providing additional outreach and assistance to participants 
and beneficiaries enrolled in the plan or coverage to assist them in 
finding available in-network mental health and substance use disorder 
providers and facilities; and
    (4) Ensuring that provider directories are accurate and reliable.
    (iv) 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

[[Page 77743]]

medical/surgical benefits in the same benefit classification.
    (v) Effect of final determination of noncompliance under Sec.  
146.137. (A) If a group health plan (or health insurance issuer 
offering coverage in connection with a group health plan) receives a 
final determination from the Secretary or applicable State authority 
that the plan or issuer is not in compliance with the requirements of 
PHS Act section 2726(a)(8) or Sec.  146.137 with respect to a 
nonquantitative treatment limitation, the nonquantitative treatment 
limitation violates this paragraph (c)(4) and the Secretary or 
applicable State authority may direct the plan or issuer not to impose 
the nonquantitative treatment limitation with respect to mental health 
or substance use disorder benefits in the relevant classification, 
unless and until the plan or issuer demonstrates to the Secretary or 
applicable State authority compliance with the requirements of this 
section or takes appropriate action to remedy the violation.
    (B) A determination by the Secretary of whether to require 
cessation of a nonquantitative treatment limitation under this 
paragraph (c)(4)(v) will be based on an evaluation of the relevant 
facts and circumstances involved in the specific final determination 
and the nature of the underlying nonquantitative treatment limitation 
and will take into account the interest of plan participants and 
beneficiaries and feedback from the plan or issuer.
    (vi) 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.
    (A) Example 1 (not comparable and more stringent factors for 
reimbursement rate methodology, in operation)--(1) Facts. A plan's 
reimbursement rate methodology for outpatient, in-network providers 
is based on a variety of factors. 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 are based on 
a combination of factors, such as the nature of the service, 
duration of the service, intensity and specialization of training, 
provider licensure and type, number of providers qualified to 
provide the service in a given geographic area, and market need 
(demand). In operation, the plan utilizes an additional strategy to 
further reduce reimbursement rates for mental health and substance 
use disorder non-physician providers from those 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)(vi)(A) (Example 1), the 
plan violates the rules of this paragraph (c)(4). 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 of mental health and substance use 
disorder services by the same percentage for every CPT code but does 
not apply the same reductions to non-physician providers of medical/
surgical services from the rate for physician providers of medical/
surgical services, in operation, the factors used in designing and 
applying the nonquantitative treatment limitation to mental health 
and substance use disorder benefits in the outpatient, in-network 
classification are not comparable to, and are applied more 
stringently than, the factors used in designing and applying the 
limitation with respect to medical/surgical benefits in the same 
classification. As a result, the nonquantitative treatment 
limitation with respect to mental health or substance use disorder 
benefits in the outpatient, in-network classification is more 
restrictive than the predominant nonquantitative treatment 
limitation that applies to substantially all medical/surgical 
benefits in the same classification.
    (B) Example 2 (strategy for exclusion for experimental or 
investigative treatment more stringently applied to ABA therapy in 
operation)--(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, as experimental, a 
treatment or procedure when no professionally recognized treatment 
guidelines include the treatment or procedure as a clinically 
appropriate standard 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 as one intervention to treat certain children with ASD.
    (2) Conclusion. In this paragraph (c)(4)(vi)(B) (Example 2), the 
plan violates the rules of this paragraph (c)(4). As written, the 
plan excludes coverage of 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 as including the treatment or procedure at 
issue, and fewer than two randomized controlled trials are available 
to support the treatment's use with respect to the given condition 
or procedure. However, in operation, the plan deviates from this 
strategy with respect to ABA therapy because more than one 
professionally recognized treatment guideline defines clinically 
appropriate standards of care for ASD as including ABA therapy to 
treat certain children with ASD and more than two randomized 
controlled trials are available to support the use of ABA therapy to 
treat certain children with ASD. Therefore, in operation, the 
strategy used to design the nonquantitative treatment limitation for 
benefits for the treatment of ASD, which is a mental health 
condition, in the outpatient, in-network classification is not 
comparable to, and is applied more stringently than, the strategy 
used to design the nonquantitative treatment limitation for medical/
surgical benefits in the same classification. As a result, the 
nonquantitative treatment limitation with respect to mental health 
or substance use disorder benefits in the outpatient, in-network 
classification is more restrictive than the predominant 
nonquantitative treatment limitation that applies to substantially 
all medical/surgical benefits in the same classification.
    (C) Example 3 (step therapy protocol with exception for severe 
or irreversible consequences, discriminatory factor)--(1) Facts. A 
plan's written terms include a step therapy protocol that requires 
participants and beneficiaries who are prescribed certain drugs to 
try and fail a generic or preferred brand name drug before the plan 
will cover the drug originally prescribed by a participant's or 
beneficiary's attending provider. The plan provides an exception to 
this protocol that was developed solely based on a methodology 
developed by an external third-party organization. The third-party 
organization's methodology, which is not based on a generally 
recognized independent professional medical or clinical standard, 
identifies instances in which a delay in treatment with a drug 
prescribed for a medical condition or surgical procedure could 
result in either severe or irreversible consequences. However, with 
respect to a drug prescribed for a mental health condition or a 
substance use disorder, the third-party organization's methodology 
only identifies instances in which a delay in treatment could result 
in both severe and irreversible consequences, and the plan does not 
take any steps to correct, cure, or supplement the methodology.
    (2) Conclusion. In this paragraph (c)(4)(vi)(C) (Example 3), the 
plan violates the rules of paragraph (c)(4)(i)(B) of this section. 
The source upon which the factor used to apply the step therapy 
protocol is based is biased or not objective in a manner that 
discriminates against mental health or substance use disorder 
benefits as compared to medical/surgical benefits because it 
addresses instances in which a delay in treatment with a drug 
prescribed for a medical condition or surgical procedure could 
result in either severe or irreversible consequences, but only 
addresses instances in which a delay in treatment with a drug 
prescribed for a mental health condition or substance use disorder 
could result in both

