Requirements Related to the Mental Health Parity and Addiction Equity Act, 51552-51669 [2023-15945]
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Federal Register / Vol. 88, No. 148 / Thursday, August 3, 2023 / Proposed Rules
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[REG–120727–21]
RIN 1545–BQ29
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2590
RIN 1210–AC11
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
45 CFR Parts 146 and 147
[CMS–9902–P]
RIN 0938–AU93
Requirements Related to the Mental
Health Parity and Addiction Equity Act
Internal Revenue Service,
Department of the Treasury; Employee
Benefits Security Administration,
Department of Labor; Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services.
ACTION: Proposed rules.
AGENCY:
This document proposes
amendments to regulations
implementing the Paul Wellstone and
Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008
(MHPAEA) and proposes new
regulations implementing the
nonquantitative treatment limitation
(NQTL) comparative analyses
requirements under MHPAEA, as
amended by the Consolidated
Appropriations Act, 2021 (CAA, 2021).
Specifically, these proposed rules
would amend the existing NQTL
standard to prevent plans and issuers
from using NQTLs to place greater
limits on access to mental health and
substance use disorder benefits as
compared to medical/surgical benefits.
As part of these changes, these proposed
rules would require plans and issuers to
collect and evaluate relevant data in a
manner reasonably designed to assess
the impact of NQTLs on access to
mental health and substance use
disorder benefits and medical/surgical
benefits, and would set forth a special
rule with regard to network
composition. These proposed rules
would also amend existing examples
and add new examples on the
application of the rules for NQTLs to
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SUMMARY:
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clarify and illustrate the protections of
MHPAEA. Additionally, these proposed
rules would set forth the content
requirements for NQTL comparative
analyses and specify how plans and
issuers must make these comparative
analyses available to the Department of
the Treasury (Treasury), the Department
of Labor (DOL), and the Department of
Health and Human Services (HHS)
(collectively, the Departments), as well
as to an applicable State authority, and
participants, beneficiaries, and
enrollees. The Departments also solicit
comments on whether there are ways to
improve the coverage of mental health
and substance use disorder benefits
through other provisions of Federal law.
Finally, HHS proposes regulatory
amendments to implement the sunset
provision for self-funded, non-Federal
governmental plan elections to opt out
of compliance with MHPAEA, as
adopted in the Consolidated
Appropriations Act, 2023 (CAA, 2023).
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than October 2, 2023.
ADDRESSES: Written comments may be
submitted to the address specified
below. Any comment that is submitted
will be shared with Treasury, Internal
Revenue Service (IRS), and HHS. Please
do not submit duplicates.
Comments will be made available to
the public. Warning: Do not include any
personally identifiable information
(such as name, address, or other contact
information) or confidential business
information that you do not want
publicly disclosed. All comments are
posted on the internet exactly as
received and can be retrieved by most
internet search engines. No deletions,
modifications, or redactions will be
made to the comments received, as they
are public records. Comments may be
submitted anonymously.
In commenting, please refer to file
code 1210–AC11. Because of staff and
resource limitations, the Departments
cannot accept comments by facsimile
(FAX) transmission.
Comments must be submitted in one
of the following two ways (please
choose only one of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to https://www.regulations.gov. Follow
the ‘‘Submit a comment’’ instructions.
2. By mail. You may mail written
comments to the following address
ONLY: Office of Health Plan Standards
and Compliance Assistance, Employee
Benefits Security Administration, Room
N–5653, U.S. Department of Labor, 200
PO 00000
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Constitution Avenue NW, Washington,
DC 20210, Attention: 1210–AC11.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. The comments are posted
on the following website as soon as
possible after they have been received:
https://www.regulations.gov. Follow the
search instructions on that website to
view public comments.
FOR FURTHER INFORMATION CONTACT:
Shira McKinlay, Internal Revenue
Service, Department of the Treasury, at
202–317–5500; Beth Baum or David
Sydlik, Employee Benefits Security
Administration, Department of Labor, at
202–693–8335; David Mlawsky, Centers
for Medicare & Medicaid Services,
Department of Health and Human
Services, at 410–786–6851.
Customer Service Information:
Individuals interested in obtaining
information from DOL concerning
private employment-based health
coverage laws may call the Employee
Benefits Security Administration
(EBSA) Toll-Free Hotline at 1–866–444–
EBSA (3272) or visit the DOL’s website
(www.dol.gov/agencies/ebsa).
In addition, information from HHS on
private health insurance coverage and
coverage provided by self-funded, nonFederal governmental group health
plans can be found on the Centers for
Medicare & Medicaid Services (CMS)
website (www.cms.gov/cciio), and
information on health care reform can
be found at www.Healthcare.gov or
https://www.hhs.gov/healthcare/
index.html. In addition, information
about mental and behavioral health and
addiction is available at https://
www.samhsa.gov/mental-health and
https://www.samhsa.gov/find-support.
SUPPLEMENTARY INFORMATION:
I. Background
A. Introduction
Mental health is essential to personal
and societal wellbeing. America is
experiencing a mental health and
substance use disorder crisis 1 that
worsened during the COVID–19
1 Department of Health and Human Services
(2023). SAMHSA Announces National Survey on
Drug Use and Health (NSDUH) Results Detailing
Mental Illness and Substance Use Levels in 2021.
Retrieved from https://www.hhs.gov/about/news/
2023/01/04/samhsa-announces-national-surveydrug-use-health-results-detailing-mental-illnesssubstance-use-levels-2021.html.
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pandemic.2 This crisis impacts both
children and adults across various
demographics nationwide and
disproportionately affects marginalized
and underserved communities. Recent
data from the Centers for Disease
Control and Prevention (CDC) indicate
that, between August 2020 and February
2021, the percentage of adults exhibiting
symptoms of an anxiety or depressive
disorder increased significantly, from
36.4 percent to 41.5 percent.3
Similarly, the overdose and substance
use disorder epidemic has worsened in
recent years. Overdose death numbers
have risen substantially since 2015,
reaching a then-historic high of 70,630
deaths nationally in 2019 and growing
to a reported value of 107,421 overdose
deaths in the 12-month period ending in
July 2022.4 Additionally, from 1999
through 2019, the rate of drug overdose
deaths increased from 4.0 per 100,000 to
19.6 in rural counties,5 and in 2020, the
age-adjusted rate of drug overdose
deaths increased to 26.2 per 100,000 in
rural counties.6 The number of people
who died from drug overdoses in 2021
increased by approximately 36,000 over
the prior 2 years.7 During the first year
of the COVID–19 pandemic, the
overdose death rates were highest for
American Indians and Alaska Natives
and Black or African Americans,
exceeding the overdose death rate for
White people by about 30 and 16
percent, respectively.8 While Hispanic
2 Vahratian, A., Blumberg, S.J., Terlizzi, E.P.,
Schiller, J.S. (2021). Symptoms of Anxiety or
Depressive Disorder and Use of Mental Health Care
Among Adults During the COVID–19 Pandemic—
United States, August 2020–February 2021. MMWR
Morb Mortal Wkly Rep 2021;70:490–494. DOI:
https://dx.doi.org/10.15585/mmwr.mm7013e2.
3 Id.
4 Hedegaard, H., Minin
˜ o, A.M., Wagner, M.
(2020). Drug Overdose Deaths in the United States,
1999–2019. NCHS Data Brief No. 304 (December
2020) https://www.cdc.gov/nchs/data/databriefs/
db394-H.pdf; Centers for Disease Control and
Prevention, National Center for Health Statistics.
Vital Statistics Rapid Release: Provisional Drug
Overdose Death Counts. Available at https://
www.cdc.gov/nchs/nvss/vsrr/drug-overdosedata.htm. Accessed on July 14, 2023.
5 Hedegaard H, Spencer MR. Urban–rural
differences in drug overdose death rates, 1999–
2019. NCHS Data Brief, no 403. Hyattsville, MD:
National Center for Health Statistics. 2021. DOI:
https://dx.doi.org/10.15620/cdc:102891.
6 Spencer MR, Garnett MF, Minin
˜ o AM. Urban–
rural differences in drug overdose death rates, 2020.
NCHS Data Brief, no 440. Hyattsville, MD: National
Center for Health Statistics. 2022. DOI: https://
dx.doi.org/10.15620/cdc:118601.
7 National Vital Statistics System. Provisional
Drug Overdose Death Counts. https://www.cdc.gov/
nchs/pressroom/nchs_press_releases/2022/
202205.htm.
8 Friedman, Joseph R, and Helena Hansen (2022).
Research Letter: Evaluation of Increases in Drug
Overdose Mortality Rates in the US by Race and
Ethnicity Before and During the COVID–19
Pandemic. JAMA Psychiatry. https://
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and Latino people saw the lowest
overdose death rates, those rates still
increased in 2020.9
As noted above, both children and
adolescents are also impacted by this
mental health and substance use
disorder crisis. Prior to the COVID–19
public health emergency (PHE), millions
of children ages 12 to 17 reported
experiencing at least one major
depressive episode or severe major
depression.10 Suicidal behavior among
children has increased sharply; known
suicide attempts by ingestion alone in
children ages 10 to 12 increased by
about 450 percent from 2010 to 2020.11
Suicide rates among Black or African
American children below age 13
increased rapidly from 2001 to 2015,
and those children are nearly twice as
likely to die by suicide than White
children of the same age.12
Additionally, one survey, conducted
from September 20 to December 31,
2021, notes that 45 percent of Lesbian,
Gay, Bisexual, Transgender, and Queer
(LGBTQ) youth respondents ages 13 to
24 seriously considered attempting
suicide in the past year,13 including
nearly half of multiracial LGBTQ youth
respondents.14 A sharp rise in eating
disorders throughout the COVID–19
PHE also demonstrates the extent of this
crisis for young people.15 Emergency
jamanetwork.com/journals/jamapsychiatry/
fullarticle/2789697?utm_
campaign=articlePDF&utm_
medium=articlePDFlink&utm_
source=articlePDF&utm_
content=jamapsychiatry.2022.0004.
9 Id.
10 Mental Health America (2022). Youth Ranking
2022. https://mhanational.org/issues/2022/mentalhealth-america-youth-data.
11 Sheridan D, Grusing S, Marshall R. (2022)
Changes in Suicidal Ingestion Among Preadolescent
Children from 2000 to 2020. JAMA Pediatrics.
https://jamanetwork.com/journals/jamapediatrics/
article-abstract/2789948; see also CDC, Youth Risk
Behavior Survey, available at https://www.cdc.gov/
healthyyouth/data/yrbs/pdf/YRBS_Data-SummaryTrends_Report2023_508.pdf.
12 Bridge JA, Horowitz LM, Fontanella CA, et al.
(2018). Age-Related Racial Disparity in Suicide
Rates Among US Youths From 2001 Through 2015.
JAMA Pediatrics. https://jamanetwork.com/
journals/jamapediatrics/fullarticle/2680952.
13 The Trevor Project (2022). 2022 National
Survey on LGBTQ Youth Mental Health. https://
www.thetrevorproject.org/survey-2022/.
14 The Trevor Project (2022). The Mental Health
and Well-Being of Multiracial LGBTQ Youth.
https://www.thetrevorproject.org/research-briefs/
the-mental-health-and-well-being-of-multiraciallgbtq-youth-aug-2022/.
15 Radhakrishnan L, Leeb R, Bitsko R, Carey K,
Gates A, Holland K, Hartnett K, Kite-Powell A,
DeVies J, Smith A, van Santen K, Crossen S,
Sheppard M, Wotiz S, Lane R, Njai R, Johnson A,
Winn A, Kirking H, Rodgers L, Thomas C, Soetebier
K, Adjemian J, Anderson K. (2022) Pediatric
Emergency Department Visits Associated with
Mental Health Conditions Before and During the
COVID–19 Pandemic—United States, January 2019–
January 2022. MMWR Morb Mortal Wkly Rep 2022;
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department visits for adolescent girls
ages 12–17 with eating disorders
doubled in January 2022 as compared to
2019,16 and children are beginning to
experience eating disorders at younger
ages.17 In addition, in 2021, nearly 3 in
5 teen girls felt persistently sad or
hopeless, the highest level reported over
the past decade.18
Americans are too frequently
discouraged from and forgo seeking
mental health and substance use
disorders care because of barriers, both
inside and outside of the health care
system, such as discrimination,
stigmatization,19 inability to find an innetwork provider accepting new
patients,20 cost, and geography. These
barriers are particularly problematic for
young adults ages 18–34, who are less
likely to believe their mental health
symptoms are well-managed than older
adults,21 and for people seeking
substance use disorder treatment.22 One
survey reports that less than seven
percent of people in need of substance
use disorder treatment received care at
a specialty facility and less than 10
percent received ‘‘any treatment,’’ 23
71(8);319–324. https://www.cdc.gov/mmwr/
volumes/71/wr/mm7108e2.htm.
16 Id.
17 Stuart B. Murray, Aaron J. Blashill, and Jerel P.
Calzo (2022). Prevalence of Disordered Eating and
Associations With Sex, Pubertal Maturation, and
Weight in Children in the US, available at https://
jamanetwork.com/journals/jamapediatrics/articleabstract/2794847.
18 Centers for Disease Control and Prevention,
National Center for HIV, Viral Hepatitis, STD, and
TB Prevention, U.S. Teen Girls Experiencing
Increased Sadness and Violence (Feb. 13, 2023),
available at https://www.cdc.gov/nchhstp/
newsroom/2023/increased-sadness-and-violencepress-release.html.
19 Van Boekel, L.C., Brouwers, E.P., van Weeghel,
J., & Garretsen, H.F. (2013). Stigma among health
professionals towards patients with substance use
disorders and its consequences for healthcare
delivery: systematic review. Drug and Alcohol
Dependence, 131(1–2), 23–35. DOI: 10.1016/
j.drugalcdep.2013.02.018, available at https://
pubmed.ncbi.nlm.nih.gov/23490450/.
20 Cf. Jack Turbin. Ghost networks of psychiatrists
make money for insurance companies but hinder
patients’ access to care. Stat News, June 17, 2019,
https://www.statnews.com/2019/06/17/ghostnetworks-psychiatrists-hinder-patient-care/.
21 National Alliance on Mental Illness (2021).
Mood Disorder Survey Report. https://nami.org/
NAMI/media/NAMI-Media/Research/NAMI-MoodDisorder-Survey-White-Paper.pdf.
22 Esther Adeniran, Megan Quinn, Richard
Wallace, Rachel R. Walden, Titilola Labisi,
Afolakemi Olaniyan, Billy Brooks, Robert Pack
(2023). A scoping review of barriers and facilitators
to the integration of substance use treatment
services into US mainstream health care, Drug and
Alcohol Dependence Reports; Volume 7, 100152
https://www.sciencedirect.com/science/article/pii/
S2772724623000227.
23 Center for Behavioral Health Statistics and
Quality (2022), Results from the 2021 National
Survey on Drug Use and Health: Detailed Tables,
Substance Abuse and Mental Health Services
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while only about 19 percent of people
with opioid use disorder in 2021
received life-saving medications.24 Sixty
percent of rural Americans live in
mental health professional shortage
areas.25 Additionally, non-metropolitan
adults were more likely than
metropolitan adults (43.7% vs. 34.5%)
to see a general practitioner or family
doctor, as opposed to a mental health
specialist, for depressive symptoms, and
among non-metropolitan adults with
depression, fewer than 20 percent
received treatment from a mental health
professional.26
Moreover, against the backdrop of this
mental health and substance use
disorder crisis, when patients seek
benefits under their health plan or
coverage, they often find that coverage
for treatment of mental health
conditions or substance use disorders
operates in a separate—and too often
disparate—system than their health
plan’s coverage for treatment of
medical/surgical conditions.27 These
disparities exacerbate the hardships
faced by people living with mental
health conditions and substance use
disorders. The disparities also can
magnify the challenges faced by the
parents, children, and loved ones of
people living with mental health
conditions or substance use disorders as
well as those who care for them, who
are profoundly affected by the person’s
illness and their difficulties in getting,
or inability to get, coverage for needed
care.28
Administration, available at https://
www.samhsa.gov/data/report/2021-nsduh-detailedtables. For this purpose, ‘‘any treatment’’ includes
having participated in a mutual aid group, such as
Alcoholics Anonymous, Narcotics Anonymous, or
SMART Recovery, and receiving services in a
hospital through primary care.
24 Id.
25 Health Resources and Services Administration,
Designated Health Professional Shortage Areas
Statistics (data updated through June 30, 2023),
available at https://data.hrsa.gov/Default/
GenerateHPSAQuarterlyReport (last accessed July
18, 2023).
26 Borders, TF. Major Depression, Treatment
Receipt, and Treatment Sources among NonMetropolitan and Metropolitan Adults. Lexington,
KY: Rural and Underserved Health Research Center;
2020. Available at https://
www.ruralhealthresearch.org/publications/1348.
27 See, generally, Commonwealth Fund,
Behavioral Health Care in the United States: How
It Works and Where It Falls Short, available at
https://www.commonwealthfund.org/publications/
explainer/2022/sep/behavioral-health-care-us-howit-works-where-it-falls-short.
28 See National Alliance on Mental Illness, Mental
Health By the Numbers, available at https://
www.nami.org/mhstats (showing 8.4 million people
in the U.S. provide care to an adult with a mental
or emotional health issue); KFF, KFF/CNN Mental
Health In America Survey, available at https://
www.kff.org/other/report/kff-cnn-mental-health-inamerica-survey/ (showing half of adults say they
have had a severe mental health crisis in their
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Ensuring meaningful access to mental
health and substance use disorder care
is vital to addressing the Nation’s
mental health and substance use
disorder crisis. A key component of
access is the availability of an adequate
number of appropriate providers within
a plan’s network. A survey of adults
with private health coverage found that
plan participants were more likely to
perceive their mental health provider
networks as inadequate when compared
to medical provider networks.29
Furthermore, another survey noted that
most plan participants reported
choosing mental health services from
out-of-network mental health providers
based on provider quality issues.30
A 2019 Milliman report found a
growing disparity in the utilization of
out-of-network behavioral health care
(which the report uses to refer to care
for mental health conditions and
substance use disorders) providers
relative to out-of-network medical/
surgical care providers.31 The same
report found that the disparity between
how often out-of-network behavioral
health inpatient facilities were used
relative to out-of-network medical/
surgical inpatient facilities had
increased 85 percent between 2013 and
2017 for people with commercial
preferred provider organization (PPO)
health plans. Over the same period,
there were also increasing disparities in
the use of out-of-network outpatient
facilities and office visits for mental
health and substance use disorder
treatment relative to the use of out-ofnetwork outpatient facilities and office
visits for medical/surgical care.32 The
report additionally noted a growing
disparity in reimbursement rates (as a
percentage of Medicare-allowed
amounts) between in-network mental
health and substance use disorder
family); California Health Care Foundation, In Their
Own Words: How Fragmented Care Harms People
with Both Mental Illness and Substance Use
Disorder, available at https://www.chcf.org/
publication/fragmented-care-harms-people-mentalillness-substance-use-disorder/.
29 See Busch, Susan H. and Kelly Kyanko,
Assessment of Perception of Mental Health vs.
Medical Health Plan Networks Among US Adults
with Private Insurance, available at https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC8536951/.
30 See Kelly A. Kyanko, Leslie A. Curry, and
Susan H. Busch, Out-of-Network Providers Use
More Likely in Mental Health than General Health
Care Among Privately Insured, available at https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC4707657/.
31 Melek, S., Davenport, S., Gray, T.J. (2019).
Addiction and mental health vs. physical health:
Widening disparities in network use and provider
reimbursement (p. 6). Milliman. https://
assets.milliman.com/ektron/Addiction_and_
mental_health_vs_physical_health_Widening_
disparities_in_network_use_and_provider_
reimbursement.pdf.
32 Id.
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providers and medical/surgical
providers. Primary care reimbursements
were, on average, 23.8 percent higher
than behavioral health office visit
reimbursements relative to Medicare
allowed amounts in 2017—up from a
20.8 percent difference in 2015.33 Low
reimbursement rates for behavioral
health providers and high demand for
services, among other factors, contribute
to this difficulty finding in-network
providers,34 which can stifle efforts to
receive necessary care for mental health
conditions or substance use disorders.
MHPAEA’s fundamental purpose is to
ensure that individuals in group health
plans or with group or individual health
insurance coverage who seek treatment
for covered mental health conditions or
substance use disorders do not face
greater barriers to accessing benefits for
such mental health conditions or
substance use disorders than they
would face when seeking coverage for
the treatment of a medical condition or
for a surgical procedure.35 Such barriers
are particularly problematic when they
effectively result in the loss of benefits
that the plan or issuer purports to make
available and that individuals
reasonably expect to be covered, and
they contravene MHPAEA’s clear
mandate that the financial requirements
and treatment limitations applicable to
mental health benefits or substance use
disorder benefits be ‘‘no more
restrictive’’ than the predominant
requirements and limitations applicable
to substantially all medical/surgical
benefits.36
MHPAEA was enacted as bipartisan
legislation reflecting what Congress saw
as a shared public concern: that it is
wrong to place greater burdens on
people in need of mental health and
33 Id.
at pp. 6–7.
Busch, Susan H. and Kelly Kyanko,
Assessment of Perception of Mental Health vs.
Medical Health Plan Networks Among US Adults
with Private Insurance, available at https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC8536951/.
35 In a floor statement, Representative Patrick
Kennedy (D–RI), one of the chief architects of
MHPAEA, made the case for its passage on the
grounds that ‘‘access to mental health services is
one of the most important and most neglected civil
rights issues facing the Nation. For too long,
persons living with mental disorders have suffered
from discriminatory treatment at all levels of
society’’ 153 Cong. Rec. S1864–5 (daily ed. Feb. 12,
2007). Cf. H. Rept. 110–374, Part 3, available at
https://www.congress.gov/congressional-report/
110th-congress/house-report/374. (‘‘The purpose of
H.R. 1424, the ‘Paul Wellstone Mental Health and
Addiction Equity Act of 2007’ is to have fairness
and equity in the coverage of mental health and
substance-related disorders vis-a-vis coverage for
medical and surgical disorders.’’)
36 Internal Revenue Code (Code) section
9812(a)(3)(A), Employee Retirement Income
Security Act of 1974 (ERISA) section 712(a)(3)(A),
and Public Health Service Act (PHS Act) section
2726(a)(3)(A).
34 See
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substance use disorder treatment than
people in need of medical/surgical
treatment under the same health
coverage. However, almost 15 years after
MHPAEA’s enactment, disparities
persist, as people face greater barriers
when accessing benefits for mental
health and substance use disorders
under their plan or coverage than they
do when accessing medical/surgical
benefits. The Departments’ experience
since the MHPAEA final regulations
were issued in 2013 (2013 final
regulations) (78 FR 68240 (Nov. 13,
2013)) has shown that too often, group
health plans and health insurance
issuers offering group or individual
health insurance coverage are not
operating in compliance with MHPAEA,
which can have devastating
consequences for individuals with
mental health conditions and substance
use disorders and their families. The
Departments continue to receive and
investigate complaints that plans and
issuers fail to comply with MHPAEA, by
continuing to restrict access to benefits
for mental health conditions and
substance use disorders in ways that are
more onerous and limiting than for
medical or surgical care. As reflected in
recent reports to Congress on MHPAEA
compliance, the Departments found
nearly all plans or issuers audited for
MHPAEA compliance could not
demonstrate compliance with the law’s
obligations in response to an initial
request for NQTL comparative
analyses.37 As a result of these failures,
participants and beneficiaries routinely
encounter additional barriers to access
and are denied needed and potentially
lifesaving care for opioid use disorder,
eating disorders, autism spectrum
disorder (ASD), anxiety, depression, and
other mental health conditions and
substance use disorders. The harm to
these participants and beneficiaries, and
to their families, friends, co-workers,
and others, is incalculable.
In the last 2 years, the Departments
have made an unprecedented
commitment to advance parity for
mental health and substance use
disorder care by making it a top
enforcement priority, especially with
37 2022 MHPAEA Report to Congress, p. 4,
available at https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/report-to-congress-2022-realizing-parityreducing-stigma-and-raising-awareness.pdf and
https://www.cms.gov/files/document/2022-mhpaeareport-congress.pdf; 2023 MHPAEA Comparative
Analysis Report to Congress, July 2023 (2023
MHPAEA Report to Congress), available at
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2023-mhpaea-comparative-analysis.pdf
and https://www.cms.gov/cciio/resources/formsreports-and-other-resources#mental-health-parity.
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respect to NQTLs.38 Specifically, EBSA,
which has primary enforcement
jurisdiction over MHPAEA for
approximately 2.5 million private,
employment-based group health plans
covering approximately 133 million
individuals, is taking extraordinary
steps to enforce mental health and
substance use disorder parity
requirements and ensure that it is using
its full authority to help participants
and beneficiaries receive equitable
coverage for mental health and
substance use disorder treatment.
Similarly, CMS continues to prioritize
its MHPAEA enforcement activities
with respect to non-Federal
governmental plans nationwide 39 and
health insurance issuers offering group
and individual health insurance
coverage in States where CMS is the
direct enforcer of MHPAEA with respect
to issuers.40 41
In addition to using their enforcement
authority, the Departments continue to
work to reduce the stigma and
discrimination that individuals with
mental health conditions and substance
use disorders face, raise awareness so
these individuals can receive the
treatment they need and the benefits to
which they are entitled, and engage
consumer advocates, members of the
regulated community, State regulators,
and other interested parties to inform
the Departments’ efforts in addressing
the nation’s mental illness and
substance use disorder epidemic. These
efforts have helped to deepen the
Departments’ understanding of the
barriers to mental health and substance
use disorder treatment Americans face,
inform DOL’s and HHS’s MHPAEA
enforcement approach, and connect
advocacy groups to government
resources.
The Departments have also continued
to help plans, issuers, consumers,
providers, States, and other interested
38 As discussed in more detail later in this
preamble, NQTLs are generally non-numerical
requirements that limit the scope or duration of
benefits, such as prior authorization requirements,
step therapy, and standards for provider admission
to participate in a network, including
methodologies for determining reimbursement
rates.
39 PHS Act section 2723(b).
40 PHS Act section 2723(a).
41 CMS currently enforces MHPAEA with respect
to issuers in Texas and Wyoming. In addition, CMS
has collaborative enforcement agreements with
Alabama, Florida, Louisiana, Montana, and
Wisconsin. These States with collaborative
enforcement agreements with CMS perform State
regulatory and oversight functions with respect to
some or all of the applicable provisions of title
XXVII of the PHS Act, including MHPAEA.
However, if the State finds a potential violation and
is unable to obtain compliance by an issuer, the
State will refer the matter to CMS for possible
enforcement action.
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parties understand and comply with
MHPAEA’s requirements, including the
NQTL comparative analysis
requirements. Additionally, the
Departments have worked to help
families, caregivers, and individuals
understand the law and benefit from it,
as Congress intended.
Since the promulgation of the 2013
final regulations on November 13,
2013,42 the Departments have provided
extensive guidance and compliance
assistance materials to the regulated
community, State regulators, and other
interested parties to facilitate the
implementation and enforcement of
MHPAEA, as discussed later in this
preamble, including numerous sets of
Frequently Asked Questions (FAQs),43
42 78
FR 68240 (Nov. 13, 2013).
e.g., FAQs About Affordable Care Act
Implementation Part V and Mental Health Parity
Implementation (Dec. 22, 2010), available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/faqs/aca-part-v.pdf
and https://www.hhs.gov/guidance/document/
affordable-care-act-implementation-faqs-set-5;
FAQs About Affordable Care Act Implementation
(Part VII) and Mental Health Parity Implementation
(Nov. 17, 2011), available at https://www.dol.gov/
sites/dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-vii.pdf and https://
www.hhs.gov/guidance/document/affordable-careact-implementation-faqs-set-7; Understanding
Implementation of the Mental Health Parity and
Addiction Equity Act of 2008 (May 9, 2012),
available at https://www.dol.gov/sites/dolgov/files/
EBSA/about-ebsa/our-activities/resource-center/
faqs/understanding-implementation-ofmhpaea.pdf; FAQs for Employees about the Mental
Health Parity and Addiction Equity Act (May 18,
2012), available at https://www.dol.gov/sites/
dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/mhpaea-2.pdf; FAQs About
Affordable Care Act Implementation (Part XVII) and
Mental Health Parity Implementation (Nov. 8,
2013), available at https://www.dol.gov/sites/
dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xvii.pdf and https://
www.hhs.gov/guidance/document/affordable-careact-implementation-faqs-set-17; FAQs About
Affordable Care Act Implementation (Part XVIII)
and Mental Health Parity Implementation (Jan. 9,
2014), available at https://www.dol.gov/sites/
dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xviii.pdf and https://
www.hhs.gov/guidance/document/affordable-careact-implementation-faqs-set-18; FAQs About
Affordable Care Act Implementation (Part XXIX)
and Mental Health Parity Implementation (Oct. 23,
2015), available at https://www.dol.gov/sites/
dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-xxix.pdf and https://
www.hhs.gov/guidance/document/affordable-careact-implementation-faqs-set-29 (FAQs Part XXIX);
FAQs About Affordable Care Act Implementation
Part 31, Mental Health Parity Implementation, and
Women’s Health and Cancer Rights Act
Implementation (Apr. 20, 2016), available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/faqs/aca-part-31.pdf
and https://www.hhs.gov/guidance/document/
affordable-care-act-implementation-faqs-set-31;
FAQs About Affordable Care Act Implementation
Part 34 and Mental Health and Substance Use
Disorder Parity Implementation (Oct. 27, 2016),
available at https://www.dol.gov/sites/dolgov/files/
EBSA/about-ebsa/our-activities/resource-center/
43 See,
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fact sheets,44 compliance assistance
tools,45 templates,46 reports,47 and
faqs/aca-part-34.pdf and https://www.hhs.gov/
guidance/document/affordable-care-actimplementation-faqs-set-34 (FAQs Part 34); FAQs
About Mental Health and Substance Use Disorder
Parity Implementation and the 21st Century Cures
Act Part 38 (June 16, 2017), available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/faqs/aca-part-38.pdf
and https://www.hhs.gov/guidance/document/
affordable-care-act-implementation-faqs-set-38
(FAQs Part 38); Proposed FAQs About Mental
Health and Substance Use Disorder Parity
Implementation and the 21st Century Cures Act
Part 39, available at https://www.dol.gov/sites/
dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-39-proposed.pdf
(Proposed FAQs Part 39); Final FAQs About Mental
Health and Substance Use Disorder Parity
Implementation and the 21st Century Cures Act
Part 39 (Sept. 5, 2019), available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/faqs/aca-part-39final.pdf and https://www.hhs.gov/guidance/
document/affordable-care-act-implementation-faqsfinal-set-39 (FAQs Part 39); FAQs About Families
First Coronavirus Response Act and Coronavirus
Aid, Relief, and Economic Security Act
Implementation Part 43 (June 23, 2020), available at
https://www.dol.gov/sites/dolgov/files/ebsa/aboutebsa/our-activities/resource-center/faqs/aca-part43.pdf and https://www.hhs.gov/guidance/
document/faqs-about-families-first-coronavirusresponse-act-and-coronavirus-aid-relief-and-0
(FAQs part 43); FAQs About Mental Health and
Substance Use Disorder Parity Implementation and
the Consolidated Appropriations Act, 2021 Part 45
(Apr. 2, 2021), available at https://www.dol.gov/
sites/dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/faqs/aca-part-45.pdf and https://
www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/Downloads/MHPAEA-FAQs-Part-45.pdf
(FAQs Part 45); and Mental Health Parity and
Addiction Equity Act (MHPAEA) FAQs, available at
https://www.dol.gov/agencies/ebsa/about-ebsa/ouractivities/resource-center/faqs/mhpaea-1#.
44 See, e.g., The Mental Health Parity and
Addiction Equity Act of 2008 (MHPAEA) Fact Sheet
(Jan. 2010), available at https://www.dol.gov/sites/
dolgov/files/EBSA/about-ebsa/our-activities/
resource-center/fact-sheets/mhpaea.pdf; MHPAEA
Enforcement Fact Sheet (Jan. 2016), available at
https://www.dol.gov/sites/dolgov/files/EBSA/aboutebsa/our-activities/resource-center/fact-sheets/
mhpaea-enforcement.pdf; FY 2016 MHPAEA
Enforcement Fact Sheet, available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/fact-sheets/mhpaeaenforcement-2016.pdf; FY 2017 MHPAEA
Enforcement Fact Sheet, available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/fact-sheets/mhpaeaenforcement-2017.pdf; FY 2018 MHPAEA
Enforcement Fact Sheet, available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/fact-sheets/mhpaeaenforcement-2018.pdf; FY 2019 MHPAEA
Enforcement Fact Sheet, available at https://
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/mhpaeaenforcement-2019.pdf and https://www.cms.gov/
CCIIO/Resources/Forms-Reports-and-OtherResources/Downloads/mhpaea-enforcement2019.pdf; FY 2020 MHPAEA Enforcement Fact
Sheet, available at https://www.dol.gov/sites/
dolgov/files/EBSA/laws-and-regulations/laws/
mental-health-parity/mhpaea-enforcement2020.pdf and https://www.cms.gov/CCIIO/
Resources/Forms-Reports-and-Other-Resources/
Downloads/mhpaea-enforcement-2020.pdf; FY
2021 MHPAEA Enforcement Fact Sheet, available at
https://www.dol.gov/sites/dolgov/files/EBSA/lawsand-regulations/laws/mental-health-parity/
mhpaea-enforcement-2021.pdf; and FY 2022
MHPAEA Enforcement Fact Sheet, available at
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/mhpaeaenforcement-2022.pdf.
45 See Self-Compliance Tool for Part 7 of ERISA:
Health Care-Related Provisions, available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/publications/
compliance-assistance-guide-appendix-a.pdf; 2018
Self-Compliance Tool for the Mental Health Parity
and Addiction Equity Act (MHPAEA), available at
https://www.dol.gov/sites/dolgov/files/EBSA/lawsand-regulations/laws/mental-health-parity/selfcompliance-tool-2018.pdf; and 2020 SelfCompliance Tool for the Mental Health Parity and
Addiction Equity Act (MHPAEA), available at
https://www.dol.gov/sites/dolgov/files/EBSA/lawsand-regulations/laws/mental-health-parity/selfcompliance-tool.pdf.
46 See Form to Request Documentation from an
Employer-Sponsored Health Plan or a Group or
Individual Market Insurer Concerning Treatment
Limitations, available at https://www.dol.gov/sites/
dolgov/files/EBSA/laws-and-regulations/laws/
mental-health-parity/mhpaea-disclosuretemplate.pdf.
47 See, e.g., DOL 2012 Report to Congress:
Compliance With the Mental Health Parity and
Addiction Equity Act of 2008 (Jan. 1, 2012),
available at https://www.dol.gov/sites/dolgov/files/
EBSA/about-ebsa/our-activities/resource-center/
publications/mhpaea-report-to-congress-2012.pdf;
DOL 2014 Report to Congress: Compliance of Group
Health Plans (and Health Insurance Coverage
Offered in Connection with Such Plans With the
Requirements of the Mental Health Parity and
Addiction Equity Act of 2008 (Sept. 2014), available
at https://www.dol.gov/sites/dolgov/files/EBSA/
about-ebsa/our-activities/resource-center/
publications/mhpaea-report-to-congress-2014.pdf;
DOL 2016 Report to Congress: Improving
Healoverage for Mental Health and Substance Use
Disorder Patients Including Compliance with the
Federal Mental Health and Substance Use Disorder
Parity Provisions (Jan. 2016), available at https://
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/improvinghealth-coverage-for-mental-health-and-substanceuse-disorder-patients.pdf; HHS Mental Health
Parity and Addiction Equity Act of 2008 (MHPAEA)
Enforcement Report (Dec. 12, 2017), available at
https://www.cms.gov/CCIIO/Resources/FormsReports-and-Other-Resources/Downloads/HHS2008-MHPAEA-Enforcement-Period.pdf; DOL 2018
Report to Congress: Pathway to Full Parity,
available at https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/dol-report-to-congress-2018-pathway-to-fullparity.pdf; 21st Century Cures Act: Section 13002
Action Plan for Enhanced Enforcement of Mental
Health and Substance Use Disorder Coverage,
available at https://www.hhs.gov/sites/default/files/
parity-action-plan-b.pdf; HHS Mental Health Parity
and Addiction Equity Act of 2008 (MHPAEA)
Enforcement Report for the 2018 Federal Fiscal
Year, available at https://www.cms.gov/CCIIO/
Resources/Forms-Reports-and-Other-Resources/
Downloads/FY2018-MHPAEA-EnforcementReport.pdf; DOL 2020 Report to Congress: Parity
Partnerships: Working Together, available at
https://www.dol.gov/sites/dolgov/files/EBSA/lawsand-regulations/laws/mental-health-parity/dolreport-to-congress-parity-partnerships-workingtogether.pdf; 2022 Report to Congress: Realizing
Parity, Reducing Stigma, and Raising Awareness,
available at https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/report-to-congress-2022-realizing-parityreducing-stigma-and-raising-awareness.pdf and
https://www.cms.gov/files/document/2022-mhpaeareport-congress.pdf; MHPAEA Comparative
Analysis Report to Congress, July 2023, available at
www.dol.gov/sites/dolgov/files/EBSA/laws-and-
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publications.48 Despite this
unprecedented outreach, plans and
issuers continue to fall short of
MHPAEA’s central mandate to ensure
that participants, beneficiaries, and
enrollees do not face greater barriers and
restrictions to accessing benefits for
mental health conditions or substance
use disorders than they face when
accessing benefits for a medical
condition or surgical procedure. This
noncompliance is especially evident
with respect to the design and
application of NQTLs that apply to
mental health and substance use
disorder benefits. Accordingly, Congress
amended MHPAEA in the CAA, 2021,
as described later in this preamble.
The Departments are proposing these
revised rules to reinforce MHPAEA’s
fundamental objective, to ensure that
limitations on mental health and
substance use disorder benefits are no
regulations/laws/mental-health-parity/report-tocongress-2023-mhpaea-comparative-analysis.pdf
and https://www.cms.gov/cciio/resources/formsreports-and-other-resources#mental-health-parity.
48 See Consumer Guide to Disclosure Rights:
Making the Most of Your Mental Health and
Substance Use Disorder Benefits, available at
https://www.dol.gov/sites/dolgov/files/EBSA/lawsand-regulations/laws/mental-health-parity/
disclosure-guide-making-the-most-of-your-mentalhealth-and-substance-use-disorder-benefits.pdf;
Know Your Rights: Parity for Mental Health and
Substance Use Disorder Benefits, available at
https://www.dol.gov/sites/dolgov/files/EBSA/lawsand-regulations/laws/mental-health-parity/knowyour-rights-parity-for-mental-health-and-substanceuse-disorder-benefits.pdf; Parity of Mental Health
and Substance Use Benefits with Other Benefits:
Using Your Employer-Sponsored Health Plan to
Cover Services, available at https://www.dol.gov/
sites/dolgov/files/EBSA/laws-and-regulations/laws/
mental-health-parity/parity-of-mental-health-andsubstance-use-benefits-with-other-benefits.pdf;
Understanding Parity: A Guide to Resources for
Families and Caregivers, available at https://
www.dol.gov/sites/dolgov/files/ebsa/laws-andregulations/laws/mental-health-parity/
understanding-parity-a-guide-to-resources-forfamilies-and-caregivers.pdf; Warning Signs—Plan
or Policy Non-Quantitative Treatment Limitations
(NQTLs) that Require Additional Analysis to
Determine Mental Health Parity Compliance,
available at https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/warning-signs-plan-or-policy-nqtls-thatrequire-additional-analysis-to-determine-mhpaeacompliance.pdf; Mental Health Parity Provisions
Questions and Answers, available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/publications/
compliance-assistance-guide-mhpaea.pdf; Mental
Health and Substance use Disorder Parity:
Compliance Assistance Materials Index, available at
https://www.dol.gov/sites/dolgov/files/EBSA/lawsand-regulations/laws/mental-health-parity/
compliance-assistance-materials-index.pdf; The
Essential Aspects of Parity: A Training Tool for
Policymakers, available at https://store.samhsa.gov/
product/essential-aspects-of-parity-training-toolfor-policymakers/pep21-05-00-001; and Approaches
in Implementing the Mental Health Parity and
Addiction Equity Act: Best Practices from the
States, available at https://store.samhsa.gov/
product/Approaches-in-Implementing-the-MentalHealth-Parity-and-Addiction-Equity-Act-BestPractices-from-the-States/SMA16-4983.
