White House Seeks Changes in Mental Health Insurance Rules

Mental health patient filling out insurance paperwork
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In 1996, the U.S. Congress passed the Mental Health Parity Act (MHPA), which created rules that enhanced and ensured quality mental health insurance coverage as part of group and employer-based insurance plans. Lawmakers amended the law three times since its original passage. They amended rules in 2008, which changed the name of the law to the Mental Health Parity and Addiction Equity Act (MHPAEA). They changed rules in 2010 as part of the Affordable Care Act (ACA). Finally, in 2020, they changed rules to ensure compliance with the existing rules.

In broad terms, both the act itself and the changes implemented since its initial passage work to expand mental health insurance coverage and create equity with other types of healthcare covered by insurance plans. Essentially, the government wants insurers to approach mental health and substance use disorder coverage the same way they approach coverage for physical injuries, diseases, or accidents.

On August 8th, 2023, the White House, in collaboration with the Internal Revenue Service, the Department of the Treasury, the Employee Benefits Security Administration, the Department of Labor, the Centers for Medicare & Medicaid Services, and the Department of Health and Human Services, proposed a new set of amendments to the MHPAEA to ensure full and transparent compliance with the letter and spirit of the law.

This is an important step forward for mental health insurance coverage. Here’s how the American Psychological Association (APA) summarizes these new amendments to the MHPAEA:

“For far too long and despite efforts from the federal and state governments, many insurers have treated mental health as an afterthought to physical health, leaving patients and families dealing with mental health and addiction issues scrambling to find affordable care, or going without. Today’s actions from the White House to bolster and strengthen enforcement of the mental health parity law are important steps toward ensuring more Americans who need these services can access them.”

We’ll review the proposed improvements to the MHPAEA in a moment. First, we’ll offer a brief summary of the initial law. We’ll also review the changes that led to this latest round of proposals.

What is the Mental Health Parity and Addiction Equity Act (MHPAEA)?

We describe the core of the act above. The goal in 1996 was to put mental health treatment on equal footing with treatment for physical disease, illness, and injury. The initial act did the following:

  • Created parity with physical disease for annual dollar limits on coverage for mental health services in insurance plans
  • Created parity with physical disease for lifetimes dollar limits on coverage for mental health services in insurance plans

When Congress updated the act in 2008, they changed the name to reflect the updates. The new act – the Mental Health Parity and Addiction Equity Act (MHPAEA) – included the following additions and expansions:

  • Extended annual and yearly provisions from the MHPA to substance use disorder (SUD) treatment in addition to mental health treatment
  • To reiterate, those provisions created parity with regards to:
    • Financial requirements for MH/SUD treatment, including deductibles, copays, number of visits, and days of coverage
  • Required MH/SUD coverage to be excluded from separate cost-sharing or treatment limitations that only apply to MH/SUD coverage
  • Required insurers to provide out-of-network MH/SUD coverage

In 2010, after the passage of the Affordable Care Act (ACA), the departments involved – IRS, HHS, Treasure, and Labor, released the first set of regulations for implementation of the MHPAE. The details of these regulations are laden with the insurance jargon. It’s the type of language that’s nearly impossible for laypeople to understand without a glossary. Phrases like nonquantitative treatment limits (NQTLs) abound. Those refer to limits that are not dollar amounts, but rather address complex issues.

What Are NQTLs?

These are limits or exclusions on:

  • Treatment networks made available to patients
  • The type of visits covered
  • Prior authorization policies
  • Other non-dollar amount factors

All these factors are related to mental health and addiction insurance coverage. In some cases, they can determine whether a person receives the stated benefits in their insurance policies.

To read about the 2010 rules and their implementation, please read: FAQs About the Mental Health Parity and Addiction Equity Act.

What’s in the Proposed Changes?

We mention the rules detailed in the link we provide directly above because they’re the subject of the new rules the White House seeks to implement with the latest round of proposals submitted in August 2023.

The goal of the new proposals by the White House is to ensure insurance providers comply with not only the letter, but the spirit and concept behind the provisions in the MHPAEA. That’s where all the jargon and complex insurance language comes in. There’s a labyrinthine system of accountability and compliance procedures that would befuddle most laypeople, and also likely cause healthcare providers to scratch their heads in confusion, as well.