[[Page 77744]]

severe and irreversible consequences, and the plan fails to take the 
steps necessary to correct, cure, or supplement the methodology so 
that it is not biased and is objective. Based on the relevant facts 
and circumstances, this source systematically disfavors access or is 
specifically designed to disfavor access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits. Therefore, the factor used to apply the step therapy 
protocol is discriminatory for purposes of determining comparability 
and stringency under paragraph (c)(4)(i)(A) of this section, and may 
not be relied upon by the plan.
    (D) Example 4 (use of historical plan data and plan steps to 
correct, cure, or supplement)--(1) Facts. A plan's methodology for 
calculating provider reimbursement rates relies only on historical 
plan data on total plan spending for each specialty, divided between 
mental health and substance use disorder providers and medical/
surgical providers, from a time when the plan was not subject to PHS 
Act section 2726. The plan has used these historical plan data for 
many years to establish base reimbursement rates in all provider 
specialties for which it provides medical/surgical, mental health, 
and substance use disorder benefits in the inpatient, in-network 
classification. In evaluating the use of these historical plan data 
in the design of the methodology for calculating provider 
reimbursement rates, the plan determined, based on all the relevant 
facts and circumstances, that the historical plan data 
systematically disfavor access or are specifically designed to 
disfavor access to mental health or substance use disorder benefits 
as compared to medical/surgical benefits. To ensure this information 
about historical reimbursement rates is not biased and is objective, 
the plan supplements its methodology to develop the base 
reimbursement rates for mental health and substance use disorder 
providers in accordance with additional information, evidence, 
sources, and standards that reflect the increased demand for mental 
health and substance use disorder benefits in the inpatient, in-
network classification and to attract sufficient mental health and 
substance use disorder providers to the network, so that the 
relevant facts and circumstances indicate the supplemented 
information, evidence, sources, or standards do not systematically 
disfavor access and are not specifically designed to disfavor access 
to mental health and substance use disorder benefits as compared to 
medical/surgical benefits.
    (2) Conclusion. In this paragraph (c)(4)(vi)(D) (Example 4), the 
plan does not violate the rules of paragraph (c)(4)(i)(B) of this 
section with respect to the plan's methodology for calculating 
provider reimbursement rates in the inpatient, in-network 
classification. The relevant facts and circumstances indicate that 
the plan's use of only historical plan data to design its 
methodology for calculating provider reimbursement rates in the 
inpatient, in-network classification would otherwise be considered 
to be biased or not objective in a manner that discriminates against 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits under paragraph (c)(4)(i)(B)(2) of this 
section, since the historical data systematically disfavor access or 
are specifically designed to disfavor access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits. However, the plan took the steps necessary to supplement 
the information, evidence, sources, and standards to reasonably 
reflect the increased demand for mental health and substance use 
disorder benefits in the inpatient, in-network classification, and 
adjust the methodology to increase reimbursement rates for those 
benefits, thereby ensuring that the information, evidence, sources, 
and standards relied upon by the plan for this purpose are not 
biased and are objective. Therefore, the factors and evidentiary 
standards used to design the plan's methodology for calculating 
provider reimbursement rates in the inpatient, in-network 
classification are not discriminatory.
    (E) Example 5 (generally recognized independent professional 
medical or clinical standards and more stringent prior authorization 
requirement in operation)--(1) Facts. The provisions of a plan state 
that it relies on, and does not deviate from, generally recognized 
independent professional medical or clinical standards to inform the 
factor used to design prior authorization requirements for both 
medical/surgical and mental health and substance use disorder 
