Mental Health Parity – NQTL Comparative Analysis Requirement (Benefit Minute)
The Consolidated Appropriations Act (CAA) amended the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to provide important new protections for participants. The CAA requires a documented comparative analysis of nonquantitative treatment limitations (NQTLs) between medical/surgical benefits and mental health/substance use disorder (MH/SUD) benefits to demonstrate that such treatment limitations are applied comparably (i.e. not more stringently to MH/SUD conditions). This new requirement is the latest in a series of efforts to strengthen mental health-related benefits in group health plans and became effective February 10, 2021.
MHPAEA states that processes, strategies, evidentiary standards or other factors used in applying a NQTL to MH/SUD benefits must be comparable to, and applied no more stringently than for medical/surgical benefits. Comparability requirements must be met both as written and in operation, and are applied separately to six classifications of benefits. Nonquantitative treatment limitations include:
- medical management standards, including prior authorization requirements
- prescription drug formulary design
- standards for provider admission to a network, including reimbursement rates
- methods to determine usual, customary and reasonable charges
- fail-first or step therapy protocols
- exclusions based on failure to complete a course of treatment
In the near term, the agencies responsible for enforcement of MHPAEA will focus on prior authorization requirements for in-network and out-of-network inpatient services, concurrent review for in-network and out-of-network services, standards for provider admission to a network (including provider reimbursement rates), and out-of-network reimbursement rates. However, an initial focus on these four areas does not limit compliance obligations with respect to other NQTLs.
Items to be Included in the Comparative Analysis
While comparable application of NQTLs is generally required under MHPAEA, the CAA now mandates insurers and plans to perform and document their comparative analysis of the design and utilization of NQTLs. The comparative analysis should include a thorough discussion of the following components:
- a clear description of the specific NQTL, plan terms, and policies at issue
- identification of the specific MH/SUD and medical/surgical benefits to which the NQTL applies within each benefit classification, and a clear statement as to which benefits identified are treated as MH/SUD and which are treated as medical/surgical
- identification of any factors, evidentiary standards or sources, strategies, or processes considered in the design or application of the NQTL and in the determination of which benefits, including MH/SUD benefits and medical/surgical benefits, are subject to the NQTL.
- precise definitions of any factors, evidentiary standards, strategies, or processes used and any supporting sources
- explanation of any variation in the application of a guideline or standard between MH/SUD benefits and medical/surgical benefits, and the process and factors used for establishing that variation
- the nature of any decisions, the decision maker(s), the timing of the decisions, and the qualifications of the decision maker(s) if the application of the NQTL turns on specific decisions in administration of the benefits
- an assessment of an expert’s qualifications and the extent to which the expert’s evaluations was relied upon in setting recommendations regarding both MH/SUD benefits and medical/surgical benefits
- a reasoned discussion of the plan’s or insurer’s findings and conclusions as to the comparability of the processes, strategies, evidentiary standards, factors, and sources within each affected classification, and their relative stringency, both as applied and as written, including citations to any specific evidence considered and any results of analysis indicating compliance or non-compliance with MHPAEA
- the date of the analysis and the name, title, and position of the person or persons who performed or participated in the comparative analysis
A plan or insurer should also be prepared to produce other documents that support the analysis and conclusions of the NQTL comparative analysis.
MHPAEA Self-Compliance Tool
The agencies have not provided any guidance on the format of the comparative analysis and it is unclear how they will determine if a specific NQTL comparative analysis is sufficiently detailed to demonstrate compliance. However, they strongly recommend use of the DOL’s MHPAEA Self-Compliance Tool. The tool includes robust guidance related to the requirements for parity of NQTLs and outlines four steps to be taken to assess compliance. For each step, the tool also identifies certain information to support the analysis. Plans and insurers that carefully follow the guidance in the tool should be in a better position to demonstrate compliance with the CAA’s comparative analysis requirement. The DOL has informally stated they use this tool in enforcing MHPAEA.
Preparation of the comparative analysis requires considerable resources and knowledge. Plan sponsors with fully insured plans should reach out to their carriers to determine how they will handle the requirements. For self-funded plans, the employer is primarily responsible for MHPAEA compliance. However, given a TPA’s role in plan design and claims processing/payment, it is likely that the TPA will have to assist with preparation of the comparative analysis. Legal counsel may also be involved in assessing the adequacy of the analysis.
Requests by Regulatory Agencies
Effective February 10, 2021, insurers and plans must make the NQTL comparative analysis available to the applicable agencies upon request. If there is an initial finding of non-compliance, corrective action must be taken within 45 days. If a final determination of non-compliance is made, the plan or insurer must notify all covered individuals of the non-compliance within 7 days and the findings will also be shared with the state where the plan is located or the insurer is licensed. In addition, the agencies must submit an annual report to Congress that includes a summary of the comparative analyses, the names of the plans selected and any instances of non-compliance.