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more restrictive than the limitations
applicable to medical/surgical benefits.
These proposed rules also would
implement important requirements that
Congress enacted in the CAA, 2021 to
ensure that plans and issuers perform
and document their NQTL comparative
analyses and provide them to the
Departments or an applicable State
authority upon request for evaluation of
compliance with MHPAEA. The aim of
these proposed rules is to ensure that
individuals benefit from the full
protections afforded to them under
MHPAEA, while providing clear
standards for plans and issuers on how
to comply with MHPAEA.
Specifically, the proposed regulations
would:
• Make clear that MHPAEA requires
that individuals can access their mental
health and substance use disorder
benefits in parity with medical/surgical
benefits.
• Provide specific examples that
make clear that plans and issuers cannot
use more restrictive prior authorization
and other medical management
techniques for mental health and
substance use disorder benefits;
standards related to network
composition for mental health and
substance use disorder benefits; and
factors to determine out-of-network
reimbursement rates for mental health
and substance use disorder providers.
• Require plans and issuers to collect
and evaluate outcomes data and take
action to address material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits, with a
specific focus on ensuring that there are
not any material differences in access as
a result of the application of their
network composition standards.
• Codify the requirement that plans
and issuers conduct meaningful
comparative analyses to measure the
impact of NQTLs. This includes
evaluating standards related to network
composition, out-of-network
reimbursement rates, and prior
authorization NQTLs.
• Implement the sunset provision for
self-funded, non-Federal governmental
plan elections to opt out of compliance
with MHPAEA, adopted in the CAA,
2023.
As a result of these proposals, the
Departments anticipate changes in
network composition and medical
management techniques that would
result in more robust mental health and
substance use disorder provider
networks and fewer and less restrictive
prior authorization requirements for
individuals seeking mental health and
substance use disorder treatment.
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Under a regulatory regime in which
MHPAEA’s promise of parity is realized,
participants, beneficiaries, and enrollees
would experience financial
requirements and treatment limitations
for mental health and substance use
disorder benefits that are in parity with
those applied to their medical/surgical
benefits. These proposed rules are
designed to achieve MHPAEA’s purpose
to ensure that participants,
beneficiaries, and enrollees will not face
greater restrictions on access to
obtaining mental health and substance
use disorder benefits than those for
medical/surgical benefits. At the same
time, the proposed rules also aim to
ensure that benefit structures that apply
limitations that reflect independent
professional medical or clinical
standards or guard against indicators of
fraud, waste, and abuse (while
minimizing the negative impact on
access to appropriate benefits) would
continue to be permitted, as the
Departments are of the view that such
limitations are premised on standards
that generally provide an independent
and less suspect basis for determining
access to mental health and substance
use disorder treatment. These proposed
rules also aim to ensure that plans and
issuers that offer mental health and
substance use disorder benefits strive to
attain and maintain mental health and
substance use disorder treatment
provider networks that are as robust as
their medical/surgical provider
networks in terms of available innetwork providers and facilities–not just
as shown by a list of names in a
provider directory, but as measured by
actual provider participation and as
evidenced by participant usage.
In evaluating their compliance with
these proposed rules, plans and issuers
would be required to consider whether
an NQTL is inhibiting access to
treatment for mental health conditions
and substance use disorders by
examining whether the NQTL that
applies to mental health or substance
use disorder benefits is more restrictive
than the predominant NQTL that
applies to substantially all medical/
surgical benefits within a classification
of benefits set forth under the
regulations.49 A plan or issuer would
also be required to consider whether the
processes, strategies, evidentiary
standards, or other factors that it uses to
design or apply an NQTL to mental
health or substance use disorder
49 The required classifications of benefits (and
permissible sub-classifications) used to apply the
MHPAEA regulations are addressed at 26 CFR
54.9812–1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and
45 CFR 146.136(c)(2)(ii).
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benefits in a classification are
comparable to, and applied no more
stringently than, those used in designing
and applying the NQTL to medical/
surgical benefits in the same
classification. Under these proposed
rules, plans and issuers would be
required to consider data relevant to an
NQTL’s impact on participants’ or
beneficiaries’50 abilities to obtain
mental health and substance use
disorder benefits under the plan or
coverage relative to its impact on access
to medical/surgical benefits, and to take
action to address the potential causes of
material differences in access identified
through the data as necessary to ensure
compliance. As the proposal makes
clear, ensuring that people seeking
mental health and substance use
disorder treatment do not face greater
barriers to access to benefits for such
treatment is central to the fundamental
purpose of MHPAEA. These proposed
rules would ensure that NQTLs that
apply to mental health and substance
use disorder benefits are ‘‘no more
restrictive,’’ and that processes,
strategies, evidentiary standards, and
other factors are ‘‘comparable to, and
applied no more stringently,’’ than those
applicable to medical/surgical benefits.
These proposed rules’ focus on access to
mental health and substance use
disorder benefits and constraints on
obtaining such benefits would add
needed clarity to the statutory
requirements for the regulated
community and other interested parties.
Under the current rules, plans and
issuers are generally permitted to
prepare NQTL comparative analyses
without regard to the overall impact of
NQTLs on participants and
beneficiaries. This has contributed to
plans and issuers looking for ways to
50 These proposed rules would apply directly to
group health plans or health insurance coverage
offered by an issuer in connection with a group
health plan, and would apply to individual health
insurance coverage by cross-reference through 45
CFR 147.160, which currently provides that the
requirements of 45 CFR 146.136 apply to health
insurance coverage offered by a health insurance
issuer in the individual market in the same manner
and to the same extent as to health insurance
coverage offered by a health insurance issuer in
connection with a group health plan in the large
group market. As noted below, HHS also proposes
an amendment to 45 CFR 147.160 to also include
a cross-reference to proposed 45 CFR 146.137 to
similarly extend the new proposed comparative
analysis requirements to individual health
insurance coverage in the same manner and to the
same extent as group health insurance coverage. For
simplicity, this preamble generally refers only to
the applicability on group health plans and health
insurance coverage offered in connection with a
group health plan and to participants and
beneficiaries enrolled in such a plan or coverage,
but references to participants and beneficiaries
should also be considered to include enrollees in
the individual market, unless otherwise specified.
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characterize the processes, strategies,
evidentiary standards, and other factors
associated with an NQTL as being
‘‘comparable’’ and ‘‘applied no more
stringently’’ through careful word
choice, without regard to how, in
operation, the limitation burdens
participants and beneficiaries by
limiting access to, or by limiting the
scope and duration of, the plan’s or
issuer’s mental health and substance use
disorder benefits relative to medical/
surgical benefits. Such limitations on
mental health and substance use
disorder benefits under the plan or
coverage must be analyzed in terms of
the comparative burden on access they
place (that is, whether they are more
restrictive) on individuals.
These proposed rules set forth a
number of standards that are intended
to reinforce the proper application of
the statutory and regulatory
requirements; promote compliance with
the NQTL comparative analysis
requirements; explain how the various
components of the regulation work
together; and ensure that the purpose of
MHPAEA, to remove greater barriers to
access to mental health and substance
use disorder benefits, is fulfilled. The
Departments recognize the value of
input from interested parties and
welcome feedback on all aspects of the
approach set forth in these proposed
rules, as well as alternative approaches
that would enable the Departments to
more effectively implement MHPAEA.
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B. The Mental Health Parity Act, The
Mental Health Parity and Addiction
Equity Act, and the Affordable Care Act
In 1996, Congress enacted the Mental
Health Parity Act of 1996 (MHPA 1996),
which required parity in aggregate
lifetime and annual dollar limits for
mental health benefits and medical/
surgical benefits. These mental health
parity provisions were codified in
Employee Retirement Income Security
Act of 1974 (ERISA) section 712, PHS
Act section 2705, and Internal Revenue
Code (Code) section 9812, and applied
to group health plans and health
insurance coverage offered in
connection with a group health plan.51
MHPAEA was enacted on October 3,
2008, as sections 511 and 512 of the Tax
Extenders and Alternative Minimum
Tax Relief Act of 2008 (Division C of
Pub. L. 110–343, 122 Stat. 3765), to
amend ERISA section 712, PHS Act
section 2705, and Code section 9812 to
add new requirements, including
51 Public Law 104–204, 110 Stat. 2874 (Sept. 26,
1996). The Departments published interim final
rules implementing MHPA 1996 at 62 FR 66932
(Dec. 22, 1997).
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provisions to apply the mental health
parity requirements to substance use
disorder benefits, and make further
amendments to the existing mental
health parity provisions.
MHPAEA, as enacted, generally
requires that group health plans and
health insurance issuers offering group
health insurance coverage ensure that
the financial requirements and
treatment limitations applicable to
mental health or substance use disorder
benefits be no more restrictive than
those applicable to medical/surgical
benefits and that there be no separate
financial requirements and treatment
limitations applicable only with respect
to mental health or substance use
disorder benefits. Together with the
existing requirements for parity in
aggregate lifetime and annual dollar
limits, this is referred to as providing
mental health and substance use
disorder benefits ‘‘in parity’’ with
medical/surgical benefits.
The Patient Protection and Affordable
Care Act (Pub. L. 111–148, 123 Stat.
3028) was enacted on March 23, 2010,
and the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111–
152, 124 Stat. 1029) was enacted on
March 30, 2010 (collectively, the
Affordable Care Act). The Affordable
Care Act reorganized, amended, and
added to the provisions of part A of title
XXVII of the PHS Act relating to group
health plans and health insurance
issuers in the group and individual
markets. The Affordable Care Act added
section 715(a)(1) to ERISA and section
9815(a)(1) to the Code to incorporate the
provisions of part A of title XXVII of the
PHS Act into ERISA and the Code, and
to make them applicable to group health
plans and health insurance issuers
providing health insurance coverage in
connection with group health plans.
The PHS Act sections incorporated by
these references are sections 2701
through 2728.
The Affordable Care Act extended
MHPAEA to apply to individual health
insurance coverage and redesignated
MHPAEA in the PHS Act as section
2726.52 Additionally, section 1311(j) of
52 The requirements of MHPAEA generally apply
to both grandfathered and non-grandfathered health
plans. See section 1251 of the Affordable Care Act
and its implementing regulations at 26 CFR
54.9815–1251, 29 CFR 2590.715–1251, and 45 CFR
147.140. Under section 1251 of the Affordable Care
Act, grandfathered health plans are exempted only
from certain Affordable Care Act requirements
enacted in Subtitles A and C of Title I of the
Affordable Care Act. The provisions extending
MHPAEA requirements to individual health
insurance coverage and requiring that qualified
health plans comply with MHPAEA are not
included in these sections. However, because
MHPAEA requirements apply to health insurance
coverage offered in the small group market only
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the Affordable Care Act applies PHS Act
section 2726 to qualified health plans
(QHPs) 53 in the same manner and to the
same extent as to health insurance
issuers and group health plans.
Furthermore, HHS’ regulations
regarding essential health benefits
(EHBs) 54 require health insurance
issuers offering non-grandfathered
health insurance coverage in the
individual and small group markets to
comply with MHPAEA and its
implementing regulations in order to
satisfy the requirement to cover ‘‘mental
health and substance use disorder
services, including behavioral health
treatment,’’ as part of EHBs.55
On April 28, 2009, the Departments
published a request for information
soliciting comments on issues under
MHPAEA (2009 RFI).56 Over the next
few years, the Departments considered
comments regarding MHPAEA and
issued further clarifications and
guidance. On February 2, 2010, the
Departments published interim final
regulations implementing MHPAEA
(interim final regulations).57 After
considering the comments and other
feedback received from interested
parties, the Departments published the
2013 final regulations.58
The 2013 final regulations established
an exhaustive list of six classifications
of benefits (not counting the exhaustive
list of permissible sub-classifications
also articulated in the 2013 final
regulations): inpatient, in-network;
inpatient, out-of-network; outpatient, innetwork; outpatient, out-of-network;
emergency care; and prescription drugs.
through the requirement to provide EHB, which
does not apply to grandfathered health plans, the
requirements of MHPAEA do not apply to
grandfathered health plans offered in the small
group market.
53 A QHP is a health insurance plan that is
certified by a health insurance exchange that it
meets certain minimum standards established
under the Affordable Care Act and described in
subpart C of 45 CFR part 156. See 45 CFR 155.20.
54 Section 1302 of the Affordable Care Act
requires non-grandfathered health plans in the
individual and small group markets to cover
essential health benefits (EHB), which include
items and services in the following ten benefit
categories: (1) ambulatory patient services; (2)
emergency services; (3) hospitalization; (4)
maternity and newborn care; (5) mental health and
substance use disorder services including
behavioral health treatment; (6) prescription drugs;
(7) rehabilitative and habilitative services and
devices; (8) laboratory services; (9) preventive and
wellness services and chronic disease management;
and (10) pediatric services, including oral and
vision care. See 45 CFR 156.115 for description of
the benefits a health plan must provide to provide
EHB.
55 Section 1302(b)(1)(E) of the Affordable Care
Act; 45 CFR 156.115(a)(3).
56 74 FR 19155 (Apr. 28, 2009).
57 75 FR 5410 (Feb. 2, 2010).
58 78 FR 68240 (Nov. 13, 2013).
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If a plan or health insurance coverage
provides benefits for a mental health
condition or substance use disorder in
any of these classifications of benefits,
benefits for that condition or disorder
must be provided in every classification
in which medical/surgical benefits are
provided. The 2013 final regulations
specify that the parity requirements
apply to financial requirements, such as
deductibles, copayments, and
coinsurance; quantitative treatment
limitations that are expressed
numerically, such as day or visit limits;
and NQTLs, which are generally nonnumerical requirements that limit the
scope or duration of benefits, such as
prior authorization requirements, step
therapy requirements, and standards for
provider admission to participate in a
network, including methodologies for
determining reimbursement rates.
Under MHPAEA, financial
requirements and treatment limitations
imposed on mental health or substance
use disorder benefits cannot be more
restrictive than the predominant
financial requirements and treatment
limitations that apply to substantially
all medical/surgical benefits in a
classification.59 The 2013 final
regulations defined the ‘‘substantially
all’’ numerical standard for a financial
requirement or quantitative treatment
limitation as two-thirds, using the same
approach as the regulations
implementing MHPA 1996 with respect
to aggregate annual and lifetime
limits.60 The 2013 final regulations also
quantified ‘‘predominant’’ to mean the
level of the financial requirement or
quantitative treatment limitation that
applies to more than one-half of
medical/surgical benefits in the relevant
classification subject to the financial
requirement or quantitative treatment
limitation. Using these numerical
standards, the Departments established
a mathematical test by which plans and
issuers could determine if a financial
requirement or quantitative treatment
limitation that applies to medical/
59 Code section 9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
60 With respect to aggregate lifetime and annual
limits under MHPA 1996, the regulations in 26 CFR
54.9812–1(b); 29 CFR 2590.712(b), and 45 CFR
146.136(b) set forth rules based on whether a plan
(or health insurance coverage) includes an aggregate
lifetime or annual dollar limit that applies to less
than one-third or at least two-thirds of all medical/
surgical benefits. These provisions do not address
the provisions of PHS Act section 2711, as
incorporated by ERISA section 715 and Code
section 9815, which prohibit imposing lifetime and
annual limits on the dollar value of EHBs. As a
result, plans and issuers cannot impose lifetime and
annual dollar limits on mental health and substance
use disorder benefits that are not EHBs, if such a
limit applies to less than one-third of all medical/
surgical benefits.
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surgical benefits in a classification may
be applied to mental health and
substance use disorder benefits in that
classification, and if so, what level of
the financial requirement or quantitative
treatment limitation is the most
restrictive level that could be imposed
on mental health or substance use
disorder benefits within the
classification.
MHPAEA generally prohibits separate
financial requirements and treatment
limitations that apply only to mental
health and substance use disorder
benefits.61 The 2013 final regulations
also prohibit plans and issuers from
applying separate cumulative financial
requirements, such as deductibles or
out-of-pocket maximums, or separate
cumulative quantitative treatment
limitations, such as annual or lifetime
day or visit limits, to mental health or
substance use disorder benefits in a
classification.62
In addition, the 2013 final regulations
require that a group health plan or
health insurance issuer may not impose
an NQTL with respect to mental health
and substance use disorder benefits in
any classification unless, under the
terms of the plan (or health insurance
coverage) as written and in operation,
any processes, strategies, evidentiary
standards, or other factors used in
applying the NQTL to mental health and
substance use disorder benefits in the
classification are comparable to, and are
applied no more stringently than, the
processes, strategies, evidentiary
standards, or other factors used in
applying the limitation to medical/
surgical benefits in the same
classification.63 The 2013 final
regulations also implemented the
statutory disclosure requirements
imposed on group health plans and
health insurance issuers that are subject
to MHPAEA’s requirements.64
C. Guidance
As described earlier in this preamble,
since the promulgation of the 2013 final
regulations, the Departments have
provided extensive guidance and
compliance assistance materials to the
regulated community, State regulators,
and other interested parties to facilitate
the implementation and enforcement of
MHPAEA. Specifically, the Departments
61 Code section 9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
62 26 CFR 54.9812–1(c)(3)(v), 29 CFR
2590.712(c)(3)(v), 45 CFR 146.136(c)(3)(v) and
147.160.
63 26 CFR 54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), 45 CFR 146.136(c)(4)(i) and
147.160.
64 26 CFR 54.9812–1(d), 29 CFR 2590.712(d), 45
CFR 146.136(d) and 147.160.
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have jointly issued 15 sets of FAQs with
96 questions, eight enforcement fact
sheets, six compliance assistance tools
and templates, seven reports to
Congress, six press releases, and seven
consumer publications. In general, the
Departments’ FAQs are designed to
provide additional guidance and
clarification on how MHPAEA applies
in specific contexts and are informed by
questions raised by interested parties
and scenarios encountered in the
context of the Departments’ enforcement
efforts. For example, FAQs Part 34
addresses how MHPAEA applies to
treatment of substance use disorders
(such as treating opioid use disorder
with medication) and provides
examples of impermissible NQTLs (such
as more stringent fail-first or steptherapy requirements, including where
an individual cannot reasonably satisfy
if there are no available providers that
can provide services related to the
requirement in the participant’s
geographic area).65
Guidance issued by the Departments
also reflects stakeholder feedback and,
in several instances, guidance
documents were proposed before they
were issued in final form. For example,
the Departments proposed FAQs Part 39
on April 23, 2018. The finalized FAQs
Part 39 was issued on September 5,
2019, and incorporate insights from the
regulated community regarding
compliance issues faced by plans and
issuers, as well as issues faced by plan
participants and their authorized
representatives when seeking
information about mental health and
substance use disorder benefits. FAQs
Part 39 also provides guidance on how
the law and regulations apply to
treatments for eating disorders, opioid
use disorder, and ASD, as well as
exclusions for experimental or
investigative treatments, and standards
for provider admission to a plan’s or
issuer’s network, including the
methodology for determining
reimbursement rates for mental health
and substance use disorder providers.66
In addition to FAQs issued after the
promulgation of the 2013 final
regulations, the Departments have
issued, generally every 2 years, an
updated compliance program guidance
document (the MHPAEA SelfCompliance Tool), which is intended to
help plans and issuers, State regulators,
and other interested parties comply
with and understand MHPAEA and the
additional related requirements under
ERISA that apply to group health plans.
The Departments most recently issued
65 See
66 See
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the MHPAEA Self-Compliance Tool in
2020 (2020 MHPAEA Self-Compliance
Tool).67 The 2020 MHPAEA SelfCompliance Tool includes an
illustrative, non-exhaustive list of
NQTLs, a process for conducting NQTL
comparative analyses, a list of the types
of documents and information that a
plan or issuer should have available to
support its analyses, and illustrations of
specific fact patterns to aid in
compliance.68
The 2020 MHPAEA Self-Compliance
Tool includes a stepwise process a plan
or issuer can follow to perform an
analysis assessing whether its NQTLs
satisfy MHPAEA’s parity
requirements.69 Under this stepwise
process, the plan or issuer should
identify all NQTLs that apply to benefits
under the plan or coverage. The plan or
issuer should also identify all the
medical/surgical benefits and mental
health and substance use disorder
benefits to which each NQTL applies.
After identifying all NQTLs and the
benefits to which each NQTL applies,
the 2020 MHPAEA Self-Compliance
Tool suggests the plan or issuer identify
the factors considered in the design of
each NQTL. The plan or issuer should
also identify the sources used to define
those factors. Plans and issuers have
flexibility in determining the factors and
sources of factors to apply to NQTLs, so
long as they are comparable and applied
no more stringently to mental health
and substance use disorder benefits than
to medical/surgical benefits in the
respective benefits classification. When
identifying the sources of the factors
considered in designing an NQTL, the
plan or issuer should also identify any
threshold of a factor that will implicate
the NQTL.
After identifying the plan’s NQTLs,
their application to mental health and
substance use disorder benefits and to
medical/surgical benefits, the factors
used in designing each NQTL, and the
sources of those factors, the plan or
67 Section 13001(a) of the 21st Century Cures Act
added section 2726(a)(6) of the PHS Act, which
directs the Departments to provide a publicly
available compliance program guidance document
that is updated every 2 years.
68 See Self-Compliance Tool for the Mental
Health Parity and Addiction Equity Act (MHPAEA)
(2020), available at https://www.dol.gov/sites/
dolgov/files/EBSA/laws-and-regulations/laws/
mental-health-parity/self-compliance-tool.pdf. The
Departments issued the proposed 2020 MHPAEA
Self-Compliance Tool on June 19, 2020, and
requested comments from interested parties.
Engagement with interested parties through written
comments and listening sessions provided vital
feedback for finalizing the 2020 update to the
MHPAEA Self-Compliance Tool, and that final
version includes revisions in response to that
feedback.
69 Id. at section F (at pp. 21–28).
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issuer should determine whether the
processes, strategies, and evidentiary
standards used in applying the NQTL
are comparable and no more stringently
applied to mental health and substance
use disorder benefits than to medical/
surgical benefits, both as written and in
operation, in the relevant benefit
classification. For instance, if a plan’s or
issuer’s utilization review is conducted
by different entities or individuals for
mental health and substance use
disorder benefits and medical/surgical
benefits, the plan or issuer should have
measures in place to ensure comparable
application of utilization review
policies.
The 2020 MHPAEA Self-Compliance
Tool stresses that measuring and
evaluating results and quantitative
outcomes can be helpful to identify
potential areas of noncompliance. For
example, comparing a plan’s or issuer’s
average reimbursement rates for both
mental health and substance use
disorder providers and medical/surgical
providers against an external benchmark
of reimbursement rates, such as
Medicare, may help identify whether
the underlying methodology used to
determine the plan’s or issuer’s
reimbursement rates warrants additional
review. The 2020 MHPAEA SelfCompliance Tool notes that
substantially disparate results are a red
flag that a plan or issuer may be
imposing an NQTL on mental health
and substance use disorder benefits in a
way that fails to satisfy the parity
requirements. Other warning signs of
potential noncompliance identified in
the 2020 MHPAEA Self-Compliance
Tool include generally paying at or near
Medicare reimbursement rates for
mental health or substance use disorder
benefits, while paying much more than
Medicare reimbursement rates for
medical/surgical benefits, and
reimbursing psychiatrists, on average,
less than medical/surgical physicians
for the same evaluation and
management codes.70
The 2020 MHPAEA Self-Compliance
Tool also provides many compliance
tips on how an NQTL should be
analyzed. For example, a plan or issuer
should have information available to
substantiate how factors are used to
design or apply any specific NQTL to
both medical/surgical benefits and
mental health or substance use disorder
benefits. The plan or issuer should be
clear as to whether and why any factors
were given more weight than others and
70 2020
MHPAEA Self-Compliance Tool, at p. 21,
available at https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/self-compliance-tool.pdf.
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should be able to explain any variation
in the application of a guideline or
evidentiary standard, including the
process and factors relied upon for
establishing the variation. To comply
with MHPAEA’s parity requirements,
plans and issuers must adopt measures
for mental health and substance use
disorder providers that are at least
comparable to and no more stringently
applied (with regard to limiting the
scope and duration of a participant’s,
beneficiary’s, or enrollee’s benefits
under the plan or coverage) than those
applied to medical/surgical providers.
This includes taking steps to help
address provider shortages, ensure an
adequate network of mental health and
substance use disorder providers, and
ensure reasonable patient wait times to
avoid noncompliance with MHPAEA’s
parity requirements. By providing a
basic framework for plans and issuers to
do a stepwise analysis and providing
additional warning signs and tips, the
2020 MHPAEA Self-Compliance Tool
has provided additional guidance for
plans and issuers to comply with the
requirements of MHPAEA with respect
to NQTLs.
D. The Consolidated Appropriations
Act, 2021 and Related Guidance
The CAA, 2021 was enacted on
December 27, 2020.71 Section 203 of
Title II of Division BB of the CAA, 2021
amended MHPAEA, in part, by adding
Code section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section
2726(a)(8) to expressly require group
health plans and health insurance
issuers offering group or individual
health insurance coverage that include
both medical/surgical benefits and
mental health or substance use disorder
benefits and impose NQTLs on mental
health or substance use disorder
benefits to perform and document their
comparative analyses of the design and
application of NQTLs.72 Further, plans
and issuers are required to make their
comparative analyses and other
applicable information available to the
Departments or applicable State
authorities, upon request.73 The
comparative analysis requirement took
effect on February 10, 2021, 45 days
after the date of enactment of the CAA,
2021.
In order to advance compliance with
MHPAEA, the CAA, 2021 states that the
Departments shall request that a group
health plan or health insurance issuer
71 Public Law 116–260, 134 Stat. 1182 (Dec. 27,
2020).
72 Code section 9812(a)(8)(A), ERISA section
712(a)(8)(A), and PHS Act section 2726(a)(8)(A).
73 Id.
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offering group or individual health
insurance coverage submit comparative
analyses, with respect to a plan or
coverage, that involve potential
MHPAEA violations, in response to
complaints against a plan or coverage
regarding potentially noncompliant
NQTLs, and in any other instances that
the Departments determine
appropriate.74 These comparative
analyses must include:
(1) the specific plan or coverage terms
or other relevant terms regarding the
NQTLs and a description of all mental
health and substance use disorder
benefits and medical/surgical benefits to
which each such term applies in each
benefit classification;
(2) the factors used to determine how
the NQTLs will apply to mental health
or substance use disorder benefits and
medical/surgical benefits;
(3) the evidentiary standards used to
develop the identified factors, when
applicable, provided that each factor
shall be defined, and any other source
or evidence relied upon to design and
apply the NQTLs to mental health or
substance use disorder benefits and
medical/surgical benefits;
(4) the comparative analyses
demonstrating that the processes,
strategies, evidentiary standards, and
other factors used to apply the NQTLs
to mental health or substance use
disorder benefits, as written and in
operation, are comparable to, and are
applied no more stringently than those
used to apply the NQTLs to medical/
surgical benefits in the benefits
classification; and
(5) the specific findings and
conclusions reached by the plan or
issuer, including any results of the
analyses that indicate that the plan or
coverage is or is not in compliance with
MHPAEA requirements.75
The CAA, 2021 further sets forth a
process by which the Departments must
evaluate the requested NQTL
comparative analyses and enforce the
comparative analyses requirements. If
the relevant Department with
jurisdiction over the group health plan
(or health insurance coverage)
determines that a plan or issuer has not
provided sufficient information for the
relevant Department to review the
comparative analyses, the CAA, 2021
provides that the Departments shall
specify the information the plan or
issuer must submit to be responsive to
74 Code section 9812(a)(8)(B)(i), ERISA section
712(a)(8)(B)(i), and PHS Act section 2726(a)(8)(B)(i).
75 Code section 9812(a)(8)(A)(i)–(v), ERISA
section 712(a)(8)(A)(i)–(v), and PHS Act section
2726(a)(8)(A)(i)–(v).
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the request.76 In instances in which the
Departments have reviewed the
requested comparative analyses and
determined that the plan or issuer is not
in compliance with MHPAEA, the plan
or issuer must specify the actions it will
take to come into compliance and
submit additional comparative analyses
that demonstrate compliance not later
than 45 days after the initial
determination of noncompliance.77
Following the 45-day corrective action
period, if the relevant Department
makes a final determination that the
plan or issuer is still not in compliance,
the plan or issuer must notify all
individuals enrolled in the plan or
coverage of this determination, not later
than 7 days after such final
determination.78
The CAA, 2021 also requires the
Departments, after review of the
comparative analyses, to share
information on findings of compliance
and noncompliance with the State
where the plan is located or the State
where the issuer is licensed to do
business, in accordance with any
information sharing agreement entered
into with the State.79 Additionally, as
explained in more detail later in this
preamble, the CAA, 2021 requires the
Departments to submit annually to
Congress and make publicly available a
report summarizing the comparative
analyses requested by the Departments.
The report must state, in part, whether
each plan or issuer submitted sufficient
information to permit review; whether
and why the plan or issuer is in
compliance with MHPAEA; the specific
information each plan or issuer needed
to submit to allow for a review of their
comparative analysis; and, for each plan
or issuer the Departments determined
not to be in compliance, specifications
of the actions that must be taken to
come into compliance.80
On April 2, 2021, the Departments
issued FAQs Part 45 to provide
guidance on the amendments to
MHPAEA made by the CAA, 2021 and
to promote compliance by plans and
issuers. FAQs Part 45 underscores that,
for a comparative analysis to be treated
as sufficient under the CAA, 2021, it
must contain a detailed, written, and
76 Code section 9812(a)(8)(B)(ii), ERISA section
712(a)(8)(B)(ii), and PHS Act section
2726(a)(8)(B)(ii).
77 Code section 9812(a)(8)(B)(iii)(I), ERISA section
712(a)(8)(B)(iii)(I), and PHS Act section
2726(a)(8)(B)(iii)(I).
78 Id.
79 Code section 9812(a)(8)(C)(iii), ERISA section
712(a)(8)(C)(iii), and PHS Act section
2726(a)(8)(C)(iii).
80 Code section 9812(a)(8)(B)(iv), ERISA section
712(a)(8)(B)(iv), and PHS Act section
2726(a)(8)(B)(iv).
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reasoned explanation of the specific
plan terms and practices at issue and
include the bases for the plan’s or
issuer’s conclusion that the NQTL
complies with MHPAEA. As FAQs Part
45 explains, at a minimum, a sufficient
NQTL comparative analysis must
include a robust discussion of certain
elements, including a clear description
of the specific NQTL; plan terms;
policies at issue; and identification of
any factors, evidentiary standards,
sources, strategies, and processes
considered in the design and
application of the NQTL and in
determining which benefits, including
both mental health and substance use
disorder benefits and medical/surgical
benefits, are subject to the NQTL. To the
extent a plan or issuer defines any of the
factors, evidentiary standards, strategies,
or processes in a quantitative manner,
its analysis should include the precise
definitions used and any supporting
sources. The analysis also should
explain whether the plan or issuer
imposes any variation in the application
of a guideline or standard between
mental health and substance use
disorder benefits and medical/surgical
benefits, and if so, should describe the
processes and factors used for
establishing that variation. The plan or
issuer should provide a reasoned
discussion, including citations or any
specific evidence of its findings and
conclusions, as to the comparability of
the processes, strategies, evidentiary
standards, factors, and sources
identified within each affected
classification and their relative
stringency, both as written and in
operation.
FAQs Part 45 highlights that a general
statement of compliance by plans and
issuers, coupled with a conclusory
reference to broadly stated processes,
strategies, evidentiary standards, or
other factors is insufficient to meet the
statutory requirements for an NQTL
comparative analysis. Accordingly, a
comparative analysis that consists of
conclusory or generalized statements,
without specific supporting evidence
and detailed explanations, or the
production of a large volume of
documents without a clear explanation
of how and why each document is
relevant to the comparative analysis,
fails to satisfy the statutory
requirements.
In addition, FAQs Part 45 provides
guidance as to the types of documents
that plans and issuers should be
prepared to make available to support
the analysis and conclusions reached in
their comparative analyses. This
includes records documenting NQTL
processes and detailing how the plan or
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issuer applies NQTLs to both medical/
surgical and mental health or substance
use disorder benefits, documents and
other information relevant to the factors
identified, and samples of covered and
denied mental health or substance use
disorder and medical/surgical benefits
claims. FAQs Part 45 also highlights
several NQTLs that DOL anticipated
focusing on in the near term.
FAQs Part 45 also notes that under
the CAA, 2021, plans and issuers must
make available their respective
comparative analyses of NQTLs and
other applicable information to the
applicable State authority upon request.
Additionally, plans and issuers must
make the comparative analyses and
other applicable information required
by the CAA, 2021 available upon
request to participants and beneficiaries
in plans subject to ERISA and to
participants, beneficiaries, and enrollees
in all non-grandfathered group health
plans and non-grandfathered group or
individual health insurance coverage
upon request in connection with an
appeal of an adverse benefit
determination. If a provider or other
individual is acting as a patient’s
authorized representative, the provider
or other authorized representative may
request these documents.
E. Reports to Congress
DOL is required to send Congress a
biennial report on MHPAEA
implementation,81 and the Departments
are required to send Congress an annual
report on NQTL comparative analyses
reviews.82 To satisfy these
requirements, on January 25, 2022, the
Departments issued the first report to
Congress since the enactment of the
CAA, 2021 (2022 MHPAEA Report to
Congress).83 The 2022 MHPAEA Report
to Congress contains extensive
descriptions of the Departments’
MHPAEA enforcement efforts, outreach
efforts, consumer and compliance
assistance efforts, and guidance to
interested parties, including information
related to the requirement that plans
81 ERISA
section 712(f).
203 of the CAA, 2021 (Pub. L. 116–260,
134 Stat. 1182 (Dec. 27, 2020)). In addition, the
Departments were required to send Congress an
annual report on complaints and investigations
concerning compliance with the requirements of
MHPAEA from 2017 until 2021. See section 13003
of the 21st Century Cures Act (Cures Act), Public
Law 114–255, 130 Stat. 1033 (Dec. 13, 2016), as
amended by the Substance Use-Disorder Prevention
that Promotes Opioid Recovery and Treatment for
Patients and Communities Act, Public Law 115–
271, 132 Stat. 3894 (Oct. 24, 2018).
83 2022 MHPAEA Report to Congress, available at
https://www.dol.gov/sites/dolgov/files/EBSA/lawsand-regulations/laws/mental-health-parity/reportto-congress-2022-realizing-parity-reducing-stigmaand-raising-awareness.pdf.
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and issuers perform and document
comparative analyses with respect to the
design and application of NQTLs.
Contemporaneously with these
proposed rules, the Departments are
issuing the second report to Congress
since the enactment of the CAA, 2021,
the MHPAEA Comparative Analysis
Report to Congress, July 2023 (2023
MHPAEA Report to Congress).84 The
2023 MHPAEA Report to Congress
details efforts by the Departments to
implement and enforce the amendments
to MHPAEA made by the CAA, 2021.
The 2023 MHPAEA Report to Congress
focuses on the Departments’
enforcement efforts regarding NQTLs
during the second year of CAA, 2021
implementation, looks broadly at the 18month period since plans and issuers
were first required to make their
comparative analyses and other
applicable information available on
request, discusses common deficiencies
in comparative analyses submitted by
plans and issuers, and explores
examples of results that the
Departments have achieved through
enforcement.
The 2023 MHPAEA Report to
Congress notes that nearly all of the
comparative analyses reviewed by the
Departments during the relevant time
period contained insufficient
information upon initial receipt and
identifies common deficiencies in the
comparative analyses prepared by plans
and issuers. Specifically, many initial
responders seemed unprepared to
submit their comparative analyses upon
request and some plans did not
complete or start a comparative analysis
until after one was requested. Some
comparative analyses lacked specific
supporting evidence, detailed
explanations, or sufficient detail to draw
meaningful comparisons. For example,
many plans’ comparative analyses failed
to adequately explain whether or how
factors were comparably applied to
mental health and substance use
disorder benefits and to medical/
surgical benefits. Also, many plans and
issuers provided supporting documents
for which the relevance and probative
value was not readily apparent.
Some plans also failed to identify the
specific mental health or substance use
disorder benefits and medical/surgical
benefits or MHPAEA benefit
classification to which an NQTL
applied. Additionally, some
84 2023 MHPAEA Report to Congress, July 2023,
available at www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
report-to-congress-2023-mhpaea-comparativeanalysis.pdf and https://www.cms.gov/cciio/
resources/forms-reports-and-otherresources#mental-health-parity.
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comparative analyses failed to identify
or define every relevant factor. In other
instances, plans failed to demonstrate
the application of identified factors in
the design of an NQTL, and most
comparative analyses failed to evaluate
the relative stringency of how the NQTL
was applied to mental health or
substance use disorder benefits versus
medical/surgical benefits. When data
was included in a comparative analysis,
the data often lacked meaning because
the plan or issuer did not provide a
description of its source, how the source
was selected, or information about
underlying calculations. Many
comparative analyses for standards to
participate in a network did not
adequately address apparent differences
in access standards for medical/surgical
providers as opposed to mental health
and substance use disorder providers,
such as different time and distance
standards or provider-to-member ratios.
F. MHPAEA Opt Out for Self-Funded
Non-Federal Governmental Plans
Prior to the enactment of the
Affordable Care Act, PHS Act section
2721(b)(2), as added by the Health
Insurance Portability and
Accountability Act of 1996 (HIPAA),
permitted sponsors of self-funded, nonFederal governmental plans to elect to
exempt those plans from (that is, ‘‘opt
out of’’) any or all of the following
requirements of title XXVII of the PHS
Act:
1. Limitations on preexisting
condition exclusion periods under PHS
Act section 2701 (redesignated as
section 2704 by the Affordable Care
Act).
2. Requirements for special
enrollment periods under PHS Act
section 2701 (redesignated as section
2704 by the Affordable Care Act).
3. Prohibitions against discriminating
against individual participants and
beneficiaries based on health status (but
not including provisions added by the
Genetic Information Nondiscrimination
Act of 2008) under PHS Act section
2702 (redesignated as section 2705 by
the Affordable Care Act).
4. Standards relating to benefits for
newborns and mothers under PHS Act
section 2704 (redesignated as section
2725 by the Affordable Care Act).
5. Parity in the application of certain
limits to mental health and substance
use disorder benefits (including
requirements of MHPAEA) under PHS
Act section 2705 (redesignated as
section 2726 by the Affordable Care
Act).
6. Required coverage for
reconstructive surgery following
mastectomies under PHS Act section
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2706 (redesignated as section 2727 by
the Affordable Care Act).
7. Coverage of dependent students on
a medically necessary leave of absence
under PHS Act section 2707
(redesignated as section 2728 by the
Affordable Care Act).
The Affordable Care Act redesignated
PHS Act section 2721 as section 2722
and amended PHS Act section
2722(a)(2) to allow sponsors of selffunded, non-Federal governmental
plans to only opt out of requirements
categories 4–7 listed above.
In response to the Affordable Care Act
amendments, HHS issued guidance on
September 21, 2010, indicating that, for
plan years beginning on or after
September 23, 2010, plan sponsors of
non-collectively bargained plans could
elect to be exempt only from
requirements categories 4–7 listed above
and that requirements categories 1–3
were no longer available for
exemption.85 Group health plans
maintained pursuant to a collective
bargaining agreement ratified before
March 23, 2010, and that had been
exempted from any of the first three
requirements categories listed above,
would not have to come into
compliance with those requirements
categories until the commencement of
the first plan year following the
expiration of the last plan year governed
by the collective bargaining agreement.
