Mental health parity final rule indicates compliance changes | Verrill

On September 9, 2024, the long-awaited final rule under the Mental Health and Addiction Equity Act (MHPAEA) was published. The MHPAEA prohibits group health plans that provide mental health and substance use disorder (MH/SUD) benefits from imposing more restrictions. coverage limitations of these benefits that the plan imposes on medical and surgical (M/S) benefits. The Consolidated Appropriations Act of 2021 (CAA) requires group health plans to document comparative analyzes of nonquantitative treatment limitations (NQTL) to ensure compliance with the MHPAEA. The final rule ensures that group health plan sponsors evaluate participants’ access to MH/SUD benefits and modify their plans if necessary to provide greater access to MH/SUD benefits.

Many of the requirements in the final rule are effective for plan years beginning on or after January 1, 2025. Some requirements that require substantial changes in plan administration will not be effective until plan years beginning in from January 1, 2026.

Plan sponsors must be aware of the extensive MHPAEA compliance requirements under the final rule and the new requirement that plan fiduciaries certify that they are acting prudently to follow the MHPAEA requirements.

What is effective in 2025?

The final rule contains the following significant changes, effective for plan years beginning on or after January 1, 2025:

• Requires group health plans to define if a condition or disorder is an MH or SUD condition: Group health plans must define whether a condition or disorder is classified as MH/SUD, according to the most current version of the International Classification of Diseases or the Diagnostic and Statistical Manual of Mental Disorders (commonly known as in DSM).
• Requires group health plans to make changes when they provide inadequate access to MH/SUD care: Group health plans must collect and evaluate data to determine whether there are material differences in access to MH/SUD benefits compared to M/S benefits from the application of an NQTL. NQTL test results will show where a plan is failing and where it needs to be updated to achieve compliance. Group health plans may not use restrictive medical management techniques or narrow networks to make it more difficult for participants to access MH/SUD benefits than M/S benefits.
• Code the NQTL benchmarking requirement: Group health plans must conduct benchmarking to measure the effect of NQTLs on their plan, both as written and in operation. This analysis includes a review of standards related to network composition, out-of-network reimbursement rates, utilization, and medical management NQTLs.
• Clarify the meaning of the terms:
  • The final rule refines the definitions of medical/surgical benefits, mental health benefits, and substance use disorder benefits by removing references to state guidelines. In practice, a plan can no longer refer to state insurance requirements as justification for any limitations on its benefit offerings.
  • The final rule adds definitions to terms relevant to how an NQTL is designed and applied, including definitions of evidentiary standards, factors, processes, and strategies.
• Remove the MHPAEA exclusion: The final rule eliminates the ability of state and local government group health plans to opt out of compliance with the MHPAEA effective December 29, 2022.

What is effective in 2026?

The final rule delays implementation of the significant benefits standard, the prohibition of discriminatory factors and standards of evidence, the mandatory use of outcomes data, and the related NQTL benchmarking requirements until plan years beginning in from January 1, 2026.

• Significant benefits standard: If a plan provides benefits for a mental health condition or substance use disorder in any benefit classification, it must provide significant benefits, including core treatments, in all classifications where core treatments are provided for the conditions M/S.
• Prohibition of discriminatory factors and evidentiary standards: Group health plans are prohibited from using factors, information, sources of evidence, and standards of evidence to design or apply NQTLs that discriminate between MH conditions and SUDs.
• Using revised NQTL standards and outcome data: Group health plans may not impose an NQTL in any classification that is “more restrictive” on MH/SUD benefits, as written or in operation, than is imposed on substantially all of the same M/S benefits classification The final rule adds two metrics for determining whether an NQTL is more restrictive for MH/SUD benefits: design/application and data evaluation.
  • Design and application of the NQTL: Group health plans may not apply an NQTL to MH/SUD benefits unless the processes, strategies, evidentiary standards, and factors used to design and apply the NQTL are comparable to, and not applied more strictly than, those used by to M/S profits in the same classification. .
  • Data evaluation: Group health plans must collect and evaluate relevant outcome data and take reasonable steps to address any material differences in access between MH/SUD and M/S benefits.

The departments plan to issue additional guidance and update the MHPAEA self-completion tool to provide information about the data that must be collected and evaluated to help group health plans meet benchmarking requirements. Plan sponsors should continue to follow the benchmarking requirements of the CAA and the final rule.

