MHPAEA Guidance Expands on Comparative Analysis Disclosures Under the CAA-21 | Practical Law

MHPAEA Guidance Expands on Comparative Analysis Disclosures Under the CAA-21 | Practical Law

The Department of Labor (DOL) (in coordination with the Departments of Health and Human Services and Treasury) has issued FAQ guidance addressing amendments to the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) under the Consolidated Appropriations Act, 2021 (CAA-21). The FAQs address compliance with a CAA-21 requirement, effective since early February, under which plans and insurers must provide the Departments their comparative analyses regarding nonquantitative treatment limitations (NQTLs).

MHPAEA Guidance Expands on Comparative Analysis Disclosures Under the CAA-21

Practical Law Legal Update w-030-4605 (Approx. 7 pages)

MHPAEA Guidance Expands on Comparative Analysis Disclosures Under the CAA-21

by Practical Law Employee Benefits & Executive Compensation
Published on 05 Apr 2021USA (National/Federal)
The Department of Labor (DOL) (in coordination with the Departments of Health and Human Services and Treasury) has issued FAQ guidance addressing amendments to the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) under the Consolidated Appropriations Act, 2021 (CAA-21). The FAQs address compliance with a CAA-21 requirement, effective since early February, under which plans and insurers must provide the Departments their comparative analyses regarding nonquantitative treatment limitations (NQTLs).
On April 2, 2021, the DOL, in coordination with HHS and Treasury (collectively, the Departments), issued FAQ guidance (Part 45) addressing compliance issues under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), as amended by the Consolidated Appropriations Act, 2021 (CAA-21) (see Practice Notes, Mental Health Parity Requirements Under the CAA-21 and Mental Health Parity: Overview). As amended, the MHPAEA now requires group health plans and health insurers to perform and document comparative analyses regarding the design and application of nonquantitative treatment limitations (NQTLs)—and to disclose their comparative analyses to the Departments on request (see Practice Note, Mental Health Parity: Nonquantitative Treatment Limitations (NQTLs)).

Timing and Content Rules for Furnishing NQTL Comparative Analyses

Because the CAA-21 was enacted on December 27, 2020, the requirement that plans and insurers make available their NQTL comparative analyses applies beginning February 10, 2021 (that is, 45 days after the CAA-21's enactment). As a result, plans and insurers must now be prepared to furnish their comparative analyses—if requested to do so by the Departments. Under the CAA-21, a plan's or insurer's comparative analyses must include an extensive set of information (see Practice Note, Mental Health Parity Requirements Under the CAA-21: Disclosures Involving Plan Compliance with NQTL Requirements).
Regarding substance, the Departments indicated in the FAQs that a plan's or insurer's comparative analysis cannot consist merely of a general statement of compliance and a conclusory reference to broadly stated processes, strategies, evidentiary standards, or other factors. Rather, plans or insurers should consult the Departments' MHPAEA Self-Compliance Tool in performing and documenting their comparative analyses of NQTLs. For example, the Tool:
  • Contains four steps for use by plans or insurers in assessing NQTL compliance.
  • Specifies information to support each step of the analysis, along with the plan's or insurer's conclusions concerning whether the plan is compliant.
As a result, plans or insurers that have already applied the Tool's guidance should be well-positioned to submit their comparative analyses on request (as required under the CAA-21).
Notably, a pre-CAA-21 recommendation in the Tool that plans and insurers analyze NQTLs and document their analyses as a "best practice" is no longer adequate. Rather, under the CAA-21, conducting and documenting comparative analyses of NQTL design and application are now statutory requirements.