On March 21, 2014, HHS published
proposed regulations in the Federal
Register that proposed to revise the
provisions of 45 CFR 146.180 to reflect
the amendments made by the Affordable
Care Act, consistent with the September
21, 2010, guidance.86 On May 27, 2014,
HHS finalized those proposed
regulations with modifications related
to how opt out elections must be filed.87
The CAA, 2023,88 enacted on
December 29, 2022, eliminated the
election for self-funded, non-Federal
governmental plans to opt out of
MHPAEA.89 Specifically, PHS Act
85 Office of Consumer Information and Insurance
Oversight, Amendments to the HIPAA opt-out
provision (formerly section 2721(b)(2) of the Public
Health Service Act) made by the Affordable Care
Act (Sept. 21, 2010), available at www.cms.gov/
CCIIO/Resources/Files/Downloads/opt_out_
memo.pdf.
86 79 FR 15808 (Mar. 21, 2014).
87 79 FR 30240 (May 27, 2014).
88 Public Law 117–328, 136 Stat. 4459.
89 Division FF, Title I, Subtitle C, Chapter 3, sec.
1321, Public Law 117–328, 136 Stat. 4459. As a
result of the CAA, 2023 amendments to PHS Act
section 2722(a)(2), self-funded, non-Federal
governmental plan sponsors may opt out of only the
following three PHS Act requirement categories:
Standards relating to benefits for newborns and
mothers (PHS Act section 2725), Required coverage
for reconstructive surgery following mastectomies
(PHS Act section 2727), and Coverage for
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section 2722(a)(2), as amended by the
CAA, 2023, provides that no election to
opt out of compliance with the
requirements of MHPAEA may be made
on or after December 29, 2022 (the date
of enactment of the CAA, 2023) and that
generally no such election with respect
to MHPAEA expiring on or after June
27, 2023 (the date that is 180 days after
the date of enactment of the CAA, 2023),
may be renewed.90 In addition, PHS Act
section 2722(a)(2), as amended by the
CAA, 2023, includes an exception for
certain collectively bargained plans.
Specifically, a self-funded, non-Federal
governmental plan that is subject to
multiple collective bargaining
agreements of varying lengths and that
has a MHPAEA opt-out election in effect
on December 29, 2022, that expires on
or after June 27, 2023, may extend such
election until the date on which the
term of the last collective bargaining
agreement expires.91
HHS issued a Bulletin on June 7,
2023, that informs self-funded, nonFederal governmental plans and other
interested parties about the CAA, 2023
amendments to PHS Act section
2722(a)(2), outlines when plans that
currently opt out of compliance with
MHPAEA are required to come into
compliance with these requirements,
and specifies the form and manner for
submission of opt-out renewal election
requests 92 to operationalize the special
rule for certain collectively bargained
plans.93
II. Overview of the Proposed Rules—
Departments of the Treasury, Labor,
and HHS
The Departments are proposing these
rules to further MHPAEA’s fundamental
goal of ensuring that limitations on
mental health and substance use
disorder benefits provided by group
health plans or health insurance issuers
offering group or individual health
insurance coverage are no more
restrictive than the predominant
limitations applicable to substantially
all medical/surgical benefits, and to
further implement important new
statutory requirements to ensure that
plans and issuers document their NQTL
comparative analyses and other
applicable information to demonstrate
dependent students on a medically necessary leave
of absence (PHS Act section 2728).
90 PHS Act section 2722(a)(2)(F)(i).
91 PHS Act section 2722(a)(2)(F)(ii).
92 See 45 CFR 146.180(b) and (f).
93 Center for Consumer Information and
Insurance Oversight, Insurance Standards Bulletin
Series—INFORMATION, Sunset of MHPAEA optout provision for self-funded, non-Federal
governmental group health plans (June 7, 2023),
available at https://www.cms.gov/files/document/
hipaa-opt-out-bulletin.pdf.
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51563
whether the processes, strategies,
evidentiary standards, and other factors
used to apply an NQTL to mental health
and substance use disorder benefits are
comparable to, and applied no more
stringently than, those used to apply the
limitation with respect to medical/
surgical benefits in the same benefit
classification. The goal of these
proposed rules is to ensure that
individuals with mental health
conditions and substance use disorders
can benefit from the full protections
afforded to them under MHPAEA, while
offering clear guidance to plans and
issuers on how to comply with
MHPAEA’s requirements.
These proposed rules would be
codified in 26 CFR part 54, 29 CFR part
2590, and 45 CFR parts 146 and 147.
Specifically, these proposed rules
would amend certain provisions of
existing MHPAEA regulations at 26 CFR
54.9812–1, 29 CFR 2590.712, and 45
CFR 146.136 to incorporate new and
revised definitions of key terms, as well
as to specify additional steps that plans
and issuers must take to meet their
obligations under MHPAEA. These
proposed rules also would add a new
regulation at 26 CFR 54.9812–2, 29 CFR
2590.712–1, and 45 CFR 146.137
establishing minimum standards for
developing NQTL comparative analyses
to assess whether an NQTL, as written
and in operation, complies with
MHPAEA’s requirements. In addition,
these proposed rules would set forth the
content elements of comparative
analyses and the timeframe for plans
and issuers to respond to a request from
the Departments to submit their
comparative analyses. Additionally,
HHS proposes an amendment to 45 CFR
147.160 to specify that proposed
regulations at 45 CFR 146.137 would
apply to individual health insurance
coverage offered by a health insurance
issuer in the same manner and to the
same extent that this proposed
provision would apply to health
insurance coverage offered by a health
insurance issuer in connection with a
group health plan in the large group
market.94 Consistent with the existing
text at 45 CFR 147.160(a), HHS also
proposes to extend the same
requirements and framework outlined in
the proposed amendments to 45 CFR
94 Non-grandfathered health insurance coverage
offered by a health insurance issuer in connection
with a group health plan in the small group market
is required to comply with the requirements under
PHS Act section 2726 to satisfy the requirement to
provide coverage for mental health and substance
use disorder services, including behavioral health
treatment, as part of EHB, and as such would also
be required to comply with the comparative
analysis requirements proposed under 45 CFR
146.137. See 45 CFR 156.115(a)(3).
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146.136 in these proposed rules to
individual health insurance coverage in
the same manner and to the same extent
as such proposed amendments, if
finalized, would apply to group health
insurance coverage. Finally, HHS also
proposes amendments to 45 CFR
146.180 to reflect the sunset of the
election option for self-funded, nonFederal governmental plans to opt out of
compliance with MHPAEA, consistent
with changes made by the CAA, 2023 to
PHS Act section 2722(a)(2).95
The Departments are soliciting public
comment on all aspects of these
proposed rules.
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A. Amendments to Existing Regulations
at 26 CFR 54.9812–1, 29 CFR 2590.712,
and 45 CFR 146.136
1. Purpose Section—26 CFR 54.9812–
1(a)(1), 29 CFR 2590.712(a)(1), and 45
CFR 146.136(a)(1)
In general, the fundamental purpose
of MHPAEA, its existing implementing
regulations, and these proposed rules is
to ensure that participants and
beneficiaries in a group health plan or
in group health insurance coverage
offered by a health insurance issuer that
offers mental health or substance use
disorder benefits are not subject to
greater restrictions, such as more
restrictive lifetime or annual dollar
limits, financial requirements, or
treatment limitations, when seeking
those benefits than when they seek
medical/surgical benefits under the
terms of the plan or coverage. This
should serve as the guiding principle for
group health plans and health insurance
issuers offering group health insurance
coverage as they work to comply with
MHPAEA and its implementing
regulations. While MHPAEA generally
does not mandate coverage of mental
health or substance use disorder
benefits, these proposed rules aim to
better ensure that plans and issuers that
cover such benefits implement
MHPAEA in accordance with its express
terms and fundamental purpose.
Accordingly, the Departments
propose to add a purpose section to the
regulations, specifying that a
fundamental purpose of MHPAEA and
its implementing regulations is to
ensure that participants and
beneficiaries covered under a plan or
health insurance coverage that offers
mental health or substance use disorder
benefits are not subject to more
restrictive lifetime or annual dollar
limits, financial requirements, or
treatment limitations with respect to
95 Division FF, Title I, Subtitle C, Chapter 3, sec.
1321, Public Law 117–328, 136 Stat. 4459 (Dec. 29.
2022).
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covered mental health and substance
use disorder benefits than the
predominant dollar limits, financial
requirements, or treatment limitations
that are applied to substantially all
medical/surgical benefits covered by the
plan or coverage.96 The purpose section
would further state that in complying
with the provisions of MHPAEA and its
implementing regulations, plans and
issuers must not design or apply
financial requirements and treatment
limitations that impose a greater burden
on access (that is, are more restrictive)
to mental health and substance use
disorder benefits under the plan or
coverage than plans and issuers impose
on access to generally comparable
medical/surgical benefits. Further, these
proposed rules provide that MHPAEA
and its implementing regulations should
be interpreted in a manner that is
consistent with this purpose. The
Departments seek comment on the
proposed addition of a purpose section
to the implementing regulations and the
proposed language.
2. Meaning of Terms—26 CFR 54.9812–
1(a)(2), 29 CFR 2590.712(a)(2), and 45
CFR 146.136(a)(2)
The Departments propose to amend
the 2013 final regulations to revise
several existing definitions, add new
definitions of key terms, and add
language to specify that, except where
the context clearly indicates otherwise,
the definitions in 26 CFR 54.9812–
1(a)(2), 29 CFR 2590.712(a)(2), and 45
CFR 146.136(a)(2) would also apply to
the new proposed comparative analysis
requirements set forth in proposed 26
CFR 54.9812–2, 29 CFR 2590.712–1, and
45 CFR 146.137, which are discussed in
more detail later in this preamble.97
Under MHPAEA, the term ‘‘medical
or surgical benefits’’ means benefits
with respect to medical or surgical
services, as defined under the terms of
the plan or coverage.98 This statutory
definition further clarifies that the term
96 While the Departments recognize the relevant
statutory text for dollar limits does not use the term
‘‘predominant’’ and different rules apply, the
purpose of MHPA 1996 was similar and therefore
the provisions for dollar limits should generally be
read and applied in a similar manner. See, e.g.,
Government Accountability Office (GAO), Mental
Health Parity Act, May 2000, at p. 13, available at
https://www.gao.gov/assets/hehs-00-95.pdf (‘‘To
help address the discrepancies in coverage between
mental and other illnesses, the Congress passed the
Mental Health Parity Act of 1996.’’).
97 To accommodate the proposed addition of the
‘‘purpose’’ provision in paragraph (a)(1), these
proposed rules would also redesignate the
definitions from paragraph (a) to paragraph (a)(2) of
26 CFR 54.9812–1, 29 CFR 2590.712, and 45 CFR
146.136.
98 Code section 9812(e)(3), ERISA section
712(e)(3), and PHS Act section 2726(e)(3).
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does not include mental health or
substance use disorder benefits.99 The
terms ‘‘mental health benefits’’ and
‘‘substance use disorder benefits’’ are
defined by the statute to mean benefits
with respect to services for mental
health conditions or substance use
disorders, respectively, as defined under
the terms of the plan and in accordance
with applicable Federal and State
law.100 The definitions of all three of
these terms included in the 2013 final
regulations further provide that any
condition defined by the plan or
coverage as being or as not being a
medical/surgical condition, mental
health condition, or substance use
disorder, respectively, must be defined
to be consistent with generally
recognized independent standards of
current medical practice (for example,
the most current version of the
Diagnostic and Statistical Manual of
Mental Disorders (DSM), the most
current version of the International
Classification of Diseases (ICD), or State
guidelines).
The Departments have received
questions from interested parties about
what it means for a definition of a
mental health condition or substance
use disorder to be ‘‘consistent with’’
generally recognized independent
standards of current medical practice,
and whether, for purposes of MHPAEA,
a condition is a medical condition, a
mental health condition, or a substance
use disorder when State insurance law
and generally recognized independent
standards of current medical practice
conflict. In response to these requests
for further guidance, the Departments
propose to amend the existing
regulatory definitions of the terms
‘‘medical/surgical benefits,’’ ‘‘mental
health benefits,’’ and ‘‘substance use
disorder benefits’’ to address these
questions and help delineate more
clearly what is a medical/surgical
benefit, a mental health benefit, or a
substance use disorder benefit for
purposes of complying with MHPAEA.
Specifically, the Departments propose
to amend the definition of the term
‘‘medical/surgical benefits’’ to mean
benefits with respect to items or services
for medical conditions or surgical
procedures, as defined under the terms
of the group health plan (or health
insurance coverage offered by an issuer
in connection with such a plan) and in
accordance with applicable Federal and
State law, but does not include mental
health benefits or substance use
disorder benefits. These proposed rules
99 Id.
100 See Code section 9812(e)(4)–(5), ERISA section
712(e)(4)–(5), and PHS Act section 2726(e)(4)–(5).
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would also amend this regulatory
definition of ‘‘medical/surgical benefits’’
to provide that, notwithstanding the
first sentence, any condition or
procedure defined by the plan or
coverage as being or not being a medical
condition or surgical procedure must be
defined consistent with generally
recognized independent standards of
current medical practice (for example,
the most current version of the ICD). To
the extent that generally recognized
independent standards of current
medical practice do not address whether
a condition or procedure is a medical
condition or surgical procedure, plans
and issuers may define the condition or
procedure as medical/surgical benefits,
as long as such definitions are in
accordance with applicable Federal and
State law.
The Departments propose to remove
the reference to State guidelines in the
definition of medical/surgical benefits.
This proposed amendment is more
consistent with the statute, and
importantly, would no longer allow
plans and issuers to rely on standards
that are not applicable to the plan or
coverage at issue in applying financial
requirements or treatment limitations to
mental health and substance use
disorder benefits.101 Generally
recognized independent standards of
current medical practice more
accurately align with how a plan should
characterize benefits for purposes of
compliance with MHPAEA, and this
provision would minimize situations
where contradictions with State
guidelines create conflicts and
improperly limit the protections under
MHPAEA.
The Departments propose to make
similar changes to the definitions of
‘‘mental health benefits’’ and ‘‘substance
use disorder benefits’’ by amending the
first sentences of these definitions,
removing the reference to State
guidelines, and clarifying that,
notwithstanding the terms of a plan or
coverage, any condition or disorder
defined by the plan or coverage as being
or not being a mental health condition
or a substance use disorder must be
defined to be consistent with generally
recognized independent standards of
current medical practice. Specifically,
under these proposed rules, to be
consistent with generally recognized
independent standards of current
medical practice, the plan’s or
coverage’s definition of ‘‘mental health
benefits’’ must include all conditions
covered under the plan or coverage,
except for substance use disorders, that
fall under any of the diagnostic
categories listed in the mental,
behavioral, and neurodevelopmental
disorders chapter (or equivalent
chapter) of the most current version of
the ICD or that are listed in the most
current version of the DSM. Similarly,
the plan’s or coverage’s definition of
‘‘substance use disorders’’ must include
all disorders covered under the plan or
coverage that fall under any of the
diagnostic categories listed as a mental
or behavioral disorder due to
psychoactive substance use (or
equivalent category) in the mental,
behavioral, and neurodevelopmental
disorders chapter (or equivalent
chapter) of the most current version of
the ICD or that are listed as a SubstanceRelated and Addictive Disorder (or
equivalent category) in the most current
version of the DSM.102 Similar to the
proposed revisions to the definition of
‘‘medical/surgical benefits,’’ the
proposed amended definitions of
‘‘mental health benefits’’ and ‘‘substance
use disorder benefits’’ also provide that,
to the extent generally recognized
independent standards of current
medical practice do not address whether
a condition or disorder is a mental
health condition or substance use
disorder, respectively, plans and issuers
may define the condition or disorder in
accordance with applicable Federal and
State law.
The ICD would be defined as the
World Health Organization’s
International Classification of Diseases
adopted by HHS through 45 CFR
162.1002 or successor regulations, and
the DSM would be defined as the
American Psychiatric Association’s
Diagnostic and Statistical Manual of
Mental Disorders. Because the proposed
amendments to the definitions of
‘‘medical/surgical benefits,’’ ‘‘mental
health benefits,’’ and ‘‘substance use
disorder benefits,’’ refer to the most
current version of the ICD or DSM,
respectively, these proposed rules also
explain how to determine which version
is the most current as of a particular
date. This serves to provide plans and
101 For example, some self-insured ERISA plans
have argued that they can rely on State insurance
law definitions that characterize a particular
condition as a medical condition, mental health
condition, or substance use disorder based on State
guidelines despite the fact that State insurance law
is generally not applicable to self-insured ERISA
plans and such plans do not otherwise consistently
comply with State insurance law.
102 Substance use disorders that fall under any of
the diagnostic categories listed in the mental and
behavioral health disorders chapter of the most
current version of the ICD or that are listed in the
most current version of the DSM would be excluded
from the definition of the term ‘‘mental health
benefits’’ because they would be included in the
definition of the term ‘‘substance use disorder
benefits.’’
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issuers with clarity on when they would
be required to begin to rely on a new
version of the ICD or DSM after it is
released, and sufficient time after the
adoption of an updated version of the
ICD or DSM to ensure that the terms of
their plan or coverage are consistent
with any changes made from the
previous version. The definitions would
specify that, for purposes of compliance
with these proposed rules, the most
current version of the ICD or DSM,
respectively, would be that which is
applicable no earlier than on the date
that is 1 year before the first day of the
applicable plan year.
These proposed rules also would
permit plans and issuers to use a more
current version of the ICD or DSM than
the version in effect 1 year before the
first day of the applicable plan year. In
addition, the Departments recognize
that future versions of the ICD or DSM
may include revisions to the categories
of conditions or disorders or chapters
listed in the proposed amended
definitions for ‘‘mental health benefits’’
and ‘‘substance use disorder benefits,’’
which could affect the characterization
of a benefit under MHPAEA. Therefore,
the proposed amended definitions for
these two terms also refer to ‘‘equivalent
categories’’ and ‘‘equivalent chapters’’ to
help plans and issuers understand how
they would apply the proposed
definitions, if finalized, and how to
implement such changes if they are
made in the future. The Departments
request comments on this aspect of
these proposed amended definitions.
To ensure parity between mental
health and substance use disorder
benefits and medical/surgical benefits, it
is critical that plans and issuers define
mental health conditions and substance
use disorders in a manner consistent
with the purposes of MHPAEA. While
plans and issuers have some discretion
in defining mental health benefits and
substance use disorder benefits, this
discretion must be exercised in a
manner that comports with generally
recognized independent standards of
current medical practice. Moreover, the
proposed amended definitions for
‘‘medical/surgical benefits,’’ ‘‘mental
health benefits,’’ and ‘‘substance use
disorder benefits’’ specify that plans and
issuers may use applicable State law to
inform their definitions, but only to the
extent that those laws are consistent
with and do not contradict generally
recognized independent standards of
current medical practice (or to the
extent these standards do not address
whether a condition or disorder is a
medical condition or surgical procedure
or a mental health condition or
substance use disorder). Under both the
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2013 final regulations and these
proposed rules, plans and issuers must
be prepared to provide supporting
documentation to demonstrate that the
way the plan or issuer has defined a
condition or disorder for purposes of
MHPAEA is consistent with generally
recognized independent standards of
current medical practice. The
Departments solicit comments on
whether any additional clarification is
needed on how State law may interact
with the proposed amended definitions
for these key terms.
As discussed earlier in this section of
the preamble, the Departments are
proposing these amendments to the
definitions of the terms ‘‘medical/
surgical benefits,’’ ‘‘mental health
benefits,’’ and ‘‘substance use disorder
benefits’’ in part to ensure that the use
of State laws does not prevent the
application of MHPAEA’s protections
with respect to conditions or disorders
that are recognized as mental health
conditions and substance use disorders
under generally recognized independent
standards of current medical practice.
The Departments recognize that States
may enact various laws for different
purposes. Therefore, the Departments
are proposing to make clear that when
a plan or issuer relies upon a State law
to inform its definitions for purposes of
MHPAEA, the plan or issuer must
ensure that definitions operate to apply
MHPAEA’s protections to mental health
conditions and substance use disorders,
as they are generally defined by the
medical community. The Departments
also clarify that under the proposed
framework, to the extent a State law or
generally recognized independent
standards of current medical practice
define a condition or disorder as a
mental health condition or substance
use disorder, plans and issuers must
treat all benefits for the condition or
disorder as mental health benefits or
substance use disorder benefits,
respectively, for purposes of analyzing
parity and compliance with MHPAEA.
The Departments solicit comments on
any potential challenges of applying
MHPAEA to all benefits for a mental
health condition or substance use
disorder where items and services can
be delivered for both medical conditions
or surgical procedures and mental
health conditions or substance use
disorders, and whether additional
clarifications or modifications to the
proposed definitions are necessary.
Interested parties also have requested
that the Departments confirm whether
specific conditions are mental health
conditions for purposes of MHPAEA.
Under these proposed rules, as under
the existing MHPAEA regulations and
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section 13007 of the Cures Act,103 the
Departments confirm that eating
disorders, such as anorexia nervosa,
bulimia nervosa, and binge-eating
disorder, are mental health conditions
under generally recognized independent
standards of current medical practice.104
Therefore, benefits for treatment of
eating disorders are mental health
benefits for purposes of MHPAEA and
may not be defined as medical/surgical
benefits under a plan or coverage.105
Similarly, in response to questions
from interested parties, these proposed
rules would make clear that, for
purposes of MHPAEA, ASD is a mental
health condition under generally
recognized independent standards of
current medical practice.106 Therefore,
under the proposed amended definition
and framework established in these
proposed rules, if a plan or issuer
generally provides benefits for ASD,
ASD may not be defined by the plan or
issuer as a medical/surgical condition.
In addition, the plan or issuer may not
impose any financial requirements or
treatment limitations in a classification
on benefits for ASD treatment that are
more restrictive than the predominant
financial requirements or treatment
limitations that apply to substantially
all medical/surgical benefits in the
classification. The plan or issuer also
may not impose any financial
requirements or treatment limitations,
including exclusions for Applied
Behavior Analysis (ABA) therapy (one
of the primary treatments for ASD), that
are separately applicable to ASD
benefits in a classification and not to
any medical/surgical benefits in the
same classification. The Departments
propose to incorporate new examples
illustrating the application of MHPAEA
to eating disorders and ASD, as
discussed later in this preamble. The
Departments solicit comments on other
specific mental health conditions or
substance use disorders that may
warrant additional clarification for
purposes of analyzing parity and
compliance with MHPAEA.
103 Section 13007 of the Cures Act states that, if
a plan or an issuer offering group or individual
health insurance coverage provides coverage for
eating disorder benefits, including residential
treatment, such group health plan or health
insurance issuer shall provide such benefits
consistent with the requirements of MHPAEA.
104 See, e.g., Diagnostic and Statistical Manual of
Mental Disorders (5th ed.), section II, Feeding and
Eating Disorders; ICD–10, Chapter 05.
105 The Departments previously clarified that
eating disorders are mental health conditions, and
therefore treatment of an eating disorder is a mental
health benefit, in FAQs Part 38, Q1. See DSM (5th
ed.), section II, Feeding and Eating Disorders.
106 See DSM (5th ed.), section II, Autism
Spectrum Disorder.
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In addition to the proposals outlined
above to amend certain existing
definitions, these proposed rules also
would add several new definitions to
codify the meaning of terms used in
paragraph (c)(4)(i) of the 2013 final
regulations, which requires the
processes, strategies, evidentiary
standards, and other factors used in
applying an NQTL to mental health or
substance use disorder benefits to be
comparable to, and no more stringently
applied than those used to apply the
NQTL to medical/surgical benefits in
the same classification. These terms and
the standard were incorporated into
MHPAEA’s statutory language in the
amendments made by the CAA, 2021.107
The Departments propose to add new
definitions for the terms ‘‘processes,’’
‘‘strategies,’’ ‘‘evidentiary standards,’’
and ‘‘factors’’ to the list of definitions
for key terms proposed to be included
in 26 CFR 54.9812–1(a)(2), 29 CFR
2590.712(a)(2), and 45 CFR
146.136(a)(2) of these proposed rules.
These new definitions would provide
clarity to plans and issuers, as well as
to State regulators and participants and
beneficiaries, and help facilitate
compliance with the provisions of these
proposed rules related to NQTLs and
the development of sufficient
comparative analyses required under
the CAA, 2021 and proposed 26 CFR
54.9812–2, 29 CFR 2590.712–1, and 45
CFR 146.137. Although the Departments
have issued guidance with examples
that demonstrate how these terms apply,
interested parties have stated that it can
be difficult to determine what
constitutes relevant processes,
strategies, evidentiary standards, and
other factors. The Departments solicit
comments on these proposed
definitions, including any alternate
definitions or additional clarifications
that should be considered.
The Departments propose to add a
definition of the term ‘‘evidentiary
standards’’ to mean any evidence,
sources, or standards that a group health
plan (or health insurance issuer offering
coverage in connection with such a
plan) considered or relied upon in
designing or applying a factor with
respect to an NQTL, including specific
benchmarks or thresholds. The
proposed definition further provides
that evidentiary standards may be
empirical, statistical, or clinical in
nature, and include sources acquired or
originating from an objective third
party, such as recognized medical
literature, professional standards and
107 See, e.g., Code section 9812(a)(8)(A), ERISA
section 712(a)(8)(A), and PHS Act section
2726(a)(8)(A).
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protocols (which may include
comparative effectiveness studies and
clinical trials), published research
studies, payment rates for items and
services (such as publicly available
databases of the ‘‘usual, customary, and
reasonable’’ rates paid for items and
services), and clinical treatment
guidelines. The proposed definition
provides that evidentiary standards
would also include internal plan or
issuer data, such as claims or utilization
data or criteria for assuring a sufficient
mix and number of network providers,
and benchmarks or thresholds, such as
measures of excessive utilization, cost
levels, time or distance standards, or
network participation percentage
thresholds.
Under these proposed rules,
evidentiary standards generally would
not be considered factors, but instead
would be considered or relied upon in
designing or applying a factor. Under
the framework established in the 2013
final regulations, the terms within the
phrase ‘‘processes, strategies,
evidentiary standards, and other
factors’’ were treated as having
overlapping meanings, and specifically,
the term ‘‘other factors’’ was treated as
a catch-all. The CAA, 2021 codified in
the statute the phrase ‘‘processes,
strategies, evidentiary standards, and
other factors.’’ 108 However, the CAA,
2021 added to MHPAEA other
references to factors and evidentiary
standards that indicate the drafters
meant to distinguish between factors
and evidentiary standards. For example,
Code section 9812(a)(8)(A)(iii), ERISA
section 712(a)(8)(A)(iii), and PHS Act
2726(a)(8)(A)(iii) refer to the evidentiary
standards that are used for the factors to
determine that an NQTL will apply to
benefits, and those provisions go on to
distinguish between factors and any
other sources or evidence relied upon to
design or apply an NQTL. The proposed
definition of evidentiary standards is
consistent with the use of these terms by
Congress in the CAA, 2021 amendments
to MHPAEA and the Departments’ goal
of clarifying the meanings of these terms
to help the regulated community
comply with MHPAEA’s requirements.
The Departments request comments on
this approach, including whether there
are any circumstances under which an
evidentiary standard should also be
considered a factor under these
proposed rules (such as, for example,
when the plan or issuer only relies upon
a single evidentiary standard to design
108 Code section 9812(a)(7)(B)(ii)(II) and (8)(A)(iv),
ERISA section 712(a)(7)(B)(ii)(II) and (8)(A)(iv), and
PHS Act section 2726(a)(7)(B)(ii)(II) and (8)(A)(iv).
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or apply an NQTL, and no additional
processes, strategies, or other factors).
The Departments also propose to
clarify that the definition of the term
‘‘factors’’ should be read broadly, so that
factors are all information, including
processes and strategies (but generally
not evidentiary standards), that a group
health plan (or health insurance issuer
offering coverage in connection with
such a plan) considered or relied upon
to design an NQTL or used to determine
whether or how the NQTL applies to
benefits under the plan or coverage. The
proposed definition of the term
‘‘factors’’ also would include
information (but generally not
evidentiary standards) that the plan or
issuer considered but rejected,
consistent with previous guidance on
MHPAEA in the context of the
documents or plan information the
Departments consider relevant to a
compliance determination.109 The
proposed definition also provides
examples of factors, which include, but
are not limited to, provider discretion in
determining diagnosis or type or length
of treatment; clinical efficacy of any
proposed treatment or service; licensing
and accreditation of providers; claim
types with a high percentage of fraud;
quality measures; treatment outcomes;
severity or chronicity of condition;
variability in the cost of an episode of
treatment; high cost growth; variability
in cost and quality; elasticity of
demand; and geographic location.
Under these proposed rules, factors
would include processes and strategies,
but the Departments note that there may
be factors that do not satisfy the
proposed definitions of ‘‘processes’’ or
‘‘strategies.’’ By defining the term
‘‘factor’’ broadly, the Departments
intend to capture any information used
to design or apply an NQTL (other than
evidentiary standards generally),
regardless of whether a plan or issuer
believes that information could also be
characterized as a process or a strategy,
as those terms are proposed to be
defined under these proposed rules.
Additionally, the Departments
propose to define ‘‘processes’’ and
‘‘strategies’’ as types of factors, in a
manner that makes clear the differences
between the two terms as they relate to
109 See FAQs Part 31, Q9, which states that a plan
must provide documents and plan information to a
participant or beneficiary, or their authorized
representative, including the specific underlying
processes, strategies, evidentiary standards, and
other factors (including, but not limited to, all
evidence) considered by the plan (including factors
that were relied upon and were rejected) in
determining that the NQTL will apply to a
particular mental health and substance use disorder
benefit or any medical/surgical benefits within the
benefit classification at issue.
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the design and application of an NQTL.
Specifically, the Departments would
define ‘‘processes’’ as relating to the
application of an NQTL, while
‘‘strategies’’ would relate to the design
of an NQTL.
The Departments therefore propose to
define ‘‘processes’’ to mean actions,
steps, or procedures that a plan or issuer
uses to apply an NQTL. ‘‘Processes’’
would include requirements established
by the plan or issuer for a participant or
beneficiary to access benefits, including
through actions by a participant’s or
beneficiary’s authorized representative,
or a provider or facility. The proposed
definition further provides that
processes include, but are not limited
to: procedures to submit information to
authorize coverage for an item or service
prior to receiving the benefit or while
treatment is ongoing (including
requirements for peer or expert clinical
review of that information); provider
referral requirements; and the
development and approval of a
treatment plan. The proposed definition
also provides that processes include the
specific procedures used by staff or
other representatives of a plan or issuer
(or the service provider of a plan or
issuer) to administer the application of
NQTLs, such as: how a panel of staff
members applies the NQTL (including
the qualifications of staff involved,
number of staff members allocated, and
time allocated); consultations with
panels of experts in applying the NQTL;
and reviewer discretion in adhering to
criteria hierarchy when applying an
NQTL.
These proposed rules would define
‘‘strategies’’ as practices, methods, or
internal metrics that a plan or issuer
considers, reviews, or uses to design an
NQTL. The proposed definition
provides that examples of strategies
include, but are not limited to: the
development of the clinical rationale
used in approving or denying benefits;
deviation from generally accepted
standards of care; the selection of
information (such as from medical or
clinical guidelines) deemed reasonably
necessary to make a medical necessity
determination; reliance on treatment
guidelines or guidelines provided by
third-party organizations; and rationales
used in selecting and adopting certain
threshold amounts, professional
protocols, and fee schedules. These
proposed rules would further specify
that strategies also include the creation
and composition of the staff or other
representatives of a plan or issuer (or
the service provider of a plan or issuer)
that deliberates, or otherwise makes
decisions, on the design of NQTLs,
including the plan’s decisions related to
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qualifications of staff involved, number
of staff members allocated, and time
allocated; breadth of sources and
evidence considered; consultations with
panels of experts in designing the
NQTL; and the composition of the
panels used to design an NQTL.
To illustrate the interaction of the
definitions of these terms, a plan might
rely on various combinations of
processes, strategies, evidentiary
standards, and other factors in designing
and applying a prior authorization
NQTL for in-network, non-hospitalbased, inpatient/residential facilities for
non-emergency medical/surgical or
mental health or substance use disorder
treatment. For example, the strategies
used by the plan to design the NQTL
could include the development of the
clinical rationales the plan used in
determining when to approve or deny
benefits for the facility, and the
composition of the staff of the plan that
chose what information would be
deemed necessary to determine whether
a participant or beneficiary has an
immediate, clinically valid need for
treatment at the facility. The processes
the plan used in applying the NQTL
could include the specific steps a
participant or beneficiary (or their
authorized representative, including
their provider or the facility) would
need to take to obtain prior
authorization, such as obtaining a
written treatment plan. The processes
would also include the procedures used
by staff or other representatives of the
plan (or the service provider of the plan)
in determining whether a particular
request for prior authorization would be
approved. These processes and
strategies would also be considered
factors, as would the licensing and
accreditation requirements for nonhospital-based, inpatient/residential
facilities and the severity or chronicity
of a patient’s condition when they are
seeking treatment at such a facility.
Finally, the evidentiary standards used
to design or apply the factors would
include, for example, the benchmarks or
thresholds the plan uses to inform the
number of days of treatment at the
facility that would be authorized at one
time, as well as published research
studies on the efficacy of the treatment
in this particular facility setting.
Finally, the Departments propose to
amend the definition of ‘‘treatment
limitation’’ to clarify that the illustrative
list of NQTLs to which the definition
refers is non-exhaustive, and to amend
the last sentence to state that a complete
exclusion of all benefits for a particular
condition or disorder is not a treatment
limitation for purposes of this
definition. By changing the existing
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reference in the definition from a
‘‘permanent’’ exclusion to a ‘‘complete’’
exclusion, the proposed amended
definition of ‘‘treatment limitation’’
would better reflect a plan’s or issuer’s
ability to amend the terms of their plan
or coverage and affirm that this part of
the definition refers to an exclusion of
all benefits for a particular condition or
disorder.
While NQTLs are generally defined as
treatment limitations that are not
expressed numerically, the application
of an NQTL in a numerical way does not
modify its nonquantitative character
simply because the NQTL sometimes
involves numerical standards. For
example, standards to participate in a
network would be NQTLs because such
standards are treatment limitations that
typically are not expressed numerically.
Nevertheless, these standards
sometimes rely on or involve numerical
standards, such as reimbursement rates.
In this case, the numerical expression of
a reimbursement rate does not modify
the nonquantitative character of the
standards related to network
composition. Therefore, such standards
would still be evaluated in accordance
with the rules for NQTLs under the
statute and these proposed rules.
The Departments solicit comments on
all aspects of these proposed
amendments to existing definitions, as
well as the new proposed definitions.
The Departments also request comment
on what additional clarifications or
examples might be helpful in
understanding these amended and new
proposed defined terms.
3. Nonquantitative Treatment
Limitations—26 CFR 54.9812–1(c)(4), 29
CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4)
As explained earlier in this preamble,
the Departments are proposing changes
that are designed to prevent plans and
issuers from designing and
implementing NQTLs that impose
greater limits on access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
These proposed rules would add
additional requirements for plans and
issuers that apply NQTLs with respect
to mental health and substance use
disorder benefits, to prevent the
imposition of a greater burden on
participants and beneficiaries accessing
those benefits, while preserving the
ability of plans and issuers to impose
those NQTLs to the extent they are
consistent with generally recognized
independent professional medical or
clinical standards or standards related
to fraud, waste, and abuse. Subject to
those two narrow exceptions, these
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proposed rules provide that plans and
issuers would not be permitted to
impose an NQTL unless (1) the NQTL
is no more restrictive as applied to
mental health and substance use
disorder benefits than to medical/
surgical benefits (also referred to in this
preamble as the no more restrictive
requirement); 110 (2) the plan or issuer
satisfies requirements related to the
design and application of the NQTL
(also referred to in this preamble as the
design and application
requirements); 111 and (3) the plan or
issuer collects, evaluates, and considers
the impact of relevant data on access to
mental health and substance use
disorder benefits relative to access to
medical/surgical benefits; and
subsequently takes reasonable action as
necessary to address any material
differences in access shown in the data
to ensure compliance with MHPAEA
(also referred to in this preamble as the
relevant data evaluation
requirements).112
The proposed rules do not require or
suggest a particular sequence to the
analysis for evaluating compliance, and
no inferences should be drawn from the
order in which each of these
independent requirements appear in the
proposed regulatory text. For example, a
plan or issuer designing or applying an
NQTL with respect to mental health or
substance use disorder benefits could
begin analyzing compliance with
MHPAEA by looking at the design and
application requirements under these
proposed rules before fully evaluating
whether the NQTL with respect to
mental health or substance use disorder
benefits complies with the no more
restrictive requirement. Additionally, if
a plan or issuer, in the process of
complying with the relevant data
evaluation requirements, identifies
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits, those differences
would be considered a strong indicator
that the plan or issuer violated the
proposed no more restrictive
requirement or the design and
application requirements.113 In such
110 Proposed 26 CFR 54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i).
111 Proposed 26 CFR 54.9812–1(c)(4)(ii), 29 CFR
2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii).
112 Proposed 26 CFR 54.9812–1(c)(4)(iv), 29 CFR
2590.712(c)(4)(iv), and 45 CFR 146.136(c)(4)(iv).
113 But see the special rule for NQTLs related to
network composition at proposed 26 CFR 54.9812–
1(c)(4)(iv)(C), 29 CFR 2590.712(c)(4)(iv)(C), and 45
CFR 146.136(c)(4)(iv)(C), which states that, when
designing and applying one or more NQTLs related
to network composition standards, a plan fails to
meet the no more restrictive requirement and the
design and application requirements, in operation,
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instances, if the plan or issuer took the
additional steps required under the
material differences requirement at 26
CFR 54.9812–1(c)(4)(iv)(B), 29 CFR
2590.712(c)(4)(iv)(B), or 45 CFR
146.136(c)(4)(iv)(B) (and the special rule
for NQTLs related to network
composition at 26 CFR 54.9812–
1(c)(4)(iv)(C), 29 CFR
2590.712(c)(4)(iv)(C), or 45 CFR
146.136(c)(4)(iv)(C) did not apply), then
the plan or issuer would meet all three
independent requirements.114 The
Departments solicit comments on this
proposed approach.
If a plan or issuer fails to meet any of
the three requirements with respect to
an NQTL in a classification, these
proposed rules state that the NQTL
would violate MHPAEA and may not be
imposed on mental health or substance
use disorder benefits in the
classification. Where a plan or issuer
fails to satisfy the requirements of one
part of these proposed rules for NQTLs,
the plan or issuer must make changes to
the terms of the plan or coverage or the
way the NQTL is designed or applied to
ensure compliance with MHPAEA.
These proposed rules also would
prohibit plans and issuers from relying
upon any factor or evidentiary standard
if the information, evidence, sources, or
standards on which the factor or
evidentiary standard is based
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical
benefits.115 Additionally, the proposed
rules would require plans and issuers to
collect and evaluate relevant outcomes
data and address any material
differences in access between mental
health and substance use disorder
benefits and medical/surgical benefits as
necessary to ensure compliance. This
proposed provision also would impose
a special rule for NQTLs related to
network composition.116
if the relevant data show material differences in
access to in-network mental health and substance
use disorder benefits as compared to in-network
medical/surgical benefits in a classification.
114 The plan or issuer would also be required to
document any steps taken in accordance with the
material differences requirement (and the special
rule for NQTLs related to network composition, if
applicable) as part of its comparative analyses. Even
if the plan or issuer had assessed compliance prior
to the steps taken in accordance with the material
differences requirement and the special rule for
NQTLs related to network composition, the plan or
issuer would be required to re-evaluate whether the
no more restrictive requirement and the design and
application requirements are met with respect to
the adjusted NQTL.
