On January 25, the U.S. Department of Labor (DOL), Department of Health and Human Services (HHS), and Treasury (collectively the three agencies) released the first annual report on compliance of group health plans and health insurance issuers with the Mental Health Parity and Substance Abuse Equity Act (MHPAEA) as amended by the Consolidated Appropriations Act of 2021 (CAA). The report noted that nothing benchmarks reviewed “contained sufficient information when initially received”. The three bodies have issued preliminary decisions of non-compliance for many plans and issuers, but the report notes that no final decision has yet been made. Instead, plans and issuers can still take corrective action, and in doing so, avoid the triple whammy of being named in next year’s report, by having a notice of non-compliance sent to participants. and plan enrollees (essentially by rolling out a red carpet for class action suits), and the three bodies notifying the state regulator. Plans and issuers should not expect the Tri-Agencies to exercise such restraint in the future.
As previously noted, the CAA codified previous guidance and specifically required that plans and issuers document benchmarks demonstrating that the processes, strategies, evidentiary standards and other factors used to apply each non-quantitative processing limitation (NQTL) to mental health and substance abuse disorder benefits, both written and in effect, are comparable and applied without more rigor than those used to apply each NQTL to medical/surgical benefits within the same benefit classification . Health plans and issuers had to comply with the new requirements by February 10, 2021. The tri-agency issued additional guidance on what constitutes minimum and sufficient benchmarking on April 2, 2021. The report notes that A week later, on April 9, the DOL began sending letters requesting benchmarking from plans and issuers.
But many regimes and issuers were not ready to react. One reason is the continued absence of a standardized tri-agency format or template for presenting sufficient comparative analysis. Iterations of the DOL’s MHPAEA Self-Compliance Tool and multiple FAQs provided guidance on some questions to ask and general guidance, but failed to identify exactly how and what needs to be done to satisfy regulators. This concern is exacerbated by the fact that states may have additional and varying expectations, especially during market driving reviews. Nonetheless, the report’s summaries of common missteps – such as mere conclusive assertions devoid of analysis, failure to explain how factors were measured and applied, and explain who and how were involved in the design and implementing an NQTL – provide more water to iterate an effective benchmarking model.
However, another reason many plans and issuers struggled to produce enough benchmarking is that some plans believed their third-party administrators or service providers would provide the analyses. This highlights one of the complexities of complying with MHPAEA (as well as ERISA, more generally). In general, a plan may contract with a third-party service provider or administrator to provide administrative services for the plan, such as usage management, network development, and other activities that may limit the scope or duration of covered services – and thus constitute NQTL. The DOL has jurisdiction over the plan, but not necessarily over the service provider or the TPA; To enforce compliance with the MHPAEA against the service provider or the TPA, the DOL must determine whether it is a fiduciary under ERISA and bring an action against the plan and its trustees. This is an exercise in fact and labor.
It is therefore not surprising that the DOL recommends that Congress amend ERISA to provide a direct line of attack to enforce parity against service providers, TPAs or other entities that provide administrative services. to ERISA group health plans. Health insurance issuers, that is, state-licensed and regulated health insurers, often provide such administrative services. Historically, and as reported in the report, the DOL seeks “to obtain voluntary global corrections. . . when a violation concerns an insurance product, a prototype document or a systemic operation affecting several schemes. The ERISA amendment would allow for mandatory global corrections and add additional enforcement powers.
Likewise, the report again calls on Congress to grant the DOL the authority to impose civil monetary penalties for violations of the MHPAEA. Currently, there are no such penalties. But the DOL can require restatement of affected benefit claims and, if the entity has breached a fiduciary duty under ERISA, the DOL can impose a penalty equal to 20% of the amount recovered under a resolution. with the DOL or a court order. And plan members have filed recovery claims for alleged wrongful denials of benefits. A related recommendation calls on Congress to make this recovery of denied benefits more explicit, by amending “ERISA to expressly provide that participants and beneficiaries, and the DOL on their behalf, may recover amounts lost by participants and beneficiaries whose claims were wrongly denied in violation. of the MHPAEA.
The report also explains that the DOL has increased its staff and training to bring more resources to MHPAEA compliance. Likewise, the NAIC, state insurance regulators and state attorneys general have not been idle. Mental health access and equity, in addition to compliance with the MHPAEA, continues to be a focal point and a bipartisan policy issue within federal and state governments. Over the summer, the Biden administration is expected to release a new rule proposal on the MHPAEA regarding legislative changes made by the 21st Century Cures Act and CAA and evolving guidelines. These rules may provide clearer guidance on NQTL benchmarking and set additional standards for certain NQTLs.