In 2022 MHPAEA Report, DOL Highlights Robust Enforcement of CAA-21 and Widespread Noncompliance | Practical Law

In 2022 MHPAEA Report, DOL Highlights Robust Enforcement of CAA-21 and Widespread Noncompliance | Practical Law

In late January 2022, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (collectively, Departments) issued their "2022 Report to Congress" addressing compliance by group health plans and health insurers with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The report highlights the Departments' review of plans' and insurers' comparative analyses (CAs) concerning nonquantitative treatment limitations (NQTLs), a disclosure requirement added by the Consolidated Appropriations Act, 2021 (CAA-21).

In 2022 MHPAEA Report, DOL Highlights Robust Enforcement of CAA-21 and Widespread Noncompliance

by Practical Law Employee Benefits & Executive Compensation
Published on 28 Jan 2022 • USA (National/Federal)
In late January 2022, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (collectively, Departments) issued their "2022 Report to Congress" addressing compliance by group health plans and health insurers with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The report highlights the Departments' review of plans' and insurers' comparative analyses (CAs) concerning nonquantitative treatment limitations (NQTLs), a disclosure requirement added by the Consolidated Appropriations Act, 2021 (CAA-21).
In late January 2022, the DOL, HHS, and Treasury (collectively, Departments) issued their 2022 Report to Congress regarding compliance by group health plans and health insurers with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (see Practice Note, Mental Health Parity: Overview). The 2022 report is intended to satisfy a MHPAEA provision requiring the DOL to submit a report to Congress addressing MHPAEA compliance generally. The 2022 report also doubles as the Departments' first installment of an annual report to Congress (as required under the Consolidated Appropriations Act, 2021 (CAA-21)) addressing comparative analyses (CAs) for nonquantitative treatment limitations (NQTLs). CAs are an expansive disclosure requirement for plans and insurers that:
  • Was added under the CAA-21 (enacted on December 27, 2020).
  • Became effective just a few weeks later—on February 10, 2021.
For more information, see:

Comparative Analyses Characterized as New Enforcement Tool

Under the CAA-21, plans and insurers offering coverage that provides both medical/surgical benefits and mental health or substance use disorder (MH/SUD) benefits—and that impose NQTLs—must perform and document detailed CAs of how NQTLs are designed and applied. Specifically, plans and insurers must make available to the federal and state agencies on request:
  • The specific plan or coverage terms (or other relevant terms) regarding NQTLs that apply to the plan or coverage, along with a description of all MH/SUD benefits to which each term applies in each of the six benefits classifications that are used—under MHPAEA implementing regulations—as a framework for assessing mental health parity compliance (see Practice Note, Mental Health Parity: Overview: Six Classifications of Benefits).
  • The factors used to determine that the NQTLs apply to medical/surgical benefits or to MH/SUD benefits.
  • Evidentiary standards used for the factors (with definitions for each factor) and any other source or evidence relied on to design and apply the NQTLs to medical/surgical or MH/SUD benefits.
  • The CAs used to determine that the processes, strategies, evidentiary standards, and other factors for applying the NQTLs to MH/SUD benefits (as written and in operation) are comparable to and applied no more stringently than the processes, strategies, evidentiary standards, and other factors used to apply NQTLs to medical and surgical benefits in a benefits classification (see Practice Note, Mental Health Parity: Overview: Six Classifications of Benefits).
  • The specific findings and conclusions reached by the plan or insurer (including the results of any CAs) concerning whether the coverage complies with MHPAEA's requirements.
(For more information, see Practice Note, Mental Health Parity Requirements Under the CAA-21: Comparative Analysis Content Requirements Under FAQ Guidance.)

Many Plans and Insurers Were Not Prepared to Provide CAs

The DOL waited two months after the effective date of the CA requirement (that is, until April 10, 2021) to issue its first requests to plans and insurers for CAs. But roughly 40% of plans and insurers responded to the DOL's initial letter with requests for time extensions to furnish the complicated CA disclosures. Some plans replied that they needed extensions because they mistakenly believed their third-party administrators (TPAs) were preparing CAs on their behalf. Others indicated that they needed time to find a preparer for their CAs.

All Plans and Insurers Submitted Insufficient CAs; Common Noncompliance Examples

After reviewing the 156 CAs submitted, the DOL concluded that all of the analyses were insufficient. The 2022 report identified common examples of this noncompliance, including:
  • Plan failures to begin preparing CAs until requested by DOL to do so.
  • Benefit classification issues. Some CAs did not indicate how plans handled specific benefits from a MHPAEA perspective, for example, whether:
    • intermediate services were considered inpatient or outpatient; or
    • benefits for certain therapies were considered medical/surgical or MH/SUD benefits.
  • Not showing how identified factors were applied in an NQTL's design. The DOL viewed a CA as deficient if it did not:
    • specifically explain precisely how each factor was applied (and to which benefits);
    • show the outcome of the factor's application;
    • provide documentation demonstrating the plan's process.

Initial Determinations of Noncompliance

The DOL concluded that it had enough information to perform compliance reviews for 48 NQTLs, which corresponded to 30 plans and insurers. All of the compliance reviews resulted in initial noncompliance determination letters. NQTLs for which DOL made initial noncompliance determinations included:
  • Limits or exclusions for applied behavioral analysis (ABA) treatment or other services to treat autism spectrum disorder (ASD).
  • Billing requirements.
  • Limits or exclusions of medication-assisted treatment of opioid use disorder.

Corrective Action Plans Addressed NQTLs

In response to the initial noncompliance determination letters, DOL received 19 corrective action plans (CAPs) from plans, while other plans and insurers indicated they were making prospective changes to their NQTLs. These changes included removing:
  • An ABA therapy exclusion.
  • An exclusion for medication-assisted treatment for opioid use disorder.

Practical Impact

The Departments repeatedly refer to the CA requirement as an enforcement tool for MHPAEA compliance and make clear in the 2022 report that they will continue to aggressively enforce the new disclosure requirement—backed by "significantly expanded staffing." The Departments' robust enforcement approach may seem demanding to plan sponsors, insurers, and their advisors—who also faced compliance challenges in 2021 for surprise medical billing and other new CAA-21 requirements, the ongoing COVID-19 pandemic, and COBRA premium assistance. However, the report does include guideposts for complying with MHPAEA (as amended by the CAA-21), including:
  • Insight into how the Departments chose who to request CAs from (a process that relied heavily on previously identified specific investigative leads).
  • A list of the most common NQTLs for which DOL requested CAs.
  • The most common deficiencies in submitted CAs (discussed above).
  • Common corrections and plan amendments in response to the Departments' enforcement.
In addition, the 2022 report notes that we can expect additional rulemaking in the future regarding MHPAEA compliance.