benefits in the prescription drug classification. The 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 for 
treatment of opioid use disorder, every 30 days, which is 
inconsistent with the generally recognized independent professional 
medical standard on which the factor used to design the limitation 
is based. The plan's factor used to design prior authorization 
requirements for medical/surgical benefits in the prescription drug 
classification relies on, and does not deviate from, generally 
recognized independent professional medical or clinical standards.
    (2) Conclusion. In this paragraph (c)(4)(vi)(E) (Example 5), the 
plan violates the rules of this paragraph (c)(4). The American 
Society of Addiction Medicine national practice guidelines on which 
the factor used to design prior authorization requirements for 
substance use disorder benefits is based are generally recognized 
independent professional medical or clinical standards that are not 
considered to be biased or not objective in a manner that 
discriminates against mental health and substance use disorder 
benefits under paragraph (c)(4)(i)(B)(3) of this section. However, 
the plan must comply with other requirements in this paragraph 
(c)(4), as applicable, with respect to such standards or measures 
that are used as the basis for a factor or evidentiary standard used 
to design or apply a nonquantitative treatment limitation. In 
operation, the plan's factor used to design and apply prior 
authorization requirements with respect to substance use disorder 
benefits is not comparable to, and is applied more stringently than, 
the same factor used to design and apply prior authorization 
requirements for medical/surgical benefits, because the factor 
relies on, and does not deviate from, generally recognized 
independent professional medical or clinical standards for medical/
surgical benefits, but deviates from the relevant guidelines for 
substance use disorder benefits. As a result, the nonquantitative 
treatment limitation with respect to substance use disorder benefits 
in the prescription drug classification is more restrictive than the 
predominant nonquantitative treatment limitation that applies to 
substantially all medical/surgical benefits in the same 
classification.
    (F) Example 6 (plan claims no data exist to reasonably assess 
impact of nonquantitative treatment limitation on access; medical 
necessity criteria)--(1) Facts. A plan approves or denies claims for 
mental health and substance use disorder benefits and for medical/
surgical benefits in the inpatient, in-network and outpatient, in-
network classifications based on medical necessity criteria. The 
plan states in its comparative analysis that no data exist that can 
reasonably assess any relevant impact of the medical necessity 
criteria nonquantitative treatment limitation on relevant outcomes 
related to access to mental health or substance use disorder 
benefits as compared to the plan's medical necessity criteria 
nonquantitative treatment limitation's impact on relevant outcomes 
related to access to medical/surgical benefits in the relevant 
classifications, without further explanation.
    (2) Conclusion. In this paragraph (c)(4)(vi)(F) (Example 6), the 
plan violates this paragraph (c)(4). The plan does not comply with 
paragraph (c)(4)(iii)(A)(3)(ii) of this section because the plan did 
not include in its comparative analysis, as required under Sec.  
146.137(c)(5)(i)(D), a reasoned justification as to the basis for 
its conclusion that there are no data that can reasonably assess the 
nonquantitative treatment limitation's impact, an explanation of why 
the nature of the nonquantitative treatment limitation prevents the 
plan from reasonably measuring its impact, an explanation of what 
data was considered and rejected, and documentation of any 
additional safeguards or protocols used to ensure the 
nonquantitative treatment limitation complies with this paragraph 
(c)(4). Data that could reasonably assess the medical necessity 
criteria nonquantitative treatment limitation's impact might 
include, for example, the number and percentage of claims denials, 
or the number and percentage of claims that were approved for a 
lower level of care than the level requested on the initial claim. 
Therefore, because the plan has not collected and evaluated relevant 
data in a manner reasonably designed to assess the impact of the 
nonquantitative treatment limitation on relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits in the relevant classifications, the plan 
violates the requirements of paragraph