115 Proposed 26 CFR 54.9812–1(c)(4)(ii)(B), 29
CFR 2590.712(c)(4)(ii)(B), and 45 CFR
146.136(c)(4)(ii)(B).
116 Proposed 26 CFR 54.9812–1(c)(4)(iv)(C), 29
CFR 2590.712(c)(4)(iv)(C), and 45 CFR
146.136(c)(4)(iv)(C).
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Finally, these proposed rules would
make clear that a plan or issuer that has
received a final determination of
noncompliance under the comparative
analysis review process established by
the CAA, 2021, including a final
determination of noncompliance based
on failure to provide a sufficient
comparative analysis, also could be in
violation of the substantive
requirements that apply to NQTLs
under MHPAEA, as determined by the
Departments. Upon such a
determination, the Departments would
direct the plan or issuer to not impose
the NQTL that is the subject of the
comparative analysis, unless and until
the plan or issuer can demonstrate
compliance or take appropriate action to
remedy the violation.117 The
Departments request comments on all
aspects of these proposed amendments
and additions to the rules regarding
NQTLs.
a. Requirement That NQTLs be No More
Restrictive for Mental Health and
Substance Use Disorder Benefits—26
CFR 54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i)
These proposed rules, if finalized,
would redesignate, from what is
currently 26 CFR 54.9812–1(c)(4)(i), 29
CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) to 26 CFR 54.9812–
1(c)(4)(ii)(A), 29 CFR 2590.712
(c)(4)(ii)(A), and 45 CFR
146.136(c)(4)(ii)(A), the general rule for
evaluating NQTLs, and add new
language to these paragraphs to impose
additional requirements for NQTLs. As
noted elsewhere in the preamble, these
proposed rules would provide that a
plan or issuer may not apply any NQTL
to mental health or substance use
disorder benefits in any classification
that is more restrictive, as written or in
operation, than the predominant NQTL
that applies to substantially all medical/
surgical benefits in the same
classification.118 While the 2013 final
regulations largely relied on an analysis
of the processes, strategies, evidentiary
standards, and other factors used in the
application of NQTLs, proposed 26 CFR
54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) is consistent with the
fundamental purpose of MHPAEA and
117 Proposed 26 CFR 54.9812–1(c)(4)(vii), 29 CFR
2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii).
118 As explained later in this preamble, the
Departments are also proposing to add clarifying
language to these proposed rules to make clear that
any references to the term ‘‘classifications’’ in
MHPAEA’s implementing regulations also includes
permissible sub-classifications, including with
respect to NQTLs.
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more closely mirrors the statutory
language in Code section 9812(a)(3)(A),
ERISA section 712(a)(3)(A), and PHS
Act 2726(a)(3)(A), which states that
plans and issuers ‘‘. . . shall ensure that
. . . the treatment limitations applicable
to . . . mental health or substance use
disorder benefits are no more restrictive
than the predominant treatment
limitations applied to substantially all
medical and surgical benefits covered
by the plan ([or coverage]) . . . .’’
To that end, the proposed rules
provide an explanation of how the terms
‘‘restrictive,’’ ‘‘substantially all,’’ and
‘‘predominant’’ would apply in the
context of the no more restrictive
requirement in proposed 26 CFR
54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i). To comply with these
proposed rules, if finalized, plans and
issuers would be required to follow
similar steps to those that apply when
analyzing parity with respect to
financial requirements or quantitative
treatment limitations under the 2013
final regulations. These steps would
involve determining the portion of plan
payments for medical/surgical benefits
subject to an NQTL in a classification;
whether the NQTL applies to
substantially all medical/surgical
benefits in the classification; the
predominant variation of the NQTL that
applies to medical/surgical benefits in
the classification; and whether the
NQTL, as applied to mental health and
substance use disorder benefits in the
classification, is more restrictive than
the predominant variation of the NQTL
as applied to substantially all medical/
surgical benefits.
First, in determining whether an
NQTL applies to substantially all
medical/surgical benefits in a
classification, plans and issuers would
be required to determine the portion of
plan payments for medical/surgical
benefits expected to be subject to the
NQTL based on the dollar amount of all
plan payments for medical/surgical
benefits in the classification expected to
be paid under the plan or coverage for
the plan year (or the portion of the plan
year after a change in benefits that
affects the applicability of the NQTL).
Similar to the longstanding rules for
financial requirements and quantitative
treatment limitations, these proposed
rules would provide that for NQTLs,
any reasonable method may be used to
determine the dollar amount expected
to be paid under the plan or coverage for
medical/surgical benefits. In the
Departments’ view, for a method to be
reasonable with respect to large group
market and self-insured group health
plans, a plan or issuer would be
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required to consider group health planlevel claims data to perform the
substantially all and predominant
analyses, and must rely on such data if
it is credible to perform the required
projections.119 Similarly, for small
group market plans, an issuer would be
required to consider ‘‘plan’’-level (as
opposed to the ‘‘product’’-level) claims
data to perform the substantially all
analysis, using the definitions of ‘‘plan’’
and ‘‘product’’ in 45 CFR 144.103, and
would be required to rely on such data
if it is credible to perform the required
projections.120 However, if an actuary
who is subject to and meets the
qualification standards for the issuance
of a statement of actuarial opinion
regarding health plans in the United
States,121 including having the
necessary education and experience to
provide the actuarial opinion,
determines that a group health plan or
issuer does not have sufficient data at
the plan level for a reasonable
projection of future claims costs for the
‘‘substantially all’’ analyses, the group
health plan or issuer should utilize
other reasonable claims data to make a
projection to conduct actuariallyappropriate analyses. As part of using a
‘‘reasonable method’’ to make these
projections, plans and issuers should
document the assumptions used in
choosing a data set and making
projections. Plans and issuers would not
be required to perform the parity
analysis under proposed 26 CFR
54.9812–1(c)(4)(i), 29 CFR 2590.712
(c)(4)(i), and 45 CFR 146.136(c)(4)(i)
each plan year unless there is a change
in plan benefit design or utilization that
would affect an NQTL within a
classification. The Departments solicit
comments on whether there are any
challenges or other considerations with
this approach regarding which level of
119 See FAQs Part 34, Q3 (interpreting the
reasonable method requirement with respect to
financial requirements and quantitative treatment
limits).
120 45 CFR 144.103 generally defines ‘‘product’’ as
a discrete package of health insurance coverage
benefits offered using a particular product network
type within a service area, and ‘‘plan’’ as the pairing
of the health insurance coverage benefits under the
product with a particular cost-sharing structure,
provider network, and service area. In this context,
the term ‘‘plan’’ is not synonymous with the term
‘‘group health plan.’’ This approach would also
apply to individual health insurance coverage
under HHS regulations that incorporate the group
market rules by reference.
121 The U.S. Qualification Standards apply to
members of the six U.S.-based organizations who
issue Statements of Actuarial Opinion in the United
States. The organizations are the American
Academy of Actuaries, American Society of Pension
Professionals and Actuaries, American Society of
Enrolled Actuaries, Casualty Actuarial Society,
Conference of Consulting Actuaries, and Society of
Actuaries.
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data plans and issuers should look to in
performing this prong of the analysis,
and whether there should be a different
standard given the different nature of
NQTLs.
Second, plans and issuers would be
required to determine whether the
NQTL applies to substantially all
medical/surgical benefits in the
classification, based on the plan
payments for medical/surgical benefits
subject to an NQTL as a portion of the
dollar amount of all plan payments for
medical/surgical benefits in the
classification expected to be paid under
the plan for the plan year. An NQTL
would be considered to apply to
substantially all medical/surgical
benefits in a classification if it applies
to at least two-thirds of all medical/
surgical benefits in that classification.
Whether the NQTL applies to at least
two-thirds of all medical/surgical
benefits would be determined without
regard to whether the NQTL was
triggered based on a particular factor or
evidentiary standard. For example, if a
plan or issuer applies a general
exclusion for all benefits in a
classification that are for experimental
or investigative treatment, and defines
experimental or investigative treatment
to be treatments with less than a certain
number of peer-reviewed studies
demonstrating efficacy, the exclusion
would be treated as applying to all of
the benefits in the classification—not
just those that may be subject to the
general exclusion for experimental or
investigative treatment because they
lack the requisite number of peerreviewed studies (that is, those that
actually triggered the NQTL based on
the evidentiary standard). These
proposed rules further provide that if an
NQTL does not apply to at least twothirds of all medical/surgical benefits in
a classification, then that NQTL would
not be permitted to be applied to mental
health or substance use disorder
benefits in that classification.
The Departments request comment on
whether any additional clarification is
needed for plans and issuers to
determine whether an NQTL applies to
substantially all medical/surgical
benefits in a classification. The
Departments acknowledge that there are
significant differences between financial
requirements or quantitative treatment
limitations and NQTLs and therefore
also request comments on whether
plans and issuers maintain systems
capable of making such determinations
and the potential administrative
burdens that would be associated with
such determinations. Specifically, the
Departments are interested in feedback
on the approach under these proposed
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rules for determining substantially all
medical/surgical benefits in a
classification with respect to certain
NQTLs, including those that are used to
exclude benefits under the plan or
coverage (such as exclusions for
experimental or investigational
treatment). The Departments also solicit
comments on the interaction of this
approach with other statutory
requirements for plans and issuers
prohibiting certain NQTLs on medical/
surgical benefits (such as the
prohibition on prior authorization for
any minimum hospital length of stay
after childbirth under the Newborns’
and Mothers’ Health Protection Act 122).
If an NQTL applies to substantially all
medical/surgical benefits in a
classification, the third step would
require plans and issuers to determine
the predominant variation of the NQTL
that is applied to substantially all
medical/surgical benefits subject to the
NQTL in the classification. The
Departments propose that the term
‘‘predominant’’ would, for this purpose,
mean the most common or most
frequent variation of an NQTL within a
benefit classification. For example, if a
plan applies inpatient concurrent
review commencing 1 day, 3 days, or 7
days after admission, depending on the
reason for a stay in a hospital or other
inpatient facility, or the procedure
performed during such a stay, the plan
imposes three different variations of the
NQTL within the benefit classification.
Under this example, to determine which
variation is predominant, the plan
would determine the portion of
inpatient benefits subject to each of the
three different variations of the NQTL
based on the dollar amount of all plan
payments expected to be paid under the
plan or coverage for the plan year (or the
portion of the plan year after a change
in benefits that affects the applicability
of the NQTL). Similarly, if a plan
applies an NQTL such as prior
authorization in a manner that differs
based on the manner of review (autoadjudication vs. manual review) and the
number of levels of review (first-level
review vs. first-level review and peer-topeer review), the plan would regard
each unique combination as a separate
variation. If the plan or issuer imposes
only one variation of an NQTL, that
variation is considered the predominant
NQTL for purposes of the no more
restrictive requirement.
Variations of an NQTL for purposes of
the determination of which is
122 Code section 9811, ERISA section 711, and
PHS Act sections 2725 and 2751; 26 CFR 54.9811–
1, 29 CFR 2590.711, and 45 CFR 146.130 and
148.170.
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‘‘predominant’’ are different than levels
of a type of financial requirement or
quantitative treatment limitation.
Because of the nature of NQTLs, the
same mathematical principles for
combining plan payments to get to more
than one-half for a financial requirement
or quantitative treatment limitation may
not always be transferrable when
determining which variation of an
NQTL is predominant. Therefore, for
purposes of NQTLs, the ‘‘predominant’’
variation would be the most common or
frequent variation of the NQTL. The
most common or frequent variation
would be the variation that applies to
the highest portion of all medical/
surgical benefits within a classification
that are subject to the NQTL based on
expected plan payments. This proposed
definition mirrors the statutory
definition of the term ‘‘predominant’’ in
Code section 9812(a)(3)(B)(ii), ERISA
section 712(a)(3)(B)(ii), and PHS Act
section 2726(a)(3)(B)(ii). However, it is
different in some ways from the 2013
final regulations for financial
requirements and quantitative treatment
limitations, because the distinct nature
of NQTLs necessitates looking to the
most common or frequent variation
rather than comparing and combining
numerical levels. Using the inpatient
concurrent review example described
earlier in this section of the preamble,
if the plan had determined that applying
concurrent review 7 days after
admission was the predominant
variation, the plan would be prohibited
from applying a more restrictive
variation of that NQTL to mental health
or substance use disorder benefits in the
classification.
The Departments request comment on
this approach and any additional
clarifications or specificity that is
necessary for plans and issuers to
determine the predominant NQTL that
applies to substantially all medical/
surgical benefits in a classification,
including what characteristics of a
particular NQTL should be considered
when determining the predominant
variation when a plan or issuer imposes
multiple variations, and how to
distinguish between what might be a
single NQTL without any variations
versus what might be variations of a
single NQTL. The Departments also
request comment on what should be
considered the predominant variation of
an NQTL when multiple variations are
equally common or frequent.
Additionally, the Departments are
interested in alternative approaches to
determining the predominant variation
of an NQTL that would provide clarity
across a wide variety of NQTLs and
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ways that plans and issuers design and
apply NQTLs to various types of
benefits.
Fourth, under these proposed rules,
an NQTL applied to mental health or
substance use disorder benefits cannot
be more restrictive than the
predominant NQTL applied to
substantially all medical/surgical
benefits in the same classification. An
NQTL is restrictive if it imposes
conditions, terms, or requirements that
limit access to benefits under the terms
of the plan or coverage. For purposes of
determining whether an NQTL is
restrictive, ‘‘conditions, terms, or
requirements’’ would include, but
would not be limited to, those that
compel an action by or on behalf of a
participant or beneficiary (including by
their authorized representative or a
provider or facility) to access benefits
and those that limit access to the full
range of treatment options available for
a condition or disorder under the plan
or coverage. Thus, if an NQTL applied
to mental health or substance use
disorder benefits is determined to be
more restrictive, as written or in
operation, than the predominant NQTL
applied to substantially all medical/
surgical benefits in the same
classification, the NQTL would violate
MHPAEA, subject to certain exceptions
for independent professional medical or
clinical standards and standards related
to fraud, waste, and abuse, discussed in
more detail later in this preamble.
The Departments recognize that the
term ‘‘restrictive’’ is not specifically
defined in MHPAEA or the 2013 final
regulations in the context of the parity
analysis for financial requirements and
quantitative treatment limitations. The
Departments are of the view that it is
generally apparent when one financial
requirement or quantitative treatment
limitation is more restrictive than
another. For example, a $25 copayment
is clearly more restrictive than a $15
copayment, and a 5-visit limit is more
restrictive than a 10-visit limit.
However, due to the nature of NQTLs,
which generally do not allow for such
straightforward comparison, and the fact
that many plans and issuers have
designed and applied NQTLs to mental
health and substance use disorder
benefits in a manner that limits access
to those benefits as compared to
medical/surgical benefits, the
Departments are proposing a definition
of ‘‘restrictive’’ to clarify how this term
should be interpreted specifically for
NQTLs in a manner that is consistent
with MHPAEA’s fundamental purpose.
The Departments solicit comments on
any additional clarifications necessary
for plans and issuers to apply the no
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more restrictive requirement with
respect to NQTLs applicable to mental
health and substance use disorder
benefits. The Departments also solicit
comments on whether there are any
specific NQTLs for which it would be
challenging for plans and issuers to
determine whether the NQTL is more
restrictive with respect to mental health
and substance use disorder benefits than
medical/surgical benefits, consistent
with the proposed definition of
‘‘restrictive.’’
The following example applies each
of the steps in the analysis described
earlier in this preamble for the proposed
no more restrictive requirement at 26
CFR 54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i). Under this example, a
self-insured group health plan imposes
a medical management requirement that
all inpatient, in-network medical/
surgical and mental health and
substance use disorder facilities have
24-hour onsite nursing services
available. First, the plan would
determine the portion of plan payments
for medical/surgical benefits that are
subject to the NQTL, based on the dollar
amount of all plan payments for
medical/surgical benefits in the
inpatient, in-network classification
expected to be paid under the plan for
the plan year. Second, based on this
calculation, the plan would determine
whether the NQTL applies to at least
two-thirds of inpatient, in-network
medical/surgical benefits. Because all
medical/surgical benefits in the
classification are subject to the medical
management requirement, the NQTL
would apply to substantially all
medical/surgical benefits in the
classification. Third, the plan would
identify the predominant, or most
common or frequent, variation of the
NQTL based on the portion of plan
payments for medical/surgical benefits
that are subject to each variation of the
NQTL. In this case, because there is
only one variation (the requirement that
facilities have 24-hour on-site nursing
services available), that variation of the
NQTL would be predominant under the
framework in these proposed rules.
Finally, the plan would evaluate
whether the NQTL as applied to mental
health and substance use disorder
benefits is more restrictive, as written or
in operation, than the predominant
NQTL applicable to substantially all
medical/surgical benefits in the
inpatient, in-network classification.
Because the requirement that facilities
have 24-hour on-site nursing services
available does not impose additional
conditions, terms, or requirements that
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limit access to benefits under the terms
of the plan or coverage for mental health
or substance use disorder benefits as
compared to medical/surgical benefits
by, for example, compelling an
additional action by a participant or
beneficiary to access mental health and
substance use disorder benefits or
limiting access to the full range of
treatment options available, for mental
health or substance use disorder
benefits as compared to medical/
surgical benefits in the classification,
this NQTL would satisfy the no more
restrictive requirement under 26 CFR
54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) of these proposed rules.
If a plan or issuer analyzes an NQTL
and determines that it satisfies the no
more restrictive requirement under
these proposed rules, it would also still
be required under these proposed rules
to analyze the NQTL under the design
and application requirements and the
relevant data evaluation requirements,
discussed later in this preamble, to
ensure compliance with MHPAEA. As
discussed earlier in this preamble, the
Departments note that, while the no
more restrictive requirement appears
first in these proposed rules, nothing in
these proposed rules is intended to
require that compliance with the no
more restrictive requirement be assessed
before the other requirements for NQTLs
in proposed 26 CFR 54.9812–1(c)(4), 29
CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4). The Departments propose
adding several examples, described later
in this preamble, to illustrate how the
no more restrictive requirement, the
design and application requirements,
and the relevant data evaluation
requirements in these proposed rules
apply to various factual scenarios.
Under these proposed rules, the
Departments do not intend to interfere
with a plan’s or issuer’s attempts to
ensure that coverage for benefits for the
treatment of mental health conditions
and substance use disorders is
consistent with generally accepted
independent professional medical or
clinical standards. Similarly, the
Departments do not intend for the no
more restrictive requirement to prevent
plans and issuers from applying
reasonably designed and carefully
circumscribed measures adopted for the
purpose of detecting or preventing and
proving fraud, waste, and abuse. The
Departments recognize that the
application of independent professional
medical or clinical standards and
standards related to fraud, waste, and
abuse generally improve and help to
ensure appropriate care for participants
and beneficiaries, rather than restrict
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access to needed benefits. The
Departments also acknowledge that
there are instances in which the
application of independent professional
medical or clinical standards might
result in plans and issuers applying
NQTLs to mental health or substance
use disorder benefits that would
otherwise be more restrictive than the
predominant NQTL applied to
substantially all medical/surgical
benefits in the same classification when
applying the no more restrictive
requirement in proposed 26 CFR
54.9812–1(c)(4)(i)(A) through (D), 29
CFR 2590.712(c)(4)(i)(A) through (D),
and 45 CFR 146.136(c)(4)(i)(A) through
(D). Therefore, the Departments propose
that an NQTL applied to mental health
or substance use disorder benefits in
any classification would not be
considered to violate the no more
restrictive requirement if the NQTL
impartially applies independent
professional medical or clinical
standards or applies standards related to
fraud, waste, and abuse, that meet
specific requirements, discussed in
more detail later in this preamble.
b. Requirements Related to Design and
Application of the NQTL—26 CFR
54.9812–1(c)(4)(ii), 29 CFR
2590.712(c)(4)(ii), and 45 CFR
146.136(c)(4)(ii)
As mentioned earlier in this
preamble, these proposed rules would
redesignate the requirement currently in
26 CFR 54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) as paragraph (c)(4)(ii)(A)
and would amend the requirement
codified in the 2013 final regulations to
align with the Departments’ consistent
interpretation that a plan or issuer may
not impose an NQTL with respect to
mental health or substance use disorder
benefits in any classification unless,
under the terms of the plan (or health
insurance coverage) as written and in
operation, any processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
NQTL to mental health or substance use
disorder benefits in the classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the limitation with respect to
medical/surgical benefits in the
classification. To codify this
interpretation, and for consistency with
statutory language added by the CAA,
2021, the Departments propose to revise
the regulatory text to make this
requirement explicit.
Under these proposed rules, a key
consideration in determining whether,
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in designing or applying an NQTL to
mental health or substance use disorder
benefits, the processes, strategies,
evidentiary standards, or other factors
are applied no more stringently than
those used in designing and applying
the limitation to medical/surgical
benefits in the classification, would be
whether any process, strategy,
evidentiary standard, or other factor
restricts access more so to mental health
or substance use disorder benefits than
to generally comparable medical/
surgical benefits. This approach is
consistent with the proposed new
purpose section set forth in these
proposed rules and discussed earlier in
this preamble.
Under these proposed rules, if a plan
or issuer imposes an NQTL that
impartially applies independent
professional medical or clinical
standards to medical/surgical benefits
and mental health or substance use
disorder benefits that would not be
considered a violation of the no more
restrictive requirement or the relevant
data evaluation requirements. However,
the plan or issuer would still need to
comply with the design and application
requirements in proposed 26 CFR
54.49812–1(c)(4)(ii)(A), 29 CFR
2590.712(c)(4)(ii)(A), and 45 CFR
146.136(c)(4)(ii)(A). That is, the plan or
issuer would not be permitted to impose
an NQTL with respect to mental health
or substance use disorder benefits in
any classification unless, under the
terms of the plan (or health insurance
coverage) as written and in operation,
any processes, strategies, evidentiary
standards, or other factors used in
designing and applying the NQTL to
mental health or substance use disorder
benefits in the classification are
comparable to, and are applied no more
stringently than those used in designing
and applying the NQTL with respect to
medical/surgical benefits in the
classification. Similarly, if a plan or
issuer imposes standards related to
fraud, waste, and abuse in a manner
described in the proposed rules, the
plan or issuer would still be required to
comply with the design and application
requirements and the relevant data
evaluation requirements in proposed 26
CFR 54.49812–1(c)(4)(ii) and (iv), 29
CFR 2590.712(c)(4)(ii) and (iv), and 45
CFR 146.136(c)(4)(ii) and (iv).
The Departments also propose to add
a new provision to further ensure that
processes, strategies, evidentiary
standards, and other factors used in
designing and applying an NQTL to
mental health or substance use disorder
benefits in a classification are
comparable to, and are applied no more
stringently than, those used in designing
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and applying an NQTL to medical/
surgical benefits in the same
classification. Specifically, for purposes
of determining comparability and
stringency under the design and
application requirements of 26 CFR
54.49812–1(c)(4)(ii)(A), 29 CFR
2590.712(c)(4)(ii)(A), and 45 CFR
146.136(c)(4)(ii)(A), these proposed
rules would prohibit plans and issuers
from relying upon any factor or
evidentiary standard if the information,
evidence, sources, or standards on
which the factor or evidentiary standard
is based discriminates against mental
health or substance use disorder
benefits as compared to medical/
surgical benefits. Various factors and
evidentiary standards that plans and
issuers have previously relied on, or
currently rely on, to design or apply
NQTLs to mental health or substance
use disorder benefits might themselves
discriminate against mental health and
substance use disorder benefits by
treating them in a different and less
favorable manner. Consistent with
MHPAEA’s fundamental purpose, the
Departments are of the view that plans
and issuers should not be permitted to
rely on such factors or evidentiary
standards to design and apply an NQTL
if the information, evidence, sources, or
standards on which the factor or
evidentiary standard is based
discriminates against mental health and
substance use disorder benefits as
compared to medical/surgical benefits.
These proposed rules establish this
requirement as a threshold component
of the analysis that a plan or issuer
would be required to undertake when
analyzing an NQTL’s compliance with
the design and application requirements
under these proposed rules.123
For purposes of these proposed rules,
independent professional medical or
clinical standards described in proposed
26 CFR 54.49812–1(c)(4)(v)(A), 29 CFR
2590.712(c)(4)(v)(A), and 45 CFR
146.136(c)(4)(v)(A) would not be
considered to discriminate against
mental health or substance use disorder
benefits, consistent with the exceptions
to other requirements for NQTLs in
described elsewhere in this preamble.
Similarly, standards related to fraud,
waste, and abuse under proposed 26
CFR 54.49812–1(c)(4)(v)(B), 29 CFR
2590.712(c)(4)(v)(B), and 45 CFR
123 The Departments note that the prohibition on
discriminatory factors and evidentiary standards in
proposed 26 CFR 54.49812–1(c)(4)(ii)(B), 29 CFR
2590.712(c)(4)(ii)(B), and 45 CFR
146.136(c)(4)(ii)(B) is not intended to affect the
application of any other Federal or State laws for
other purposes, and solicit comments on any
potential interactions with other such laws that may
warrant additional clarification.
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146.136(c)(4)(v)(B) would also not be
considered to discriminate against
mental health or substance use disorder
benefits. The Departments request
comments on this approach. The
Departments also solicit comments on
any additional clarifications necessary
for plans and issuers to apply this
standard with respect to NQTLs
applicable to mental health and
substance use disorder benefits, as the
term ‘‘discriminate’’ is proposed to be
defined in these proposed rules.
Under these proposed rules,
information is considered to
discriminate against mental health or
substance use disorder benefits if it is
biased or not objective, in a manner that
results in less favorable treatment of
mental health or substance use disorder
benefits, based on all the relevant facts
and circumstances. Such relevant facts
and circumstances include, but are not
limited to, the source of the information,
the purpose or context of the
information, and the content of the
information. Therefore, plans and
issuers would not be permitted to rely
on information that reflects bias, as
those factors or evidentiary standards
would be discriminatory under these
proposed rules. For this purpose, the
Departments are of the view that
information that results in the less
favorable treatment of mental health and
substance use disorder benefits without
legitimate justification or that is
otherwise not objective would be
considered to be biased and to
discriminate against mental health and
substance use disorder benefits. Under
these proposed rules, the determination
of whether information is objective and
unbiased would be based on all the
relevant facts and circumstances
including, but not limited to, the source
of the information, the purpose or
context of the information, and the
content of the information. When
determining which information,
evidence, sources, or standards should
inform the factors or evidentiary
standards used to design or apply an
NQTL, plans and issuers would not be
permitted under these proposed rules to
use information, evidence, sources, or
standards if they are biased in favor of
imposing greater restrictions on access
to covered mental health and substance
use disorder benefits or not objective,
based on all the relevant facts and
circumstances.
More specifically, the proposed rules
would prohibit plans and issuers from
relying on historical plan data or other
historical information from a time when
the plan or coverage was not subject to
MHPAEA or was in violation of
MHPAEA’s requirements where the use
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of such data results in less favorable
treatment of mental health and
substance use disorder benefits. As an
example, under these proposed rules, a
plan or issuer would not be permitted
to calculate reimbursement rates based
on historical data on total plan spending
for each specialty that is divided
between mental health and substance
use disorder providers and medical/
surgical providers, when the total
spending by the plan was based on a
time period when the plan or coverage
was not subject to MHPAEA or was in
violation of MHPAEA, if the data results
in less favorable treatment of mental
health and substance use disorder
benefits. Consequently, plans and
issuers could not use such data to
develop a factor or evidentiary standard
for the design or application of an NQTL
to mental health or substance use
disorder benefits.
Under these proposed rules, to the
extent a plan or issuer relies on any
factor or evidentiary standard that
discriminates against mental health or
substance use disorder benefits, or any
information, evidence, sources, or
standards that inform such factors or
evidentiary standards to design and
apply NQTLs, the plan or issuer violates
the requirement set forth in proposed 26
CFR 54.9812–1(c)(4)(ii)(B), 29 CFR
2590.712(c)(4)(ii)(B), and 45 CFR
146.136(c)(4)(ii)(B). The Departments
request comments on all aspects of these
provisions of the proposed rules,
including whether additional
definitions are necessary to comply with
these requirements.
c. Illustrative, Non-Exhaustive List of
NQTLs—26 CFR 54.9812–1(c)(4)(iii), 29
CFR 2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii)
These proposed rules, if finalized,
would move the illustrative, nonexhaustive list of NQTLs from 26 CFR
54.9812–1(c)(4)(ii), 29 CFR
2590.712(c)(4)(ii), and 45 CFR
146.136(c)(4)(ii) to 26 CFR 54.9812–
1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii),
and 45 CFR 146.136(c)(4)(iii) and make
several minor changes to this provision.
First, these proposed rules would
amend this provision to make clear that
this illustrative list of NQTLs is nonexhaustive and that there are additional
NQTLs not listed in this paragraph.124
124 The Departments are also proposing to add the
term ‘‘non-exhaustive’’ to cross-references to the
illustrative, non-exhaustive list of NQTLs,
contained in the definition of ‘‘treatment
limitations’’ in 26 CFR 54.9812–1(a), 29 CFR
2590.712(a), and 45 CFR 146.136(a) and in the
clarification of the term ‘‘type of financial
requirement or treatment limitation’’ in 26 CFR
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As stated in the definition of the term
‘‘treatment limitations’’ in the 2013 final
regulations and these proposed rules, an
NQTL is any provision that limits the
scope or duration of benefits for
treatment under a plan or coverage that
is not a quantitative treatment
limitation. Some interested parties have
requested that the Departments issue an
exhaustive list of NQTLs to provide
clarity as to the exact provisions for
which plans and issuers are expected to
perform and document comparative
analyses pursuant to the CAA, 2021.
Others have asked the Departments not
to provide such a list, asserting that
doing so could encourage plans and
issuers to create new NQTLs outside the
list or rename NQTLs in an attempt to
circumvent MHPAEA’s requirements.
Because of the broad scope of the
meaning of the term ‘‘nonquantitative
treatment limitation,’’ 125 and the fact
that plan or coverage terms that
otherwise limit the scope or duration of
benefits for treatment in similar ways
may use different terminology, the
Departments are not proposing to issue
an exhaustive list of NQTLs. However,
the Departments are proposing to add
examples of additional NQTLs to these
proposed rules, as discussed later in this
preamble. Previous Reports to
Congress 126 also include lists of the
NQTLs that have been the subject of
comparative analyses reviewed by the
Departments. Additionally, the 2020
MHPAEA Self-Compliance Tool
provides an illustrative, non-exhaustive
list of NQTLs.127 As the Departments
encounter additional NQTLs, the
Departments expect to highlight them in
future resources. The list of NQTLs,
therefore, is more accurately framed as
a non-exhaustive list of examples that
can be updated, as appropriate, as part
of the resources the Departments make
available to assist the regulated
community and interested parties in
their efforts to understand and comply
with MHPAEA.
54.9812–1(c)(1)(ii), 29 CFR 2590.712(c)(1)(ii), and
45 CFR 146.136(c)(1)(ii).
125 26 CFR 54.9812–1(a), 29 CFR 2590.712(a), and
45 CFR 146.136(a) state that ‘‘[t]reatment limitations
include . . . nonquantitative treatment limitations,
which otherwise limit the scope or duration of
benefits for treatment under a plan or coverage.’’
126 See, e.g., 2022 MHPAEA Report to Congress,
available at https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/report-to-congress-2022-realizing-parityreducing-stigma-and-raising-awareness.pdf and
https://www.cms.gov/files/document/2022-mhpaeareport-congress.pdf.
127 Self-Compliance Tool for the Mental Health
Parity and Addiction Equity Act (MHPAEA) (2020),
available at https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/self-compliance-tool.pdf.
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These proposed rules would also
amend the illustrative, non-exhaustive
list of NQTLs to replace ‘‘[s]tandards for
provider admission to participate in a
network, including reimbursement
rates’’ with ‘‘standards related to
network composition, including but not
limited to, standards for provider and
facility admission to participate in a
network or for continued network
participation, including methods for
determining reimbursement rates,
credentialing standards, and procedures
for ensuring the network includes an
adequate number of each category of
provider and facility to provide covered
services under the plan or coverage.’’
The standards that govern how the
network is constructed and defined are
critical limitations on the availability of
benefits under the plan or coverage.
Accordingly, the Departments reaffirm
that standards related to network
composition are subject to the
requirements applicable to NQTLs,
including their design and application
as set forth in these proposed rules.
Standards related to network
composition operate to limit the scope
or duration of benefits for treatment—a
fundamental characteristic of an NQTL.
The design, administration, and
composition of networks that comply
with MHPAEA’s requirements are
essential to participants and
beneficiaries having access to treatment
for mental health conditions and
substance use disorders in parity with
medical/surgical benefits.
Additionally, the Departments
recognize that some plans and issuers
use other related NQTLs, such as
credentialing standards, to help ensure
an adequate number of available
providers as part of their standards
related to network composition.
Therefore, the Departments propose to
specifically include credentialing
standards and procedures for ensuring
the network includes an adequate
number of each category of mental
health and substance use disorder
providers and facilities relative to the
number of medical/surgical providers
and facilities in the illustrative, nonexhaustive list of NQTLs to make clear
that plans and issuers setting standards
to participate in a network through the
application of one or more NQTLs
would be required to satisfy the
requirements for NQTLs under these
proposed rules.
In the 2013 final regulations, the
phrase ‘‘usual, customary, and
reasonable charges,’’ found in the
illustrative list of NQTLs is often used
to refer to a plan’s method for
determining out-of-network rates.
However, the Departments are aware
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that plans and issuers may use other
methods to determine out-of-network
rates, such as using a percentage of
Medicare rates.128 These proposed rules
therefore would amend the description
of this illustrative NQTL to encompass
a broader range of methods for
determining out-of-network rates, such
as allowed amounts; usual, customary,
and reasonable charges; or application
of other external benchmarks for out-ofnetwork rates.
Finally, these proposed rules would
add a specific reference to prior
authorization requirements as an
example of a medical management
standard limiting or excluding benefits
based on medical necessity or medical
appropriateness, consistent with
Example 1 in 26 CFR 54.9812–
1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii),
and 45 CFR 146.136(c)(4)(iii) of the 2013
final regulations. In addition to
proposing amendments to the NQTLs
included in the illustrative, nonexhaustive list codified in this
provision, the Departments emphasize
that even if an NQTL is not included on
this list, a plan or issuer is not excused
from compliance with the same
standards and framework outlined in
these proposed rules. That is, the many
other NQTLs not included in the list
codified in this provision would also be
subject to the same standards and
framework outlined in these proposed
rules. Examples of additional NQTLs
not listed include, but are not limited to,
concurrent care review; billing
restrictions, such as a requirement for a
licensed provider to bill through or
under the supervision of another type of
licensed provider; retrospective review;
treatment plan requirements; refusal to
cover treatment until completion of a
comprehensive assessment by specific
providers; outlier management; and
limitations based on expectation of
improvement, likelihood of progress, or
demonstration of progress. The
Departments request comments on the
proposed amendments to this provision
and additional clarifications that may be
necessary with respect to specific
NQTLs listed.
128 See NY Times, Insurers Alter Cost Formula,
and Patients Pay More, available at https://
www.nytimes.com/2012/04/24/nyregion/healthinsurers-switch-baseline-for-out-of-networkcharges.html; FairHealth, ‘‘Types of Out-of-Network
Reimbursement,’’ available at https://
www.fairhealthprovider.org/download/your-costs/
Types%20of%20Out-ofNetwork%20Reimbursement.pdf.
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d. Required Use of Outcomes Data and
Special Rule for NQTLs Related to
Network Composition—26 CFR
54.9812–1(c)(4)(iv), 29 CFR
2590.712(c)(4)(iv), and 45 CFR
146.136(c)(4)(iv)
As the Departments have highlighted
in previous guidance, substantially
disparate results are often a red flag that
a plan or issuer may be imposing an
NQTL in a manner that does not comply
with MHPAEA.129 The Departments are
of the view that relevant outcomes data
should be collected and evaluated as
part of analyzing whether an NQTL with
respect to mental health or substance
use disorder benefits in a classification,
is more restrictive, in operation, than
the predominant NQTL that is applied
to substantially all medical/surgical
benefits in the classification.
Additionally, the comparative analysis
requirement added to MHPAEA by the
CAA, 2021 requires a demonstration of
whether the processes, strategies,
evidentiary standards, and other factors
used to apply an NQTL to mental health
or substance use disorder benefits, as
written and in operation, are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, and
other factors used to apply the NQTL to
medical/surgical benefits in a
classification.130
In evaluating how such processes,
strategies, evidentiary standards, and
other factors are applied in operation, it
is necessary to look at how the plan is
administered in operation, which in the
Departments’ view necessarily requires
review and consideration of quantitative
outcomes data to get a sense of how the
NQTL functions in the context of the
plan’s or issuer’s administration and
provision of benefits. For example, the
Departments have highlighted in prior
guidance that plans and issuers should
have samples of covered and denied
mental health and substance use
disorder and medical/surgical benefit
claims available to support the
comparative analysis.131 It is critical
that a plan or issuer collect information
to assess relevant data that show the
outcomes that result from the
application of an NQTL, evaluate those
outcomes (which, as stated earlier in
this preamble, may be a red flag that the
plan or issuer is imposing an
impermissible NQTL that disparately
impacts access to covered mental health
129 2020 MHPAEA Self-Compliance Tool; see
FAQs Part 39, Q7.
130 See Code section 9812(a)(8)(A)(iv), ERISA
section 712(a)(8)(A)(iv), and PHS Act section
2726(a)(8)(A)(iv).
131 See FAQs Part 45, Q4.
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or substance use disorder benefits), and
take reasonable action as necessary to
address any material differences in
access.
Of particular concern to the
Departments are the NQTLs described
in 26 CFR 54.9812–1(c)(4)(iii)(D), 29
CFR 2590.712(c)(4)(iii)(D), and 45 CFR
146.136(c)(4)(iii)(D) of these proposed
rules. These NQTLs involve standards
related to network composition, which
include but are not limited to, standards
for provider and facility admission to
participate in a network or for
continued network participation,
including methods for determining
reimbursement rates, credentialing
standards, and procedures for ensuring
the network includes an adequate
number of each category of provider and
facility to provide services under the
plan or coverage. These standards are
critical to ensuring parity in access to
mental health and substance use
disorder benefits for participants and
beneficiaries. The Departments are also
aware that there is a growing disparity
between in-network reimbursement
rates for mental health and substance
use disorder providers and medical/
surgical providers, which may more
negatively impact access under a plan or
coverage to mental health and substance
use disorder benefits as compared with
medical/surgical benefits.132
Additionally, there is a significant
disparity between how often
participants and beneficiaries have little
or no choice under their plan or
coverage but to utilize out-of-network
mental health and substance use
disorder providers and facilities, as
compared to medical/surgical providers
and facilities.133
Therefore, the Departments propose to
add a requirement to provide that, when
designing and applying an NQTL, a plan
or issuer must collect and evaluate
relevant data in a manner reasonably
designed to assess the impact of the
NQTL on access to mental health and
substance use disorder benefits and
medical/surgical benefits, and consider
the impact as part of the plan’s or
issuer’s analysis of whether such NQTL,
in operation, complies with proposed 26
CFR 54.9812–1(c)(4)(i) and (ii), 29 CFR
2590.712(c)(4)(i) and (ii), and 45 CFR
146.136(c)(4)(i) and (ii). These proposed
rules would permit the Departments to
132 Melek, S., Davenport, S., Gray, T.J. (2019).
Addiction and mental health vs. physical health:
Widening disparities in network use and provider
reimbursement (p. 6). Milliman. https://
assets.milliman.com/ektron/Addiction_and_
mental_health_vs_physical_health_Widening_
disparities_in_network_use_and_provider_
reimbursement.pdf.
133 Id.
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51575
specify the type, form, and manner for
this data collection and evaluation in
future guidance.
