November 8, 2013
By Jud DeLoss*
Save the Date—Wednesday, December 4: Webinar on Final Regulations and Their Implications
At a joint conference today, the U.S. Departments of Health & Human Services (HHS), Labor (DOL), and Treasury announced the Final Rules under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. The Final Rules set forth the requirements imposed upon certain group health plans for coverage of mental health and substance use disorders (MH/SUD). The Final Rules do not require that plans offer coverage for MH/SUD. Rather, plans that do offer benefits coverage for MH/SUD must provide them at parity with coverage for medical/surgical health conditions.
The Final Rules classify benefits for purposes of comparison into four categories:
- Inpatient, in network;
- Inpatient, out of network;
- Outpatient, in network; and
- Outpatient, out of network.
Within this framework, the Final Rules apply to financial requirements, quantitative treatment limitations, and nonquantitative treatment limitations. Financial requirements include: copays, coinsurance, and deductibles.
Quantitative 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.
Nonquantitative treatment limitations include: medical management standards relating to medical necessity; formulary design for prescription drugs; network tier design; standards for provider admission; reimbursement rates; methods for determining usual, customary, and reasonable charges; fail-first policies or step-therapy protocols; exclusions based on failure to complete a course of treatment; and restrictions based on geographic location, facility type, provider specialty, or other criteria that limit scope or duration of benefits.
Generally, for purposes of determining parity, the Final Rules provide that a plan may not impose a financial requirement or quantitative treatment limitation upon MH/SUD in any classification that is more restrictive than the predominant financial requirement or quantitative treatment limitation for substantially all medical/surgical benefits in the same classification. For nonquantitative treatment limitations, a plan may not impose limitations with respect to a MH/SUD benefit in any classification unless such limitations are comparable to, and are applied no more stringently than, the limitations imposed by the plan for medical/surgical benefits in the same classification. The Final Rules do away with an exception in the Interim Final Rules that allowed plans to impose nonquantitative treatment limitations to the extent that recognized clinically appropriate standards of care may permit a difference.
In order to assist with compliance issues and questions, the Final Rules contain numerous examples containing anticipated factual scenarios and conclusions on the applicability of the MHPAEA. The Final Rules also spell out plan obligations for making certain documentation available to participants and beneficiaries at no cost. According to guidance provided, the enforcement of the Final Rules will be carried out in collaboration by DOL or HHS. Patients and providers were informed that the departments would coordinate with each other to ensure proper enforcement and response. HHS and DOL will work with the states to enforce the Final Rules, which would be carried out through private rights of action as well.
The MHPAEA applies to:
- Employer-funded plans with more than 50 insured employees;
- Federal employees enrolled in the Federal Employees Health Benefit Program;
- Medicaid managed care programs; and
- Children's Health Insurance Program.
After January 1, 2014, the Final Rules will also apply to:
- Employers who have fewer than 51 employees;
- Individual market plans; and
- Medicaid alternative benefit plans.
Some plans may request an exemption from the law. If an employer-based plan can demonstrate that the Final Rules have increased its health care costs by 2% in the first year that MHPAEA applies to the plan, or by at least 1% in subsequent years, they may ask to be exempt for the following year. Self-insured non-federal government employee plans also have the option to opt out if they desire. The Final Rules will apply to group health plans and health insurance issuers for plan years or policy years on or after July 1, 2014.
Save the Date: Wednesday, December 4
In light of the publication of the final parity regulations, AHLA has set aside Wednesday, December 4 at 1:00 PM Eastern for a webinar entitled "Patients, Providers and Plans: The Legal Implications of the Mental Health Parity and Addiction Equity Act," which will address the final regulations and their implications for behavioral and physical health. The webinar will be moderated by Behavioral Health Task Force Vice Chair of Educational Programs Jud DeLoss, and will feature Laura Goodman, director of the Health Law Advocates' Mental Health Parity Initiative; Stephen Warch, shareholder and chair, Health Care Practice Group, Nilan Johnson Lewis PA; and a federal government legal representative to provide consumer, provider, plan, and enforcement perspectives, respectively. AHLA will notify the membership as soon as registration is available.
*We would like to thank Jud DeLoss (Popovits & Robinson, Frankfort, IL), for providing this email alert.