Ann Tran-Lien, JD
Managing Director of Legal Affairs
The Therapist
January/February 2017

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) generally prohibits group health plans and insurance carriers that offer group or individual health insurance coverage from imposing more restrictive financial requirements and treatment limitations on mental health or substance use disorder benefits than on medical/surgical benefits the plans provide. Effective January 1, 2014, the Affordable Care Act (ACA) expanded MHPAEA to apply to all small group and individual market plans (including plans offered through exchanges, like Covered California) in addition to large group employer plans and state-regulated plans, including Medi-Cal managed care plans.

MHPAEA establishes requirements for determining parity with respect to financial requirements and treatment limitations. Financial requirements include deductibles, copayments, coinsurance, and out-of-pocket maximums. Treatment limitations may be either “quantitative treatment limitations” (QTLs) which are expressed numerically, such as limits on the number of psychotherapy sessions; or, “nonquantitative treatment limitations” (NQTLs) which are non-numerical, such as pre-authorization requirements or written treatment plan requirements. This article will focus on NQTLs and provide examples of provisions in policies that may require further analysis by enforcement agencies (See below “Enforcement of Parity”) to determine if the plan is in compliance with the mental health parity requirements of MHPAEA.

NQTLs
According to MHPAEA, generally, a plan may not impose a treatment limitation on mental health or substance use disorder benefits unless, under the terms of the policy, “any processes, strategies, evidentiary standards, or other factors used” in applying the NQTL to mental health or substance abuse disorder benefits are “comparable to, and are applied no more stringently than,” those used in applying the NQTL with respect to medical/surgical benefits in the same classification. The classifications include: in-patient in-network; inpatient out-of-network; outpatient in-network; outpatient out-of-network; prescription drugs and emergency care.¹ MHPAEA regulations contain an illustrative, non-exhaustive list of NQTLs,² which includes the following:

Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative (including standards for concurrent review);

• Formulary design for prescription drugs;
• Network tier design for plans with multiple network tiers (such as preferred providers and participating providers);
• Standards for provider admission to participate in network, including reimbursement rates;
• Plan methods for determining usual, customary, and reasonable charges;
• Fail-first policies or step therapy protocols;
• Exclusions based on failure to complete a course of treatment; and
• Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan or coverage.

Examples of NQTL Warning Signs
The Department of Labor (DOL) recently published examples of nonquantitative treatment limitations that raise potential parity concerns under MHPAEA.³ The following examples are adapted from the DOL’s publication of plan provisions that behavioral health providers may encounter when providing services to insured clients. These provisions do not automatically violate the law, but do raise a red flag for further review by enforcement agencies to determine the plan’s parity compliance. To determine compliance, the investigating agency will review the processes, strategies, evidentiary standards or other factors used by the plan in applying the NQTLs to both mental health and substance use disorder benefits and medical/surgical benefits. If inquired by a regulatory agency, the plan would need to provide evidence to substantiate compliance with MHPAEA.

Preauthorization/Review Requirements

• The plan requires preauthorization for all mental health and substance use disorder services.
• The plan requires preauthorization or concurrent review every 10 days for mental health and substance use disorder services but not medical/surgical services.
• The plan requires pre-notification or preauthorization for all mental health and substance use disorder services and extended outpatient treatment visits beyond 45-50 minutes.
• The plan’s medical management program (or preauthorization or concurrent review program) delegates its review authority to attending physicians for medical/surgical services but conducts its own review for mental health and substance use disorder services.
• The plan requires concurrent review for out-patient, in-network mental health and substance use disorder benefits to determine “medical necessity” but does not require it for any out-patient, in-network medical/surgical benefits.

Treatment Plan Requirements

• The plan requires an individual-specific treatment plan be updated for review by the plan every 6 months.
• The plan requires that within 7 days of beginning treatment, a treatment plan be completed and submitted, and the treatment plan needs to be reviewed at least once a week for progress.

Probability of Improvement Requirements

• The plan only covers mental health and substance use disorder services that result in measurable and substantial improvement in mental health status within 90 days.

Fail-First Protocols

• The plan covers intensive outpatient treatment for mental health and substance use disorder services only if the patient has not achieved progress with non-intensive outpatient treatment of a lesser frequency.
• The plan only covers inpatient mental health and substance use disorder services only if the patient first completes a partial hospitalization treatment program.

Other Limitations

• The plan imposes geographical limitations related to treatment for mental health and substance use disorder services but does not impose similar limitations on medical/ surgical benefits.
• An employer offers to its employees both a major medical program and an employee assistance program (EAP). The EAP provides, among other benefits, a limited number of mental health or substance use disorder counseling sessions. Participants are eligible for mental health or substance use disorder benefits under the major medical program only after exhausting the counseling sessions provided by the EAP. No similar exhaustion requirement applies with respect to medical/surgical benefits provided under the major medical program.

