UPDATE: Final Rules Seek To Enhance Mental Health Parity Compliance

(Original post published September 20, 2023)

Access to mental health and substance use disorder treatment could improve under new federal rules.

The U.S. is experiencing a mental health crisis, with nearly 1 in 5 Americans reporting symptoms of anxiety or depressive disorder in July of this year, according to the Centers for Disease Control and Prevention. In Arkansas, nearly a fourth of adults — 24% — had a mental illness in 2022, yet only 21% of adults received mental health treatment, according to the Substance Abuse and Mental Health Services Administration. In the face of Americans’ high mental healthcare needs, the federal government has issued final rules to prevent healthcare plans from making mental health care less accessible than other care.

It was long common practice for health plans to offer less coverage for mental health and substance use disorder (MH/SUD) treatment than for other care, but Congress has sought to address this disparity through multiple pieces of legislation, including the Mental Health Parity Act of 1996, the Mental Health Parity and Addiction Equity Act of 2008, and certain provisions in the Patient Protection and Affordable Care Act of 2010. Arkansas lawmakers have also passed state laws aimed at making mental health care more accessible, including the Arkansas Mental Health Parity Act of 2009.

The final rules, issued by the Departments of Treasury, Labor, and Health and Human Services on Monday, Sept. 9, further tighten parity requirements. The rules are intended to prevent healthcare plans from placing greater limits on access to MH/SUD benefits than on other benefits by using what are known as nonquantitative treatment limitations.

Health plans generally have limitations on benefits regarding the type of treatment a patient receives and where the patient receives treatment; the limitations may be quantitative or nonquantitative. A quantitative treatment limitation (QTL) establishes a straightforward numerical limit, such as a maximum number of visits that will be covered. A nonquantitative treatment limitation (NQTL) establishes a non-numerical limitation, such as a requirement for prior authorization or a coverage limit based on whether treatment is provided at an outpatient facility or an inpatient facility.

Federal law requires NQTLs applied to MH/SUD benefits to be no more restrictive than those applied to medical benefits. Federal law also requires health plans to perform comparative analyses of their NQTLs to demonstrate compliance. They must also make these analyses available to certain federal and state authorities.

Requirements in the Final Rules

• No more restrictive requirement: Under the proposed rule, an NQTL applicable to MH/SUD benefits would have to be no more restrictive than the “predominant” requirements and limitations (defined as requirements and limitations applying to more than half of benefits) applicable to “substantially all” (two-thirds or more) medical benefits.The final rules move away from the proposed “substantially all” and “predominant” tests, which were based on the dollar amounts of plan payments, due to concerns about workability and complexity. Instead, the rules focus on ensuring that NQTLs applied to MH/SUD benefits are no more restrictive, as written or in operation, than those applied to medical/surgical benefits.
• Design and application requirements: The processes, strategies, evidentiary standards, or other factors used in applying an NQTL to MH/SUD benefits must be comparable to, and applied no more stringently than, those used in applying the NQTL to medical benefits.
• Relevant data evaluation requirements: Plans must collect, evaluate, and consider the impact of relevant data on access to MH/SUD benefits as compared to medical benefits. If the data reveal material differences in access, the plan will be required to take reasonable action to address these differences and ensure compliance.

See our explainer for more information on mental health parity in Arkansas.