[[Page 77745]]

(c)(4)(iii) of this section, and violates the requirements under 
Sec.  146.137(c)(5)(i)(D) because it did not include sufficient 
information in its comparative analysis with respect to the lack of 
relevant data.
    (G) Example 7 (concurrent review data collection; no material 
difference in access)--(1) Facts. A plan follows a written process 
to apply a concurrent review nonquantitative treatment limitation to 
all medical/surgical benefits and mental health and substance use 
disorder benefits within the inpatient, in-network classification. 
Under this 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. The plan collects relevant data, including the 
number of referrals to second-level review, and the number of 
denials of claims for medical/surgical benefits and mental health 
and substance use disorder benefits subject to concurrent review as 
compared to the total number of claims subject to concurrent review, 
in the inpatient, in-network classification. The plan also collects 
and evaluates the number of denied claims for medical/surgical 
benefits and mental health and substance use disorder benefits that 
are overturned on appeal in the inpatient, in-network 
classification. The plan evaluates the relevant data and determines 
that, based on the relevant facts and circumstances, the data do not 
suggest that the concurrent review nonquantitative treatment 
limitation contributes to material differences in access to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits in the classification. Upon requesting the plan's 
comparative analysis for the concurrent review nonquantitative 
treatment limitation and reviewing the relevant data, the Secretary 
does not request additional data and agrees that the data do not 
suggest material differences in access.
    (2) Conclusion. In this paragraph (c)(4)(vi)(G) (Example 7), the 
plan does not violate the rules of paragraph (c)(4)(iii) of this 
section. The plan collected and evaluated relevant data in a manner 
reasonably designed to assess the impact of the nonquantitative 
treatment limitation on relevant outcomes related to access to 
mental health and substance use disorder benefits and medical/
surgical benefits and considered the impact as part of its 
evaluation. Because the relevant data evaluated do not suggest that 
the nonquantitative treatment limitation contributes to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits in the inpatient, 
in-network classification, under paragraph (c)(4)(iii)(B) of this 
section, there is no strong indicator that the plan violates this 
paragraph (c)(4).
    (H) Example 8 (material difference in access for prior 
authorization requirement with reasonable action)--(1) Facts. A plan 
requires prior authorization 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. The plan collects and evaluates relevant data in a manner 
reasonably designed to assess the impact of the prior authorization 
requirement on relevant outcomes related to access to mental health 
and substance use disorder benefits and medical/surgical benefits in 
the inpatient, in-network classification. The plan's written process 
for prior authorization states that the plan approves inpatient, in-
network benefits for medical conditions and surgical procedures and 
mental health and substance use disorder benefits 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. Approvals for 
mental health and substance use disorder benefits are most commonly 
given only for 1 day, after which a treatment plan must be submitted 
by the patient's attending provider and approved by the plan. The 
relevant data show that approvals for 7 days are most common for 
medical conditions and surgical procedures under this plan. Based on 
all the relevant facts and circumstances, the difference in the 
relevant data suggests that the nonquantitative treatment limitation 
is likely to have a negative impact on access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits. Therefore, the data suggest that the nonquantitative 
