Departments Release MHPAEA 2024 Report to Congress

January 28, 2025

On January 17, 2025, the DOL, IRS, and HHS (the departments) released the 2024 MHPAEA Report to Congress (“the 2024 Report”). The 2024 Report highlights ongoing efforts of the departments to enforce protections of MHPAEA and, more specifically, the CAA 2021 nonquantitative treatment limitation (NQTL) comparative analyses requirements. The 2024 Report, which was issued simultaneously with the 2023 Enforcement Fact Sheet, is intended to fulfill the CAA 2021 requirement that the departments provide an annual report to Congress on enforcement related to the NQTL comparative analyses.

The CAA 2021, which amended MHPAEA, requires plans and insurers to perform and document comparative analyses of the design and application of their NQTLs (e.g., prior authorization requirements, treatment exclusions) to demonstrate that NQTLs applied to their plan’s mental health/substance use disorder (MH/SUD) benefits are not more restrictive than those applied to medical/surgical (M/S) benefits. Among other items, the 2024 Report summarizes recent enforcement activity, outlines enforcement priority areas, and discusses future initiatives.

Enforcement Activity

The DOL’s Employee Benefits Security Administration (EBSA) enforces MHPAEA with respect to approximately 2.6 million private employment-based group health plans. According to the report, EBSA is currently devoting nearly 25% of its enforcement program to work focusing on MHPAEA NQTLs but faces challenges maintaining this level of enforcement due to budgetary constraints. HHS’s Centers for Medicare and Medicaid Services (CMS) enforces MHPAEA with respect to approximately 91,000 nonfederal governmental group health plans and 67 issuers in two states where CMS is the primary MHPAEA enforcer.

Generally, the 2024 Report reflects continued widespread noncompliance with the CAA 2021 NQTL comparative analyses requirement. According to the 2024 Report, common deficiencies identified in the 2022 Report and 2023 Report remain, including:

• Failure to prepare a comparative analysis
• Lack of meaningful comparison or analysis
• Documents provided without adequate explanation
• Failure to identify the specific MH/SUD and M/S benefits or MHPAEA benefit classifications affected by an NQTL
• Focusing only on similarities — rather than explaining differences — to show parity
• Conclusory assertions lacking specific supporting evidence

For the annual reporting period ending July 2023 (the reporting period), the EBSA issued 17 initial letters requesting comparative analyses from plans and insurers, 45 insufficiency letters, and 13 initial determination letters finding MHPAEA NQTL violations. Notably, the EBSA did not issue any final determinations of noncompliance, which the 2024 Report indicates is largely due to efforts by the EBSA to work closely with plans and insurers to correct any identified NQTL deficiencies to bring the plan(s) into compliance.

During the CMS reporting period between September 2, 2022, and July 31, 2023, CMS issued 22 letters requesting comparative analyses from plans and insurers, 10 insufficiency letters, 19 initial determination letters finding MHPAEA NQTL violations, and 3 final determination letters of noncompliance. (For detailed findings of CMS NQTL enforcement, please refer to the 2024 Report.)

Enforcement Priority Areas

According to the 2024 Report, the following six priority areas, which were identified in the 2023 Report, continue to comprise the vast majority of NQTLs subject to review in EBSA’s enforcement cases:

1. Prior authorization requirements for in-network (INN) and out-of-network (OON) inpatient services
2. Concurrent care review for INN and OON inpatient and outpatient services
3. Standards for provider admission to participate in a network, including reimbursement rates
4. OON reimbursement rates (methods for determining usual, customary, and reasonable charges)
5. Adequacy standards for MH/SUD provider networks
6. Impermissible exclusions of key MH/SUD treatments

The 2024 Report explains that the EBSA has deepened its focus on NQTLs specifically relating to network adequacy and composition because these NQTLs can significantly impact participants’ ability to access INN MH/SUD benefits. (EBSA considers it a red flag when participants go OON much more often for MH/SUD treatments than for M/S treatments.) EBSA has investigated and cited plans and insurers for impermissible NQTLs related to network adequacy and composition and expects to continue to do so in future reporting periods.

The EBSA has also expanded its initiative to target impermissible exclusions of key MH/SUD treatments, such as applied behavior analysis (ABA) therapy for autism spectrum disorder, medications for opioid use disorder, and nutritional counseling for eating disorders. Under this initiative, EBSA works directly with the service providers (e.g., TPAs) before contacting the plans they serve. Once potentially impermissible exclusions are flagged, the service provider identifies plan clients that have the exclusions. EBSA then gathers information about the comparative analyses and works with the service provider and plans to correct or remove any impermissible exclusion(s). The 2024 Report provides numerous examples of corrections for various types of NQTL deficiencies, including impermissible exclusions.

Future Initiatives

The 2024 Report explains that the comparative analysis review process is not a substitute for NQTL investigations, which typically span multiple years and involve numerous interviews, document requests, and data reviews. However, a deficient comparative analysis can prolong the investigative process.

Accordingly, the 2024 Report indicates the departments are currently developing a sample comparative analysis, which will include helpful details to assist plans and insurers in performing and documenting a sufficient comparative analysis. As described, the fictional sample comparative analysis will incorporate various types of information that the EBSA found helpful in NQTL investigations and will be designed to comply with the 2024 Final Rules, which we covered in our September 10, 2024, article. (Note: Following the issuance of the 2024 Report, a lawsuit was filed to invalidate the 2024 Final Rules. We are monitoring this lawsuit and initiatives by the new Trump administration that may impact the implementation and enforcement of the 2024 Final Rules.)

Takeaways

Employers should review their current plan designs with respect to MH/SUD benefits, particularly NQTLs and their comparative analyses, to evaluate whether changes are needed based on this 2024 Report and recent enforcement efforts.

Importantly, if an employer currently does not have its plan’s NQTL comparative analyses, they should work with their insurer, TPA, and legal counsel to prepare the required detailed comparative analyses as soon as possible. This process should involve the identification of any potential risks regarding their plan design, considering the common deficiencies and enforcement priorities identified in the 2024 Report.

We will continue to report on any new guidance and relevant updates in Compliance Corner.

2024 MHPAEA Report to Congress