The latest effort to implement and clarify evolving mental health parity requirements occurred on April 23 when the federal government proposed new guidance in the form of frequently asked questions.
The departments of Labor, Health and Human Services, and Treasury released “[Proposed] FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part XX," and they invited public input during a 60-day comment period.
The proposed guidance addresses nonquantitative treatment limitations and disclosure obligations in connection with the Mental Health Parity and Addiction Equity Act. The departments also released a self-compliance tool and revised draft disclosure template.
Bloomberg Law interviewed Damian Myers, senior counsel at Proskauer Rose LLP, to learn more about the mental health parity FAQs and what to expect after the June 22 comment deadline.
This interview was edited for clarity and brevity.
Bloomberg Law: Why did the agencies release the proposed FAQs?
Damian Myers: Congress passed, and the President signed, the 21st Century Cures Act in December 2016. Although this legislation covered many things related to mental health, it mandates that the agencies work to promote understanding and compliance with the mental health parity law. The agencies held meetings with various stakeholders in 2017 to determine what aspects of mental health parity needed additional guidance. Since then, the agencies have focused on expanding disclosures related to mental health parity and providing guidance on nonquantitative treatment limitations.
Bloomberg Law: What are nonquantitative treatment limitations?
Myers: Unlike quantitative treatment limitations, which can be easily identified by reference to dollar and visit limits, nonquantitative treatment limitations (or NQTLs) are not always readily apparent. At a high level, one could describe NQTLs as medical management techniques that are employed by health plans to manage costs. The 21st Century Cures Act directed the agencies to provide examples of NQTLs and the methods by which they are applied. The proposed FAQs identified a number of NQTLs, including prior authorization requirements, medical necessity guidelines, exclusions related to the experimental or investigational nature of the service or treatment, drug dosage limits, step therapy programs, network design standards (such as provider admission, reimbursement methods, and network adequacy), and facility restrictions. This is not an exhaustive list of NQTLs, and the key to the proposed FAQs is that if any NQTL is applied to a mental health or substance abuse-related service or treatment, the NQTL cannot be applied to that service or treatment more stringently than it is applied to medical and surgical services or treatments within the same classification.
Bloomberg Law: What is the biggest change to MHPAEA in the proposed FAQs (if finalized)?
Myers: The guidance related to NQTLs, although more comprehensive than we have previously seen, was not particularly surprising. The biggest, and potentially most problematic, change in the proposed FAQs relates to disclosure of network providers in a summary plan description (SPD). In general, the SPD content regulations require that the SPD describe the composition of a provider network. The regulations also allow for this information to be provided in a separate document. Years ago, health plans provided separate network provider books that participants could use to identify in-network providers. However, the standard practice now is to refer plan participants to the network administrator’s website to locate in-network providers. The proposed FAQs allow employers to continue this practice, but only if they satisfy electronic disclosure requirements under ERISA (discussed below). Further, if the network provider list changes, the plan would need to notify participants through the summary of material modification rules (i.e., notice within 210 days of the change).
The Department of Labor’s electronic disclosure rule generally provides that ERISA-required notices can be sent electronically only if recipients have access to the internet as part of their day-to-day job functions. This means that employees in many industries (e.g., retail, hospitality, manufacturing, and transportation) would have to receive hard copy network provider books unless they affirmatively consent to receive electronic disclosures. If this requirement remains in the proposed FAQs, it will result in administrative issues and higher costs for plans. For example, plans and plan sponsors generally have no control over the network structure, and network administrators are not in the practice of regularly communicating provider changes to participating plans. Providers join and leave various networks on a frequent basis, so hard copy provider lists (which could be dozens of pages long) would need to be updated and distributed, at a minimum, on an annual basis.
Bloomberg Law: What in the proposed FAQs (if finalized) will be the most work for employers to implement?
Myers: Although compliance with the NQTL requirements is difficult, employers generally have little control over the application of NQTLs. Employers should nevertheless seek assurances from the third parties administering their plans that all NQTLs comply with mental health parity requirements. The proposed requirement to provide hard copy network provider lists to employees who do not have access to the internet as part of their job would be the hardest requirement to implement. Plans and plan sponsors would need to work with the network administrator to develop the required disclosures and create a process for updating the provider lists in accordance with ERISA.
Bloomberg Law: Do you anticipate the proposed guidance in the FAQs will change after the comment period ends and the guidance is finalized?
Myers: I do not expect much change with respect to the NQTL guidance. However, the agencies have received numerous comments on the disclosure requirements, particularly with respect to the issuance of hard copy network provider lists. If we see significant changes to the proposed FAQs, it would likely be to the disclosure guidance.
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