treatment limitation contributes to material differences in access. 
To address these material differences in access, the plan consults 
more recent medical guidelines to update the factors that inform its 
medical necessity nonquantitative treatment limitations. Based on 
this review, the plan modifies the limitation so that inpatient, in-
network prior authorization requests for mental health or substance 
use disorder benefits are approved for similar periods to what is 
approved for medical/surgical benefits. The plan includes 
documentation of this action as part of its comparative analysis.
    (2) Conclusion. In this paragraph (c)(4)(vi)(H) (Example 8), the 
plan does not violate the rules of paragraph (c)(4)(iii) of this 
section. While relevant data for the plan's prior authorization 
requirements suggested that the nonquantitative treatment limitation 
contributes to material differences in access to mental health and 
substance use disorder benefits as compared to inpatient, in-network 
medical/surgical benefits under paragraph (c)(4)(iii)(B) of this 
section, the plan has taken reasonable action, as necessary, to 
ensure compliance, in operation, with this paragraph (c)(4) by 
updating the factors that inform its prior authorization 
nonquantitative treatment limitation for inpatient, in-network 
mental health and substance use disorder benefits so that these 
benefits are approved for similar periods to what is approved for 
medical/surgical benefits. The plan also documents its action taken 
to address material differences in access to inpatient, in-network 
benefits as required by paragraph (c)(4)(iii)(B)(1) of this section.
    (I) Example 9 (differences attributable to 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 factors and evidentiary 
standards used to design and apply the medical management 
requirement rely on independent professional medical or clinical 
standards that are generally recognized by health care providers and 
facilities in relevant clinical specialties. 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. 
The plan collects and evaluates relevant data in a manner reasonably 
designed to assess the impact of the medical management 
nonquantitative treatment limitation on relevant outcomes related to 
access to mental health and substance use disorder benefits and 
medical/surgical benefits, and considers the impact as part of the 
plan's evaluation, as required by paragraph (c)(4)(iii)(A) of this 
section. 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. The plan correctly 
determines that these differences in access are attributable to the 
generally recognized independent professional medical or clinical 
standards used as the basis for the factors and evidentiary 
standards used to design or apply the limitation and adequately 
explains the bases for that conclusion as part of its comparative 
analysis.
    (2) Conclusion. In this paragraph (c)(4)(vi)(I) (Example 9), the 
plan does not violate the rules of this paragraph (c)(4). Generally 
recognized independent professional medical or clinical standards of 
care are not considered to be information, evidence, sources, or 
standards that are biased and not objective in a manner that 
discriminates against mental health or substance use disorder 
benefits as compared to medical/surgical benefits, and the plan 
otherwise complies with the requirements in paragraph (c)(4)(i) of 
this section. Additionally, the plan does not violate paragraph 
(c)(4)(iii) of this section because it has collected and evaluated 
relevant data, the differences in access are attributable to the 
generally recognized independent professional medical or clinical 
standards that are used as the basis for the factors and evidentiary 
standards used to design or apply the medical management 
nonquantitative treatment limitation, and the plan explains the 
bases for this conclusion in its comparative analysis. As a result, 
the

[[Page 77746]]