Enforcement of Parity
A number of state and federal agencies share oversight and enforcement of parity. Enforcement varies based on the type of insurance plan. State insurance commissioners and regulatory agencies oversee individual and employer-funded plans of less than 51 insured employees, as well as fully insured large group plans.4

In California, the vast majority of health plans in California are subject to enforcement by either the Department of Managed Healthcare or the Department of Insurance, depending on with which department the plans have filed.

In 2014 through 2015, the DMHC implemented Phase I of its MHPAEA Compliance Project5 and found the most frequent parity violations included: wrong level or type of cost-sharing for outpatient mental health and substance use disorder services; illegal day limits on mental health and substance use disorder services; different definitions of medical necessity for behavioral health plans than medical/surgical plans; more restrictive prior authorization policies on mental health and substance use disorder services than on medical/surgical services; and more vague and ambiguous disclosures of mental health and substance use disorder benefits and cost-sharing.

In 2016, the DMHC implemented Phase II, in which it conducted on-site reviews of five plans that participated in the pilot project. The DMHC issued reports to the plans that participated in the on-site reviews in the fall of 2016. The final reports will be released to the public, but as of the publication of this article, the Department has not yet determined that release date.

The Federal Parity Task Force
On March 29, 2016, President Obama created the White House Mental Health and Substance Use Disorder Parity Task Force and charged Federal Departments and Agencies to work together to ensure Americans are benefiting from the mental health and substance use disorder parity protections under the law.

In October 2016, the Task Force announced in its Final Report6 a series of actions and recommendations to advance parity in mental health and substance use disorder health benefits. In deciding actions and recommendations, the Task Force, from March to September 2016, held multiple listening sessions, solicited written comments and feedback, reviewed the research on parity implementation, and synthesized findings.

At several listening sessions and in many written comments, concerns were raised about the way reimbursement rates for mental health and substance use disorder providers are determined, resulting in reimbursement rates for mental health and substance use disorder services that may be lower than for medical/ surgical services.

In addition, the insurance plans stated they need more guidance on what they are required to do to determine compliance with parity requirements for NQTLs.

Over 300 written comments from consumers referenced their personal difficulties in finding mental health and substance use disorder providers in their area. Some comments indicated the workforce shortage was due to mental health and substance use providers opting not to join a health plan network due to lower reimbursement rates than they could receive from cash payment. It is important to note that plans’ processes and standards for provider inclusion in the network and provider rate settings are considered nonquantitative treatment limitations that are afforded parity protection under the Act. To address the workforce shortage, many stakeholders recommended finding ways to incentivize a new generation of behavioral health professionals, to help improve access to care.

Some of the Task Force actions include:

• The Centers for Medicare & Medicaid Services (CMS) is awarding $9.3 million to States to help enforce parity protections. The California Department of Insurance was awarded $1.84 million.
• The Department of Health and Human Services released the beta version of a new parity website to help consumers find the appropriate Federal or State agency to assist with their parity complaints, appeals, and other actions.7
• The Substance Abuse and Mental Health Services Administration (SAMHSA) and the DOL released a Consumer Guide to Disclosure Rights: Making the Most of Your Mental Health and Substance Use Disorder Benefits to help consumers, their representatives, and providers understand what type of information to ask for when inquiring about a plan’s compliance with parity and to explain the various Federal disclosure laws that also require disclosure of information related to parity.8
• The DOL, HHS, and Treasury issued a Parity Compliance Assistance Materials Index.9

The Task Force also made recommendations, which include, but are not limited to:
Increase Federal agencies’ capacity to audit health plans for parity compliance. The Task Force recommends that agencies’ future budgets include funding to expand audit capacity.

Provide the DOL authority to assess civil monetary penalties for parity violations.
Provide federal support for State efforts to enforce parity through trainings, resources, and new implementation tools, including model compliance templates. The Task Force also recommends that Federal regulators work with the National Association of Insurance Commissioners and the States to develop a standardized template that States might use to help assess parity compliance and to jointly develop a model prior authorization form and other model forms.

CAMFT’s Advocacy Efforts
CAMFT continues to advocate for our member providers with respect to managed care companies and access to behavioral health care in California. Members who are insurance providers and have encountered treatment limitations such as those listed in this article with a particular plan are encouraged to bring those to CAMFT’s attention at comments@camft.org (please title the subject line: “Parity”), as well as directly to the Department of Insurance, the Department of Managed Healthcare, or to EBSA.

