MHPAEA 2023 Report to Congress Focuses on NQTLs and CAA, 2021 Compliance

On July 25, 2023, the DOL, Department of the Treasury, and HHS (the departments) released the 2023 MHPAEA Comparative Analysis Report to Congress (“the 2023 Report”). The 2023 Report highlights the departments’ enforcement efforts regarding MHPAEA’s non-quantitative treatment limitations (NQTLs) (e.g., prior authorization and benefits exclusions) during the second year of the Consolidated Appropriations Act, 2021 (CAA, 2021) implementation. The departments simultaneously published related guidance; please see our articles entitled Departments Announce Proposed Rules to Strengthen MHPAEA, Technical Release on Network Composition Accompanies Proposed MHPAEA Rule, and DOL and CMS Release 2022 MHPAEA Enforcement Fact Sheet, which are also featured in this edition of Compliance Corner.

The CAA 2021, which amended MHPAEA, requires plans and insurers to perform and document comparative analyses of the design and application of their NQTLs to demonstrate that NQTLs applied to their plan’s mental health or substance use disorder (MH/SUD) benefits are not more restrictive than those applied to medical/surgical benefits (MED/SURG). The CAA, 2021 also requires the departments to report annually to Congress on the results of the DOL and CMS’s reviews of these NQTL comparative analyses. The first year of the report to Congress was issued in January 2022, and its summary was featured in the February 3, 2022, edition of Compliance Corner.

Enforcement Activity
The DOL’s Employee Benefits Security Administration (EBSA) enforces MHPAEA with respect to approximately 2.5 million private employment-based group health plans. The report notes that EBSA is currently devoting nearly 25% of its enforcement program to work focusing on MHPAEA NQTLs and continues to expand staffing dedicated to MHPAEA enforcement. HHS’s Centers for Medicare and Medicaid Services (CMS) enforces MHPAEA with respect to approximately 90,000 nonfederal governmental group health plans and 41 issuers in three states that do not enforce MHPAEA.

Between February 2021 and July 2022, the EBSA requested comparative analyses from 182 plans and insurers, for which 138 insufficiency letters covering over 290 NQTLs were issued. During that same period, EBSA issued 53 initial determination letters finding MHPAEA violations and three final determination letters finding MHPAEA violations. Between February 2021 and September 2022, CMS issued 26 letters requesting comparative analyses from 24 plans and issuers, for which 35 insufficiency letters for 44 NQTLs were issued. During that same period, CMS issued 15 initial determination letters finding MHPAEA violations. Between January 2022 and September 1, 2022, CMS issued five final determination letters finding MHPAEA violations. (For detailed findings of CMS NQTL enforcement, please refer to the 2023 Report.)

According to the 2023 Report, common deficiencies found in the January 2022 Report continued. These include:

• Failure to prepare comparative analyses.
• Failure to identify the benefits, classifications or plan terms to which the NQTL applies.
• Failure to describe in sufficient detail how the NQTL was designed or how it is applied in practice to MH/SUD benefits and MED/SURG benefits.
• Failure to identify or define in sufficient detail the factors, sources and evidentiary standards used in designing and applying the NQTL to MH/SUD and MED/SURGE benefits.
• Failure to analyze in sufficient detail the stringency with which factors, sources and evidentiary standards are applied.
• Failure to demonstrate parity compliance of NQTLs as written and in operation.

However, the EBSA reported that, in many cases, the departments’ outreach and enforcement initiatives prompted insurers and plans to correct their noncompliance before the EBSA reached a final determination of MHPAEA violations. The 2023 Report notes that appropriate corrective action depends on the NQTL and may include one or more of the following:

• Complete removal of an NQTL.
• Changes to plan document language and disclosures, along with notification to participants and beneficiaries of the change in plan terms.
• Amendments to plan practices or claims processing procedures.
• Addition of coverage for previously excluded benefits.
• Reduction in the scope of an NQTL’s application to MH/SUD benefits.
• Submission of a complete and sufficient comparative analysis, cured of identified deficiencies.
• Re-adjudication of claims affected by an impermissible NQTL, with payment of claims wrongfully denied because of the NQTL.
• Notice to participants and beneficiaries of an opportunity to submit previously unsubmitted claims that will now be accepted for processing.

Further, the 2023 Report provides specific examples of NQTL corrections by plans and insurers in response to EBSA’s enforcement actions, including the following:

• A plan excluded MH/SUD benefits at residential treatment facilities but covered benefits at MED/SURG residential treatment facilities (e.g., skilled nursing facilities and stroke rehabilitation programs). In response to EBSA's initial determination letter regarding the plan’s imposition of an impermissible NQTL, the plan removed the exclusion and reprocessed previously denied MH/SUD residential treatment claims. Furthermore, the plan agreed to cover MH/SUD residential treatment going forward.
• A plan excluded benefits for ABA therapy to treat autism spectrum disorder (ASD) though the plan covers general benefits for ASD. In response to the EBSA’s inquiry, the plan removed the ABA therapy exclusion.

As required by CAA, 2021, the 2023 Report identifies the noncompliant plans that did not take sufficient corrective action prior to EBSA’s final determination.

Enforcement Priorities and Legislative Recommendations
In the 2023 reporting, the departments added two additional priority enforcement areas, including network adequacy. The six priority areas are:

• Prior authorization requirements for in- and out-of-network inpatient services.
• Concurrent care review for in- and out-of-network inpatient and outpatient services.
• Standards for provider admission to participate in a network, including reimbursement rates.
• Out-of-network reimbursement rates (methods for determining usual, customary, and reasonable charges).
• New — impermissible exclusions of key treatments for mental health conditions and substance use disorders (e.g., ABA therapy to treat autism spectrum disorder and nutritional counseling for eating disorders).
• New — adequacy standards for MH/SUD provider networks (e.g., adequacy of provider networks and provider reimbursement rates).

Additionally, the 2023 Report, consistent with the 2022 Report, recommends that the legislature provide authority to enforce group health plan requirements directly against a plan’s administrative service providers for efficiency purposes. The 2023 Report also indicates that the departments will work to update the MHPAEA Self-Compliance Tool to reflect the CAA, 2021 requirements and related guidance.

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 2023 Report and the recent departments’ enforcement efforts.

Importantly, if an employer currently does not have its plan’s NQTLs 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 with particular attention the common deficiencies, corrective actions, and enforcement priorities identified in the 2023 Report. Note that a plan’s NQTL comparative analyses must be updated when there is a change in benefits and plan policy. Additionally, employers should review their vendor contracts to ensure that insurers or TPAs will provide necessary MHPAEA compliance assistance.

We will continue to monitor for any new legislation or guidance.

MHPAEA Comparative Analysis Report to Congress — July 2023 »