Snell & Wilmer

On April 2, 2021, the Labor, Treasury, and Health and Human Services departments (the “Departments”) issued ACA FAQs Part 45 (“FAQ 45”), which elaborates on the new reporting requirements implemented by the Consolidated Appropriations Act, 2021 (the “CAA”) under the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”). FAQ 45 reiterates that the new reporting requirements are enforceable now, so group health plan (“GHP”) sponsors subject to these rules should consider making compliance a priority.

Under the MHPAEA, as amended by the CAA, GHPs that (1) offer medical/surgical benefits and mental health or substance use disorder (“MH/SUD”) benefits and (2) impose nonquantitative treatment limitations (“NQTLs”) on the MH/SUD benefits must be able to provide a detailed comparative analysis regarding compliance with the MHPAEA’s NQTL rules upon request. NQTLs are non-numerical limitations on the scope and duration of benefits. Generally, any processes, strategies, evidentiary standards, or other factors used to apply NQTLs to MH/SUD benefits can be no more stringent than those used for medical/surgical benefits.

A few key takeaways from FAQ 45 follow:

February 10, 2021 Effective Date. FAQ 45 confirms that the CAA changes became effective as of February 10, 2021 and states that GHP sponsors (subject to the reporting rules) should be prepared to make the comparative analysis available upon request. It has been reported that the Department of Labor has already started issuing subpoenas, so GHP sponsors subject to these rules should consider next steps soon.

Requests from Non-Department Parties. GHP sponsors subject to these rules must not only provide the comparative analysis to the Departments upon request, but also upon request by benefit claimants (if the GHP is a non-grandfathered plan) and by participants, beneficiaries, enrollees, and certain authorized representatives (if the plan is subject to ERISA). Applicable state authorities can also request the comparative analysis. This broad pool of individuals increases chances that the comparative analysis will be requested.

Contents of Comparative Analysis. Q/A-2 identifies nine elements that must be included as part of the comparative analysis. The comparative analysis should be sufficiently specific, detailed and reasoned to demonstrate whether the processes, strategies, evidentiary standards, or other factors used in developing and applying NQTLs are applied no more stringently to MH/SUD benefits than to medical/surgical benefits. General statements of compliance, coupled with conclusory references to broadly stated processes, strategies, evidentiary standards, or other factors is insufficient. The Departments note that plans using the Department of Labor’s MHPAEA Self-Compliance Tool should be in a strong position to comply with the comparative analysis requirements.

Supporting Documentation. GHP sponsors subject to these rules should be prepared to make available detailed documents supporting the comparative analysis and to provide a list of such documents. Q/A-4 includes several types of documents that should be available and notes that the necessary supporting documentation will vary with the NQTL at issue.

Insufficient Practices. Q/A-3 provides a list of practices and procedures that GHP sponsors should avoid in responding to requests for the comparative analysis, such as provision of large volumes of documents without a clear explanation of relevancy or use of outdated analysis.

Failures to Comply with Comparative Analysis or MHPAEA Requirements. If the Departments conclude that a comparative analysis is insufficient, the Departments will request the necessary information. If the Departments conclude that a GHP is not in compliance with the MHPAEA, the GHP will have 45 days to take corrective action and submit additional comparative analysis. If the GHP is still determined to be noncompliant, the GHP must notify all enrolled individuals within seven days. The Departments will share findings of compliance and noncompliance with applicable state officials.

DOL Enforcement Priorities. The DOL expects to focus on the following NQTLs over the near term: (1) in-network and out-of-network prior authorization requirements for in-patient services; (2) concurrent review for in-network and out-of-network inpatient and outpatient services; (3) standards for provider admission to participate in a network, including reimbursement rates; and (4) out-of-network reimbursement rates (methods for determining usual, customary, and reasonable charges). However, the Departments are not limited to these priorities and can request comparative analyses for other NQTLs.

Given the number of entities and individuals that can request the comparative analysis and the fact that these rules are currently effective, GHP sponsors should consider coordinating with their service providers as soon as possible to determine who will perform and document the comparative analysis and the timeframes for doing so. Service agreements may need to be revised to address this issue. Additionally, it might be a best practice to perform and document the comparative analysis now, using tools such as the Department of Labor’s MHPAEA Self-Compliance Tool, so that it is ready in the event of a request. Performing the analysis now might also identify any compliance failures so that appropriate action, such as plan design changes and amendments, can be taken.

For additional information on the MHPAEA, see our July 5, 2017 blog, “Recent Mental Health Parity Guidance – A Good Reminder to Review Your Health Plan for Compliance.” For broader information on the CAA, see our March 26, 2021 SW Benefits Update, “2021 Consolidated Appropriations Act Compliance Checklist for Plan Sponsors.