Mental health parity report released, lawsuit filed 

In January, the departments of Labor, Health and Human Services and Treasury publicly released their third report to Congress and a fact sheet describing their enforcement of the Mental Health Parity and Addiction Equity Act of 2008. On the same day, a lawsuit was filed against the departments, challenging the sweeping mental health parity rule (final rule) issued in 2024. Health plan fiduciaries should review both the report and the lawsuit as their work to comply with MHPAEA continues.

Generally, MHPAEA prohibits financial and other quantitative limits, as well as Nonquantitative Treatment Limits on Mental Health and Substance Use Disorder benefits that are more restrictive than those imposed on Medical and Surgical benefits. The 2021 Consolidated Appropriations Act added a requirement for health plans to complete a comparative analysis of NQTLs to demonstrate parity between MH/SUD and M/S benefits. The CAA also requires the departments to provide an annual report to Congress on the results of their NQTL comparative analysis reviews.

The third report to Congress provides extensive detail about MHPAEA investigations conducted by the Department of Labor and the Centers for Medicare and Medicaid Services, identifies the types of nonquantitative treatment limits that are top enforcement priorities and provides many specific examples of noncompliance and plan corrections. Significantly, the lawsuit challenges the final rule, but not the CAA’s requirement for health plans to complete a comparative analysis.

Report notes more detail but continued noncompliance in comparative analyses

The DOL sent 17 letters requesting comparative analyses for 22 NQTLs during its reporting period (Aug. 1, 2022 through July, 31, 2023). CMS, which reviews the comparative analysis for non-federal governmental plans and insurers, sent 22 initial letters requesting comparative analyses for 22 NQTLs during its reporting period (Sept. 2, 2022 through Aug. 31, 2023).

For the first time, the DOL and CMS report that some plans and issuers provided more detailed comparative analyses and responses. However, both agencies still find many comparative analyses lack sufficient information and that noncompliance remains widespread. Rather than identify such plans as noncompliant, the DOL worked with plans to correct MHPAEA violations and improve access to MH/SUD treatment, and did not name any noncompliant plans. CMS identified one issuer as being noncompliant with respect to three NQTLs.

The DOL continues to prioritize violations by service providers that serve hundreds or thousands of plans, and reports that its investigations relating to network composition involve some of the largest service providers in the industry. Further, ten new NQTL inquiries relating to impermissible exclusions of key MH/SUD treatments were directed to service providers as opposed to employer plan sponsors.

Agencies update list of NQTL enforcement priorities

The DOL retained all six priority areas of enforcement identified in the second report, but much of the third report focuses on NQTLs related to network composition and exclusions of key MH/SUD treatments. NQTLs relating to network composition include participation standards for providers (e.g., credentials, reimbursement rates) and network assessment standards (e.g., provider to member ratios, time and distance standards, and maximum wait times). In addition to exclusions previously targeted by the DOL (applied behavioral therapy, medication for opioid use disorder, and nutritional counseling), the DOL expanded its enforcement focus to include residential treatment, partial hospitalization, speech therapy and autism spectrum disorder treatment based on age. Separately, CMS placed a new emphasis on the comparative analysis for provider reimbursement treatment limitations and pharmacy benefit formulary design (including step therapy and quantity limits).

Spotlight on DOL’s network composition investigations

The DOL is currently analyzing network composition NQTLs in 25 investigations involving some of the largest service providers. These cases often require a full investigation, which could include multiple rounds of interviews, depositions and document requests. Key aspects of the DOL’s network NQTL investigations include:

• Examination of out-of-network utilization and other outcomes data
• Disparities in access standards and processes for monitoring network adequacy and composition (for example, a goal of 95% of participants in urban areas within 10 miles of two pediatricians versus a goal of 85% of participants in urban areas within 10 miles of a single psychiatrist who will treat children)
• Secret shopper surveys
• Disparities in reimbursement rates without explanation
• Unsupported conclusions offered by plans and insurers (for example, citing MH/SUD provider shortages as a justification for network disparities, without addressing the shortage in the same manner as an M/S provider shortage)

Notably, the DOL conducted 9 secret shopper surveys, calling over 4,300 randomly selected outpatient providers that plan network directories listed as accepting new patients. The surveys found fewer available behavioral health providers (8-28 percent) than providers of M/S services (24-37 percent).

The report provides many examples of corrective actions to demonstrate network parity for MH/SUD benefits, including:

• Providing live support to participants having difficulty finding an in-network provider
• Paying for out-of-network care when in-network providers are unavailable
• Identifying network gaps through ongoing data review, and taking steps to close the gaps, such as recruiting providers
• Expanding telehealth and a supplemental network of SUD treatment facilities
• Soliciting proposals to evaluate other networks

Sample comparative analysis promised

In welcome news, the report states that the departments intend to provide a sample comparative analysis demonstrating the compliant design and application of an NQTL. This is addition to possible guidance about the data evaluation required by the 2024 MHPAEA final rule, and an intended update to the MHPAEA self-compliance tool. However, the timing of any future guidance is uncertain.

Lawsuit challenges 2024 MHPAEA rule

The complaint against the departments alleges that the 2024 MHPAEA final rule is unlawful in numerous respects and asks the court to invalidate the 2024 MHPAEA final rule, or in the alternative, to invalidate provisions identified as particularly problematic:

• The meaningful benefits requirement
• The material differences in access standard
• The rule’s comparative analysis requirements
• The fiduciary certification
• The Jan. 1, 2025, applicability date

Note that the lawsuit doesn’t challenge the requirement to conduct a comparative analysis, which Congress made law as part of the CAA. In other words, plans will be required to have a comparative analysis regardless of the outcome of this lawsuit. The complaint alleges that the rule offers little guidance on what specific information a plan must provide and uses vague and undefined terms. Accordingly, the complaint contends that the rule’s comparative analysis requirements are arbitrary and capricious and violate due process.

It’s unclear how the Trump administration will respond to this lawsuit. While MHPAEA has received bipartisan support in prior years, the Trump administration’s view of MHPAEA enforcement and the 2024 final rule is unknown. The rule could also be challenged under the Congressional Review Act.

Action items

Health plan fiduciaries should continue to ensure that plans comply with MHPAEA, including maintaining a comparative analysis, regardless of the outcome of the lawsuit. As the lawsuit unfolds, make sure to include a fiduciary certification and otherwise comply with the portions of the 2024 final rule effective for the 2025 plan year. See Section 3 of this GRIST for specific compliance steps.

Plan sponsors should also review the report and take note of the types of corrective action plans and insurers took to monitor and address disparities in access to MH/SUD providers, and work with service providers to ensure that network adequacy and access standards for MH/SUD benefits are in parity with M/S networks. Consider steps to address any gaps such as adding/improving customer support for participants, telehealth or supplemental networks, review plan design to ensure there are no impermissible exclusions for key treatments of MH/SUD conditions and ensure that service providers will provide data if required by the departments.