In August 2016, CAMFT staff met with the California Insurance Commissioner, Dave Jones, and his legal staff to discuss CAMFT member providers’ top concerns in dealing with insurance companies, including low provider reimbursement rates and administrative hurdles. As a result of our meeting, CAMFT was offered a direct contact in the Consumer Services Division of the Department of Insurance with whom CAMFT communicates our member’s concerns regarding parity violations, any widespread claims handling issues, or other major areas of concern.

Shortly after the meeting, CAMFT wrote a letter to the Department of Insurance to request the Department focus its parity enforcement efforts on two key issues: 1) provider reimbursement parity and 2) plans’ requests for preauthorization of certain behavior healthcare services. CAMFT has also presented the issue of provider reimbursement parity to the DMHC and has offered our assistance to the Department on its analysis of this important matter.

CAMFT is an active member of the California Coalition for Mental Health (CCMH) and is a participant in CCMH’s Parity Work Group. CCMH advocates for fair and equitable treatment of all Californians living with mental illness and has been a strong voice on the issue of parity for mental health and substance abuse disorder benefits. CCMH’s Parity Work Group addresses health insurance discrimination that seriously harms people with mental health and substance use disorders. CAMFT will continue to keep members apprised as to parity and other managed care/insurance issues that impact our membership and access to behavioral healthcare in California.

Where to file a complaint or inquire for further information:

• Department of Insurance: Any individual inquiries or provider complaints can be made to the Department’s Consumer Hotline at 1-800-927-4357 or the Department’s online portal at http://www. insurance.ca.gov/01-consumers/101-help/ index.cfm.
• Department of Managed Healthcare: Any individual inquiries or provider complaints can be made to the Department’s Help Center at 1-888-466- 2219 or by submitting an online Independent Medical Review Form at http://www.dmhc. ca.gov/File-a-Complaint/Apply-for-an- Independent-Medical-Review-IMR/IMR-Application-Form.aspx.
• Employee Benefits Security Administration: Providers or consumers can contact EBSA’s Consumer Assistance at 1-866-444-3272.
• U.S. Department of Health & Human Services: Providers or consumers can contact HHS at 1-877-696-6775.

Parity Registry: This complimentary registry and resource has been launched by the Kennedy Forum to help consumers, providers, advocates and others gather valuable information and access resources to prepare to register a complaint or an appeal with a health plan or regulatory agency when a denial of care for mental health or addiction services has occurred. Providers and consumers may register a complaint and review available educational resources regarding parity at http://www. parityregistry.org.

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Ann Tran-Lien, JD, is a staff attorney and the Managing Director of Legal Affairs at CAMFT. Ann is available to answer member calls regarding legal, ethical, and licensure issues.

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Endnotes
¹ 26 CFR 54.9812-1(c)(2)(ii), (3)(iii); 29 CFR 2590.712(c)(2)(ii), (3) (iii); 45 CFR 146.136(c)(2)(ii), (3)(iii); and 147.160
² 26 CFR 54.9812-1(c)(4)(ii); 29 CFR 2590.712(c)(4)(ii); 45 CFR 146.136(c)(4)(ii); and 147.160
³ See publication at https://www.dol.gov/ebsa/pdf/warning-signs-plan-or-policy-nqtls-that-require-additional-analysis-to-determine-mhpaea-compliance.pdf
⁴ The Department of Labor and the Internal Revenue Service generally have enforcement authority over self-insured private sector employment-based plans that are subject to the Employee Retirement Income Security Act. The U.S. Department of Health and Human Services has direct enforcement authority with respect to self-funded, non-federal (state or local) governmental plans. Individuals and service providers with questions about the MHPAEA or complaints about compliance of a health plan can contact any of the departments. The departments will work together and, to the extent an insurer is involved, will work with the states, as appropriate, to ensure parity violations are corrected.
⁵ On a representative sample of 7 individual products, 5 small group products, and 3 large group or IHSS products
⁶ The Final Report can be accessed at http://www.hhs.gov/sites/ default/files/mental-health-substance-use-disorder-parity-task-force-final-report.pdf.
⁷ The website can be accessed at http://www.hhs.gov/mental-health-and-addiction-insurance-help#
⁸ The Guide can be found at http://store.samhsa.gov/shin/content// SMA16-4992/SMA16-4992.pdf
⁹ The Index can be found at https://www.dol.gov/sites/default/files/ ebsa/laws-and-regulations/laws/mental-health-parity/compliance-assistance-materials-index.pdf.

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This article is not intended to serve as legal advice and is offered for educational purposes only. The information provided should not be used as a substitute for independent legal advice and it is not intended to address every situation that could potentially arise. Please be aware that laws, regulations and technical standards change over time. As a result, it is important to verify and update any reference or information that is provided in this article.