[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
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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
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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\
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\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.
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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).
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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.
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\46\ See Code section 9833, ERISA section 734, and PHS Act
section 2792.
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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.
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\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).
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2. Meaning of Terms--26 CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and
45 CFR 146.136(a)(2)
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.
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\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).
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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.''
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\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.
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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.
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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\
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\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.
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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.
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\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.
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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.
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\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.
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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\
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\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\
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\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).
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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.
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\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).
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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.
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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.
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\74\ Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A), and
PHS Act section 2726(a)(8)(A).
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The Departments 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.
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\75\ Code section 9812(a)(3)(A)(ii), ERISA section
712(a)(3)(A)(ii), and PHS Act section 2726(a)(3)(A)(ii).
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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.
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\76\ 88 FR 51552, 51575. (Aug. 3, 2023).
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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\
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\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.
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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.
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\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.''
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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.
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\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.
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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).
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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.
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\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.
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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.
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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.
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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).
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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.
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\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.
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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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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\
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\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.
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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.
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\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).
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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.
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\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.
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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.
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\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).
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\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.
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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\
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\105\ 75 FR 5410, 5413 (Feb. 2, 2010).
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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.
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\107\ DSM (5th ed.), Section II: Diagnostic Criteria and Codes,
Autism Spectrum Disorder.
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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).
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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.
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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).
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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).
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\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.
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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).
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\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.
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\118\ Code section 9812(a)(8)(A)(iv), ERISA section
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
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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.
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\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.
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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.
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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.
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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).
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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\
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\128\ PHS Act section 2722(a)(2); 45 CFR 146.180.
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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).
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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\
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\131\ PHS Act section 2722(a)(2)(F)(ii).
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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.
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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.
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\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.
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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.
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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\
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\177\ FAQs Part 45, Q6.
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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.
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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.
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\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.)
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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.
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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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
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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\
---------------------------------------------------------------------------
\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\
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\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).
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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\
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\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\
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\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).
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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\
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\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).
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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\
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\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\
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\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\
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\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\
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\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\
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\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.
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\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).
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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.
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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.
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\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.
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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\
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\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.
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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).
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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.
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\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).
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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.
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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\
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\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.
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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.
---------------------------------------------------------------------------
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
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\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
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\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\
---------------------------------------------------------------------------
\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\
---------------------------------------------------------------------------
\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\
---------------------------------------------------------------------------
\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\
---------------------------------------------------------------------------
\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.
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\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].
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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\
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\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..........................
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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.
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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\
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\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.
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\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&dash=17.
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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
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\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/.
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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\
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\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).)
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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\
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\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).
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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.
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\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))
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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 $2.0 billion of total
expenditures for private insurance for depression.\404\
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\403\ Agency for Healthcare Research and Quality, Total
Expenditures ($) 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).
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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\
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\405\ The estimates in 2023 dollars are estimated using the
Consumer Price Index (CPI) medical care cost.
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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
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\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.
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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\
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\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).
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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\
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\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.
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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.
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\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.
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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.
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\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).
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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\
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\423\ EBSA, FY 2022 MHPAEA Enforcement Fact Sheet, https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2022.
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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.
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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.
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\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