Biden Administration Takes Aim at Unlawful Insurance Barriers to Mental Health Treatment

The Mental Health Parity and Addiction Equity Act (MHPAEA) is a federal law that governs benefits provided by group health plans and health insurance issuers.  Since its enactment in 2008, MHPAEA prohibits less favorable benefit limitations for mental health or substance use disorder benefits when compared to limitations on medical and surgical benefits.  This law reflects the growing recognition that mental health is a key component of an individual’s overall health and well-being, as well as the fact that addiction is not a personality flaw but has medical components as well.

On July 25, 2023, the Departments of Labor, Health and Human Services, and the Treasury announced proposed rules to strengthen MHPAEA.  The proposed rules demonstrate the Biden Administration’s efforts to address the nation’s mental health crisis by improving MHPAEA enforcement mechanisms.

The agencies are specifically interested in gathering data on limitations in network composition (nonquantitative treatment limitations or “NQTLs”) that act as barriers to affordable mental health treatment.  Examples of NQTLs include prescription drug formularies, tiered network designs, step therapy/fail-first policies, referral/pre-authorization requirements, and limitations on coverage for experimental or investigational treatment.

With respect to mental health parity, the government is specifically interested in the following:

1. How often insurance beneficiaries are using mental health providers outside of their network compared to out-of-network medical providers;

2. Whether listed in-network behavioral providers actually provide behavioral care, or only provide medical care based on claims submitted by providers to insurers (often referred to as “ghost networks”);

3. The availability of in-network mental health providers within a given time and distance radius compared to in-network medical providers within the same radius; and

4. Whether there is a difference in reimbursement rates for in-network behavioral providers compared to in-network medical providers.

If there is a material difference between mental health care and medical/surgical care for any of the above data points, the agencies will treat this disparity as strong evidence of a violation of MHPAEA.  The proposed rule contains an exception for NQTLs that impartially apply independent medical or clinical standards.  This exception is designed to incentivize NQTLs that are based on generally accepted standards of care, rather than cost-saving priorities.

These proposed rules were available for public comment until October 2, 2023.  The agencies will now review public feedback, make edits they deem appropriate, and publish a final version of the rule.

If you have questions about mental health parity or NQTLs for plans administered by a union trust fund, contact your trust counsel.