DOL Proposed Updates to MHPAEA Self-Compliance Tool Address Disclosures and Internal Compliance Process
Published on 23 Jun 2020
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USA (National/Federal)
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by Practical Law Employee Benefits & Executive Compensation
PRACTICAL LAW
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23 Jun 2020
The Department of Labor (DOL) has announced proposed updates to its self-compliance tool for evaluating compliance with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The updates include additional compliance examples and implementation of internal procedures for MHPAEA compliance. Additionally, the DOL has issued a 2020 DOL Report to Congress on MHPAEA implementation and a fact sheet reviewing MHPAEA enforcement in 2019.
A fact sheet that reviews MHPAEA enforcement in 2019.
MHPAEA Requirements
In general, the MHPAEA:
Requires that financial requirements and treatment limits imposed on mental health or substance use disorder (MH/SUD) benefits cannot be more restrictive than the predominant financial requirements and treatment limits that apply to substantially all medical and surgical benefits.
Address implementation of internal plan procedures to promote MHPAEA compliance.
Include additional examples and warning signs of noncompliance.
Defining Mental Health Benefits: Autism Spectrum Disorder
In a section addressing the definition of "mental health benefits," the self-compliance tool would require plans that define a condition as a mental health condition to treat benefits for that condition as mental health benefits. For example, the DOL would require a plan that defines autism spectrum disorder (ASD) as a mental health condition to treat benefits for ASD as mental health benefits (see Practice Note, Mental Health Parity: Nonquantitative Treatment Limitations (NQTLs): Experimental or Investigative Treatments: Autism Spectrum Disorder). As a result, plan exclusions for experimental treatment applicable to ASD would need to conduct NQTL analysis. Under this analysis, the plan's processes, strategies, evidentiary standards, and other factors used by the plan to determine whether a particular treatment for ASD is experimental (both as written and in operation) must be comparable to (and no more stringently applied than) those used for exclusions of medical/surgical treatments in the same classification.
Six Benefit Classifications and Prescription Drug Coverage, Room and Board
If a plan or insurer provides MH/SUD benefits in any of the six classifications described in the MHPAEA final regulations, the MH/SUD benefits must be provided in every classification in which medical/surgical benefits are provided (see Practice Note, Mental Health Parity: Overview: Six Classifications of Benefits). DOL would update the self-compliance tool to provide that if a plan excludes all other benefits for a particular mental health condition or substance use disorder, but still covers formulary prescription drugs for that condition or disorder, the plan is covering mental health or substance use benefits in one classification (that is, prescription drugs). As a result, the plan would need to provide MH/SUD benefits for that condition or disorder for each of the other five classifications for which the plan also provides medical/surgical benefits.
Another new example would address a plan that:
Covers room and board for inpatient medical/surgical care, including skilled nursing facilities and other intermediate levels of care, both of which the plan classifies as inpatient care.
Imposes a restriction on room and board for MH/SUD residential care.
According to the DOL, the plan in this example would impose an impermissible restriction based on facility type (which is a treatment limitation) only on MH/SUD benefits. Because this design would violate MHPAEA, the plan would need to cover room and board for intermediate levels of care for MH/SUD benefits comparably with medical/surgical inpatient treatment.
The DOL would expand the self-compliance tool to address reimbursement rate issues. Additional language would indicate that plans and insurers must show they have followed comparable procedures in determining reimbursement rates for in-network providers for both medical/surgical and MH/SUD benefits (for example, consistent use of the Medicare Physician Fee Schedule). Variance in rates for factors such as the nature of the service, provider type, market dynamics, and market need or availability (demand) would need to be applied comparably and no more stringently to MH/SUD benefits than medical/surgical benefits.
The self-compliance also would identify plan provisions concerning provider reimbursements that may suggest noncompliance and the need for additional inquiry.
Plan Document Disclosure Requirements Under ERISA and the MHPAEA
New language in the compliance tool would expand on the concept that compliance with the MHPAEA's disclosure requirements does not determine compliance with other federal or state law. This includes, under a proposed example in the tool, compliance with Part 4 of ERISA, which requires that the plan be administered in accordance with the controlling plan documents (see Practice Note, Title I of the Employee Retirement Income Security Act (ERISA): Overview).