The new rules seek to bring order and parity to the complicated rules, regulations, and various compliance procedures. The rules will affect the internal reporting procedures of the insurance companies, which law requires they file regularly with the federal government. Regular people using their insurance will never know about all these behind-the-scenes details, but they will, however, feel the direct impact of these rules because they’ll bolster the ability of the federal government to require insurers to meet the equity standards for mental health and addiction insurance as defined in the MHPAEA.

The New Rules: MHPAEA

Insurance companies must:

  • Implement updated requirements for NQTLs that help plans improve their comparative analyses:
    • This means that when insurance companies report how and when they cover MH and SUD treatment, they must provide more accurate and transparent information.
  • Require plans to collect and analyze data on the outcomes of their NQTLs.
  • Require plans to address material differences in access between mental health/SUD and other medical benefits. These comparative analyses are mandatory for any plans that cover MH and SUD treatment.
    • This means insurers must accurately and transparently evaluate the following:
      • Actual provider networks
      • Real, documented pay to out-of-network providers
      • Actual data on prior authorization, including when it’s required and actual approval and denial rates
    • Submit all comparative analyses of coverage to all relevant departments – IRS, HH, Labor, Treasury – for review.
    • Require insurers that are not in compliance to document their action plan to bring any relevant plans into compliance. This includes any plan that covers MH/SUD treatment.
    • Require insurers to report the timely and accurate implementation of action steps to bring out-of-compliance plans into compliance
    • Prevent plans from limiting mental health and SUD insurance when analyses determine noncompliance
    • Require non-federal governmental plans, including plans for state and local government employees, to comply with the parity rules.
      • This would expand MHPAEA-compliant coverage to include at least 90,000 additional people

To assist insurance providers in their efforts to bring plans into compliance, the new rules contain specific examples on how to ensure any allowable nonquantitative treatment limits (NQTLs) related to mental health and/or substance use disorder (SUD) do indeed meet all the rules and regulations established by law in 1996, 2008, 2010, 2020, and again in 2023.

Rules and Regulations to Reduce Barriers to Mental Health and SUD Treatment

In addition, the rules – contained in the Consolidated Appropriations Act of 2021 (CAA) – require that the IRS, HHS, Treasury, and Labor departments review all the comparative analyses submitted by insurers, and provide the results of their various reviews to Congress on an annual basis. These reports are not a new requirement. However, this law introduces language that makes it clear to insurance providers – in no uncertain terms – that they must establish parity for MH/SUD coverage, and document that parity accurately and transparently.

These rules have a track history of success:

  • A plan that excluded 22,000 patients from coverage removed the exclusion. The expansion granted coverage to the 22,000 affected patients
  • A plan that excluded coverage for applied behavioral analysis (ABA) for people with autism spectrum disorder (ASD) removed that exclusion. The expansion gave more than one million patients coverage under that plan.

Here’s how the Assistant Director of Employee Benefits Security at the Department of Health and Human Services, Lisa M. Gomez, describes these new rules:

“Anyone who has ever lived with a mental health condition or substance use disorder knows how hard getting through the day can be at times and should not have to be worried about facing obstacles to getting treatment. Yet, throughout the U.S., people in need of help continue to encounter…restrictions on their mental health and substance use disorder benefits. Today’s proposed rulemaking is an important step for the departments and stakeholders to work together to make parity a reality.”

We commit to reducing barriers to care. We offer the best possible evidence-based treatment for people with mental health and/or substance use disorder available. We’re in accord with the APA and Assistant Director Gomez on these new rules. We’re ready to welcome new patients for treatment at any of our locations. We hope that this new law and these new rules enable more people who need professional support for mental health and/or substance use disorder to seek treatment with full confidence that the benefits enumerated in their insurance plans are honored by their insurance providers.

The materials provided on the Pinnacle Blog are for information and educational purposes only. No behavioral health or any other professional services are provided through the Blog and the information obtained through the Blog is not a substitute for consultation with a qualified health professional. If you are in need of medical or behavioral health treatment, please contact a qualified health professional directly, and if you are in need of emergency help, please go to your nearest emergency room or dial 911.