Under these proposed rules, the
relevant data that a plan or issuer would
be required to collect and evaluate for
all NQTLs (in each individual
comparative analysis) includes, but is
not limited to, the number and
percentage of relevant claims denials, as
well as any other data relevant to the
NQTLs as required by State law or
private accreditation standards. The
Departments seek comments on whether
plans and issuers collect such data as
part of their normal business operations,
as well as whether there are NQTLs for
which the number and percentage of
relevant claims denials would not be
relevant for evaluating the impact of the
NQTL. The Departments also seek
comments on any additional guidance
plans and issuers would need to comply
with the requirements of proposed 26
CFR 54.9812–1(c)(4)(iv), 29 CFR
2590.712(c)(4)(iv), and 45 CFR
146.136(c)(4)(iv) for newly imposed
NQTLs or for NQTLs imposed by new
plans or issuers, for which relevant data
may not be immediately available.
Moreover, because of the
Departments’ specific concerns about
standards related to network
composition and other related NQTLs,
these proposed rules would require that,
in addition to the relevant data required
for all NQTLs, plans and issuers must
collect and evaluate additional relevant
data for NQTLs related to network
composition. Such data would include,
but would not be limited to, in-network
and out-of-network utilization rates
(including data related to provider claim
submissions), network adequacy metrics
(including time and distance data, and
data on providers accepting new
patients), and provider reimbursement
rates (including as compared to billed
charges). While this list of data for
NQTLs related to network composition
is not reflective of the full list of data
that plans and issuers often use to assess
their networks, these specific data
points provide a cross-section of
relevant data points that the
Departments have looked at in their
MHPAEA compliance reviews and
investigations, or that States and other
interested parties have found useful.134
134 See, e.g., 2020 MHPAEA Self-Compliance
Tool, Appendix II available at https://www.dol.gov/
sites/dolgov/files/EBSA/laws-and-regulations/laws/
mental-health-parity/self-compliance-tool.pdf;
Washington State, Model Data Definitions and
Methodology Form (used by Washington State for
their Second Market Scan), available at https://
www.mhtari.org/model-data-definitionsmethod.pdf; Maryland, Instructions for Completing
Data Supplement 1 Report (Utilization Review)
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The Departments solicit comments on
these specific data points, including
whether provider reimbursement rates
should be compared to Medicare
reimbursement rates as an alternative to
billed charges or another external
benchmark.
Pursuant to these proposed rules, to
the extent the relevant data evaluated
under these proposed rules reveal
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits, the differences would
be considered a strong indicator that the
plan or issuer violates proposed 26 CFR
54.9812–1(c)(4)(i) and (ii), 29 CFR
2590.712(c)(4)(i) and (ii), and 45 CFR
146.136(c)(4)(i) and (ii). While under
this provision, material differences
alone would not be dispositive (except,
as discussed below, for NQTLs related
to network composition), and would not
automatically result in a finding of
noncompliance, a plan or issuer would
be required to take reasonable action to
address any material differences in
access as necessary to ensure
compliance, in operation, with 26 CFR
54.9812–1(c)(4)(i) and (ii), 29 CFR
2590.712(c)(4)(i) and (ii), and 45 CFR
146.136(c)(4)(i) and (ii) of these
proposed rules. Whether any particular
action would be considered reasonable
in response to any given material
differences in access resulting from an
evaluation of outcomes data would be
determined based on the relevant facts
and circumstances, including the NQTL
itself, the relevant data, the extent of the
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits, and the impact of the
material differences in access on
participants and beneficiaries. The
Departments also solicit comments on
what additional information is
necessary to clarify what would
constitute reasonable action in response
to relevant data that reveals material
differences in access.
In addition to taking reasonable action
to address material differences in
access, the plan or issuer would also be
required to document in their
comparative analyses any such action
that has been or is being taken by the
plan or issuer to mitigate those material
differences, under proposed 26 CFR
54.9812–2(c)(5)(v), 29 CFR 2590.712–
1(c)(5)(v), and 45 CFR 146.137(c)(5)(v),
as discussed later in this preamble. This
requirement would allow plans and
issuers to explain why material
differences in access demonstrated by
Form, available at https://insurance.maryland.gov/
Consumer/Pages/workgroups.aspx.
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the outcomes data should not result in
a violation of the rules for NQTLs. The
Departments solicit comments on all
aspects of the material difference
standard at proposed 26 CFR 54.9812–
1(c)(4)(iv)(B), 29 CFR
2590.712(c)(4)(iv)(B), and 45 CFR
146.136(c)(4)(iv)(B), including how to
define a material difference in access.
The Departments are particularly
interested in comments regarding how
‘‘material difference’’ could be defined
in a manner that translates into tangible
quantitative research methods that
would ensure that data is analyzed
using statistical tools and results in
meaningful information for plans and
issuers to use in addressing barriers to
accessing benefits. Specifically, the
Departments seek comment on whether
materiality should be defined in terms
of the results of statistical testing and
request feedback from interested parties
on the optimal method for assembling
data and statistical analysis.
Network composition is the result of
the design and application of a myriad
of NQTLs and is informed by various
processes, strategies, evidentiary
standards, and other factors, many of
which interact in complex ways and are
often either difficult to evaluate
separately, or do not portray an
adequate picture of the overall relative
impact on access when analyzed
separately. For example, plans and
issuers may develop or consult several
standards to help inform their network
composition, such as State licensing
standards, quality and performance
metrics, patient utilization in particular
geographic regions, and overall provider
availability. Because plans and issuers
generally look to the cumulative effect
of such standards, practices, and
strategies when designing their
networks, it is important that plans and
issuers also look to the cumulative effect
of such standards, practices, and
strategies when evaluating any data and
standards related to network
composition for compliance with
MHPAEA.
The Departments are concerned that
some plans or issuers may define their
NQTLs related to network composition
in a way that silos interrelated
processes, strategies, and evidentiary
standards that should be evaluated
together under a plan’s or issuer’s
standards related to network
composition. In the Departments’ view,
all NQTLs related to network
composition, taken together, must be
designed and applied in compliance
with MHPAEA’s parity requirements to
ensure that networks do not materially
disfavor access to mental health and
substance use disorder benefits when
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compared to medical/surgical benefits.
Furthermore, because such NQTLs will
inherently impact a participant’s or
beneficiary’s access to mental health
and substance use disorder benefits, the
Departments are of the view that
material differences in access shown by
outcomes data related to such NQTLs
should be subject to a higher level of
scrutiny than for other NQTLs.
Accordingly, these proposed rules
include a special rule for NQTLs related
to network composition. Under these
proposed rules at 26 CFR 54.9812–
1(c)(4)(iv)(C), 29 CFR
2590.712(c)(4)(iv)(C), and 45 CFR
146.136(c)(4)(iv)(C), when designing
and applying one or more NQTLs
related to network composition
standards, a plan or issuer fails to meet
the requirements of proposed 26 CFR
54.9812–1(c)(4)(i) and (ii), 29 CFR
2590.712(c)(4)(i) and (ii), and 45 CFR
146.136(c)(4)(i) and (ii), in operation, if
the relevant data show material
differences in access to in-network
mental health or substance use disorder
benefits as compared to in-network
medical/surgical benefits in a
classification. The Departments also
solicit comments on the likely impacts,
costs, and benefits of treating network
composition as an NQTL for purposes of
the regulation, as opposed to treating it
merely as an outcome of other NQTLs.
To what extent would such an approach
better promote equal access to
networks? What are potential
unintended consequences or
implementation issues? In soliciting
these comments, the Departments
recognize that there is no one
established and universal set of metrics
for determining the parity of networks,
and that parity across mental health and
substance use disorder and medical/
surgical networks does not necessarily
mean equal number of providers in a
classification. As such, the Departments
recognize that different plans and
issuers may take different approaches to
ensuring that their mental health and
substance use disorder networks are as
robust as their medical/surgical
networks. The Departments also
recognize that there may be significant
challenges for some plans and issuers to
ensure that their mental health and
substance use disorder networks are not
more restrictive in operation than their
medical/surgical networks. Accordingly,
in addition to the comments solicited in
the accompanying Technical Release
2023–01P discussed later in this
preamble, the Departments solicit
comments in this document on ways to
compare or assess the parity of mental
health and substance use disorder and
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medical/surgical networks, while
accommodating the different
approaches and different challenges that
plans and issuers face in building strong
mental health and substance use
disorder and medical/surgical networks.
The Departments are aware that some
plans and issuers rely on minimum time
and distance standards set by a private
accreditation organization or by other
Federal or State programs as the basis
for a factor or evidentiary standard for
an NQTL related to network
composition. Under these proposed
rules, plans and issuers would not be
permitted to solely rely on this
information as an evidentiary standard
or to inform a factor used to design and
apply an NQTL, unless the plan or
issuer complies with the relevant data
evaluation requirements and the special
rule for NQTLs related to network
composition to determine whether the
relevant data show material differences
in access to in-network mental health or
substance use disorder benefits as
compared to in-network medical/
surgical benefits in a classification. The
Departments are of the view that
minimum time and distance standards
set by a private accreditation
organization or by other Federal or State
programs may provide a helpful starting
point for plans and issuers to develop
factors or evidentiary standards but note
that these standards are often not
designed with purposes of MHPAEA
compliance in mind. Therefore, to
comply with the relevant data
evaluation requirements and the special
rule for NQTLs related to network
composition under these proposed
rules, a plan or issuer may need to go
beyond the minimum times and
distances outlined in such standards,
and also ensure that they do not result
in less favorable treatment for mental
health and substance use disorder
benefits under the plan or coverage,
based on all the relevant facts and
circumstances. The Departments solicit
comments on what additional
clarifications are needed on how this
proposed provision would apply to the
use of private accreditation standards
and other Federal or State program
standards.
Plans and issuers would be required
to take action to address material
differences in access or no longer
impose the relevant NQTLs. Such
actions could include, for example,
ensuring that they or their service
providers (as applicable) make special
efforts to contract with a broad range of
mental health and substance use
disorder providers who are available,
including authorizing greater
compensation or other inducements to
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the extent necessary; expanding
telehealth arrangements as appropriate
to manage regional shortages; notifying
participants and beneficiaries in clear
and prominent language on the website,
employee brochures, and the summary
plan description of a toll-free number
for help finding in-network providers;
ensuring that the plan’s or issuer’s
service providers (as applicable) reach
out to the treating professionals and
facilities to see if they will enroll in the
network; and ensuring the network
directories are accurate and reliable.
The Departments recognize that
shortages of mental health and
substance use disorder providers could
pose challenges to issuers, plans, and
their service providers.135 If, despite
taking appropriate action, the relevant
data continues to reveal material
differences in access, such as, because
of provider shortages that the plan or
issuer cannot effectively address
through no fault of its own, the
Departments would not cite such a plan
or issuer for failure to comply with 26
CFR 54.9812–1(c)(4)(iv), 29 CFR
2590.712(c)(4)(iv), and 45 CFR
146.136(c)(4)(iv) with respect to the
plan’s or issuer’s NQTL(s) related to
network composition if the plan or
issuer otherwise complied with the
other applicable MHPAEA
requirements. Plans and issuers should
be prepared, however, to document the
actions they have taken and to
demonstrate why any disparities are
attributable to provider shortages in the
geographic area, rather than their
NQTLs related to network composition.
The Departments request comments on
this provision, including on whether
and how to allow plans and issuers to
account for external circumstances that
impact material differences in access.
The Departments specifically request
comment on how to ensure that any
permitted allowances would be
sufficiently narrow so they do not
permit plans and issuers to
inappropriately rely on external
circumstances, including provider
shortages, as a reason they cannot
comply with this provision, and
similarly welcome comments on the
types of external circumstances, actions,
and responses that should be treated as
properly mitigating materially different
access shown by outcomes data.
135 See White House Issue Brief, Reducing the
Economic Burden of Unmet Mental Health Needs,
available at https://www.whitehouse.gov/cea/
written-materials/2022/05/31/reducing-theeconomic-burden-of-unmet-mental-health-needs/
(acknowledging that provider shortages exist and
37% of the population live in areas with mental
health practitioner shortages).
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These proposed rules would also
specify that plans and issuers are not
required to comply with the relevant
data evaluation requirements for NQTLs
that impartially apply generally
recognized independent professional
medical or clinical standards, consistent
with the exceptions to other
requirements for NQTLs described
elsewhere in this preamble. The
Departments solicit comments regarding
the degree to which such NQTLs would
cause material differences in access
revealed by the proposed data that plans
and issuers would be required to
evaluate with respect to other NQTLs,
and how these rules should address
multi-faceted causation of material
differences in access. Proposed 26 CFR
54.49812–1(c)(4)(iv)(D), 29 CFR
2590.712(c)(4)(iv)(D), and 45 CFR
146.136(c)(4)(iv)(D) would not provide a
comparable exception for standards
related to fraud, waste, and abuse. As a
result, for these standards, plans and
issuers would be required to comply
with the relevant data evaluation
requirements under these proposed
rules. While standards related to fraud,
waste, and abuse are important tools for
plans and issuers, the Departments are
of the view that those tools are more
likely than independent professional
medical or clinical standards to result in
NQTLs that improperly restrict access to
mental health or substance use disorder
benefits and the impact of those NQTLs
on access to mental health and
substance use disorder benefits should
be assessed. Therefore, the Departments
propose that plans and issuers that
apply NQTLs to detect or prevent and
prove fraud, waste, and abuse to mental
health and substance use disorder
benefits in a classification would be
required to comply with the relevant
data evaluation requirements with
respect to those NQTLs. The
Departments solicit comments on these
proposals related to the relevant data
evaluation requirements and the special
rule for NQTLs related to network
composition, including whether plans
and issuers (and their service providers)
generally collect this data as part of
their normal business operations.
Contemporaneously with these
proposed rules, DOL is issuing
Technical Release 2023–01P that sets
out principles and seeks public
comment to inform future guidance
with respect to required data
submissions for NQTLs related to
network composition and a potential
enforcement safe harbor.136 Specifically,
136 The Technical Release was developed in
collaboration with HHS and Treasury, and all
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the Technical Release solicits feedback
on the type, form, and manner for the
data that plans and issuers would be
required to include, along with other
relevant data as appropriate, as part of
their comparative analyses for NQTLs
related to network composition (which
must be submitted to the Departments
upon request). The Technical Release
also solicits feedback on how to define
certain thresholds for required data and
a potential enforcement safe harbor to
be specified in future guidance that, if
satisfied, would demonstrate to the
Departments that a plan or coverage
provides comparable access to innetwork of providers for mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
In turn, if the safe harbor threshold is
met, the plan or issuer would not be
subject to Federal enforcement under
MHPAEA with respect to NQTLs related
to network composition for a specified
period of time. The Departments
encourage interested parties to review
the Technical Release and submit their
comments consistent with the
instructions contained in it (separate
from any comments they submit in
response to these proposed rules). The
Departments also solicit comments on
this approach, including whether the
Departments should incorporate
additional specific data elements, such
as those collected by States, into these
proposed rules.
e. Independent Professional Medical or
Clinical Standards and Standards to
Detect or Prevent and Prove Fraud,
Waste, and Abuse—26 CFR 54.9812–
1(c)(4)(v), 29 CFR 2590.712(c)(4)(v), and
45 CFR 146.136(c)(4)(v)
As explained earlier in this preamble,
the Departments do not intend to
interfere with a plan’s or issuer’s
attempts to ensure that NQTLs for
benefits for treatment of mental health
conditions or substance use disorders
are consistent with generally accepted
independent professional medical or
clinical standards of care or are
appropriately designed and carefully
circumscribed measures used solely for
the purpose of detecting or preventing
and proving fraud, waste, and abuse.
The Departments recognize that the
application of generally recognized
independent professional medical or
clinical standards and appropriately
designed and carefully circumscribed
fraud, waste, and abuse measures
generally improve care and outcomes
for participants and beneficiaries, rather
than restrict access to benefits.
comments submitted to DOL will be shared with
them and posted on the EBSA website.
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Therefore, as discussed earlier in this
preamble, the Departments propose to
provide exceptions to the proposed
requirements in 26 CFR 54.9812–
1(c)(4)(i), (c)(4)(ii)(B), and (c)(4)(iv), 29
CFR 2590.712(c)(4)(i), (c)(4)(ii)(B), and
(c)(4)(iv), and 45 CFR 146.136(c)(4)(i),
(c)(4)(ii)(B), and (c)(4)(iv) (the no more
restrictive requirements, the prohibition
on discriminatory factors and
evidentiary standards, and the relevant
data evaluation requirements) for
NQTLs that impartially apply generally
recognized independent professional
medical or clinical standards (consistent
with generally accepted standards of
care) to medical/surgical benefits and
mental health or substance use disorder
benefits. Under these proposed rules,
the exception would not be available to
any plan or issuer with respect to an
NQTL that fails to impartially apply
such standards, or deviates from those
standards in any way, such as by
imposing additional or different
requirements.
The Departments also propose to
provide an exception to the proposed no
more restrictive requirements in 26 CFR
54.9812–1(c)(4)(i) and (c)(4)(ii)(B), 29
CFR 2590.712(c)(4)(i) and (c)(4)(ii)(B),
and 45 CFR 146.136(c)(4)(i) and
(c)(4)(ii)(B) for NQTLs reasonably
designed to detect or prevent, and prove
fraud, waste, and abuse, based on
indicia of fraud, waste, and abuse that
have been reliably established through
objective and unbiased data.
Additionally, these proposed rules
would require such NQTLs to also be
narrowly designed to minimize the
negative impact on access to appropriate
mental health and substance use
disorder benefits. The Departments
believe NQTLs reasonably designed to
detect or prevent and prove fraud,
waste, and abuse can help improve the
overall efficiency of the health care
delivery system and play an important
role in safeguarding the interests of
participants and beneficiaries, where
narrowly designed to avoid creating
more restrictive limitations on access to
mental health and substance use
disorder benefits. To ensure that NQTLs
reasonably designed to detect or prevent
and prove fraud, waste, and abuse are
also narrowly designed to minimize the
negative impact on access to appropriate
mental health and substance use
disorder benefits, such NQTLs are still
subject to the relevant data evaluation
requirements. Additionally, these
proposed rules do not provide any
exception from the design and
application requirements under 26 CFR
54.9812–1(c)(4)(ii), 29 CFR
2590.712(c)(4)(ii), and 45 CFR
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146.136(c)(4)(ii), although as discussed
earlier in this preamble, NQTLs that
apply independent professional medical
or clinical standards or standards
related to fraud, waste, and abuse in a
manner that meets the requirements of
this section would not be considered to
discriminate against mental health or
substance use disorder benefits. The
only circumstances in which plans and
issuers would not be required to satisfy
all three of the requirements of
proposed 26 CFR 54.9812–1(c)(4)(i), (ii),
and (iv); 29 CFR 2590.712(c)(4)(i), (ii),
and (iv); and 45 CFR 146.136(c)(4)(i),
(ii), and (iv) to meet their obligations to
demonstrate compliance with
MHPAEA’s parity requirements for
NQTLs would be if the NQTL is subject
to one of these two exceptions. In
instances that an NQTL qualifies for one
of these exceptions, the plan or issuer
would still be required to comply with
the requirements for which the
exception or exceptions do not apply.
The Departments stress that these
exceptions are not intended to create
potential loopholes that would
undermine the statutory requirement
that NQTLs applied to mental health
and substance use disorder benefits be
no more restrictive than the
predominant NQTLs applicable to
substantially all medical/surgical
benefits. If these rules are finalized as
proposed and the Departments become
aware of the creation of new standards
for the purpose of imposing NQTLs that
are more restrictive with respect to
mental health and substance use
disorder benefits (or the establishment
of new organizations that create such
standards), they may provide additional
guidance consistent with MHPAEA’s
fundamental purpose, as necessary.
The Departments solicit comments on
these proposed exceptions, including
ways to better or more specifically frame
them (such as, for example, specifying
that generally recognized independent
professional medical or clinical
standards must be independent, peerreviewed, or unaffiliated with plans and
issuers), consistent with the
Departments’ view that these exceptions
should be narrowly tailored. The
Departments also solicit comments on
how the framework outlined in these
proposed rules could be improved to
better ensure that individuals with
mental health conditions and substance
use disorders benefit from MHPAEA’s
consumer protections, while also
allowing plans and issuers to apply
generally recognized independent
professional medical or clinical
standards and to adopt appropriate,
narrowly tailored measures to detect or
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prevent and prove fraud, waste, and
abuse.
f. Effect of Final Determination of
Noncompliance—26 CFR 54.9812–
1(c)(4)(vii), 29 CFR 2590.712(c)(4)(vii),
and 45 CFR 146.136(c)(4)(vii)
The Departments propose to add
language to these proposed rules
specifying that, if a plan or issuer
receives a final determination from the
relevant Secretary that it is not in
compliance with the requirements of
proposed 26 CFR 54.9816–2, 29 CFR
2590.712–1, and 45 CFR 146.137 with
respect to an NQTL, the NQTL would
violate 26 CFR 54.9812–1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR
146.136(c)(4) and the relevant Secretary
may direct the plan or issuer not to
impose the NQTL, unless and until the
plan or issuer demonstrates to the
relevant Secretary compliance with the
requirements of MHPAEA or takes
appropriate action to remedy the
violation. Whereas the requirement in
the introductory paragraph of 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4) states that a
plan or issuer may not impose an NQTL
in the first instance unless it meets all
of the applicable substantive
requirements for NQTLs under these
proposed rules, this proposed provision
addresses the effect of a final
determination of noncompliance with
the NQTL comparative analysis
documentation requirements under
proposed 26 CFR 54.9812–2, 29 CFR
2590.712–1, and 45 CFR 146.137.
The MHPAEA statute requires ‘‘such
plan or coverage shall ensure that’’ the
treatment limitations comply with the
substantive requirements of the
statute.137 The statute further requires
that the plan or issuer perform and
document adequate comparative
analyses for NQTLs to ensure
compliance.138 Accordingly, under
these proposed rules plans and issuers
would be required to ensure that they
are complying with MHPAEA’s
requirements at all times an NQTL is
imposed with respect to mental health
or substance use disorder benefits and,
as explained later in this preamble,
plans and issuers would be required to
ensure that they have performed and
documented comparative analyses for
their NQTLs imposed on mental health
or substance use disorder benefits
(regardless of the timing of any request
for such documentation) to ensure
compliance. When a plan or issuer has
137 Code section 9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
138 Code section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section 2726(a)(8).
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not substantiated compliance with
MHPAEA for an NQTL applied to
mental health and substance use
disorder benefits, the application of the
NQTL also would violate MHPAEA. At
the same time, the Departments
acknowledge that whether and how to
cease the application of an
impermissible NQTL depends on the
nature of the NQTL, the impact on
access to mental health or substance use
disorder benefits, and other facts and
circumstances that are specific to a
particular case.
Therefore, when a plan or issuer
receives a final determination from the
Departments with respect to an NQTL
based on failure to demonstrate
compliance with proposed 26 CFR
54.9816–2, 29 CFR 2590.712–1, and 45
CFR 146.137, including because the
plan or issuer has not submitted a
sufficient comparative analysis to
demonstrate compliance, these
proposed rules would treat such a
failure not only as a violation of the
NQTL comparative analysis
documentation requirements but also as
a violation of the substantive NQTL
rules under proposed 26 CFR 54.9812–
1(c)(4), 29 CFR 2590.712(c)(4), and 45
CFR 146.136(c)(4). The Departments
recognize that an immediate cessation of
the application of an NQTL may not be
feasible for all NQTLs; accordingly, a
determination by the Departments of
whether to require immediate cessation
would be based on the evaluation of
facts and circumstances involved in the
specific violation and nature of the
underlying NQTL. Such facts may
include, for example, the level of
disruption in the provision of benefits
under the plan or coverage if the NQTL
immediately ceased to apply, the
practicality and complexities involved
in the cessation of the NQTL, the effect
on participants and beneficiaries and
the likely time period needed to cease
or modify the NQTL. The Departments
also note that such determination would
take into account feedback from the
plan or issuer. These facts and
circumstances would also be relevant to
the Departments’ assessment of the
plan’s or issuer’s overall efforts to come
into compliance with MHPAEA. The
Departments stress that, as discussed
later in this preamble, the review
process for the NQTL comparative
analyses allows multiple opportunities
for plans and issuers to provide
additional information to the
Departments and correct a deficient or
insufficient comparative analysis. The
application of proposed 26 CFR
54.9812–1(c)(4)(vii), 29 CFR 2590.712
(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii)
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would be illustrated by a new proposed
Example 7 of 26 CFR 54.9812–
1(c)(4)(viii), 29 CFR 2590.712(c)(4)(viii),
and 45 CFR 146.136(c)(4)(viii),
discussed later in this preamble. The
Departments solicit comments on this
proposed provision, including whether
there are specific challenges or
considerations the Departments should
be cognizant of, as a general matter, in
approaching situations that involve
ceasing application of a particular
NQTL.
g. NQTL Examples—26 CFR 54.9812–
1(c)(4)(viii), 29 CFR 2590.712(c)(4)(viii),
and 45 CFR 146.136(c)(4)(viii)
These proposed rules also would
amend 26 CFR 54.9812–1(c)(4)(iii), 29
CFR 2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii), redesignated as part of
these proposed rules as 26 CFR
54.9812–1(c)(4)(viii), 29 CFR
2590.712(c)(4)(viii), and 45 CFR
146.136(c)(4)(viii). These proposed rules
would revise some existing examples,
remove other existing examples, and
add several new examples to further
demonstrate the rules of 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4), as proposed
to be amended in these rules.
In some cases, the Departments
propose to revise existing examples to
show how an NQTL would be analyzed
under paragraph (c)(4) in accordance
with the proposed amendments. In
other cases, the Departments are
proposing to replace existing examples
with new fact patterns that would more
clearly demonstrate how these proposed
rules for NQTLs would apply to plans
and issuers. In each example in 26 CFR
54.9812–1(c)(4)(viii), 29 CFR
2590.712(c)(4)(viii), and 45 CFR
146.136(c)(4)(viii), a group health plan
is subject to the requirements of
MHPAEA and provides coverage for
both medical/surgical benefits and
mental health and substance use
disorder benefits. Additionally, in
examples that conclude that the plan or
issuer violates one provision of 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4), such
examples do not necessarily imply
compliance with all of the other
relevant provisions (as these examples
do not analyze compliance with all
other provisions). The Departments
solicit comments on these new
examples and the proposed
amendments to existing examples.
Example 1—More restrictive prior
authorization requirement in operation.
First, the Departments propose to
amend existing Example 1 to illustrate
the effect of a disparity in the routine
approval of benefits for mental health
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conditions and substance use disorders
compared to benefits for medical/
surgical conditions in a classification.
This proposed amended example would
retain similar facts to the existing
example, in which a plan requires prior
authorization from the plan’s utilization
reviewer that a treatment is medically
necessary for all inpatient, in-network
medical/surgical benefits and for all
inpatient, in-network mental health and
substance use disorder benefits. While
the plan approves inpatient, in-network
benefits for medical/surgical conditions
for periods of 1, 3, and 7 days, after
which a treatment plan must be
submitted by the patient’s attending
provider and approved by the plan, the
approvals for 7 days are most common
under this plan. However, for mental
health and substance use disorder
benefits, the plan routinely approves
only 1 day of inpatient, in-network
benefits before a treatment plan must be
submitted by the patient’s attending
provider and approved by the plan. In
this example, the difference in the
duration of approvals is not the result of
independent professional medical or
clinical standards or standards related
to fraud, waste, and abuse, but rather
reflects the application of a heightened
standard to the provision of the mental
health and substance use disorder
benefits in the relevant classification.
The existing conclusion to Example 1
states that the plan violates the no more
restrictive requirement in 26 CFR
54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) because it is applying a
stricter NQTL in operation to mental
health and substance use disorder
benefits than is applied to medical/
surgical benefits. The proposed
amended conclusion would provide
additional explanation to illustrate how
the prior authorization NQTL would be
analyzed under these proposed rules
(and revise the conclusion to indicate
that paragraph (c)(4)(i) of those sections
would be redesignated as paragraph
(c)(4)(ii)(A), and new requirements
would be added at paragraph (c)(4)(i)).
The proposed conclusion would explain
that the NQTL applies to at least twothirds of all medical/surgical benefits in
the inpatient, in-network classification,
because it applies to all inpatient
medical/surgical benefits in that
classification. The most common or
frequent variation of this NQTL, and,
therefore, the predominant NQTL that
applies to medical/surgical benefits in
the classification, is the routine
approval of inpatient benefits for 7 days
before the patient’s attending provider
must submit a treatment plan. However,
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the plan routinely approves inpatient,
in-network benefits for mental health
and substance use disorder conditions
for only 1 day before the patient’s
attending provider must submit a
treatment plan. In doing so, the plan
does not impartially apply independent
professional medical or clinical
standards or apply standards related to
fraud, waste, and abuse that qualify for
the exceptions in proposed 26 CFR
54.9812–1(c)(4)(i)(E), 29 CFR
2590.712(c)(4)(i)(E), and 45 CFR
146.136(c)(4)(i)(E).
In this proposed amended Example 1,
in operation, the prior authorization
NQTL imposed on mental health and
substance use disorder benefits in the
inpatient in-network classification is
more restrictive than the predominant
prior authorization requirement
applicable to substantially all medical/
surgical benefits in the classification,
because the practice of approving 1 day
of inpatient, in-network mental health
and substance use disorder benefits
limits access to the full range of
treatment options available for benefits
for a condition or disorder under the
plan or coverage as compared to the
routine 7-day approval that is given for
inpatient, in-network medical/surgical
benefits. As the prior authorization
requirement violates the no more
restrictive requirement, the proposed
amended example does not address the
other aspects of the NQTL parity
analysis under these proposed rules (the
design and application requirements or
the relevant data evaluation
requirements), because the plan would
violate MHPAEA, even if it satisfied
those requirements.
Example 2—More restrictive peer-topeer concurrent review requirements in
operation. In new Example 2 in these
proposed rules, a plan follows a written
process for the concurrent review of all
medical/surgical benefits and mental
health and substance use disorder
benefits within the inpatient, innetwork classification. Under the
process, a first-level review is
conducted in every instance in which
concurrent review applies, and an
authorization request is approved by the
first-level reviewer only if the clinical
information submitted by the facility
meets the plan’s criteria for a continued
stay. If the first-level reviewer is unable
to approve the authorization request
because the clinical information
submitted by the facility does not meet
the criteria for a continued stay, it is
sent to a second-level reviewer who will
either approve or deny the request.
While the written process only requires
review by the second-level reviewer to
either deny or approve the request, in
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operation, second-level reviewers for
mental health and substance use
disorder benefits conduct a peer-to-peer
review with a provider (acting as the
authorized representative of a
participant or beneficiary) before
coverage of the treatment is approved.
The peer-to-peer review requirement is
not the result of independent
professional medical or clinical
standards or standards related to fraud,
waste, and abuse. The plan does not
impose a peer-to-peer review, as written
or in operation, as part of the secondlevel review for medical/surgical
benefits.
In this proposed example, the
concurrent review requirement violates
the no more restrictive requirement at
proposed 26 CFR 54.9812–1(c)(4)(i), 29
CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i). The concurrent review
NQTL applies to at least two-thirds of
all medical/surgical benefits within the
inpatient, in-network classification
because the plan follows the concurrent
review process for all medical/surgical
benefits. The most common or frequent
variation of this NQTL and, therefore,
the predominant NQTL that applies to
all medical/surgical benefits in the
classification, is that peer-to-peer review
is not imposed as part of second-level
review. The plan does not impartially
apply independent professional medical
or clinical standards or apply standards
related to fraud, waste, and abuse that
qualify for the exceptions in 26 CFR
54.9812–1(c)(4)(i)(E), 29 CFR
2590.712(c)(4)(i)(E), and 45 CFR
146.136(c)(4)(i)(E) of these proposed
rules. While, as written, the plan’s
concurrent review requirements are the
same for medical/surgical benefits and
mental health and substance use
disorder benefits, in operation, by
compelling an additional action (peerto-peer review as part of second-level
review) to access only mental health or
substance use disorder benefits, the plan
applies the concurrent review NQTL to
mental health or substance use disorder
benefits in a manner that is more
restrictive than the predominant
concurrent review requirements applied
to substantially all medical/surgical
benefits in the inpatient, in-network
classification. Because the plan violates
the no more restrictive requirement, the
example does not analyze compliance
with the design and application
requirements or the relevant data
evaluation requirements in these
proposed rules.
Example 3—More restrictive peer-topeer review medical necessity standard
in operation; deviation from
independent professional medical and
clinical standards. The Departments
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propose to add new Example 3 focusing
on the imposition of an additional
NQTL (completion of peer-to-peer
review) on benefits for substance use
disorders that is more restrictive than
the predominant NQTL applicable to
substantially all medical/surgical
benefits in the classification. In this
example, the plan generally requires
that all treatment be medically
necessary in the inpatient, out-ofnetwork classification. For both
medical/surgical benefits and mental
health and substance use disorder
benefits, the written medical necessity
standards are based on independent
professional medical or clinical
standards that do not require peer-topeer review. In operation, the plan
covers out-of-network benefits for
medical/surgical or mental health
inpatient treatment outside of a hospital
if the physician documents medical
appropriateness, but for out-of-network
substance use disorder inpatient
treatment outside of a hospital, the plan
requires a physician to also complete
peer-to-peer review.
In this example, the plan violates
proposed 26 CFR 54.9812–1(c)(4)(i), 29
CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i). The medical necessity
NQTL applies to at least two-thirds of
all medical/surgical benefits in the outof-network, inpatient classification. The
most common or frequent variation of
the NQTL and, therefore, the
predominant NQTL that applies to
substantially all medical/surgical
benefits, is the requirement that a
physician document medical
appropriateness without peer-to-peer
review. The plan purports to satisfy the
exception for independent professional
medical or clinical standards in
proposed 26 CFR 54.9812–1(c)(4)(i)(E),
29 CFR 2590.712(c)(4)(i)(E), and 45 CFR
146.136(c)(4)(i)(E), but deviates from
those standards in operation by
imposing the additional requirements to
complete peer-to-peer review with
respect to substance use disorder
inpatient treatment outside of a hospital
within the classification. As written, the
plan provisions apply the NQTL to
mental health and substance use
disorder benefits in the inpatient, outof-network classification in the same
manner as for medical/surgical benefits.
However, in operation, the medical
necessity NQTL imposed on out-ofnetwork substance use disorder benefits
for treatment outside of a hospital is
more restrictive than the predominant
NQTL applied to substantially all
medical/surgical benefits in the
classification because it limits access to
the full range of treatment options
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available for a condition or disorder
under the plan or coverage as compared
to medical/surgical benefits. The NQTL
is not the result of independent
professional medical or clinical
standards or standards related to fraud,
waste, and abuse that qualify for the
exceptions to the no more restrictive
requirement under these proposed rules.
Because the plan violates the no more
restrictive requirement, the example
does not analyze compliance with the
design and application requirements or
the relevant data evaluation
requirements under these proposed
rules.
Example 4—Not comparable and
more stringent methods for determining
reimbursement rates in operation. New
proposed Example 4 would illustrate
how plans and issuers must ensure
compliance in operation with the design
and application requirements under 26
CFR 54.9812–1(c)(4)(ii), 29 CFR
2590.712(c)(4)(ii), and 45 CFR
146.136(c)(4)(ii) for a plan’s
reimbursement rate methodology NQTL,
based in part on guidance in FAQs Part
39.139 For purposes of this example, the
facts assume that the plan’s methods for
determining reimbursement rates for
mental health and substance use
disorder benefits satisfy the no more
restrictive requirement. In this example,
a plan’s base reimbursement rates for
outpatient, in-network providers are
determined based on a variety of factors,
including the provider’s required
training, licensure, and expertise. As
written, for mental health, substance use
disorder, and medical/surgical benefits,
all reimbursement rates for physicians
and non-physician practitioners for the
same Current Procedural Terminology
(CPT) code vary based on a combination
of factors, such as the nature of the
service, provider type, number of
providers qualified to provide the
service in a given geographic area, and
market need (demand). As a result,
reimbursement rates for mental health,
substance use disorder, and medical/
surgical benefits furnished by nonphysician providers are generally less
than for physician providers. In
operation, the plan reduces the
reimbursement rate for mental health
and substance use disorder nonphysician providers from that paid to
mental health and substance use
disorder physicians by the same
percentage for every CPT code but does
not do the same for non-physician
medical/surgical providers.
In this proposed new example, the
plan violates the design and application
requirements under these proposed
139 FAQs
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rules. Because the plan reimburses nonphysician providers of mental health
and substance use disorder services by
reducing their reimbursement rate from
the rate for physician providers by the
same percentage for every CPT code, but
does not apply the same reduction to
non-physician providers of medical/
surgical services, in operation, the
factors used in applying the NQTL to
mental health and substance use
disorder benefits are not comparable to,
and are applied more stringently than,
the factors used in applying the
limitation with respect to medical/
surgical benefits. To continue to apply
the current reimbursement rate
methodology, the plan would need to
ensure that the percentage reduction for
mental health and substance use
disorder non-physician providers
complies with the design and
application requirements as compared
to the percentage reduction for medical/
surgical non-physician providers.
Because the plan violates the design and
application requirements of these
proposed rules, the example does not
analyze compliance with the relevant
data evaluation requirements (and the
facts stipulate compliance with the no
more restrictive requirement).
Example 5—Exception for impartially
applied generally recognized
independent professional medical or
clinical standards. In new proposed
Example 5, a group health plan
develops a medical management
requirement for all inpatient, out-ofnetwork benefits for both medical/
surgical benefits and mental health and
substance use disorder benefits to
ensure treatment is medically necessary.
The medical management requirement
impartially applies independent
professional medical or clinical
standards in a manner that qualifies for
the exception in proposed 26 CFR
54.9812–1(c)(4)(i)(E), 29 CFR
2590.712(c)(4)(i)(E), and 45 CFR
146.136(c)(4)(i)(E). The plan does not
rely on any other factors or evidentiary
standards, and the processes, strategies,
evidentiary standards, and other factors
used in designing and applying the
medical management requirement to
mental health and substance use
disorder benefits are comparable to, and
are applied no more stringently than,
the processes, strategies, evidentiary
standards, and other factors used in
designing and applying the requirement
with respect to medical/surgical
benefits. Within the inpatient, out-ofnetwork classification, the application
of the medical management requirement
results in a higher percentage of denials
for mental health and substance use
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disorder claims than medical/surgical
claims because the benefits were found
to be medically necessary for a lower
percentage of mental health and
substance use disorder claims based on
the impartial application of the
independent professional medical or
clinical standards by the NQTL.
The proposed new example would
conclude that the plan does not violate
26 CFR 54.9812–1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR
146.136(c)(4) of these proposed rules.
The medical management NQTL
imposed on mental health and
substance use disorder benefits does not
violate the no more restrictive
requirement or the relevant data
evaluation requirements because the
plan impartially applies independent
professional medical or clinical
standards for both medical/surgical
benefits and mental health and
substance use disorder benefits in a
manner that qualifies for the exception
under proposed 26 CFR 54.9812–
1(c)(4)(i)(E) and (c)(4)(iv)(D), 29 CFR
2590.712(c)(4)(i)(E) and (c)(4)(iv)(D),
and 45 CFR 146.136(c)(4)(i)(E) and
(c)(4)(iv)(D), respectively. Moreover, the
independent professional medical or
clinical standards are not considered to
be a discriminatory factor or evidentiary
standard and, as written and in
operation, the plan complies with the
design and application requirements
with respect to the NQTL, regardless of
the fact that the application of the NQTL
resulted in higher percentages of claim
denials for mental health and substance
use disorder benefits as compared to
medical/surgical benefits.
Example 6—More restrictive prior
authorization requirement; exception
for impartially applied generally
recognized independent professional
medical or clinical standards not met.