nonquantitative treatment limitation with respect to mental health 
or substance use disorder benefits in the inpatient, out-of-network 
classification is no more restrictive than the predominant 
nonquantitative treatment limitation that applies to substantially 
all medical/surgical benefits in the same classification.
    (J) Example 10 (material differences in access for standards for 
provider admission to a network with reasonable action)--(1) Facts. 
A plan applies nonquantitative treatment limitations related to 
network composition in the inpatient, in-network and outpatient, 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 processes, 
strategies, evidentiary standards, and other factors used in 
designing and applying the nonquantitative treatment limitations 
related to network composition for 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)(i) of this 
section. In order to ensure, in operation, that the nonquantitative 
treatment limitations are no more restrictive than the predominant 
nonquantitative treatment limitations applied to substantially all 
medical/surgical benefits in the classification, the plan collects 
and evaluates relevant data in a manner reasonably designed to 
assess the aggregate impact of all the nonquantitative treatment 
limitations related to network composition on relevant outcomes 
related to 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 evaluation. The plan 
considers relevant data that is known, or reasonably should be 
known, including 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 (for comparable services and 
benchmarked to a reference standard, as appropriate); and in-network 
and out-of-network utilization rates (including data related to the 
dollar value and number of provider claims submissions). The plan 
determines that the relevant data suggest that the nonquantitative 
treatment limitations in the aggregate contribute to material 
differences in access to mental health and substance use disorder 
benefits compared to medical/surgical benefits in the 
classifications because, based on all the relevant facts and 
circumstances, the differences in the data suggest that the 
nonquantitative treatment limitations related to network composition 
are likely to have a negative impact on access to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits. The plan takes reasonable actions, as necessary, to 
address the material differences in access, to ensure compliance, in 
operation, with this paragraph (c)(4), by strengthening its efforts 
to recruit and encourage a broad range of available providers and 
facilities to join the plan's network of providers, including by 
taking actions to increase compensation and other inducements, 
streamline credentialing processes, contact providers reimbursed for 
items and services provided on an out-of-network basis to offer 
participation in the network, and develop a process to monitor the 
effects of such efforts; expanding the availability of telehealth 
arrangements to mitigate overall provider shortages in certain 
geographic areas; providing additional outreach and assistance to 
participants and beneficiaries enrolled in the plan to assist them 
in finding available in-network providers and facilities; and 
ensuring that the plan's provider directories are accurate and 
reliable. The plan documents the efforts that it has taken to 
address the material differences in access that the data revealed, 
and the plan includes the documentation as part of its comparative 
analysis submission.
    (2) Conclusion. In this paragraph (c)(4)(vi)(J) (Example 10), 
the plan does not violate the rules of this paragraph (c)(4). The 
plan's nonquantitative treatment limitations related to network 
composition comply with the rules of paragraph (c)(4)(i) of this 
section. Additionally, the plan collects and evaluates relevant 
data, as required under paragraph (c)(4)(iii)(A) of this section, in 
a manner reasonably designed to assess the aggregate impact of all 
such nonquantitative treatment limitations on relevant outcomes 
related to access to mental health and substance use disorder 
benefits and medical/surgical benefits, as required under paragraph 
(c)(4)(iii)(C) of this section. While the data suggest that the 
nonquantitative treatment limitations contribute to material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits, the plan has 
taken reasonable action, as necessary, to ensure compliance with 
this paragraph (c)(4). The plan also documents the actions that have 
been and are being taken by the plan to address material differences 
as required by Sec.  146.137(c)(5)(iv). As a result, the network 
composition nonquantitative treatment limitations with respect to 
mental health or substance use disorder benefits in the inpatient, 
in-network and outpatient, in-network classifications are no more 
restrictive than the predominant nonquantitative treatment 
limitations that apply to substantially all medical/surgical 
benefits in the same classifications.
    (K) Example 11 (separate EAP exhaustion treatment limitation 
applicable only to mental health or substance use disorder 
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)(vi)(K) (Example 11), 
the requirement that limits 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)(4). 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)(iv) 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 exclusion for treatment in a 
residential facility applicable only to mental health and substance 
use disorder benefits)--(1) Facts. A plan generally covers 
inpatient, in-network and inpatient, out-of-network treatment 
without any limitations on setting, including skilled nursing 
facilities and rehabilitation hospitals, provided other medical 
necessity standards are satisfied. The plan has an exclusion for 
treatment at residential facilities, 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)(vi)(L) (Example 12), 
the plan violates the rules of paragraph (c)(4)(iv) of this section. 
The exclusion of treatment at residential facilities 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 because the 
plan does not apply a comparable exclusion with respect to any 
medical/surgical benefits in the same benefit classification.
    (M) Example 13 (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 the 
plan's exclusion of mental health and substance use disorder 
benefits for failure to complete a course of treatment in the 
inpatient, in-network classification under Sec.  146.137(d), the 
plan submits a comparative analysis for the nonquantitative 
treatment limitation. After review of the comparative analysis, as 
well as additional information submitted by the plan after the 
Secretary determines that the plan has not submitted sufficient 
information