Comparative Analysis Content Requirements

The Departments' FAQs expand on the CAA-21's requirements for comparative analyses. To start, according to the Departments, an analysis must include:
  • A "detailed, written, and reasoned explanation" of the specific plan terms and practices involved.
  • The bases for a plan's or insurer's determination that an NQTL is MHPAEA-compliant.
At a minimum, an analysis also must include what the Departments characterize as a "robust discussion" of the following topics:
  • A clear description of the specific NQTL, related plan terms, and policies at issue.
  • Identification of the specific mental health/substance use disorder (MH/SUD) and medical/surgical benefits to which the NQTL applies, regarding each MHPAEA benefit classification (see Practice Note, Mental Health Parity: Overview: Six Classifications of Benefits).
  • A clear statement concerning which of the identified benefits are classified as MH/SUD versus which are treated as medical/surgical.
  • Identification of any factors, evidentiary standards/sources, or strategies/processes considered in designing or applying an NQTL and determining which benefits (that is both MH/SUD and medical/surgical benefits) are subject to the NQTL. Analyses also should describe:
    • whether any factors were weighed more heavily than others; and
    • the reason(s) why (including an evaluation of specific data used in the determination).
  • If a plan or insurer defined any factors, evidentiary standards, strategies, or processes quantitatively, the specific definitions used and any supporting sources.
  • A written explanation of whether there is any variation in how a guideline or standard is applied as between MH/SUD and medical/surgical benefits and, if so, a description of the process and factors for establishing that variation.
  • If applying an NQTL depends on specific decisions in administering the benefits, a statement that identifies:
    • the nature of the decisions.
    • the decisionmakers involved and the decisions' timing; and
    • the decisionmakers' qualifications.
  • For analyses in which the plan or insurer relied on any experts, a written assessment of:
    • each expert's qualifications; and
    • the extent to which the plan or insurer relied on the expert's assessments in setting recommendations for MH/SUD and medical/surgical benefits.
  • A "reasoned discussion" of the plan's or insurer's findings/conclusions concerning the comparability of the above-referenced processes, strategies, evidentiary standards, factors, and sources for each classification—along with their relative stringency (as written and applied). This topic should include:
    • citations to any specific evidence considered; and
    • any conclusions of an analysis indicating that the plan or coverage is (or is not) MHPAEA-compliant.
  • The analysis's date, along with the name, title, and position of the person(s) who carried out or participated in the analysis.

Reasons Why Comparative Analyses May Be Insufficient

In an FAQ, the Departments indicated that a comparative analysis will likely be inadequate if it consists of a large production of documents without a clear description of how and why each document is relevant to the comparative analysis.
In responding to comparative analysis requests from the Departments, plans and insurers also should avoid:
  • Furnishing conclusory or generalized statements that merely restate the legal standard, but lack specific supporting evidence and detailed explanations.
  • Identifying processes, strategies, sources, and factors, but without the required or clear and detailed comparative analysis.
  • Identifying factors, evidentiary standards, and strategies without clearly explaining how they were defined and applied in practice.
  • Referring to factors and evidentiary standards that were defined or applied quantitatively, but without specific definitions, data, and information needed to assess their development or application.
  • Submitting an analysis that is outdated because of the passage of time, a change in plan structure, or another reason.

Supporting Documentation

The CAA-21 also requires plans and insurers to make available documents that support the analysis and conclusions of a comparative analysis. As addressed in the Departments' MHPAEA Self-Compliance Tool, these supporting documents include:
  • Records documenting NQTL processes and detailing how the NQTLs are applied to both medical/surgical and MH/SUD benefits. These records:
    • ensure that a plan or insurer can demonstrate MHPAEA compliance; and
    • may include materials prepared for compliance with any governing reporting requirements under state law.
  • Documentation (including guidelines, claims processing policies and procedures, or other standards) that a plan or insurer relied on in determining that NQTLs apply no more stringently to MH/SUD benefits than to medical/surgical benefits. This documentation may include:
    • available details concerning how the standards were applied; and
    • a plan's or insurer's internal testing, review, or analysis to support its rationale.
  • Samples of MH/SUD and medical/surgical benefit claims that were covered and denied.
  • MHPAEA compliance documents regarding service providers (that is, for plans that delegate management of MH/SUD benefits to a third party).