New proposed Example 6 would
incorporate guidance issued in FAQs
Part 34,140 as well as these proposed
rules. In this example, the provisions of
a plan state that it applies independent
professional medical and clinical
standards consistent with generally
accepted standards of care for setting
prior authorization requirements for
both medical/surgical and mental health
and substance use disorder prescription
drugs. The relevant generally recognized
independent professional medical
standard for treatment of opioid use
disorder that the plan utilizes (the
American Society of Addiction
Medicine national practice guidelines)
does not support prior authorization
every 30 days for buprenorphine/
naloxone. However, in operation, the
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plan requires prior authorization for
buprenorphine/naloxone combination at
each refill (every 30 days) for treatment
of opioid use disorder.
In Example 6, the plan violates the no
more restrictive requirement under 26
CFR 54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) of these proposed rules.
The plan does not qualify for the
proposed exception for independent
professional medical or clinical
standards, because although the
provisions of the plan state that it
applies independent professional
medical and clinical standards, the plan
deviates from the relevant standards
with respect to prescription drugs to
treat opioid use disorder. The prior
authorization NQTL is applied to at
least two-thirds of all medical/surgical
benefits in the prescription drugs
classification. The most common or
frequent variation of this NQTL and,
therefore, the predominant NQTL that
applies to substantially all medical/
surgical benefits in the classification is
following generally recognized
independent professional medical and
clinical standards (consistent with
generally accepted standards of care).
The prior authorization requirements
imposed on substance use disorder
benefits are more restrictive than the
predominant requirement applicable to
substantially all medical/surgical
benefits in the classification, because
the plan imposes additional
requirements on substance use disorder
benefits that limit access to the full
range of treatment options available for
a condition or disorder under the plan
or coverage as compared to medical/
surgical benefits in the same
classification. Because the plan violates
the no more restrictive requirement
under the proposed rules, the example
does not analyze compliance with the
design and application requirements or
the relevant data evaluation
requirements.
The Departments note that, if the
NQTL satisfied the no more restrictive
requirement, in compliance with
proposed 26 CFR 54.9812–1(c)(4)(i), 29
CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i), the clarification in
FAQs Part 34 would still be relevant to
this example. In that guidance, the
Departments explained that, if the plan
had used a Pharmacy and Therapeutics
(P&T) committee to decide how to cover
prescription drugs and to evaluate
whether to follow or deviate from
nationally recognized treatment
guidelines for setting prior authorization
requirements, this approach may not
have violated MHPAEA. Nonetheless, as
explained in the FAQs, use of the P&T
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committee would need to be evaluated
for compliance with MHPAEA’s NQTL
requirements (for example, by
evaluating whether the P&T committee
is composed of comparable experts for
mental health conditions and substance
use disorders, as compared to the
experts for medical/surgical conditions,
and how these experts evaluated
nationally recognized treatment
guidelines in setting prior authorization
requirements for medications for mental
health conditions, substance use
disorders, and medical/surgical
conditions). Although this language on
P&T committees has not been added to
the text of this example, this guidance
continues to apply.
Example 7—Impermissible NQTL
imposed following a final determination
of noncompliance and direction by
Secretary. New proposed Example 7
would illustrate the application of the
provisions of these proposed rules at 26
CFR 54.9812–1(c)(4)(vii), 29 CFR
2590.712(c)(4)(vii), and 45 CFR
146.136(c)(4)(vii). In this example,
following an initial request by the
Secretary for a plan’s comparative
analysis of an NQTL pursuant to
proposed 26 CFR 54.9812–2(d), 29 CFR
2590.712–1(d), and 45 CFR 146.137(d),
the plan submits a comparative analysis
for the NQTL. After review of the
comparative analysis, the Secretary
makes an initial determination that the
comparative analysis fails to
demonstrate that the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the NQTL to mental health or
substance use disorder benefits in the
relevant classification are comparable
to, and applied no more stringently
than, those used in designing and
applying the limitation with respect to
medical/surgical benefits in the
classification. Pursuant to proposed 26
CFR 54.9812–2(d)(3), 29 CFR 2590.712–
1(d)(3), and 45 CFR 146.137(d)(3), the
plan submits a corrective action plan
and additional comparative analyses
within 45 calendar days after the initial
determination, and the Secretary then
determines that the additional
comparative analyses do not
demonstrate compliance with the
requirements of proposed 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4). The plan
receives a final determination of
noncompliance from the Secretary,
which informs the plan that it is not in
compliance with proposed 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4) and directs
the plan not to impose the NQTL by a
certain date, unless and until the plan
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demonstrates compliance to the
Secretary or takes appropriate action to
remedy the violation. As of that date,
the plan makes no changes to its plan
terms by that date and continues to
impose the NQTL.
The proposed example would
conclude that the plan violates the
requirements of 26 CFR 54.9812–1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4) by imposing the NQTL
after the Secretary directs the plan not
to impose the NQTL, pursuant to
proposed 26 CFR 54.9812–1(c)(4)(vii),
29 CFR 2590.712(c)(4)(vii), and 45 CFR
146.136(c)(4)(vii).
Example 8—Provider network
admission standards not more
restrictive and compliant with
requirements for design and application
of NQTLs. The Departments propose to
amend Example 7 of the 2013 final
regulations (and redesignate it as
Example 8) to better align the example
with the amended requirements for
NQTLs set forth in these proposed rules.
In this example, as part of a plan’s
standards for provider admission to its
network in the outpatient, in-network
classification, any provider seeking to
contract with the plan must have
supervised clinical experience. As a
result of that standard, master’s level
mental health therapists are required to
obtain supervised clinical experience
beyond their licensure to participate in
the network, while master’s level
medical/surgical providers,
psychiatrists and Ph.D.-level
psychologists do not require additional
experience beyond their licensure
(because their licensure already requires
supervised clinical experience). The
plan collects and evaluates relevant data
in a manner reasonably designed to
assess the impact of the NQTL. This
includes in-network and out-of-network
utilization rates (including data related
to provider claim submissions), network
adequacy metrics (including time and
distance data, and data on providers
accepting new patients), and provider
reimbursement rates (including as
compared to billed charges). This data
demonstrates that participants and
beneficiaries seeking outpatient care are
able to access outpatient, in-network
mental health and substance use
disorder providers at the same
frequency as outpatient, in-network
medical/surgical providers, that mental
health and substance use disorder
providers are active in the network and
are accepting new patients to the same
extent as medical/surgical providers,
and that mental health and substance
use disorder providers are within
similar time and distances to plan
participants and beneficiaries as are
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medical/surgical providers. This data
also does not identify material
differences in what the plan or issuer
pays psychiatrists or non-physician
mental health providers, compared to
physicians or non-physician medical/
surgical providers, respectively, both for
the same reimbursement codes and as
compared to Medicare rates. Material
differences could suggest that, in
operation, NQTLs related to
methodologies for determining
reimbursement rates are being applied
in a non-comparable or more restrictive
manner for mental health or substance
use disorder services than medical/
surgical services, resulting in a material
difference in access.
The conclusion to Example 8 states
that the plan does not violate 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4) of these
proposed rules. The standards for
provider admission to the plan’s
network are applied to at least twothirds of all medical/surgical benefits in
the outpatient, in-network classification,
as they apply to all medical/surgical
benefits in the classification.
Additionally, the most common or
frequent variation of the NQTL (the
predominant NQTL that applies to
substantially all medical/surgical
benefits) in the classification is having
a certain number of years of supervised
clinical experience. The conclusion
notes that the standards for provider
admission to the plan’s network that are
imposed with respect to mental health
or substance use disorder benefits are no
more restrictive, as written and in
operation, than the predominant
standards for provider admission
applicable to substantially all medical/
surgical benefits in the classification,
because the standards do not limit
access to the full range of treatment
options available for a mental health
condition or substance use disorder
under the plan or coverage as compared
to medical/surgical benefits. The
requirement that providers have a
certain number of years of supervised
clinical experience that the plan relied
on to design and apply the NQTL is not
considered to discriminate against
mental health or substance use disorder
benefits, even though this results in the
requirement that master’s level mental
health therapists obtain supervised
clinical experience beyond their
licensure, unlike master’s level medical/
surgical providers. In addition, as
written and in operation, the processes,
strategies, evidentiary standards, or
other factors used in applying the NQTL
to mental health or substance use
disorder benefits in the classification are
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comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in applying the
limitation with respect to medical/
surgical benefits in the classification.
Finally, the plan collects and evaluates
relevant data in a manner reasonably
designed to assess the impact of the
NQTL, which does not show material
differences in access to in-network
mental health and substance use
disorder benefits as compared to innetwork medical/surgical benefits in the
classification.
Example 9—More restrictive
requirement for primary caregiver
participation applied to ABA therapy.
As discussed earlier in this preamble,
the Departments are proposing
amendments clarifying in these
proposed rules that ASD is a mental
health condition under generally
recognized independent standards of
current medical practice. Thus, ASD is
a mental health condition, and coverage
for treatment for ASD is a mental health
benefit as defined in 26 CFR 54.9812–
1(a), 29 CFR 2590.712(a), and 45 CFR
146.136(a) of the 2013 final regulations
and 26 CFR 54.9812–1(a)(2), 29 CFR
2590.712(a)(2), and 45 CFR
146.136(a)(2) of these proposed rules. In
new proposed Examples 9 and 10, the
Departments would illustrate the
application of MHPAEA to ASD
treatment, consistent with ASD being
classified as a mental health condition.
In proposed new Example 9, a plan
generally applies medical necessity
criteria in adjudicating claims for
coverage of all outpatient, in-network
medical/surgical and mental health and
substance use disorder benefits,
including ABA therapy for the treatment
of ASD. The medical necessity criteria
for coverage of ABA therapy requires
evidence that the participant’s or
beneficiary’s primary caregivers actively
participate in ABA therapy, as
documented by consistent attendance in
parent, caregiver, or guardian training
sessions. In adding this requirement, the
plan deviates from independent
professional medical or clinical
standards, and there are no similar
medical necessity criteria requiring
evidence of primary caregiver
participation to receive coverage for any
medical/surgical benefits.
Proposed Example 9 would violate
the no more restrictive requirement of
these proposed rules. The conclusion
notes that the plan applies medical
necessity criteria to at least two-thirds of
all outpatient, in-network medical/
surgical benefits, as they apply to all
medical/surgical benefits in the
classification. The most common or
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frequent variation of this NQTL (the
predominant NQTL) that applies to
substantially all medical/surgical
benefits in the classification does not
include the requirement to provide
evidence that the participant’s or
beneficiary’s primary caregivers actively
participate in the treatment. The plan
does not qualify for the exception in 26
CFR 54.9812–1(c)(4)(i)(E), 29 CFR
2590.712(c)(4)(i)(E), and 45 CFR
146.136(c)(4)(i)(E) of these proposed
rules in applying its restriction on
coverage for ABA therapy because the
plan deviates from the independent
professional medical or clinical
standards by imposing a different
requirement that does not comport with
independent professional medical or
clinical standards (consistent with
generally accepted standards of care).
The proposed new example would
conclude that the plan’s treatment of
ABA therapy and the imposition of the
additional requirement to provide
evidence that primary caregivers
actively participate in treatment violates
proposed 26 CFR 54.9812–1(c)(4)(i), 29
CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) because the NQTL
imposed on mental health and
substance use disorder benefits in the
example is more restrictive than the
predominant medical necessity
requirement imposed on substantially
all medical/surgical benefits (which
does not include the requirement to
provide evidence that primary
caregivers actively participate in
treatment). Because the plan violates the
no more restrictive requirement, the
example does not analyze compliance
with the design and application
requirements or the relevant data
evaluation requirements of these
proposed rules.
Example 10—More restrictive
exclusion for experimental or
investigative treatment applied to ABA
therapy. Proposed new Example 10
would incorporate guidance issued as
part of FAQs Part 39.141 In this example,
a plan, as written, generally excludes
coverage for all treatments that are
experimental or investigative for
medical conditions and surgical
procedures, mental health conditions,
and substance use disorders in the
outpatient, in-network classification. As
a result, the plan generally excludes
experimental treatment of medical
conditions and surgical procedures,
mental health conditions, and substance
use disorders when no professionally
recognized treatment guidelines define
clinically appropriate standards of care
for the condition or disorder, and fewer
141 See
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than two randomized controlled trials
are available to support the treatment’s
use with respect to the given condition
or disorder. The plan provides benefits
for the treatment of ASD, which is a
mental health condition, but in
operation, the plan excludes coverage
for ABA therapy to treat children with
ASD, deeming it experimental. More
than one professionally recognized
treatment guideline defines clinically
appropriate standards of care for ASD
and more than two randomized
controlled trials are available to support
the use of ABA therapy to treat certain
children with ASD.
In this proposed new example, the
coverage exclusion for experimental or
investigative treatment applies to at
least two-thirds of all medical/surgical
benefits, as it applies to all outpatient
medical/surgical benefits in the
outpatient, in-network classification.
The most common or frequent variation
of this NQTL and, therefore, the
predominant NQTL applicable to
substantially all medical/surgical
benefits is the exclusion under the plan
for coverage of experimental treatment
of medical conditions and surgical
procedures when no professionally
recognized treatment guidelines define
clinically appropriate standards of care
for the condition or disorder and fewer
than two randomized controlled trials
are available to support the treatment’s
use with respect to the given condition
or procedure. In operation, the
exclusion for experimental or
investigative treatment imposed on ABA
therapy is more restrictive than the
predominant variation of the NQTL for
experimental or investigative treatment
imposed on substantially all medical/
surgical benefits in the classification
because the exclusion limits access to
the full range of treatment options
available for a mental health condition
under the plan as compared to medical/
surgical benefits. This is the case,
despite the fact that the requisite
number of professionally recognized
treatment guidelines and randomized
controlled trials support its use to treat
certain children with ASD. Therefore,
the plan’s application of the
experimental exclusion to ABA therapy
violates the no more restrictive
requirement in 26 CFR 54.9812–
1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and
45 CFR 146.136(c)(4)(i), and the
example does not analyze compliance
with the design and application
requirements or the relevant data
evaluation requirements under these
proposed rules.
Example 11—Separate EAP
exhaustion treatment limitation
applicable only to mental health
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benefits. The Departments also propose
to amend Example 6 of the 2013 final
regulations and redesignate it as
Example 11. In this example, the
employer maintains both a major
medical plan and an employee
assistance plan (EAP). The EAP
provides, among other benefits, a
limited number of mental health or
substance use disorder counseling
sessions, which, together with other
benefits provided by the EAP, are not
significant benefits in the nature of
medical care. Participants are eligible
for mental health and substance use
disorder benefits under the employer’s
major medical coverage only after
exhausting the counseling sessions
provided by the EAP. No similar
exhaustion requirement applies with
respect to medical/surgical benefits
provided under the major medical plan.
In this example, limiting eligibility for
mental health and substance use
disorder benefits under the major
medical plan until EAP benefits are
exhausted is an NQTL subject to
MHPAEA and violates these proposed
rules. Because the limitation does not
apply to medical/surgical benefits, it is
a separate NQTL applicable only to
mental health and substance use
disorder benefits, which violates 26 CFR
54.9812–1(c)(4)(vi), 29 CFR
2590.712(c)(4)(vi), and 45 CFR
146.136(c)(4)(vi) of these proposed
rules. The Departments also note that
this EAP would generally not qualify as
excepted benefits as set forth in the final
excepted benefits rules (published after
the 2013 final regulations).142 Under
those rules, the benefits provided under
an EAP are excepted if the EAP does not
provide significant benefits in the
nature of medical care, the benefits
under the EAP are not coordinated with
benefits under another group health
plan, no employee premiums or
contributions are required as a
condition of participation in the EAP,
and there is no cost sharing under the
EAP. In this example, the benefits under
the EAP are coordinated with the
benefits of another group health plan,
since participants in the major medical
group health plan are required to use
and exhaust benefits under the EAP
(making the EAP a gatekeeper) before an
individual is eligible for benefits under
the major medical plan.
Example 12—Separate residential
exclusion treatment limitation
applicable only to mental health
benefits. Proposed new Example 12
would demonstrate that MHPAEA
142 26 CFR 54.9831–1(c)(3)(vi)(B)(1), 29 CFR
2590.732(c)(3)(vi)(B)(1), and 45 CFR
146.145(b)(3)(vi)(B)(1); 79 FR 59130 (Oct. 1, 2014).
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specifically prohibits separate treatment
limitations that are applicable only with
respect to mental health or substance
use disorder benefits. In this example, a
plan generally covers inpatient, innetwork and inpatient, out-of-network
treatment in any setting, including
skilled nursing facilities and
rehabilitation hospitals, provided other
medical necessity standards are
satisfied. The plan also has an exclusion
for residential treatment, which the plan
defines as an inpatient benefit, for
mental health and substance use
disorder benefits. This exclusion was
not generated through any broader
NQTL (such as medical necessity or
other clinical guideline). The proposed
new example would conclude that the
plan violates 26 CFR 54.9812–
1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi),
and 45 CFR 146.136(c)(4)(vi) of these
proposed rules. Because the plan does
not apply a comparable exclusion to
inpatient benefits for medical/surgical
conditions, the exclusion of residential
treatment is a separate NQTL applicable
only to mental health and substance use
disorder benefits in the inpatient, innetwork and inpatient, out-of-network
classifications that does not apply with
respect to any medical/surgical benefits
in the same benefit classifications.
Example 13—Standards for provider
admission to a network. Finally,
proposed new Example 13 would
illustrate how plans and issuers may
comply with these proposed rules with
regard to parity, including the
requirement to collect and evaluate
data, with respect to standards related to
network composition, including
standards for provider and facility
admission to participate in a network or
for continued network participation,
methods for determining reimbursement
rates, credentialing standards, and
procedures for ensuring the network
includes an adequate number of each
category of providers and facilities to
provide covered services under the plan
or coverage. As highlighted above, the
proper design, administration, and
composition of networks are essential to
participants and beneficiaries having
access to treatment for mental health
conditions and substance use disorders
in parity with access to treatment for
medical conditions and surgical
procedures, and this proposed example
illustrates the steps that plans and
issuers may take to improve such
access.
In this proposed new example, a plan
applies NQTLs related to network
composition in the outpatient, innetwork and inpatient, in-network
classifications. The plan’s networks are
constructed by separate service
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providers for medical/surgical benefits
and mental health and substance use
disorder benefits. The facts of the
example stipulate that the plan’s NQTLs
related to network composition for
mental health and substance use
disorder benefits satisfy the no more
restrictive requirement and the design
and application requirements in the
outpatient, in-network and inpatient, innetwork classifications. It further
stipulates that the plan collects and
evaluates all relevant data in a manner
reasonably designed to assess the
impact of the NQTLs related to network
composition on access to mental health
and substance use disorder benefits as
compared with medical and surgical
benefits and considers the impact as
part of the plan’s analysis of whether
the NQTLs, in operation, comply with
the no more restrictive requirement and
the design and application requirements
of these proposed rules.
The plan determined that the data did
not reveal any material differences in
access. That data included metrics
relating to the time and distance from
plan participants and beneficiaries to
network providers in rural and urban
regions; the number of network
providers accepting new patients; the
proportions of mental health and
substance use disorder and medical/
surgical providers and facilities that
provide services in rural and urban
regions who are in the plan’s network;
provider reimbursement rates; innetwork and out-of-network utilization
rates (including data related to the
dollar value and number of provider
claims submissions); and survey data
from participants on the extent to which
they forgo or pay out-of-pocket for
treatment because of challenges finding
in-network providers. The efforts the
plan made when designing and
applying its NQTLs related to network
composition, which ultimately led to its
outcomes data not revealing any
material differences in access to benefits
for mental health or substance use
disorders as compared with medical/
surgical benefits, included making sure
that the plan’s service providers are
making special efforts to enroll available
providers, including by authorizing
greater compensation or other
inducements to the extent necessary,
and expanding telehealth arrangements
as appropriate to manage regional
shortages. The plan also notifies
participants in clear and prominent
language on its website, employee
brochures, and the summary plan
description of a toll-free number
available to help participants find innetwork providers. In addition, when
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51585
plan participants submit bills for out-ofnetwork items and services, the plan
directs their service providers to reach
out to the treating providers and
facilities to see if they will enroll in the
network.
The proposed new example would
conclude that the plan does not violate
26 CFR 54.9812–1(c)(4), 29 CFR
2590.712(c)(4), or 45 CFR 146.136(c)(4).
The plan’s NQTLs related to network
composition comply with the no more
restrictive requirement, the design and
application requirements, and the
relevant data evaluation requirements
and the data does not reveal any
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits, as a result of the
actions the plan took (as set forth in the
facts) when initially designing its
NQTLs related to network composition
Because the plan takes comparable
actions to ensure that its mental health
and substance use disorder provider
network is as accessible as its medical/
surgical provider network and exercises
careful oversight over its service
providers and the comparative
robustness of the networks with an eye
to ensuring that network composition
results in access to in-network benefits
for mental health and substance use
disorder services,, plan participants and
beneficiaries can access covered mental
health and substance use disorder
services and benefits as readily as
medical/surgical benefits. This is
reflected in the plan’s carefully
designed metrics and assessment of
network composition. The Departments
recognize, however, that there are
significant challenges to building
networks of mental health and
substance use disorder providers that
result in parity. If, despite taking such
comprehensive action in accordance
with the requirements of proposed 26
CFR 54.9812–1(c)(4)(iv)(C), 29 CFR
2590.712(c)(4)(iv)(C), and 45 CFR
146.136(c)(4)(iv)(C), a plan’s or issuer’s
participants, or beneficiaries still
experience materially greater reliance
on out-of-network, rather than innetwork, mental health or substance use
disorder benefits because of provider
shortages that the plan or issuer cannot
effectively address through no fault of
its own, the Departments would not
treat the plan or issuer as in violation of
26 CFR 54.9812–1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR
146.136(c)(4), provided that the plan or
issuer is otherwise in compliance with
the requirements of these sections.
The Departments solicit comments on
these proposed amended and added
examples, including with respect to
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how these proposed examples illustrate
the application of the provisions of
these proposed rules related to NQTLs.
The Departments also solicit comments
on any additional examples that might
be helpful to interested parties with
respect to any specific provision of
these proposed rules applicable to
NQTLs or any specific NQTLs that
apply to mental health and substance
use disorder benefits.
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4. Prohibition on Financial
Requirements and Treatment
Limitations
Applicable Only to Mental Health or
Substance Use Disorder Benefits—26
CFR 54.9812–1(c)(2)(i) and (c)(4)(vi), 29
CFR 2590.712(c)(2)(i) and (c)(4)(vi), and
45 CFR 146.136(c)(2)(i) and (c)(4)(vi)
The Departments propose to amend
the general parity requirement set forth
in 26 CFR 54.9812–1(c)(2)(i), 29 CFR
2590.712(c)(2)(i), and 45 CFR
146.136(c)(2)(i) by adding a sentence to
reiterate that a plan or issuer may not
impose any financial requirement or
treatment limitation that is applicable
only with respect to mental health or
substance use disorder benefits and not
to any medical/surgical benefits in the
same benefit classification. The general
parity requirement set forth in
paragraph (c)(2)(i) provides that a plan
or issuer that provides both medical/
surgical benefits and mental health or
substance use disorder benefits may not
apply any financial requirement or
treatment limitation to mental health or
substance use disorder benefits in any
classification that is more restrictive
than the predominant financial
requirement or treatment limitation of
that type applied to substantially all
medical/surgical benefits in the same
classification. The general parity
requirement also states that the
application of paragraph (c)(2) to
financial requirements and quantitative
treatment limitations is addressed in
paragraph (c)(3) of the regulations; the
application of paragraph (c)(2) to NQTLs
is addressed in paragraph (c)(4) of the
regulations.
Code section 9812(a)(3)(A)(i), ERISA
section 712(a)(3)(A)(i), and PHS Act
section 2726(a)(3)(A)(i) specifically
prohibit separate cost sharing
requirements that are applicable only
with respect to mental health or
substance use disorder benefits, and
Code section 9812(a)(3)(A)(ii), ERISA
section 712(a)(3)(A)(ii), and PHS Act
section 2726(a)(3)(A)(ii) specifically
prohibit separate treatment limitations
that are applicable only with respect to
mental health or substance use disorder
benefits. While the text of the 2013 final
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regulations does not explicitly
incorporate these statutory prohibitions,
financial requirements and quantitative
treatment limitations that are imposed
only with respect to mental health or
substance use disorders could not meet
the substantially all or predominant
standards in the parity requirements
contained in paragraph (c)(3) of 26 CFR
54.9812–1, 29 CFR 2590.712, and 45
CFR 146.136, as adopted in the 2013
final regulations. Moreover, an example
in the 2013 final regulations
demonstrates and affirms that an NQTL
applied only to mental health or
substance use disorder benefits would
not be permissible.143 These proposed
amendments to the general parity
requirement set forth in 26 CFR
54.9812–1(c)(2)(i), 29 CFR
2590.712(c)(2)(i), and 45 CFR
146.136(c)(2)(i) would directly
incorporate the statutory prohibitions by
expressly stating that plans and issuers
are not permitted to impose any kind of
financial requirement or treatment
limitation that applies only to mental
health or substance use disorder
benefits and not to medical/surgical
benefits in the same classification.
Because the general parity
requirement set forth in 26 CFR
54.9812–1(c)(2)(i), 29 CFR
2590.712(c)(2)(i), and 45 CFR
146.136(c)(2)(i) of the 2013 final
regulations also states that the
application of paragraph (c)(2) to NQTLs
is addressed in paragraph (c)(4) of the
regulations, the Departments also
propose to add similar language to these
proposed rules for NQTLs at 26 CFR
54.9812–1(c)(4)(vi), 29 CFR
2590.712(c)(4)(vi), and 45 CFR
146.136(c)(4)(vi), which cross-references
the language proposed to be added to
paragraph (c)(2)(i). This proposed
language would state that a plan or
issuer may not apply any NQTL that is
applicable only with respect to mental
health or substance use disorder
benefits and not with respect to any
medical/surgical benefits in the same
benefit classification. For this purpose,
an exclusion of benefits for a mental
health condition or substance use
disorder in a classification that is
merely an expression of another NQTL,
such as medical necessity requirements
or experimental or investigational
exclusions, that is applied with respect
to medical/surgical benefits in the same
classification would not be considered a
143 See 26 CFR 54.9812–1(c)(4)(iii) Ex. 6, 29 CFR
2590.712(c)(4)(iii) Ex. 6, and 45 CFR
146.136(c)(4)(iii) Ex. 6. The Departments are
proposing to renumber this example, and to add a
clarification on interaction with the Departments’
group market excepted benefit rules, but otherwise
propose to leave this example unamended.
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separately applicable treatment
limitation. For example, a plan’s
exclusion of coverage for ABA therapy
is not an expression of a broader NQTL
if it was not generated through a process
or strategy, or informed by an
evidentiary standard of, a broader NQTL
like medical necessity. As a result, such
an NQTL would be evaluated under 26
CFR 54.9812–1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR
146.136(c)(4) to determine whether such
NQTL is permitted.
The Departments solicit comments on
this proposal.
5. Other Proposed Amendments
The Departments propose to amend
26 CFR 54.9812–1(c)(2)(ii), 29 CFR
2590.712(c)(2)(ii), and 45 CFR
146.136(c)(2)(ii) to specify that if a plan
or issuer provides any benefits for a
mental health condition or substance
use disorder in any classification of
benefits, benefits for that mental health
condition or substance use disorder
must be provided in every classification
in which medical/surgical benefits are
provided. For this purpose, if a plan or
issuer provides any benefits for a mental
health condition or substance use
disorder in any classification of benefits,
the plan or issuer would not be
considered to provide benefits for the
mental health condition or substance
use disorder in every classification in
which medical/surgical benefits are
provided unless the plan or issuer
provides meaningful benefits for
treatment for that condition or disorder
in each classification, as determined in
comparison to the benefits provided for
medical/surgical conditions in such
classification. This requirement would
ensure that, when plans and issuers
cover benefits for a range of services or
treatments for medical/surgical
conditions in a classification, plans and
issuers cannot provide, for example,
only one limited benefit for a mental
health condition or substance use
disorder in that classification. The
Departments request comments on this
proposal, including whether and how to
define ‘‘meaningful benefits’’ for
purposes of this provision as well as
other potential alternatives. For
example, the Departments request
comments on whether it would be more
practical to require plans and issuers to
provide ‘‘substantial coverage’’ of
mental health and substance use
disorder benefits or benefits for the
‘‘primary or most common or frequent
types of treatment for a covered
condition or disorder’’ in each
classification in which medical/surgical
benefits are provided, and if so, how to
define and make comparisons about
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what constitutes ‘‘substantial coverage’’
or the ‘‘primary or most common or
frequent types of treatment’’ for
medical/surgical and mental health or
substance use disorder benefits.
The preamble of the 2013 final
regulations addressed an issue
characterized as ‘‘scope of services’’ or
‘‘continuum of care.’’ 144 Scope of
services generally refers to the types of
treatments and treatment settings that
are covered by a group health plan or
health insurance coverage. The
preamble to the 2013 final regulations
explained that plans and issuers must
assign mental health and substance use
disorder benefits and medical/surgical
benefits to the six classifications of
benefits in a consistent manner, and
explained that this rule also generally
applies to benefits for intermediate
levels of care provided under the plan
or coverage.145 The 2013 regulations
further explained that plan or coverage
exclusions affecting the scope of
services provided under the plan or
coverage, such as restrictions based on
geographic location, facility type, and
provider specialty, among others, must
comply with the NQTL parity standard.
The Departments recognize that the
proposal to require meaningful benefits
for mental health and substance use
disorder services in a classification is
related to scope of services and request
comments on whether additional
guidance is needed regarding how this
proposed requirement would interact
with the approach related to scope of
services adopted under the 2013 final
regulations.
As mentioned above, the proposed
amendments to 26 CFR 54.9812–
1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and
45 CFR 146.136(c)(2)(ii) would also state
that, if a plan provides any benefits for
a mental health condition or substance
use disorder, benefits would be required
to be provided for that condition or
disorder in each classification for which
any medical/surgical benefits are
provided. This proposed language
would make explicit in the regulations
the Departments’ interpretation that the
requirement to provide coverage in each
classification in which medical/surgical
144 78
FR 68240, 68246–7 (Nov. 13, 2013).
preamble to the 2013 final regulations
stated, ‘‘For example, if a plan or issuer classifies
care in skilled nursing facilities or rehabilitation
hospitals as inpatient benefits, then the plan or
issuer must likewise treat any covered care in
residential treatment facilities for mental health or
substance user disorders as an inpatient benefit. In
addition, if a plan or issuer treats home health care
as an outpatient benefit, then any covered intensive
outpatient mental health or substance use disorder
services and partial hospitalization must be
considered outpatient benefits as well.’’ 78 FR
68240, 68247 (Nov. 13, 2013).
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145 The
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benefits are provided applies on a
condition or disorder basis, an
interpretation that the Departments have
held since the interim final rules.146 The
Departments solicit comments on these
provisions of these proposed rules on
classifications of benefits, including
whether additional flexibility is needed
to account for benefits that are difficult
to place into classifications under the
current structure, and whether
additional guardrails or protections
should be required.
The Departments propose to add two
additional examples to 26 CFR 54.9812–
1(c)(2)(ii)(C), 29 CFR
2590.712(c)(2)(ii)(C), and 45 CFR
146.136(c)(2)(ii)(C) to illustrate the
application of these proposed
amendments to the rules. Proposed
Example 5 would involve a plan that
generally covers treatment for ASD, a
mental health condition, and covers
outpatient, out-of-network
developmental evaluations for ASD but
excludes all other benefits for outpatient
treatment for ASD, including ABA
therapy, when provided on an out-ofnetwork basis. Based on independent
standards of current medical practice,
ABA therapy is one of the primary
treatments for ASD in children. In this
proposed example, the plan generally
covers the full range of outpatient
treatments and treatment settings for
medical conditions and surgical
procedures when provided on an out-ofnetwork basis. This proposed example
provides that the plan would violate the
proposed rules in 26 CFR 54.9812–
1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and
45 CFR 146.136(c)(2)(ii) because it fails
to provide meaningful benefits for
treatment of ASD in the outpatient, outof-network classification, as determined
in comparison to the benefits provided
for medical/surgical conditions in the
classification.
Under proposed Example 6, a plan
generally covers diagnosis and
treatment for eating disorders, a mental
health condition, but specifically
excludes coverage for nutrition
counseling to treat eating disorders,
including in the outpatient, in-network
classification. Nutrition counseling is
one of the primary treatments for eating
disorders. The plan generally provides
benefits for the primary treatments for
medical conditions and surgical
procedures in the outpatient, in-network
classification. In this proposed example,
the exclusion of coverage for nutrition
counseling for eating disorders results
in the plan failing to provide
meaningful benefits for the treatment of
eating disorders in the outpatient, in146 75
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51587
network classification, as determined in
comparison to the benefits provided for
medical/surgical conditions in the
classification. Therefore, the plan
violates the proposed rules in 26 CFR
54.9812–1(c)(2)(ii), 29 CFR
2590.712(c)(2)(ii), and 45 CFR
146.136(c)(2)(ii). The Departments note
that, if the plan covers medical/surgical
benefits for nutritional counseling, this
plan would also violate the proposed
rules in 26 CFR 54.9812–1(c)(4)(vi), 29
CFR 2590.712(c)(4)(vi), and 45 CFR
146.136 (c)(4)(vi) prohibiting separate
NQTLs applicable only to mental health
or substance use disorder benefits.
The 2013 final regulations set forth
the only classifications of benefits that
may be used in applying the parity rules
for financial requirements and treatment
limitations, and listed specific instances
when a plan or issuer may divide
benefits into sub-classifications beyond
the six classifications permitted in
paragraph (c)(2)(ii)(A) of the 2013 final
regulations. Specifically, a plan (or
health insurance coverage) may apply
different levels of financial
requirements to different tiers of
prescription drug benefits based on
reasonable factors determined in
accordance with the rules in 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4) and without
regard to whether a drug is generally
prescribed with respect to medical/
surgical benefits or with respect to
mental health or substance use disorder
benefits. Additionally, if a plan or issuer
provides benefits through multiple tiers
of in-network providers (such as an innetwork tier of other preferred providers
with more generous cost-sharing than a
separate in-network tier of participating
providers), the plan may divide its
benefits furnished on an in-network
basis into sub-classifications that reflect
network tiers, if the tiering is based on
reasonable factors determined in
accordance with the rules in 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4) (such as
quality, performance, and market
standards) and without regard to
whether a provider provides services
with respect to medical/surgical benefits
or mental health or substance use
disorder benefits.147 A plan or issuer is
also permitted to divide its benefits
furnished on an outpatient basis into
two sub-classifications: (1) office visits
(such as physician visits), and (2) all
other outpatient items and services
(such as outpatient surgery, facility
charges for day treatment centers,
147 26 CFR 54.9812–1(c)(3)(iii)(B), 29 CFR
2590.712(c)(3)(iii)(B), and 45 CFR
146.136(c)(3)(iii)(B).
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laboratory charges, or other medical
items).148 These proposed rules at 26
CFR 54.9812–1(c)(2)(ii)(A), 29 CFR
2590.712(c)(2)(ii)(A), and 45 CFR
146.136(c)(2)(ii)(A) would clarify that
plans and issuers may use the
permissible sub-classifications under
the 2013 final regulations when
applying all of the rules for financial
requirements and treatment limitations,
including NQTLs.
After any of these permissible subclassifications are established, a plan or
issuer may not impose any financial
requirement or quantitative treatment
limitation on mental health or substance
use disorder benefits in any subclassification that is more restrictive
than the predominant financial
requirement or quantitative treatment
limitation that applies to substantially
all medical/surgical benefits in the subclassification. These proposed rules
would clarify at 26 CFR 54.9812–
1(c)(3)(iii), 29 CFR 2590.712(c)(3)(iii),
and 45 CFR 146.136(c)(3)(iii) that plans
and issuers are not permitted to divide
benefits into any sub-classifications
other than those specifically permitted
under this paragraph. While this
proposed amendment would not make
any substantive changes to the existing
rule, the Departments are proposing to
make these regulatory amendments to
further reiterate that plans and issuers
are not permitted to sub-divide the
classifications other than as described in
paragraph (c)(3)(iii).
The Departments have received
questions and requests for guidance on
how to comply with MHPAEA’s
requirements with respect to telehealth
benefits. Specifically, some of these
questions have asked where telehealth
fits into the existing classifications and
sub-classifications of benefits, and
whether changes to the Departments’
framework and existing regulations
implementing MHPAEA are necessary
to account for telehealth benefits. The
Departments are not proposing to make
any changes to the classifications and
sub-classifications other than the
proposed amendments described in the
prior paragraph. The Departments
expect plans and issuers to treat
telehealth benefits the same way they
treat those benefits when provided in
person in determining the classification
or sub-classification in which a
particular benefit belongs and in
ensuring compliance with the
requirements of MHPAEA, as required
under the 2013 final rules. The
Departments request comment on issues
148 26 CFR 54.9812–1(c)(3)(iii)(C), 29 CFR
2590.712(c)(3)(iii)(C), and 45 CFR
146.136(c)(3)(iii)(C).
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related to telehealth later in this
preamble.
Treasury and DOL also propose to
amend 26 CFR 54.9812–1(d)(3) and 29
CFR 2590.712(d)(3) by adding crossreferences to proposed 26 CFR 54.9812–
2 and 29 CFR 2590.712–1. This
amendment would clarify the
comparative analyses and any other
applicable information required under
the CAA, 2021 are considered to be
instruments under which a plan is
established or operated, and therefore,
ERISA plans generally must furnish
those documents to plan participants
and beneficiaries upon request within
30 days, as required under section 104
of ERISA and 29 CFR 2520.104b–1.
Additionally, the Departments propose
to amend 26 CFR 54.9812–1(d)(3), 29
CFR 2590.712(d)(3), and 45 CFR
146.136(d)(3) to clarify that the
comparative analyses and any other
applicable information required under
the CAA, 2021 and these proposed rules
qualify as documents, records, and other
information relevant to the claimant’s
claim for benefits to which plans and
issuers must provide reasonable access,
upon request and free of charge. This
clarification is consistent with new
proposed 26 CFR 54.9812–2(e)(2), 29
CFR 2590.712–1(e)(2), and 45 CFR
146.137(e)(2), discussed later in this
preamble, which generally would
require plans and issuers to make
available the comparative analyses
required to be performed and
documented under the CAA, 2021 when
requested by participants and
beneficiaries in ERISA plans, including
by a provider or other person acting as
a participant’s or beneficiary’s
authorized representative. These
comparative analyses are instruments
under which the plan is established and
operated, and participants and
beneficiaries should be able to request
this information in order to ensure they
are informed about their health plans or
group health insurance coverage.
Additionally, these comparative
analyses would be relevant to a
claimant’s claim for benefits and should
therefore be available to participants or
beneficiaries, and providers or other
individuals acting as a participant’s or
beneficiary’s authorized representative.