[[Page 77747]]

to be responsive to the request, 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 inpatient, in-network 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. Under Sec.  146.137(d)(3), the plan submits a 
corrective action plan and additional comparative analyses within 45 
calendar days after the initial determination. However, the 
corrective action plan does not alter or eliminate the exclusion or 
alter the processes, strategies, evidentiary standards, and other 
factors used in designing and applying the exclusion. Moreover, the 
additional comparative analysis still does not include sufficient 
information. The Secretary then determines that the additional 
comparative analyses do not demonstrate compliance with the 
requirements of this paragraph (c)(4). Accordingly, the plan 
receives a final determination of noncompliance with PHS Act section 
2726 (a)(8) and Sec.  146.137 from the Secretary, which concludes 
that the plan did not demonstrate compliance through the comparative 
analysis process. After considering the relevant facts and 
circumstances, and considering the interests of plan participants 
and beneficiaries, as well as feedback from the plan, the Secretary 
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 exclusion of benefits for failure 
to complete a course of treatment in the inpatient, in-network 
classification.
    (2) Conclusion. In this paragraph (c)(4)(vi)(M) (Example 13), by 
continuing to impose the exclusion of mental health and substance 
use disorder benefits for failure to complete a course of treatment 
in the inpatient, in-network classification after the Secretary 
directs the plan not to impose this nonquantitative treatment 
limitation, the plan violates the requirements of paragraph 
(c)(4)(v) of this section.
* * * * *
    (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) who have received 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 that is required to 
provide 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 section and Sec.  
146.137 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--
    (i) 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, except that 
the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and 
(c)(4)(iii) of this section apply on the first day of the first plan 
year beginning on or after January 1, 2026.
    (ii) Until the applicability date in paragraph (i)(1)(i) of this 
section, plans and issuers are required to continue to comply with 45 
CFR 146.136, revised as of October 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
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 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.
    (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,

[[Page 77748]]

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; and
    (iii) A description of which benefits are included in each 
classification set forth in Sec.  146.136(c)(2)(ii)(A).
    (2) Identification and definition of the factors and evidentiary 
standards 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 every factor considered or relied upon, 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;
    (B) A description of each evidentiary standard used to design or 
apply each factor (and the source of each evidentiary standard) 
identified under paragraph (c)(2)(i) of this section; and
    (C) A description of any steps the plan or issuer has taken to 
correct, cure, or supplement any information, evidence, sources, or 
standards that would otherwise have been considered biased or not 
objective under Sec.  146.136(c)(4)(i)(B)(1) in the absence of such 
steps.
    (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 under 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 
designations 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 deviations or variations 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 
deviations or variations.
    (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 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 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 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 reasons for any deviations or variations 
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,

[[Page 77749]]