Consequences of Noncompliant Comparative Analyses

Under the CAA-21, if the Departments determine that a plan or insurer has not provided enough information to review a comparative analysis, they will specify to the plan or insurer the information that must be submitted to be responsive to the request. If the Departments conclude that a comparative analysis and supporting information are noncompliant, the plan or insurer must specify to the Departments the actions they will take to become compliant. A plan or insurer must submit additional comparative analyses that demonstrate compliance not later than 45 days after the initial determination of noncompliance.
Additional consequences will result if the Departments make a final determination after the 45-day corrective action period that the plan or insurer is still noncompliant. In that case, the plan or insurer must inform all individuals enrolled in the plan that the coverage has been determined to be noncompliant with MHPAEA. In addition, the Departments will:
  • Share findings of (non)compliance with the state where the plan is located (or in which an insurer is licensed to do business).
  • Comply with other laws applicable to their particular review processes.

Types of NQTLs That May Trigger Close Review

The Departments indicated in an FAQ that if they become aware of MHPAEA violations or complaints involving NQTLs, they may request comparative analyses concerning the specific NQTLs at issue. The Departments used the example of a complaint involving preauthorization rules for a plan's coverage of buprenorphine to treat opioid use disorder—which might lead the Departments to ask for the plan's comparative analysis on preauthorization requirements for prescription drugs (see Practice Note, Mental Health Parity: Nonquantitative Treatment Limitations (NQTLs): Medication Assisted Treatment as an NQTL: Preauthorization and Buprenorphine).
In enforcing the MHPAEA, the Departments indicated that they would focus on the following NQTLs:
  • Preauthorization requirements for in-network and out-of-network inpatient services.
  • Concurrent review for in-network and out-of-network inpatient and outpatient services.
  • Standards for allowing health providers to be part of a health plan's network, including reimbursement rates.
  • Out-of-network reimbursement rates (that is, how a plan determines usual, customary, and reasonable (UCR) charges).
In general, plans and insurers should be in a position to provide:
  • A list of all other NQTLs for which they have prepared a comparative analysis.
  • A description of any existing documentation concerning each comparative analysis.
  • However, the FAQs repeatedly emphasize the Departments' broad discretion under the CAA-21 to request an NQTL comparative analysis in any situation deemed appropriate.

Requests by Participants and State Regulators

Citing ERISA's disclosure rules regarding certain plan-related information and the DOL claims procedures (as enhanced by the Affordable Care Act (ACA)), the Departments take the view that ERISA plan participants, beneficiaries, and their authorized representatives are entitled to:
  • Comparative information on medical necessity criteria for medical/surgical and MH/SUD benefits.
  • The process, strategies, evidentiary standards, and other factors used to apply NQTLs concerning medical/surgical and MH/SUD benefits.
According to the Departments, this means that any comparative analyses performed under the plan and other applicable information under the CAA-21 must be made available to participants and beneficiaries on request.
Plans and health insurers also must make available their comparative analyses and related information to state authorities on request. Regarding insurers, this may include state insurance commissioners or state designees tasked with enforcing the Public Health Service Act (PHSA).

Practical Impact

As health plan sponsors, administrators, and their advisors struggle to stay ahead of an expanding set of statutory and regulatory requirements (ARPA-21/COBRA premium subsidies, CAA-21 surprise medical billing, COVID-19 coverage mandates, outbreak period extensions, and the price transparency rules to name but a few), these latest FAQs make clear that the Departments are serious about enforcing the new MHPAEA requirements under the CAA-21. The CAA-21's comparative analysis requirements have now been in effect for nearly two months and the FAQs suggest that the Departments won't hesitate to ask plans and insurers for their analyses—particularly in situations involving participant complaints concerning lack of comparability. Moreover, the detailed and NQTL-specific analysis requirements addressed above indicate that plans and insurers will be expected to "show their work" when it comes documenting their analyses.