DOL also would recommend that plans:
Be prepared to disclose their medical necessity criteria.
Follow any specific treatment guidelines that are specified in controlling plan documents.
ERISA plans also must furnish an SPD that explains provisions governing the use of network providers and the composition of provider networks. Provider directories:
May be distributed as a separate document and provided electronically.
Must be up-to-date, accurate, and complete (using reasonable efforts).
Implementing Internal Procedures for MHPAEA Compliance
The updated self-compliance tool also addresses how plans may establish internal MHPAEA compliance procedures. Although plans and insurers are not required to establish an internal compliance plan, doing so may improve compliance with the MHPAEA. According to the DOL, effective internal compliance plans would include the following features:
Training and education for individuals responsible for MHPAEA compliance.
Retention of records required under ERISA Section 107 (29 U.S.C. § 1027) for at least six years after the relevant Form 5500 has been filed.
Timely responses and corrective actions related to MHPAEA violations, including providing retroactive benefits.
In addition, the self-compliance tool provides that group health plans under audited for MHPAEA compliance may need to provide the following information to the DOL:
Information on NQTLs that apply to MH/SUD and medical/surgical benefits.
Records concerning NQTL processes and the application of NQTLs to MH/SUD and medical/surgical benefits.
Documentation that the plan or insurer relied on in determining that any NQTLs were not being applied more stringently to MH/SUD benefits than to medical/surgical benefits, including any internal testing or reviews performed by the plan or insurer.
A sample of covered and denied MH/SUD benefit claims and medical/surgical benefit claims.
Any mental health parity testing performed by the plan or insurer regarding financial requirements or quantitative treatment limitations that apply to MH/SUD benefits.
The self-compliance tool also links to a National Association of Insurance Commissioners (NAIC) chart that plans and insurers may use as a resource for comparing MH/SUD and medical/surgical benefit NQTLs to evaluate MHPAEA compliance.
Updated Examples and Warning Signs of Noncompliance
As discussed above, the self-compliance tool would revise the examples of non-compliance that were included in the 2018 update by specifying how MHPAEA violations may be corrected. The tool also includes additional examples, including a scenario involving preauthorization for physical therapy and psychological testing.
The updated self-compliance tool also includes the following warnings signs of noncompliance with the MHPAEA:
Requiring a specialist copay requirement for all MH/SUD benefits within a classification, while requiring a specialist copay requirement for only certain medical/surgical benefits within a classification.
Preauthorization requirements for medication to treat opioid use disorder, but no preauthorization requirement for comparable medication for a medical/surgical condition.
Different medical necessity review requirements for outpatient MH/SUD benefits than for medical/surgical benefits.
Other MHPAEA Compliance Issues
In other changes, the self-compliance tool would:
Add a cross-reference to the procedures and requirements addressing the HIPAA opt-out election for self-funded, nonfederal governmental plans.
Address sources of factors for applying NQTLs (including an example involving preauthorization and electroconvulsive therapy (ECT)).
Practical Impact
The DOL's updated self-compliance tool underscores the growing importance of MHPAEA compliance as an administrative enforcement priority. In addition, the MHPAEA has increasingly become the topic of extensive benefits litigation – especially concerning challenges to coverage decisions in the NQTL context (see Practice Note, Mental Health Parity: Nonquantitative Treatment Limitations (NQTLs)). The latest updates to the self-compliance tool (if finalized as proposed) would elevate the use of internal MHPAEA compliance procedures to a level that could feel similar to the policy and procedure standards in the HIPAA privacy and security contexts (including the emphasis on specialized MHPAEA training). One could imagine requests for a plan's internal MHPAEA compliance procedures becoming part of a DOL audit or litigation discovery request in the future. The updated self-compliance tool also would address problematic plan provisions, the list of which may be helpful for plan sponsors and their advisors to review in assessing their MHPAEA compliance.
Comments on the proposed updates to the self-compliance tool are due by July 24, 2020.
End of Document
Resource ID w-026-1508Document Type Legal update: archive
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