and how the plan or issuer establishes such deviations or variations, 
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, 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 evaluates 
whether, 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;
    (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;
    (C) With respect to a nonquantitative treatment limitation for 
which relevant data is temporarily unavailable as described in Sec.  
146.136(c)(4)(iii)(A)(3)(i), a detailed explanation of the lack of 
relevant data, the basis for the plan's or issuer's conclusion that 
there is a lack of relevant data, and when and how the data will become 
available and be collected and analyzed; and
    (D) With respect to a nonquantitative treatment limitation for 
which no data exist that can reasonably assess any relevant impact of 
the nonquantitative treatment limitation on relevant outcomes related 
to access to mental health and substance use disorder benefits and 
medical/surgical benefits as described in Sec.  
146.136(c)(4)(iii)(A)(3)(ii), a reasoned justification as to the basis 
for the conclusion that there are no data that can reasonably assess 
the nonquantitative treatment limitation's impact, an explanation of 
why the nature of the nonquantitative treatment limitation prevents the 
plan or issuer from reasonably measuring its impact, an explanation of 
what data was considered and rejected, and documentation of any 
additional safeguards or protocols used to ensure that the 
nonquantitative treatment limitation complies with Sec.  146.136(c)(4);
    (ii) Identification of the relevant data collected and evaluated, 
as required under Sec.  146.136(c)(4)(iii)(A);
    (iii) Documentation 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:
    (A) The evaluation of relevant data as required under Sec.  
146.136(c)(4)(iii)(A); and
    (B) A reasoned justification and analysis that explains why the 
plan or issuer concluded that any differences in the relevant data do 
or do not suggest the nonquantitative treatment limitation contributes 
to material differences in access to mental health or substance use 
disorder benefits as compared to medical/surgical benefits, in 
accordance with Sec.  146.136(c)(4)(iii)(B)(2);
    (iv) A detailed explanation of any material differences in access 
demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of 
this section, including:
    (A) A reasoned explanation of any material differences in access 
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 (including any considerations beyond a plan's 
or issuer's control that contribute to the existence of material 
differences) and a detailed explanation of the bases for concluding 
that material differences are not attributable to differences in the 
comparability or relative stringency of the nonquantitative treatment 
limitation; and
    (B) To the extent differences in access to mental health or 
substance use disorder benefits are attributable to generally 
recognized independent professional medical or clinical standards or 
carefully circumscribed measures reasonably and appropriately designed 
to detect or prevent and prove fraud and abuse that minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits, and such standards or measures are used as the 
basis for a factor or evidentiary standard used to design or apply a 
nonquantitative treatment limitation, documentation explaining how any 
such differences are attributable to those standards or measures, as 
required in Sec.  146.136(c)(4)(iii)(B)(2)(ii); and
    (v) A discussion of the actions that have been or are being taken 
by the plan or issuer to address 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 has 
taken or is taking under Sec.  146.136(c)(4)(iii)(B)(1) to address 
material differences to comply, in operation, with Sec.  146.136(c)(4), 
including, as applicable:
    (A) A reasoned explanation of any material differences in access to 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits that persist despite reasonable actions that 
have been or are being taken; and
    (B) For a plan or issuer designing and applying one or more 
nonquantitative treatment limitations related to network composition, a 
discussion of the actions that have been or are being taken to address 
material differences in access to in-network mental health and 
substance use disorder benefits as compared to in-network medical/
surgical benefits, including those listed in Sec.  
146.136(c)(4)(iii)(C).
    (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 or is not (or might or might not be) in compliance with the 
requirements of Sec.  146.136(c)(4), including any additional actions 
the plan or issuer has taken or intends to take to address any 
potential areas of concern or noncompliance;

[[Page 77750]]

    (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 not otherwise discussed in the comparative analysis;
    (iv) The date the analysis is completed 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 the 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 coverage in connection with 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 or issuer has not submitted sufficient 
information under paragraph (d)(1) of this section for the Secretary to 
determine whether the comparative analysis required in paragraph (b) of 
this section complies with paragraph (c) of this section or whether the 
plan or issuer complies with Sec.  146.136(c)(4), 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). 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 
initial determination by 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 (c) of this section that demonstrate 
compliance with Sec.  146.136(c)(4), 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 
business days of receipt of the final determination of noncompliance, 
and the plan or issuer must 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 
timeframe.
    (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 
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 submitted or 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 Sec.  146.136(c)(4) or this section, 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 concurred with those actions; 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 Centers for Medicare & 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 (including a provider or other 
person acting as a participant's or beneficiary's authorized 
representative) who has received an adverse benefit

[[Page 77751]]

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), on the 
first day of the first plan year beginning on or after January 1, 2025, 
except the requirements of paragraphs (c)(2)(ii)(C), (c)(5)(i)(C) and 
(D), and (c)(5)(ii) through (v) of this section apply on the first day 
of the first plan year beginning on or after January 1, 2026.
    (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
10. 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 plans 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 1st 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 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
11. 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
12. 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, incorporating 45 CFR 146.136, 
each revised as of October 1, 2023. This section applies to non-
grandfathered and grandfathered health plans as defined in Sec.  
147.140.

[FR Doc. 2024-20612 Filed 9-13-24; 4:15 pm]
BILLING CODE 4510-29-P; 4830-01-P; 4120-01-P