Finally, the Departments propose to
amend 26 CFR 54.9812–1(e)(4), 29 CFR
2590.712(e)(4), and 45 CFR
146.136(e)(4) to include a reference to
26 CFR 54.9812–2(g), 29 CFR 2590.712–
1(g), and 45 CFR 146.137(g) and to
reflect current HHS regulations at 45
CFR 156.115(a)(3). Existing regulations
at 26 CFR 54.9812–1(e)(4), 29 CFR
2590.712(e)(4), and 45 CFR
146.136(e)(4) state that nothing in
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paragraphs (f) and (g) of the 2013 final
regulations related to MHPAEA’s small
employer exemption and increased cost
exemption, respectively, changes the
requirement under HHS regulations at
45 CFR 147.150 and 156.115, providing
that a health insurance issuer offering
non-grandfathered health insurance
coverage in the individual or small
group market providing mental health
and substance use disorder services,
including behavioral health treatment
services, must comply with the
provisions of 45 CFR 146.136 to satisfy
the requirement to provide essential
health benefits (EHBs). HHS has
updated 45 CFR 156.115(a)(3) to state
that provision of essential health
benefits means that a health plan
provides benefits that ‘‘[w]ith respect to
the mental health and substance use
disorder services, including behavioral
health treatment services, required
under § 156.110(a)(5), comply with the
requirements under section 2726 of the
Public Health Service Act and its
implementing regulations.’’ 149
Therefore, to be consistent with the
language contained in 45 CFR
156.115(a)(3), and to ensure that the
cross-reference between the
Departments’ MHPAEA implementing
regulations and HHS’ EHB
implementing regulations includes the
requirement to comply with the
provisions on comparative analyses, the
Departments propose to amend 26 CFR
54.9812–1(e)(4), 29 CFR 2590.712(e)(4),
and 45 CFR 146.136(e)(4) to state that
nothing in paragraph (f) or (g) of those
sections, or in proposed 26 CFR
54.9812–2(g), 29 CFR 2590.712–1(g), or
45 CFR 146.136–1(g), would change the
requirements of 45 CFR 147.150 and
156.115, providing that a health
insurance issuer offering nongrandfathered health insurance coverage
in the individual or small group market
providing mental health and substance
use disorder services, including
behavioral health treatment services, as
part of essential health benefits required
under 45 CFR 156.110(a)(5) and
156.115(a), must comply with the
requirements under section 2726 of the
PHS Act and its implementing
regulations to satisfy the requirement to
provide coverage for mental health and
substance use disorder services,
149 Patient Protection and Affordable Care Act;
Updating Payment Parameters, Section 1332 Waiver
Implementing Regulations, and Improving Health
Insurance Markets for 2022 and Beyond, 86 FR
53412 (September 27, 2021), available at https://
www.federalregister.gov/documents/2021/09/27/
2021-20509/patient-protection-and-affordable-careact-updating-payment-parameters-section-1332waiver.
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including behavioral health treatment,
as part of essential health benefits.
The Departments solicit comments on
these proposals. Additionally, the
Departments request comments on
whether there are any other steps the
Departments can take to promote
compliance with these proposed rules
or other provisions of MHPAEA, and
what other guidance or technical
support from the Departments would be
helpful to ensuring compliance with
MHPAEA.
B. New Regulations at 26 CFR 54.9812–
2, 29 CFR 2590.712–1, and 45 CFR
146.137
As explained earlier in this preamble,
the CAA, 2021 amended MHPAEA, in
part, to expressly require plans and
issuers that offer both medical/surgical
benefits and mental health or substance
use disorder benefits and impose
NQTLs on mental health or substance
use disorder benefits to perform and
document their comparative analyses of
the design and application of NQTLs,
and make their comparative analyses
available to the Departments or
applicable State authorities upon
request.150 On April 2, 2021, the
Departments issued FAQs Part 45 to
provide guidance on the amendments to
MHPAEA made by the CAA, 2021,
including the NQTL comparative
analyses requirements. Since the
issuance of this guidance, interested
parties have requested additional
guidance and clarifications on the
NQTL comparative analysis
requirements. In addition to the
proposed amendments to existing
provisions of the MHPAEA regulations
outlined earlier in this preamble, these
proposed rules would, using the
definitions indicated in 26 CFR
54.9812–1(a)(2), 29 CFR 2590.712(a)(2),
and 45 CFR 146.136(a)(2), codify in
regulations the requirement that a plan
or issuer that imposes any NQTL on
mental health or substance use disorder
benefits must perform and document
comparative analyses of the design and
application of all NQTLs, consistent
with Code section 9812(a)(8)(A), ERISA
section 712(a)(8)(A), and PHS Act
section 2726(a)(8)(A). The new
proposed rules also set forth the content
requirements for NQTL comparative
analyses, including the proposed
requirement that plans and issuers
include and evaluate relevant data as
part of their comparative analyses to
ensure compliance with MHPAEA.
The Departments are proposing these
content requirements in response to
150 Code section 9812(a)(8)(A), ERISA section
712(a)(8)(A), and PHS Act section 2726(a)(8)(A).
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requests from interested parties for more
details on how plans and issuers should
perform and document comparative
analyses and based on lessons learned
by the Departments from conducting
NQTL comparative analysis reviews
since the effective date of the
comparative analysis requirement. The
proposed additional content
requirements are designed to ensure that
the comparative analyses focus on the
statutory standards and promote parity.
The proposal includes specific
information and data that plans and
issuers would be required to incorporate
in each comparative analysis with
respect to an NQTL, and the factors and
evidentiary standards used to design or
apply the NQTL; how plans and issuers
would be required to demonstrate in
their analysis that, under the terms of
their plan or coverage, as written and in
operation, any processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
NQTL to mental health or substance use
disorder benefits are comparable to, and
are applied no more stringently than
those used with respect to medical/
surgical benefits; and what findings and
conclusions would be required to be
addressed. These proposed rules would
also set forth details with respect to
when and how plans and issuers would
be required to make those comparative
analyses available upon request to the
Departments or the applicable State
authority, and propose when and how
plans and issuers would be required to
make comparative analyses available
upon request to a participant,
beneficiary, or their authorized
representative, including the timeframes
and procedures for plans and issuers to
provide additional information to the
requesting Department or an applicable
State authority, provide a corrective
action plan,151 and notify participants
and beneficiaries of a final
determination of noncompliance. For
purposes of this proposed provision, the
term ‘‘applicable State authority’’ has
the same meaning as under PHS Act
section 2791(d)(I) and 45 CFR 144.103,
which is, with respect to a health
151 The contents of a corrective action plan will
vary from one case to another, but such corrective
action plans will generally be required to contain
certain basic elements including: (1) identification
of the noncompliant NQTL at issue, (2) proposed
approaches to address this noncompliance,
including strategies to provide relief to beneficiaries
and participants who were adversely affected, (3) a
timeline for implementation, (4) potential
constraints or sources of delay that could adversely
affect timely implementation, (5) points of contact
for corrective action plan implementation, and (6)
any other components deemed necessary by the
Departments. When a plan or issuer submits a
corrective action plan to the Departments, the plan
shall be reviewed for completeness and sufficiency.
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insurance issuer in a State, the State
insurance commissioner or official or
officials designated by the State to
enforce the requirements title of title
XXVII of the PHS Act for the State
involved with respect to the issuer.
The Departments request comments
on all aspects of these proposed rules
contained in 26 CFR 54.9812–2, 29 CFR
2590.712–1, and 45 CFR 146.137,
including what additional clarifications
would help plans and issuers perform
and document sufficient comparative
analyses and submit those analyses to
the Secretary or applicable State
authority upon request. In addition, the
Departments are interested in feedback
related to the challenges plans and
issuers face obtaining the necessary
information to perform and document a
sufficient comparative analysis. The
requirement to perform and document
comparative analyses under Code
section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section
2726(a)(8) is generally applicable to
group health plans and issuers offering
group or individual health insurance
coverage. The Departments are aware
that plans and issuers contract with
managed behavioral health
organizations (MBHOs), third-party
administrators (TPAs), or other service
providers to provide or administer
mental health or substance use disorder
benefits.152 The preamble to the 2013
final regulations notes that the fact that
an employer or issuer contracts with
one or more entities to provide or
administer mental health or substance
use disorder benefits or other benefits
does not relieve the employer, issuer, or
both of their obligations under
MHPAEA.153 Plans and issuers should
have clear protocols and processes in
place to ensure that the MBHOs and
other TPAs for both medical/surgical
and mental health and substance use
disorder benefits provide sufficient
information regarding plan structure
and benefits to each other and the plans
and issuers that they serve to ensure
that the mental health and substance
use disorder benefits are coordinated
with the medical/surgical benefits for
purposes of compliance with
MHPAEA.154
The Departments understand that, in
practice, plan sponsors often rely on the
issuer of fully-insured plans, TPAs of
self-insured plans, and other service
providers to administer their benefits,
including designing and implementing
152 78
FR 68239, 68250 (Nov. 13, 2013).
153 Ibid.
154 2020 MHPAEA Self-Compliance Tool,
available at https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/self-compliance-tool.pdf.
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the limitations and coverage terms that
are subject to MHPAEA requirements
and providing them with comparative
analyses (or detailed information to
inform the development of comparative
analyses) for the NQTLs that the issuers,
TPAs, and service providers themselves
design and apply to mental health and
substance use disorder benefits and
medical/surgical benefits under the
terms of the plan or coverage. While the
States and HHS have enforcement
authority over issuers providing health
insurance coverage with respect to fullyinsured plans,155 the Departments have
limited direct enforcement authority
over other service providers (including,
for example, an MBHO or the TPA or
TPAs of a self-insured health plan).156
However, under ERISA, such service
providers may be fiduciaries with
respect to private employment-based
group health plans. To the extent such
service providers are fiduciaries for
private employment-based plans, they
are subject to the provisions governing
fiduciary conduct and liability,
including the provisions for co-fiduciary
liability under ERISA section 405. The
Departments are committed to using all
available authority to ensure
compliance by plans and issuers with
MHPAEA for all entities that play a role
in administering and designing benefits.
The Departments solicit comments on
how best to ensure all the entities
involved in the design and
administration of a group health plan’s
benefits provide the necessary
information to plans and issuers to
support their efforts to comply with
MHPAEA.
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1. Content of Comparative Analyses—26
CFR 54.9812–2(c), 29 CFR 2590.712–
1(c), and 45 CFR 146.137(c)
The Departments propose
requirements at 26 CFR 54.9812–2(c), 29
CFR 2590.712–1(c), and 45 CFR
146.137(c) governing the content of the
comparative analyses required by Code
section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section
2726(a)(8). The proposed content
155 As noted earlier in this preamble, HHS
enforces applicable provisions of Title XXVII of the
PHS Act, including the provisions added by
MHPAEA, with respect to health insurance issuers
offering group and individual health insurance
coverage in States that elect not to enforce or fail
to substantially enforce MHPAEA or another PHS
Act provision.
156 The 2022 MHPAEA Report to Congress notes
that EBSA has used the process outlined in section
203 of the CAA, 2021 as a method to engage with
service providers (such as TPAs and MBHOs) to
obtain wider-scope corrections affecting many plans
at once, including pursuing cases against issuers in
their capacity as administrative services-only
providers (ASOs) to self-insured plans covered by
ERISA.
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requirements for comparative analyses
as set forth in these proposed
regulations are based on the stepwise
process found in the 2020 MHPAEA
Self-Compliance Tool, described earlier
in this preamble, and by the express
requirements of the governing statutory
provisions.
Consistent with Code section
9812(a)(8), ERISA section 712(a)(8), and
PHS Act section 2726(a)(8) these
proposed rules would require that a
comparative analysis include, at a
minimum, with respect to each NQTL
imposed under a plan or coverage
option on mental health or substance
use disorder benefits, six specific
elements:
(1) a description of the NQTL;
(2) the identification and definition of
the factors used to design or apply the
NQTL;
(3) a description of how factors are
used in the design or application of the
NQTL;
(4) a demonstration of comparability
and stringency, as written;
(5) a demonstration of comparability
and stringency in operation; and
(6) findings and conclusions.
Additionally, these proposed rules
would require each plan or issuer to
prepare and make available to the
Departments or applicable State
authority, upon request, a written list of
all NQTLs imposed under the plan or
coverage and a general description of
any information considered or relied
upon by the plan or issuer in preparing
the comparative analysis for each
NQTL. This requirement is consistent
with FAQs Part 45, which in addition to
highlighting four NQTLs that would be
enforcement priorities in the near
term,157 stated that plans and issuers
should be prepared to make available a
list of all other NQTLs for which they
have prepared a comparative analysis
and a general description of any
documentation considered or relied
upon to prepare each analysis.158 The
Departments propose to include a
157 See FAQs Part 45, Q8 (listing prior
authorization requirements for in-network and outof-network inpatient services; concurrent review for
in-network and out-of-network inpatient and
outpatient services; standards for provider
admission to participate in a network, including
reimbursement rates; and out-of-network
reimbursement rates (plan methods for determining
usual, customary, and reasonable charges).
Additionally, in the 2023 MHPAEA Report to
Congress, EBSA added two areas of priority for the
applicable Reporting Period based on CAA, 2021
implementation experience during the first
reporting period: impermissible exclusions of key
treatments for mental health conditions and
substance use disorders and adequacy standards for
mental health and substance use disorder provider
networks.
158 FAQs Part 45, Q8.
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requirement to make such a list
available to the Departments in
connection with a request for a
comparative analysis and to clarify that
this requirement applies with respect to
comparative analyses prepared for all
NQTLs, not just those for which the
Departments or an applicable State
authority have requested a comparative
analysis or other information at any
particular time. For plans subject to
ERISA, these proposed rules would also
require that the plan or issuer provide
this list and general description to the
named fiduciaries required to review
the findings or conclusions of each
comparative analysis, as discussed later
in this preamble.
For each comparative analysis, the
description of the NQTL required under
proposed 26 CFR 54.9812–2(c)(1), 29
CFR 2590.712–1(c)(1), and 45 CFR
146.137(c)(1) would be required to
identify the NQTL that is the subject of
the comparative analysis, including the
specific terms of the plan or coverage or
other relevant terms regarding the
NQTL, the policies or guidelines
(internal or external) in which the
NQTL appears or is described, and the
applicable sections of any other relevant
documents, such as provider contracts
that describe the NQTL, consistent with
Code section 9812(a)(8)(A)(i), ERISA
section 712(a)(8)(A)(i), and PHS Act
section 2726(a)(8)(A)(i). This would
include the documents that contain the
specific language of the NQTL that the
plan or issuer imposes.
The plan or issuer also would be
required to identify all mental health or
substance use disorder benefits and
medical/surgical benefits to which the
NQTL applies, including a list of which
benefits are considered to be mental
health and substance use disorder
benefits and which benefits are
considered to be medical/surgical
benefits (consistent with the proposed
definitions of those terms).
Additionally, each plan or issuer would
be required to include in its
comparative analysis a description of
which benefits are included in each
classification of benefits set forth in 26
CFR 54.9812–1(c)(2)(ii)(A), 29 CFR
2590.712(c)(2)(ii)(A), and 45 CFR
146.136(c)(2)(ii)(A). Finally, the plan or
issuer would be required to identify the
predominant NQTL applicable to
substantially all medical/surgical
benefits in each classification, including
an explanation of how the plan or issuer
determined which variation is the
predominant NQTL as compared to
other variations, as well as how the plan
identified the variations of the NQTL.
This requirement is consistent with the
statutory language that requires a
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description of the medical/surgical
benefits subject to the NQTL and would
operate in support of the proposed no
more restrictive requirement at 26 CFR
54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i), discussed earlier in this
preamble.
The second proposed content element
of the comparative analysis, under
proposed 26 CFR 54.9812–2(c)(2), 29
CFR 2590.712–1(c)(2), and 45 CFR
146.137(c)(2), would be that a plan or
issuer would be required to identify and
define all of the factors considered or
relied upon to design or apply the
NQTL. The plan or issuer would be
required to identify all of the factors
considered, as well as the evidentiary
standards considered or relied upon to
design or apply each factor and the
evidence or sources from which each
evidentiary standard was derived, in
determining which mental health or
substance use disorder benefits and
which medical/surgical benefits are
subject to the NQTL.
The plan or issuer would then be
required to define each factor. The
definition of each factor would be
required to include a detailed
description of the factor, and a
description of each evidentiary standard
(and the source of each evidentiary
standard) identified. The Departments
stress that when identifying the
evidence or sources from which an
evidentiary standard is derived, the plan
or issuer should be prepared to provide
the copies of the actual evidence or
source used, as well as the date and
relevant citation for the correct version
of the document used.
The third proposed content element
of the comparative analysis, under 26
CFR 54.9812–2(c)(3), 29 CFR 2590.712–
1(c)(3), and 45 CFR 146.137(c)(3) of
these proposed rules, would be a
description of how each factor is used
in the design or application of the NQTL
to mental health and substance use
disorder benefits and medical/surgical
benefits in a classification. This section
of the comparative analysis would be
required to include a detailed
explanation of how each factor
identified and defined in the
comparative analysis is used to
determine which mental health or
substance use disorder benefits and
which medical/surgical benefits are
subject to the NQTL. The description
would also include an explanation of
the evidentiary standards or other
information or sources (if any)
considered or relied upon in designing
or applying the factors or relied upon in
designing and applying the NQTL,
including in the determination of
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whether and how mental health or
substance use disorder benefits or
medical/surgical benefits are subject to
the NQTL. In instances in which the
application of the factor depends on
specific decisions made in the
administration of benefits, the
comparative analysis would be required
to provide information on the nature
and timing of the decisions, and the
professional designations and
qualifications of each decision maker.
For example, for a prior authorization
NQTL that uses quality measures as a
factor, the plan or issuer would be
required to describe the nature of the
decisions reviewers make to apply the
factor (and the timing of those
decisions) and describe the reviewers’
professional designations and
qualifications (including, for example,
whether they are psychiatrists or
psychologists) when using the factor to
apply the NQTL to mental health
benefits.
These proposed rules would further
provide that, to the extent that more
than one factor is identified and defined
with respect to an NQTL, the
comparative analysis would be required
to explain how such factors relate to
each other; the order in which all the
factors are applied, including when they
are applied; whether and how any
factors are given more weight than
others; and the reasons for the ordering
or weighting of the factors. The analysis
would also be required to address any
deviation(s) or variation(s) from a factor,
its applicability, or its definition
(including the evidentiary standards
used to define the factor and the
information or sources from which each
evidentiary standard was derived), such
as how the factor is used differently to
apply the NQTL to mental health and
substance use disorder benefits as
compared to medical/surgical benefits,
and a description of how the plan or
issuer establishes such deviations or
variations. For purposes of these
proposed rules, the terms ‘‘deviations’’
or ‘‘variations’’ in this context refer to
any differences in how a factor is
applied with respect to an NQTL. For
example, if the NQTL that is the subject
of a comparative analysis is the
calculation of reimbursement rates for
out-of-network providers, and the
factors used to determine how the
NQTL applies to mental health and
substance use disorder providers are the
geographic location of the providers and
licensing and accreditation of providers,
the comparative analysis would be
required to explain in detail how each
factor is used to determine the out-ofnetwork reimbursement rates for both
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mental health and substance use
disorder providers and medical/surgical
providers, describe how the two factors
relate to each other, and address how
the plan or issuer establishes any
deviations or variations from these
factors.
Under the fourth and fifth proposed
content elements of a comparative
analysis, these proposed rules would
require plans and issuers to demonstrate
that, in any classification, under the
terms of the plan (or health insurance
coverage), both as written (under the
fourth content element) and in
operation (under the fifth content
element), any processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
NQTL to mental health or substance use
disorder benefits in the classification are
comparable to, and are applied no more
stringently than, those used in designing
and applying the NQTL with respect to
medical/surgical benefits. These content
elements are consistent with the
statutory requirement that comparative
analyses demonstrate ‘‘that the
processes, strategies, evidentiary
standards, and other factors used to
apply the NQTLs to mental health or
substance use disorder benefits, as
written and in operation, are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, and
other factors used to apply the NQTLs
to medical/surgical benefits in the
benefits classification,’’ 159 as well as the
provisions of the 2013 final regulations
and these proposed rules that would
require plans and issuers to analyze
parity with respect to NQTLs as written
and in operation (recognizing that a
plan or issuer may have written
processes or plan or coverage terms that
are compliant as written, but might not
be compliant in practice).160
For example, a plan or issuer might
use a factor that allows discretion in
applying an NQTL that is not captured
in detail in written plan or coverage
terms or procedures (such as whether an
individual may be safely and effectively
transitioned to a lower level of care),
which might not be comparable in
practice when processing claims for
mental health and substance use
disorder benefits as compared to when
processing claims for medical/surgical
benefits. Additionally, a plan or issuer
might have written processes that are
comparable for an NQTL applicable to
159 Code section 9812(a)(8)(A)(iv), ERISA section
712(a)(8)(A)(iv), and PHS Act section
2726(a)(8)(A)(iv).
160 26 CFR 54.9812(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i).
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mental health and substance use
disorder benefits and medical/surgical
benefits, but that are applied in a more
stringent manner to mental health and
substance use disorder benefits than to
medical/surgical benefits in operation.
Thus, it is essential that the
Departments are able to determine that,
as written and in operation, any
processes, strategies, evidentiary
standards, or other factors used in
designing and applying the NQTL to
mental health or substance use disorder
benefits in the classification are
comparable to, and are applied no more
stringently than, those used in designing
and applying the NQTL to medical/
surgical benefits.
To demonstrate comparability and
stringency as written under the fourth
content element in proposed 26 CFR
54.9812–2(c)(4), 29 CFR 2590.712–
1(c)(4), and 45 CFR 146.137(c)(4), plans
and issuers would be required to
include in their comparative analysis,
with respect to the NQTL and the
factors used in applying the NQTL,
documentation of each factor identified
and defined in the comparative analysis
that was applied to determine whether
the NQTL applies to mental health or
substance use disorder benefits and
medical/surgical benefits in a
classification. This would include, as
relevant, quantitative data, calculations,
or other analyses showing whether, in
each classification in which the NQTL
applies, mental health or substance use
disorder benefits and medical/surgical
benefits met or did not meet any
applicable threshold identified in the
relevant evidentiary standard, and the
evaluation of relevant data as required
under 26 CFR 54.9812–1(c)(4)(iv)(A), 29
CFR 2590.712(c)(4)(iv)(A), and 45 CFR
146.136(c)(4)(iv)(A) of these proposed
rules, to determine that the NQTL
would or would not apply. In addition,
such documentation would include
records maintained by the plan or issuer
documenting the consideration and
application of all factors and evidentiary
standards, as well as the results of their
application. Such records could include
meeting minutes, or calculations related
to quantitative factors, such as costs.
Plans and issuers would also be
required to include in their comparative
analysis, in each classification in which
the NQTL applies, a comparison of how
the NQTL, as written, is designed and
applied to mental health or substance
use disorder benefits and to medical/
surgical benefits, including the specific
provisions of any forms, checklists,
procedure manuals, or other
documentation used in designing and
applying the NQTL or that address the
application of the NQTL. Additionally,
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the plan or issuer would be required to
include in its comparative analysis
documentation demonstrating how the
factors are comparably applied, as
written, to mental health or substance
use disorder benefits and medical/
surgical benefits in each classification,
to determine which benefits are subject
to the NQTL. To the extent there is any
deviation(s) or variation(s) in the
application of a factor, the plan or issuer
would be required to include in their
comparative analysis an explanation of
the reason(s) for any deviation(s) or
variation(s) in the application of a factor
used to apply the NQTL, or the
application of the NQTL, to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits, and how the plan or
issuer establishes such deviation(s) or
variation(s), including in the definition
of the factors, the evidentiary standards
used to define the factors, and the
sources from which the evidentiary
standards were derived; in the design of
the factors or evidentiary standards; or
in the application or design of the
NQTL. As noted earlier in this
preamble, the terms ‘‘deviations’’ or
‘‘variations’’ refer to any differences in
how a factor is applied.
In the fifth proposed content element
of a comparative analysis, to
demonstrate comparability and
stringency in operation, proposed 26
CFR 54.9812–2(c)(5), 29 CFR 2590.712–
1(c)(5), and 45 CFR 146.137(c)(5) would
require a plan or issuer to include in its
comparative analysis, with respect to
the NQTL and the factors used in
designing and applying the NQTL, a
comprehensive explanation of how the
plan or issuer ensures that, in operation,
the processes, strategies, evidentiary
standards, or other factors used in
designing and applying the NQTL to
mental health or substance use disorder
benefits in a classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the NQTL with respect to
medical/surgical benefits. This
comprehensive explanation would be
required to include an explanation of
any methodology and underlying data
used to demonstrate the application of
the NQTL in operation, and the sample
period, inputs used in any calculations,
definitions of terms used, and any
criteria used to select the mental health
or substance use disorder benefits and
medical/surgical benefits to which the
NQTL is applicable.
Requiring data to be provided to
demonstrate compliance with MHPAEA
is not a new concept. To facilitate the
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compliance review of NQTLs, many
States have adopted reporting
requirements capturing specific data
that reflect how the application of
certain NQTLs affect outcomes.161
Examples of data required to be
included in reporting by States includes
rates of utilization review (including
approvals and denials), rates of appeal
for adverse benefit determinations
(upheld and overturned), the numbers
or rates of prior or concurrent
authorization requests and denials,
percentages of claims for mental health
and substance use disorder benefits and
medical/surgical benefits that are innetwork, and provider reimbursement
rates.162 Additionally, a number of
States have established quantitative
standards for assessing network
adequacy, based on maximum travel
time or distance, provider-to-enrollee
ratios, and maximum appointment wait
times.163 HHS established similar
quantitative standards for assessing
network adequacy for QHPs offered
through the Federally-facilitated
Exchanges starting with benefit year
2023.164 The proposed requirement that
plans and issuers include such data, and
their evaluation of such data, as part of
a comparative analysis would support
the Departments’ efforts to ensure
compliance with MHPAEA, with a focus
on access to mental health and
substance use disorder care, by helping
to identify instances of operational
noncompliance with the requirements
of MHPAEA and its implementing
regulations.
Therefore, as part of a comparative
analysis, under these proposed rules,
plans and issuers would be required to
include the relevant data required under
proposed 26 CFR 54.9812–1(c)(4)(iv)(A),
29 CFR 2590.712(c)(4)(iv)(A), and 45
146.136(c)(4)(iv)(A) and evaluate the
outcomes that resulted from the
application of the NQTL to mental
health or substance disorder benefits
and medical/surgical benefits, including
an evaluation of such relevant data in
their comparative analysis, in order to
demonstrate whether, in operation, any
processes, strategies, evidentiary
161 See State Parity Implementation Survey,
available at https://www.paritytrack.org/reports/
#state-disparities.
162 See, e.g., N.Y. Ins. Law 343(b); DC Code Sec.
31–3175.03; and Tex. Ins. Code Sec. 1355.254
(coverage for mental health conditions and
substance use disorders).
163 For examples of these State-imposed
quantitative standards for assessing network
adequacy, see https://www.ncsl.org/health/healthinsurance-network-adequacy-requirements.
164 87 FR 27208 (May 6, 2022); 2023 Final Letter
to Issuers in the Federally-facilitated Exchanges,
available at https://www.cms.gov/sites/default/files/
2022-04/Final-2023-Letter-to-Issuers_0.pdf.
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standards, or other factors used in
applying the NQTL to mental health or
substance use disorder benefits in a
classification are comparable to, and are
applied no more stringently than those
used in applying the limitation with
respect to medical/surgical benefits in
the classification. The collection and
evaluation of this data would assist
plans, issuers, participants,
beneficiaries, and the Departments (or
applicable State authority) in
identifying an NQTL that might not
comply with MHPAEA.
As part of this evaluation, the
comparative analysis would be required
to include a detailed explanation of
material differences in outcomes that
are not attributable to differences in the
comparability or relative stringency of
the NQTL as applied to mental health or
substance use disorder benefits and
medical/surgical benefits, as well as the
basis for concluding that material
differences in outcomes are not
attributable to differences in the
comparability or relative stringency of
the NQTL. The requirement that plans
and issuers include the relevant data,
and their evaluation and analysis of
such data, in their comparative analysis
is consistent with the CAA, 2021’s
amendments to MHPAEA, which
require plans and issuers to demonstrate
that, in operation, the processes,
strategies, evidentiary standards, and
other factors used in applying the NQTL
to mental health or substance use
disorder benefits are comparable to, and
are applied no more stringently than,
those used to apply the NQTL to
medical/surgical benefits.165 Similarly,
to be compliant with this proposed
requirement, plans and issuers must
adequately demonstrate that any
material differences in outcomes are not
due to the processes, strategies,
evidentiary standards, and other factors
being applied more stringently to
mental health or substance use disorder
benefits, and that they are designed and
applied comparably.
The Departments note that their
authority to require data is not limited
to the data required by 26 CFR 54.9812–
2(c)(5), 29 CFR 2590.712–1(c)(5), and 45
CFR 146.137(c)(5). The proposed
requirement to evaluate a comparative
analysis for operational compliance
with MHPAEA’s requirements would
permit the Departments to require the
plan or issuer to provide, as part of that
process, additional data to analyze
assertions made in the comparative
analysis. For example, the Departments
165 Code section 9812(a)(8)(A)(iv), ERISA section
712(a)(8)(A)(iv), and PHS Act section
2726(a)(8)(A)(iv).
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may make such a request in instances in
which the Departments conclude that a
plan or issuer has not submitted to the
Departments sufficient information to
assess compliance with MHPAEA as
part of its comparative analysis, as
described later in this preamble. Plans
and issuers performing and
documenting the required comparative
analysis of an NQTL must also provide
any and all relevant information used to
design or apply the NQTL, as explained
earlier in this preamble. Finally, the
Departments may also require
additional information under their
authority to investigate plans and
issuers.166
The comparative analysis would be
required to include a discussion of any
measures that have been or are being
implemented by the plan or issuer to
mitigate any materially disparate
outcomes with respect to mental health
or substance use disorder benefits and
medical/surgical benefits, including the
actions the plan or issuer is taking
under these proposed rules to address
the material differences in access to
mental health or substance use disorder
benefits as compared to medical/
surgical benefits, including the actions
required by 26 CFR 54.9812–
1(c)(4)(iv)(B)(1), 29 CFR
2590.712(c)(4)(iv)(B)(1), and 45 CFR
146.136(c)(4)(iv)(B)(1). As discussed
earlier in this preamble and in previous
guidance related to MHPAEA,
evaluating quantitative outcomes helps
to identify areas of potential
noncompliance. Therefore, these
proposed rules would require that as
part of a sufficient comparative analysis,
a plan or issuer must carefully assess
any outcomes that resulted from the
application of an NQTL, explain
material differences in those outcomes,
and disclose any measures to mitigate
those disparate outcomes.
The sixth proposed content element
of a comparative analysis under
proposed 26 CFR 54.9812–2(c)(6), 29
CFR 2590.712–1(c)(6), and 45 CFR
146.137(c)(6) (and consistent with Code
section 9812(a)(8)(A)(v), ERISA section
712(a)(8)(A)(v), and PHS Act section
2726(a)(8)(A)(v)), would require that a
comparative analysis address findings
and conclusions as to the comparability
of the processes, strategies, evidentiary
standards, and other factors used in
designing and applying the NQTL to
mental health or substance use disorder
benefits and medical/surgical benefits
within each classification, and the
relative stringency of their application,
both as written and in operation. The
comparative analysis would be required
166 See,
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51593
to include any findings or conclusions
indicating that the plan or coverage is
not (or might not be) in compliance with
the provisions of these proposed rules
for NQTLs, including any actions the
plan or issuer has taken or intends to
take to address any potential areas of
concern or noncompliance. The
comparative analysis would be required
to include a reasoned and detailed
discussion of those findings and
conclusions, as well as citations to any
additional specific information not
otherwise included in the comparative
analysis that supports the findings and
conclusions.
Additionally, these proposed rules
would require that the comparative
analysis include the date of the analysis
and the title and credentials of all
relevant persons who participated in the
performance and documentation of the
comparative analysis. If the comparative
analysis relies upon an evaluation by a
reviewer or consultant considered by
the plan or issuer to be an expert, the
comparative analysis would be required
to include an assessment of each
expert’s qualifications and the extent to
which the plan or issuer ultimately
relied upon each expert’s evaluation in
performing and documenting the
comparative analysis of the design and
application of each NQTL applicable to
both mental health or substance use
disorder benefits and medical/surgical
benefits.
Finally, for plans subject to ERISA,
the comparative analysis would be
required to include a certification by
one or more named fiduciaries who
have reviewed the analysis, stating
whether they found the comparative
analysis to be in compliance with the
content requirements of these proposed
rules. This requirement, along with the
requirement that the plan provide
named fiduciaries with a written list of
all NQTLs and a general description of
any existing documentation relied on by
the plan or issuer in preparing the
comparative analysis for each NQTL,
would help ensure that plan fiduciaries
meet their obligations under ERISA to
review the comparative analyses and
properly monitor their plans for
compliance with MHPAEA.
The Departments emphasize that the
proposed requirement to include this
information on the factors, evidentiary
standards, and sources used to design or
apply the NQTL is crucial to
understanding whether the NQTL
complies with MHPAEA’s requirements.
Plans and issuers must disclose
information as required by MHPAEA to
participants and beneficiaries, as well as
the Departments, regardless of whether
such information is ‘‘proprietary’’ and/
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or has ‘‘commercial value.’’ 167
Similarly, if finalized, plans and issuers
must include all information required in
the comparative analyses.
The Departments solicit comments on
all aspects of the proposed content
elements for NQTL comparative
analyses, including whether there are
additional considerations, such as the
Kennedy Forum’s Six-Step Parity
Compliance Guide,168 or comparable
State processes, that the Departments
should incorporate into these proposed
rules. The Departments also solicit
comments on whether any of these
proposed requirements related to the
content of comparative analyses are
superfluous, unhelpful, or unreasonably
burdensome.
2. Requirement To Provide Comparative
Analyses and Notices to the
Departments and Other Individuals and
Entities—26 CFR 54.9812–2(d) and (e),
29 CFR 2590.712–1(d) and (e), and 45
CFR 146.137(d) and (e)
As specified in Code section
9812(a)(8), ERISA section 712(a)(8), and
PHS Act section 2726(a)(8) and FAQs
Part 45, effective February 10, 2021,
plans and issuers must be prepared to
make their comparative analyses
available to the Departments or
applicable State authorities upon
request. These proposed rules set forth
proposed requirements related to
submission of comparative analyses to
the Departments or applicable State
authorities once a request has been
received by a plan or issuer. However,
as discussed later in this section of the
preamble, the requirement to perform
and document comparative analyses of
the design and application of NQTLs is
not dependent upon a request by the
Secretary or an applicable State
authority, and plans and issuers should
not wait for a request from the Secretary
or applicable State authority to perform
and document their comparative
analyses.
These proposed rules would require
that plans and issuers make a
comparative analysis required under 26
CFR 54.9812–2(b), 29 CFR 2590.712–
1(b), and 42 CFR 147.137(b) available
and submit it upon request by the
relevant Secretary. Once a comparative
analysis is requested, these proposed
rules would require plans and issuers to
provide a comparative analysis within
10 business days of receipt of a request
167 See
FAQs Part XXIX, Q12.
‘‘Six-Step’’ Parity Compliance Guide for
Non-Quantitative Treatment Limitation (NQTL)
Requirements, available at https://www.dol.gov/
sites/dolgov/files/ebsa/laws-and-regulations/rulesand-regulations/public-comments/faq-38/
00018.pdf.
168 The
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from the relevant Secretary (or an
additional period of time specified by
the relevant Secretary). This proposed
deadline is consistent with the
Departments’ current enforcement
practices for requesting comparative
analyses from plans and issuers and
would allow each Secretary to permit
extensions of this deadline as warranted
on a case-by-case basis.
After a plan or issuer responds to an
initial request for a comparative
analysis, if the relevant Department
(with jurisdiction over the group health
plan (or health insurance coverage
offered by an issuer in connection with
such a plan)) concludes a plan or issuer
has not submitted sufficient information
for it to review the requested
comparative analyses, Code section
9812(a)(8)(B)(ii), ERISA section
712(a)(8)(B)(ii), and PHS Act section
2726(a)(8)(B)(ii) provide that the
Departments shall specify to the plan or
issuer the additional information the
plan or issuer must submit to be
responsive to the request. Under these
proposed rules, the plan or issuer would
be required to furnish this additional
information to the relevant Secretary
within 10 business days after the
relevant Secretary specifies the
additional information to be submitted
(or an additional period of time
specified by the relevant Secretary). As
noted earlier in this preamble, a request
for additional information by the
relevant Department or an applicable
State authority may include a request
for data to analyze the assertions made
in the comparative analyses, consistent
with existing authority. This additional
information or data may relate to the
relevant data specified by the
Departments to be included in a
comparative analysis (discussed earlier
in this preamble) or other data.
In instances that the relevant
Department has reviewed a plan’s or
issuer’s comparative analyses (and any
additional information submitted upon
request), and made an initial
determination that the plan or issuer is
not in compliance with the
requirements related to NQTLs, Code
section 9812(a)(8)(B)(iii)(I)(aa), ERISA
section 712(a)(8)(B)(iii)(I)(aa), and PHS
Act section 2726(a)(8)(B)(iii)(I)(aa)
require the plan or issuer to respond to
the Departments and specify the actions
the plan or issuer will take to bring the
plan or coverage into compliance (a
corrective action plan) and provide
additional comparative analyses that
demonstrate compliance not later than
45 calendar days after the initial
determination of noncompliance.
Consistent with these statutory
provisions, these proposed rules would
PO 00000
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also require the plan or issuer to
respond to the relevant Department and
specify the actions the plan or issuer
will take to bring the plan or coverage
into compliance, and provide to the
relevant Department additional
comparative analyses meeting the
requirements of these proposed rules
that demonstrate compliance with
MHPAEA not later than 45 calendar
days after the relevant Department’s
initial determination that the plan or
issuer is not in compliance.
If the relevant Department makes a
final determination that the plan or
issuer is not in compliance following
the 45-calendar-day corrective action
period, these proposed rules would
provide at 26 CFR 54.9812–2(d)(4), 29
CFR 2590.712–1(d)(4), and 45 CFR
146.137(d)(4) that, within 7 calendar
days of the receipt of the final
determination of noncompliance, the
plan or issuer must provide a
standalone notice that is not combined
with any other notices or disclosures, as
required under applicable Federal or
State law, to all participants and
beneficiaries enrolled in the plan or
coverage that the plan or issuer has been
determined to not be in compliance
with the requirements of these proposed
rules, consistent with Code section
9812(a)(8)(B)(iii)(I)(bb), ERISA section
712(a)(8)(B)(iii)(I)(bb), and PHS Act
section 2726(a)(8)(B)(iii)(I)(bb). The plan
or issuer would also be required to
provide a copy of the notice to the
Secretary, any service provider involved
in the claims process, and any fiduciary
responsible for deciding benefit claims
within the same time frame. The
Departments solicit comments on the
proposed timing of this notice,
including whether requiring the notice
to be provided within 7 calendar days
of receipt of a final determination of
noncompliance would provide
sufficient time for plans and issuers to
provide notice, or whether allowing the
notice to be provided within 7 business
days would be more practicable given
holidays and weekends that could serve
to effectively shorten the 7-calendar-day
timeframe.
The notice to participants and
beneficiaries (which would include a
participant’s or beneficiary’s authorized
representative) informing them that the
relevant Department has determined
that their plan or coverage violates
MHPAEA gives them critically
important information for the pursuit
and protection of their own benefit
claims and rights and provides a
powerful incentive for the plan or issuer
to take necessary corrective actions to
come into compliance following an
initial determination of noncompliance.
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These proposed rules set forth
requirements for the content of this
notice and the manner in which it
would be required to be provided. These
proposed rules would require that the
notice be written in plain language and
in a manner calculated to be understood
by the average plan participant or
beneficiary. This concept is consistent
with the Departments’ transparency in
coverage regulations,169 and the DOL’s
style and format requirements for
summary plan descriptions under
ERISA.170 The notice would be required
to include the following statement
prominently displayed on the first page,
in no less than 14-point font:
‘‘Attention! The [Department of
Labor/Department of Health and Human
Services/Department of the Treasury]
has determined that [insert the name of
group health plan or health insurance
issuer] is not in compliance with the
Mental Health Parity and Addiction
Equity Act.’’