Items needed for a NQTL Comparative Analysis

As described above, a group health plan may not impose any NQTL that is more restrictive on MH/SUD benefits, as written or in operation, than the prevailing NQTL that applies to substantially all the M/S profits of the same classification.

Under the final rule, the following specific items must be included in an NQTL benchmarking analysis:

1. A description of the NQTL, including identification of the benefits subject to the NQTL;
2. Identification and definition of the evidentiary factors and standards used to design or apply the NQTL;
3. A description of how the factors are used in the design or application of the NQTL;
4. A demonstration of comparability and rigor in the design requirements and application of the factors and evidentiary standards on which it is based, as written. The plan demonstrates the comparability and rigor of the NQTL by comparing how the NQTL applies to MH/SUD benefits and M/S benefits, including any documentation used in the design and application of the NQTL or that addresses the application of the NQTL. The plan must provide an explanation of the reasons for any deviation or variation in the application of a factor used to apply the NQTL to MH/SUD benefits compared to M/S benefits and how the plan established that deviation or variation ;
5. A demonstration of operational comparability and rigor, including the data required, the evaluation of that data, an explanation of any material differences in access, and a description of reasonable actions taken to address those differences; i
6. Findings and conclusions.

The proposed rule included mathematical tests to determine whether benefits met the “substantially all” test (as described above) or the “predominant” test (whether the NQTL, as applied to MH/SUD benefits in a classification, is more restrictive than the prevailing one). variation of the NQTL applied to virtually all M/S benefits in this classification) and were similar to the quantitative treatment limitation tests for those metrics that are already in place. Notably, the mathematical tests were not retained in the final rule, likely in recognition of the challenges associated with their implementation and the legal challenges the final rule may face following the Court’s reversal of agency deference Supreme in Loper Bright Enterprises v. Raimondo144 S.Ct. 2244 (2024).

Group health plans must have a current NQTL benchmarking report on file. The report must be made available within ten business days of a request by the Department of Labor, Health and Human Services, the Treasury, any applicable state authority, or a group health plan participant or beneficiary. As the benchmarking requirement has been in place since February 2021, departments are unlikely to accept an extension request to produce a benchmark.

Effect of the final determination of non-compliance

If a group health plan receives a determination from the Department of Labor, Health and Human Services, or the Treasury that an NQTL does not meet the NQTL benchmarking requirements, the department that made the determination may prohibit the plan from imposing the ‘NQTL. for MH/SUD benefits until the plan demonstrates compliance or cures the violation.

If the secretary of the appropriate department makes a final determination of noncompliance, the group health plan must notify all participants and beneficiaries, all service providers involved in the claims process, and any fiduciary responsible for deciding claims of benefits of non-compliance with the plan within seven business days. Affected service providers must consider whether changes to claim adjudication are necessary and implement those changes to comply with the final determination of noncompliance.

Added fiduciary requirements for ERISA plans

For plans subject to ERISA, benchmarking must include a certification by a plan fiduciary that it has engaged in a prudent process to select a service provider to perform and document benchmarking in in relation to any NQTL in the scheme and has fulfilled its duty. to monitor these service providers regarding their performance.

Self-funded group health plans are responsible for preparing the NQTL Benchmarking Analysis, while insurers are responsible for preparing the NQTL Benchmarking Analysis for fully insured group health plans. Compiling a benchmarking report is a service that is not typically included in an administrative service agreement between a third-party administrator and a self-funded group health plan. In many cases, the external administrator refuses to perform the comparative analysis despite being the entity in the best position to do so. Accordingly, fiduciaries of self-funded plans often need to find a different service provider to perform the analysis.

Selecting a service provider as part of a prudential process under the new fiduciary requirements may be difficult, as not all service providers will perform a comprehensive analysis that meets the terms of the final rule. Some service providers that perform NQTL benchmarking for self-funded group health plans do not certify that their analysis meets MHPAEA requirements or that the plan itself complies with MHPAEA. To ensure fiduciary requirements are met, the plan should engage service providers who will certify that their analysis complies with the MHPAEA. If a service provider does not want to make this certification, the plan fiduciary should hire an experienced employee benefits advisor to review the report to ensure compliance. Verrill can analyze the sufficiency of a benchmarking analysis prepared by a third party, complete a certified benchmarking report on behalf of our clients and analyze whether the plan complies with the MHPAEA.