The notice would also be required to
contain a summary of any changes the
plan or issuer has made as part of its
corrective action plan specified to the
Secretary following the initial
determination of noncompliance,
including an explanation of any
opportunity for a participant or
beneficiary to have a claim for benefits
reprocessed. Additionally, the notice
would be required to include a
summary of the Secretary’s final
determination that the plan or issuer is
not in compliance with MHPAEA,
including any provisions or practices
identified to be in violation of
MHPAEA, any additional corrective
actions identified by the Secretary in the
final determination notice, and
information on how participants and
beneficiaries can obtain a copy of the
final determination of noncompliance
from the plan or issuer. This notice
would also be required to include any
other actions the plan or issuer is taking
to come into compliance with
MHPAEA, information on when the
plan or issuer will take (or has taken)
such actions, and a clear and accurate
statement explaining whether the
Secretary has indicated that those
actions, if completed, will result in
compliance. Finally, these proposed
rules would require the notice include
contact information for questions and
complaints, with a statement explaining
how participants and beneficiaries can
obtain more information about the
notice, including a phone number and
169 26 CFR 54.9815–2715A1(a)(2)(xx), 29 CFR
2590.715–2715A1(a)(2)(xix), 45 CFR
147.210(a)(2)(xx).
170 29 CFR 2520.102–2(a).
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an email or web portal address for the
plan or issuer, and contact information
for the relevant Department.
Under these proposed rules, a plan or
issuer would be required to make the
notice available in paper form. The plan
or issuer may also make the notice
available electronically (such as by
email or an internet posting) if the
format is readily accessible, the notice is
provided in paper form free of charge
upon request, and, in a case in which
the electronic form is an internet
posting, the plan or issuer timely
notifies the participant or beneficiary in
paper form (such as a postcard) or email
that the documents are available on the
internet, provides the internet address,
and notifies the participant or
beneficiary that the documents are
available in paper form upon request.
This approach is similar to standards for
when a plan or issuer is permitted to
provide a copy of their plan’s or
coverage’s summary of benefits and
coverage with respect to participants
and beneficiaries who are eligible but
not enrolled for coverage.171 For ERISA
plans, the plan or issuer would also be
required to ensure that the notice is
provided to any service provider
involved in the claims process, and any
fiduciary responsible for deciding
benefit claims within 7 calendar days of
receipt of the final determination of
noncompliance, so that the service
provider or fiduciary can appropriately
take the violation into account in
deciding claims in compliance with the
requirements of 29 CFR 2590.712(c)(4)
and in accordance with section
404(a)(1)(D) of ERISA.
In addition to making the comparative
analyses available upon request to the
relevant Secretary, 26 CFR 54.9812–2(e),
29 CFR 2590.712–1(e), and 45 CFR
146.137(e) of these proposed rules
would require that plans and issuers
make available the comparative analyses
required by 26 CFR 54.9812–2, 29 CFR
2590.712–1, and 45 CFR 146.137 when
requested by any applicable State
authority. While these proposed rules
would codify the statutory requirement
to make comparative analyses available
to the applicable State authority upon
request, these proposed rules do not
otherwise apply the timeframes and
processes regarding the Secretarial
request process to requests made by
applicable State authorities. The
Departments seek comment on whether,
in cases in which an applicable State
authority makes a request for an NQTL
comparative analysis, the proposed
171 See 26 CFR 54.9815–2715(a)(4)(ii)(B), 29 CFR
2590.715–2715(a)(4)(ii)(B), 45 CFR
147.200(a)(4)(ii)(B).
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51595
requirements in paragraph (d) related to
submission of comparative analyses to
the Secretary, including the proposed
notice requirement in paragraph (d)(4),
should apply to plans and issuers with
respect to a request made by the
applicable State authority. In cases of an
adverse benefit determination, nongrandfathered group health plans and
health insurance issuers offering nongrandfathered group or individual
health insurance coverage would be
required to make these comparative
analyses available to participants or
beneficiaries, and providers or other
individuals acting as their authorized
representative, upon request and in
accordance with the requirements under
section 2719 of the PHS Act and its
implementing regulations.172 Finally,
the Departments solicit comment on
other measures to increase transparency
and better inform the general public
regarding final agency determinations of
noncompliance of plans or issuers with
MHPAEA.
Additionally, under these proposed
rules, plans subject to ERISA would be
required to make these comparative
analyses available to participants and
beneficiaries upon request, consistent
with the interpretation discussed earlier
in this preamble that comparative
analyses and any other applicable
information required under the CAA,
2021 and these proposed rules are
instruments under which a plan is
established or operated. If a provider or
other person is acting as a participant’s
or, beneficiary’s, authorized
representative, plans subject to ERISA
would be required to make this analysis
available to the provider or other
authorized representative.
The Departments have received
questions about when plans and issuers
are required to perform and document
comparative analyses, and how often
they must be updated. The Departments
are aware of reports that some plans (or
their TPAs or other service providers)
and issuers have not documented their
comparative analyses and instead wait
until the Departments, or an applicable
State authority, request comparative
analyses, or indicate that the plan or
issuer is otherwise under investigation.
The Departments are also aware of
reports that self-insured plans have been
unsuccessful in receiving comparative
analyses (or the information required to
perform and document comparative
analyses) from their TPAs or other
service providers in response to a
request. The Departments emphasize
that the requirement to perform and
172 26 CFR 54.9815–2719, 29 CFR 2590.715–2719,
and 45 CFR 147.136.
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document comparative analyses of the
design and application of NQTLs has
been effective under the CAA, 2021 for
more than two years (since February 10,
2021) and is an independent statutory
obligation that is not dependent upon a
request by the Secretary or an applicable
State authority. It is an affirmative
statutory obligation that applies
irrespective of any such request.
The requirements under Code section
9812(a)(8), ERISA section 712(a)(8), and
PHS Act section 2726(a)(8) and these
proposed rules to perform and
document comparative analyses of the
design and application of NQTLs are
essential components of a plan’s or
issuer’s legal obligation to ensure
compliance with MHPAEA, and failure
to satisfy those requirements puts
participants and beneficiaries at risk of
their mental health and substance use
disorder benefits not being in parity
with medical/surgical benefits.
Therefore, plans and issuers should
work with their service providers to
ensure that they have performed and
documented comparative analyses for
their NQTLs as required by MHPAEA,
as amended by the CAA, 2021,
regardless of the timing of any request
by the Departments, applicable State
authorities, or participants and
beneficiaries. Plans and issuers and
their service providers must also ensure
that the comparative analyses reflect the
current terms of the plan or coverage,
which may require them to update their
comparative analyses, or perform and
document new comparative analyses
when there is a change in plan benefit
design, administration or utilization that
is not reflected in the current version of
the comparative analyses.
Finally, nothing in these proposed
rules, should be construed to prevent
the relevant Secretary from acting
within the scope of existing authorities
to address violations of MHPAEA.
C. Applicability—26 CFR 54.9812–1(i),
29 CFR 2590.712(i), and 45 CFR
146.136(i) and 26 CFR 54.9812–2(g), 29
CFR 2590.712–1(g), and 45 CFR
146.137(g)
While the Departments are of the view
that the provisions included in these
proposed rules, if finalized, are critical
to helping to ensure access to vital
mental health and substance use
disorder benefits, the Departments also
recognize that new requirements may
take time for plans and issuers to
implement. In order to strike an
appropriate balance, the Departments
propose to amend 26 CFR 54.9812–
1(i)(1), 29 CFR 2590.712(i)(1), and 45
CFR 146.136(i)(1) to specify that except
as provided in paragraph (i)(2) of the
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2013 final regulations, these proposed
rules, if finalized, would apply on the
first day of the first plan year beginning
on or after January 1, 2025.173 Until the
applicability date, plans and issuers
would be required to continue to
comply with 26 CFR 54.9812–1, revised
as of April 1, 2023, 29 CFR 2590.712,
revised as of July 1, 2022, and 45 CFR
146.136, revised as of October 1, 2021,
as applicable.
For similar reasons, the Departments
also propose that the requirements in 26
CFR 54.9812–2, 29 CFR 2590.712–1, and
45 CFR 146.137 of these proposed rules
would become effective for plan years
beginning on or after January 1, 2025.
However, the Departments remind plans
and issuers 174 that the statutory
provisions added to MHPAEA by the
CAA, 2021 are self-implementing and
took effect on February 10, 2021.
Therefore, the proposed delayed
applicability date for these proposed
rules does not alter a plan’s or issuer’s
obligations under the statute. As such,
plans and issuers must continue
performing and documenting
comparative analyses of the design and
application of NQTLs in accordance
with the statutory requirements and
make them available to the Departments
or applicable State authorities before the
applicability date of these proposed
rules, if finalized. The Departments
request comments on the proposed
applicability date.
D. Severability—26 CFR 54.9812–1(j), 29
CFR 2590.712(j), and 45 CFR 146.136(j)
and 26 CFR 54.9812–2(h), 29 CFR
2590.712–1(h), and 45 CFR 146.137(h)
The Departments propose to include
severability clauses in these proposed
rules to capture the Departments’ intent
that, to the extent a reviewing court
holds that any provision of these
proposed rules, if finalized, is unlawful
by its terms, or as applied to any person
or circumstance, or stayed pending
further agency action, the provision
would be construed so as to continue to
be given the maximum effect permitted
by law. The Departments are of the view
that this rulemaking, if finalized as
proposed or as a substantially similar
173 But see 26 CFR 54.9812–1(e)(4), 29 CFR
2590.712(e)(4), and 45 CFR 146.136(e)(4), which
explains how these requirements interact with the
requirement to provide EHBs under 45 CFR 147.150
and 156.115.
174 Consistent with the statute, under these
proposed rules, the comparative analysis
requirements under proposed 26 CFR 54.9812–2, 29
CFR 2590.712–1, and 45 CFR 146.137 would not
apply to a plan or issuer that qualifies for the small
employer exemption under 26 CFR 54.9812–1(f), 29
CFR 2590.712(f), and 45 CFR 146.136(f) or the
increased cost exemption under 26 CFR 54.9812–
1(g), 29 CFR 2590.712(g), and 45 CFR 146.136(g).
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version, would provide comprehensive
protections that implement MHPAEA’s
requirements. Overall, the aim of these
proposed rules is to ensure that
individuals with mental health
conditions and substance use disorders
benefit from the full protections
afforded to them under MHPAEA, and
that separate elements of this proposal
would individually contribute to
furthering that aim. The proposed
requirements under 26 CFR 54.9812–
1(c)(4)(i) and (ii), 29 CFR
2590.712(c)(4)(i) and (ii), and 45 CFR
146.136(c)(4)(i) and (ii), for instance,
while part of a comprehensive
regulatory scheme, are separate aspects
of the parity analysis. Similarly, the rule
requires plans and issuers to collect and
evaluate outcomes data in a manner
reasonably designed to assess the
impact of the NQTL and consider the
impact as part of the plan’s or issuer’s
analysis of whether the limitation, in
operation, complies with the
requirements under 26 CFR 54.9812–
1(c)(4)(i) and (ii), 29 CFR
2590.712(c)(4)(i) and (ii), and 45 CFR
146.136(c)(4)(i) and (ii). However, the
requirements of paragraphs (c)(4)(i) and
(ii) are meant to stand independently of
the requirement to use outcomes data in
such a manner and can continue to
apply independently if other provisions
of this rule are invalidated. Finally,
while the Departments are of the view
that the unique considerations of the
NQTLs related to network composition
merit the special rule at 26 CFR
54.9812–1(c)(4)(iv)(C), 29 CFR
2590.712(c)(4)(iv)(C), and 45 CFR
146.136(c)(4)(iv)(C), the Departments
believe that the other requirements of
this proposed rule could continue to
apply to NQTLs related to network
composition, should this special rule be
invalidated or stayed pending further
action. Consequently, following a
potential legal challenge, a court’s
decision to invalidate one standard does
not affect any provision that relates to
a separate standard. As indicated, these
applications of severability to the
provisions in these proposed rules is
only an example and is not exhaustive
of other potential applications. If a court
were to hold that any provisions were
invalid or unenforceable, these
provisions in the proposed rules state
that any affected provisions would be
severable from the rest of these
proposed rules, if finalized, and would
not affect any other provisions or their
application to persons not similarly
situated or to dissimilar circumstances.
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III. Overview of the Proposed Rules—
Department of HHS
ddrumheller on DSK120RN23PROD with PROPOSALS2
A. Sunset of MHPAEA Opt Out for SelfFunded Non-Federal Governmental
Plans
As noted earlier in this preamble,
sponsors of self-funded, non-Federal
governmental plans are permitted to opt
out of certain requirements categories of
title XXVII of the PHS Act.175 Prior to
the enactment of the CAA, 2023, such
plans could elect to opt out of
compliance with the requirements
under MHPAEA, among three other
requirements categories of title XXVII of
the PHS Act.
The CAA, 2023, enacted on December
29, 2022, included a provision that
sunsets the election option with respect
to MHPAEA.176 Specifically, section
1321 of title I of Division FF of the CAA,
2023 amended PHS Act section
2722(a)(2) by adding language
specifying that no MHPAEA opt-out
election may be made on or after the
date of the enactment of the CAA, 2023,
and that generally, no MHPAEA opt-out
election expiring on or after the date
that is 180 days after the date of such
enactment may be renewed. The CAA,
2023 included an exception for certain
collectively bargained plans with an
opt-out election in effect for MHPAEA
that allows for a longer transition to
come into compliance with MHPAEA.
Specifically, the CAA, 2023 added
language to PHS Act section 2722(a)(2)
indicating that a plan that is subject to
multiple collective bargaining
agreements of varying lengths that has a
MHPAEA opt-out election in effect as of
the date of enactment of the CAA, 2023,
that expires on or after the date that is
180 days after the enactment of the
CAA, 2023, may extend such election
until the date on which the term of the
last such agreement expires.
As a result of the CAA, 2023
amendments to PHS Act section
2722(a)(2), self-funded, non-Federal
governmental plan sponsors may elect
to opt out of only the following three
PHS Act requirements categories:
standards relating to benefits for
newborns and mothers (PHS Act section
2725), required coverage for
reconstructive surgery following
mastectomies (PHS Act section 2727),
and coverage for dependent students on
a medically necessary leave of absence
(PHS Act section 2728).
In this rulemaking, HHS proposes to
amend 45 CFR 146.180 to align with the
175 PHS
Act section 2722(a)(2); 45 CFR 146.180.
FF, Title I, Subtitle C, Chapter 3, sec.
1321, Public Law 117–328, 136 Stat. 4459 (Dec. 29,
2022).
176 Division
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CAA, 2023 amendments to PHS Act
section 2722(a)(2). Specifically, HHS
proposes to redesignate paragraphs
(a)(3) through (7) as paragraphs (a)(4)
through (8) and add a new paragraph
(a)(3) specifying that a sponsor of a selffunded, non-Federal governmental plan
may not elect to exempt its plan(s) from
any of the MHPAEA requirements on or
after December 29, 2022 (the date of
enactment of the CAA, 2023) through
the process specified in 45 CFR 146.180.
HHS also proposes to add new
paragraph (f)(4)(iii) that would specify
that in the case of a self-funded, nonFederal governmental plan that is
subject to multiple collective bargaining
agreements of varying lengths and that
has an election with respect to any of
the MHPAEA requirements in effect as
of December 29, 2022, through the
process specified in 45 CFR 146.180,
that expires on or after June 27, 2023
(the date that is 180 days after the date
of enactment of the CAA, 2023), the
plan may extend such election until the
date on which the term of the last such
agreement expires. HHS also proposes
to make conforming edits to paragraphs
(a)(2), (a)(5)(i) and (ii), and (a)(6)(ii), as
proposed to be redesignated, and
paragraph (f)(1). The proposed
amendments to 45 CFR 146.180 would
apply on the effective date of the final
rule. HHS seeks comments on these
proposed amendments to implement the
sunset of the MHPAEA opt-out election
and whether additional guidance or
clarifications are necessary.
cross reference would similarly make
clear that the comparative analysis
requirements apply to health insurance
issuers offering individual health
insurance coverage in the same manner
that those provisions apply to group
health plans and health insurance
issuers offering coverage in connection
with such plans.
These provisions would apply to
health insurance issuers offering
individual health insurance coverage for
policy years beginning on or after
January 1, 2026. In the individual
market, non-grandfathered individual
health insurance coverage must be
offered on a calendar year basis.
Premium rates must be submitted to the
applicable regulator and finalized prior
to January 1 of each calendar year and
rates cannot be modified during the
year. The proposed applicability date is
intended to provide time for issuers
offering individual health insurance
coverage to account for the effects of
these rules following publication of the
final rules and prior to when rates and
benefits must be finalized and approved
for the following calendar year.
Finally, for greater clarity and
precision and to align with the statutory
terminology, HHS proposes to modify
the regulation text to refer to
‘‘individual health insurance coverage
offered by a health insurance issuer’’ as
opposed to ‘‘health insurance coverage
offered in the individual market.’’
B. Applicability of MHPAEA to
Individual Health Insurance Coverage
The HHS regulation implementing
MHPAEA for individual health
insurance coverage is codified at 45 CFR
147.160. The regulation currently
provides that the group market
regulation implementing MHPAEA at 45
CFR 146.136 applies to health insurance
coverage offered by a health insurance
issuer in the individual market in the
same manner and to the same extent as
such provisions apply to health
insurance coverage offered by a health
insurance issuer in connection with a
group health plan in the large group
market, for policy years beginning on or
after the applicability date set forth in
45 CFR 146.136(i). Therefore, through
cross-reference, the proposed
amendments to 45 CFR 146.136, if
finalized, would apply in the same
manner to health insurance issuers
offering individual health insurance
coverage. Further, HHS proposes to
include a cross reference in 45 CFR
147.160 to the comparative analysis
requirements proposed in 45 CFR
146.137 of these proposed rules. The
IV. Request for Information on Ways To
Improve Mental Health and Substance
Use Disorder Benefits Through Other
Consumer Protection Laws
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The Departments are committed to
using their full statutory authority to
address the nation’s mental health and
substance use disorder crises. In
supporting the Administration’s
response to these epidemics, the
Departments are considering ways to
improve the coverage of mental health
and substance use disorder benefits
through other consumer protection
laws, including the Affordable Care Act.
The Departments request comments
from all interested parties with respect
to the following specific areas:
1. Group health plan sponsors depend
on administrative service providers,
health insurance issuers, and other
TPAs to design and manage their plans
in a manner that complies with
MHPAEA among other Federal
consumer protections. However, plan
sponsors are generally responsible for
ensuring compliance and could, in
certain circumstances, be liable for
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penalties for any violations.177 Are there
ways that TPAs could be further
incentivized to facilitate compliance
with MHPAEA on behalf of the plans
that they design and administer?
2. Section 108 of Title I of Division BB
of the CAA, 2021 requires the
Departments to issue a rule
implementing the provider
nondiscrimination provisions in PHS
Act section 2706(a). In 2014, the
Departments published a request for
information on provider
nondiscrimination, followed by FAQs
on these requirements.178 Following the
enactment of the CAA, 2021, the
Departments held a listening session on
January 19, 2022 regarding
implementation of the provider
nondiscrimination provision, in order to
foster an exchange of information and
views and afford interested individuals
and organizations an opportunity to
share their perspective on what should
be included in forthcoming proposed
rules. As the Departments continue to
work on proposed rules implementing
the provider nondiscrimination
provisions, are there ways that the
Departments can enhance access to
mental health and substance use
disorder benefits through their
implementation of PHS Act section
2706(a)?
3. Code section 9820(a) and (b),
ERISA section 720(a) and (b), and PHS
Act section 2799A–5(a) and (b), as
added by section 116 of title I of
Division BB of the CAA, 2021, establish
standards related to provider
directories. The Departments intend to
undertake notice and comment
rulemaking to implement the provider
directory requirements. Are there ways
that the Departments can improve the
coverage of and enhance access to
mental health and substance use
disorder benefits through their
implementation of these provider
directory requirements, particularly in
underserved or rural areas where there
may be limited access to the internet?
4. Telehealth has become a vital
means of providing health care,
including mental health and substance
use disorder care, especially in rural
areas and in light of the COVID–19 PHE.
For the duration of any plan year
beginning before the end of the COVID–
19 PHE, the Departments issued
177 See
Code section 4980D.
FR 14051 (March 12, 2014); FAQs about
Affordable Care Act Implementation (Part XXVII)
(May 26, 2015), Q4–5, available at https://
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/
our-activities/resource-center/faqs/aca-partxxvii.pdf and https://www.cms.gov/CCIIO/
Resources/Fact-Sheets-and-FAQs/Downloads/ACAFAQs-Part-XXVII-MOOP-2706-FINAL.pdf.
178 79
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guidance providing relief from the
group market reforms under part 7 of
ERISA, title XXVII of the PHS Act, and
chapter 100 of the Code for a group
health plan (and health insurance
coverage offered in connection with a
group health plan) sponsored by a large
employer that solely provides benefits
for telehealth or other remote care
services offered only to employees (or
their dependents) who are not eligible
for coverage under any other group
health plan offered by that employer.179
However, these arrangements were
required to continue to comply with
certain Federal group market reforms,
including the requirements under
MHPAEA.180 How and to what extent
has this guidance affected mental health
and substance use disorder care and
access? Would any further safeguards be
needed? How can the Departments use
telehealth or other remote care services
to enhance access to mental health and
substance use disorder treatment under
the Departments’ existing authority for
both routine and crisis care for
behavioral health conditions, including
through parity requirements with
respect to financial requirements and
treatment limitations?
5. Under the internal claims and
appeals and external review rules
implementing the Affordable Care Act,
which are generally applicable to all
non-grandfathered group health plans
and non-grandfathered group and
individual health insurance coverage,
claim denials related to medical
judgment (including for mental health
and substance use disorder benefits) are
eligible for external review.181 The
internal claims and appeals rules also
provide that claimants (or their
authorized representatives) are entitled
to, upon request and free of charge,
reasonable access to and copies of all
documents, records, and other
information relevant to the claimant’s
claim for benefits.182 This includes
179 See
FAQs Part 43, Q14.
180 Id.
181 See 26 CFR 54.9815–2719, 29 CFR 2590.715–
2719, and 45 CFR 147.136. Grandfathered plans and
issuers must also extend external review to adverse
benefit determinations to items and services within
the scope of the requirements for out-of-network
emergency services, nonemergency services
performed by nonparticipating providers with
respect to patient visits to certain types of
participating facilities, and air ambulance services
furnished by nonparticipating providers of air
ambulance services under the No Surprises Act,
including for denials related to compliance with
such requirements. Such items and services may
include mental health and substance use disorder
services. See 26 CFR 54.9815–2719(a)(1)(ii), 29 CFR
2590.715–2719(a)(1)(ii), and 45 CFR
147.136(a)(1)(ii).
182 26 CFR 54.9815–2719(b)(2)(ii)(C), 29 CFR
2590.715–2719(b)(2)(i) and (b)(2)(ii)(C), 45 CFR
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documents with information about the
processes, strategies, evidentiary
standards, and other factors used to
apply an NQTL with respect to medical/
surgical benefits and mental health or
substance use disorder benefits under
the plan.183 How can the Departments
leverage ERISA’s and the Affordable
Care Act’s existing claims procedure
requirements to help facilitate access to
mental health and substance use
disorder benefits? For example, if a plan
or issuer denies a mental health or
substance use disorder benefit based on
the plan’s or issuer’s determination that
a lower level of care would be more
appropriate, should the plan or issuer be
required to identify the relevant lower
level of care? Should plans and issuers
be required to provide an explanation of
how a particular NQTL was applied to
particular benefits, beyond what is
currently required by the claims
procedure rules or other related
provisions?
6. Currently, the minimum value rules
under HHS and Treasury regulations at
45 CFR 156.145 and 26 CFR 1.36B–6,
respectively, specify that an employersponsored plan provides minimum
value only if the percentage of the total
allowed costs of benefits provided
under the plan is greater than or equal
to 60 percent, and the benefits under the
plan include substantial coverage of
inpatient hospital services and
physician services. Should HHS and
Treasury consider amending the
minimum value rule so that it would
apply separately and independently to
medical/surgical benefits, and to mental
health and substance use disorder
benefits? Should HHS and Treasury
consider amending the minimum value
rule to require substantial coverage of
mental health and substance use
disorder benefits? If so, how should
‘‘substantial coverage’’ be defined in
that context?
7. As HHS oversaw the transition to
988 as the new easy-to-remember 3-digit
code to access life-saving services
through the Suicide & Crisis Lifeline,
(https://www.samhsa.gov/find-help/
988), there has been increased attention
to current gaps in access to and
provision of a full continuum of
behavioral health crisis services. Final
rules under MHPAEA do not
specifically address mobile crisis
services. Similarly, in the establishment
of EHBs as part of required benefits for
non-grandfathered individual and small
group coverage under the Affordable
147.136(b)(2)(i) and (b)(2)(ii)(C), and 29 CFR
2560.503–1(h)(2)(iii).
183 26 CFR 54.9812–1(d)(3), 29 CFR
2590.712(d)(3), and 45 CFR 146.136(d)(3).
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Care Act, there is no specific reference
to behavioral health crisis services as
part of the EHB categories. The
Departments are interested in
determining if there are questions as to
how these services fit within the
existing categories for either MHPAEA,
or the EHB categories. Are there aspects
of community-based behavioral health
crisis services that the Departments
should address in the context of
MHPAEA? Should the Departments
ensure that community-based
behavioral health crisis services are
classified in the same way as particular
medical/surgical services, and what are
those particular services? Should crisis
call/text/chat center services, mobile
crisis and stabilization services be
specifically included as EHBs? Are there
ways the Departments can increase
access to crisis services with current
authorities, including in rural or
underserved areas in which there are
several challenges to accessing care?
How can parity be strengthened across
the behavioral health crisis services
landscape, including in areas with
shortages for behavioral health
providers? How can the Departments
collaborate with State and local agencies
to improve access to existing and future
behavioral health crisis services?
V. Regulatory Impact Analysis
ddrumheller on DSK120RN23PROD with PROPOSALS2
A. Summary—Departments of Health
and Human Services and Labor
The Departments have examined the
effects of these proposed rules as
required by Executive Order 12866,184
Executive Order 13563,185 the
Paperwork Reduction Act of 1995,186
the Regulatory Flexibility Act,187
section 202 of the Unfunded Mandates
Reform Act of 1995,188 and Executive
Order 13132.189
1.1. Executive Orders 12866 and
13563—Departments of Health and
Human Services and Labor
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, select regulatory approaches
that maximize net benefits (including
potential economic, environmental,
public health and safety effects;
distributive impacts; and equity).
Executive Order 13563 emphasizes the
184 Regulatory Planning and Review, 58 FR 51735
(Oct. 4, 1993).
185 Improving Regulation and Regulatory Review,
76 FR 3821 (Jan. 18, 2011).
186 44 U.S.C. 3506(c)(2)(A) (1995).
187 5 U.S.C. 601 et seq. (1980).
188 2 U.S.C. 1501 et seq. (1995).
189 Federalism, 64 FR 153 (Aug. 4, 1999).
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importance of quantifying costs and
benefits, reducing costs, harmonizing
rules, and promoting flexibility.
Under Executive Order 12866,
‘‘significant’’ regulatory actions are
subject to review by the Office of
Management and Budget (OMB). As
amended by Executive Order 14094 190
entitled ‘‘Modernizing Regulatory
Review’’ section 3(f) of the Executive
order defines a ‘‘significant regulatory
action’’ as any regulatory action that is
likely to result in a rule that may:
(1) have an annual effect on the
economy of $200 million or more
(adjusted every 3 years by the
Administrator of the Office of
Information and Regulatory Affairs
(OIRA) for changes in gross domestic
product); or adversely affect in a
material way the economy, a sector of
the economy, productivity, competition,
jobs, the environment, public health or
safety, or State, local, Territorial, or
Tribal governments or communities;
(2) create a serious inconsistency or
otherwise interfere with an action taken
or planned by another agency;
(3) materially alter the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or
(4) raise legal or policy issues for
which centralized review would
meaningfully further the President’s
priorities or the principles set forth in
this Executive order, as specifically
authorized in a timely manner by the
Administrator of OIRA in each case.
It has been determined that these
proposed rules are significant within the
meaning of section 3(f)(1) of the
Executive order. Therefore, the
Departments have provided an
assessment of the potential costs,
benefits, transfers, and alternatives
associated with these proposed rules,
and OMB has reviewed these proposed
rules.
1.2. Introduction and Need for
Regulations
As explained in section I.A of this
preamble, mental health is crucial to a
person’s overall wellbeing, and access to
quality mental health and substance use
disorder treatment is as essential for
health as access to medical/surgical
treatment. Moreover, failure to treat
mental health issues can be costly. For
example, depression is associated with
increased risk of cardiovascular disease,
diabetes, stroke, Alzheimer’s disease,
and osteoporosis, and an untreated
substance use disorder may result in
hospital emergency room care for a drug
190 Executive Order 14094, 88 FR 21879 (Apr. 6,
2023).
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overdose.191 Individuals with mental
health conditions or substance use
disorders have faced stigma,
discrimination, and other barriers inside
and outside of the health care system,
which can operate as impediments to
seeking and obtaining treatment. In
2021, approximately 40 percent of
adults 18 and older with a perceived
unmet need for mental health services
reported that they did not receive
services because they could not afford
the cost, almost 11 percent thought it
may cause their community to have a
negative opinion about them, almost 8
percent thought it might impact their
job, and almost 12 percent were
concerned about confidentiality.192
Despite deterrents to seeking treatment,
the need for these services has only
increased, as a reported 41 percent of
U.S. adults experienced high levels of
psychological distress during the
COVID–19 pandemic.193
In 2013, the Departments issued final
regulations to implement MHPAEA.194
The 2013 final regulations expanded
upon MHPA 1996, which required
parity in aggregate lifetime and annual
dollar limits between mental health
benefits and medical/surgical benefits.
MHPAEA additionally applies the
parity requirements to substance use
disorder benefits and provides that the
financial requirements (such as
deductibles, copays, and coinsurance)
and treatment limitations (such as day
or visit limits) imposed on mental
health or substance use disorder
benefits cannot be more restrictive than
the predominant financial requirements
and treatment limitations that apply to
substantially all medical/surgical
benefits in a classification. MHPAEA
also prohibits separate treatment
limitations that apply only to mental
health and substance use disorder
benefits.
Since 2013, the Departments have
provided extensive guidance and
compliance assistance materials to the
regulated community, State regulators,
and other interested parties and
conducted regular outreach initiatives to
facilitate the implementation and
enforcement of MHPAEA. The
Departments also issued reports to
191 Government Accountability Office.
‘‘Behavioral Health: Research on Health Care Costs
of Untreated Conditions is Limited,’’ GAO–19–274,
February 2019.
192 Substance Abuse and Mental Health Services
Administration (SAMHSA), Center for Behavioral
Health Statistics and Quality, National Survey on
Drug Use and Health, 2021. Table 6.45B.
193 Pasquini, Giancarlo, and Scott Keeter. Pews
Research Center. ‘‘At Least Four-in-Ten US Adults
Have Faced High Levels of Psychological Distress
During COVID–19 Pandemic.’’ (2022).
194 78 FR 68240 (Nov. 13, 2013).
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Congress highlighting this work. In
addition, Congress has enacted several
laws that build on MHPAEA, including
the Cures Act, the SUPPORT for Patient
and Communities Act (SUPPORT
Act),195 and most recently, the CAA,
2021 and 2023.
Prior to the CAA, 2021, while group
health plans and health insurance
issuers were prohibited from imposing
NQTLs on mental health and substance
use disorder benefits that did not
comply with MHPAEA and its
implementing regulations, there was no
statutory requirement that plans or
issuers demonstrate their compliance.
Under the CAA, 2021, group health
plans and health insurance issuers are
now required to perform and document
comparative analyses of the NQTLs they
impose on mental health and substance
use disorder benefits and to provide
those analyses to the Departments or to
an applicable State authority, as
applicable, upon request. The CAA,
2021 compels the Departments to
request not fewer than 20 such analyses
per year. In addition, the CAA, 2021
imposes steps that the Departments,
after reviewing a comparative analysis,
must take following an initial
determination that the plan’s or issuer’s
NQTL comparative analysis does not
comply with MHPAEA. The
Departments are also required to report
to Congress annually on the results of
their review of the requested NQTL
comparative analyses.
As documented in the 2022 MHPAEA
Report to Congress,196 the Departments
found that none of the NQTL
comparative analyses they reviewed
contained sufficient information and
documentation from plans and issuers
upon initial receipt. Moreover, despite
plans’ longstanding obligations under
MHPAEA, it was apparent that many
plans and issuers had not carefully
designed and implemented their NQTLs
to be compliant with MHPAEA prior to
the enactment of CAA, 2021.
Consequently, many of the comparative
analyses appeared to be focused on
finding after-the-fact rationales for
decisions and designs involving NQTLs
rather than reflecting proper attention to
MHPAEA compliance in the first place.
Similarly, many of the plans and issuers
195 Public Law 115–271, 132 Stat. 3894 (Oct. 24,
2018). The SUPPORT Act requires that Children’s
Health Insurance Program (CHIP) plans must cover
mental health and substance use disorder services.
Financial requirements and treatment limitations
applicable to such services shall not differ from
those applicable to other medical services under
CHIP.
196 Available at https://www.dol.gov/sites/dolgov/
files/EBSA/laws-and-regulations/laws/mentalhealth-parity/report-to-congress-2022-realizingparity-reducing-stigma-and-raising-awareness.pdf.
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appeared to generate their analyses for
the first time in response to the
Departments’ requests, rather than in
advance, as required by law and as a
critical part of the design and
application of a MHPAEA-compliant
NQTL. The 2023 MHPAEA Report to
Congress notes that nearly all the
comparative analyses reviewed by the
Departments during the relevant time
period contained insufficient
information upon initial receipt and
identifies common deficiencies in the
comparative analyses prepared by plans
and issuers.197
The Departments have made an
unprecedented commitment to expand
their efforts to ensure parity in access to
mental health and substance use
disorder treatment, guarantee that
individuals with mental health
conditions and substance use disorders
benefit from the full protections
required by law, and intend to provide
additional guidance to interested parties
to facilitate compliance with MHPAEA
by issuing these proposed rules.
The proposed amendments to the
existing MHPAEA regulations would
clarify existing definitions and add new
definitions of key terms, clarify the way
the parity requirements apply to NQTLs,
and provide additional examples of the
application of MHPAEA to NQTLs to
improve the understanding and ability
of the regulated community to comply
with MHPAEA. The proposed
amendments would also clarify that the
way a plan or issuer defines mental
health conditions and substance use
disorders for purposes of MHPAEA
must be consistent with generally
recognized independent standards of
current medical practice and would add
more specificity as to what conditions
or disorders plans and issuers must treat
as mental health conditions and
substance use disorders.
These proposed rules would also add
new regulations that would set forth
more specific content requirements for
comparative analyses required by the
CAA, 2021, and outline the process for
plans and issuers to provide their
comparative analyses to the
Departments or an applicable State
authority upon request. These proposed
rules would also require plans and
issuers to collect and evaluate relevant
data, including but not limited to claims
denials, as well as any other data
relevant to NQTLs as required by State
law or private accreditation standards.
Additionally, for NQTLs related to
197 2023 MHPAEA Report to Congress, available
at www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2023-mhpaea-comparative-analysis.pdf.
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network composition, these proposed
rules would require additional data,
including, but not limited to, in-network
and out-of-network utilization rates
(including data related to provider claim
submissions), network adequacy metrics
(including time and distance data, and
data on providers accepting new
patients), and provider reimbursement
rates (including as compared to billed
charges). Under these proposed rules,
plans and issuers must collect and
evaluate these data while conducting
their comparative analyses, regardless of
whether the Departments have
requested the analyses. As indicated in
section I.A.3.d of this preamble, the
type, form, and manner for these data
requirements may be further defined in
guidance, to allow the Departments to
provide more detail and adjust the data
requirements as needed to account for
enforcement experience and industry
trends. Additionally, in these proposed
rules, HHS proposes regulatory
amendments to implement a provision
in the CAA, 2023 that sunsets the
election option for self-funded, nonFederal governmental plans to opt out of
requirements under MHPAEA.
The Departments have been
particularly concerned with barriers to
access for individuals seeking mental
health or substance use disorder
treatments. A 2022 Harris Poll
sponsored by the National Council for
Mental Wellbeing found that 21 percent
of adults with unmet mental health care
needs in the past year and 28 percent of
those with unmet substance use care
needs in the past year reported their
inability to get an appointment
immediately prevented them from
getting needed care.198 While up to 70
percent of all primary care visits include
a behavioral health component,199
research suggests that primary care
providers face significant barriers to
delivering these services, including
insufficient resources, inadequate
related knowledge, and a lack of
time.200 In seeking out specialists,
198 National Council for Mental Wellbeing. ‘‘2022
Access to Care Survey Results,’’ May 11, 2022.
https://www.thenationalcouncil.org/wp-content/
uploads/2022/05/2022-Access-To-Care-SurveyResults.pdf.
199 Health Affairs. ‘‘Combating a Crisis by
Integrating Mental Health Services and Primary
Care,’’ Health Affairs Forefront, July 8, 2022,
available at https://www.healthaffairs.org/do/
10.1377/forefront.20220706.603540.
200 Loeb, Danielle F., Elizabeth A. Bayliss, Ingrid
A. Binswanger, Carey Candrian, and Frank V.
Degruy. ‘‘Primary Care Physician Perceptions on
Caring for Complex Patients with Medical and
Mental Illness.’’ Journal of General Internal
Medicine 27 (2012): 945–952. https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC3403152/;
Poghosyan L, Norful AA, Ghaffari A, George M,
Chhabra S, Olfson M. ‘‘Mental Health Delivery in
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individuals tend to face less adequate
mental health provider networks than
medical/surgical provider networks
through their plan or coverage.
According to a 2021 study, which
compared the experiences of patients
using out-of-network mental health and
out-of-network medical/surgical
providers, patients who were receiving
mental health treatment only from a
mental health practitioner rated their
plan’s mental health provider network
as inadequate more frequently than their
plan’s medical/surgical provider
network.201 The study noted that
specialty mental health practitioners are
more likely to opt out of participation in
mental health provider networks due to
a growing workforce shortage of mental
health providers, a high demand for
mental health services, and low
reimbursements for mental health
services compared with other
specialties, which has consequentially
resulted in higher out-of-network
utilization rates for mental health care
services. In response to these concerns,
the Technical Release that is being
issued concurrently with these
proposed rules would set out principles
and seek public comment to inform
guidance with respect to required data
submissions for NQTLs related to
network composition and a potential
time-limited enforcement safe harbor.
The Departments have already seen
some promising results in response to
their reviews of plans’ and issuers’
comparative analyses under the
requirements of the CAA, 2021,
including the removal of some
exclusions related to treatment for
opioid use disorder with methadone
(which must be provided through an
opioid treatment program) and ABA
therapy, as well as the removal of
unnecessary gatekeepers for treatment,
such as requiring referrals for
appointments and pre-authorization for
outpatient services, improving direct
access for mental health and substance
use disorder benefits. The Departments
expect that these proposed rules would
expand upon these successes as they
would provide plans and issuers with a
better understanding of the
requirements of MHPAEA with respect
to NQTLs and improve how they
measure, compare, and demonstrate
parity, while clarifying appropriate
Primary Care: The Perspectives of Primary Care
Providers.’’ Archives of Psychiatric Nursing 2019
Oct; 33(5):63–67. https://www.ncbi.nlm.nih.gov/
pmc/articles/PMC7077950/.
201 Busch, Susan H., and Kelly Kyanko.
‘‘Assessment of Perceptions of Mental Health vs
Medical Health Plan Networks Among US Adults
with Private Insurance.’’ JAMA Network Open 4, no.
10 (2021).
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ways for plans and issuers to modify
their policies and procedures to meet
parity requirements. The Departments
believe these proposed rules and any
additional guidance would help plans
and issuers comply with these proposed
requirements, resulting in improved
access to and coverage of mental health
and substance use disorders, as
intended by MHPAEA.
1.3. Baseline
The baseline for this analysis includes
the MHPAEA statute, as amended,
implementing regulations, and
subsequent guidance. Benefits, costs,
and transfers are measured as changes
from the baseline under these proposed
rules. For example, the CAA, 2021
requires that plans and issuers perform
and document NQTL comparative
analyses. Starting 45 days after the
enactment of the CAA, 2021, plans and
issuers are required to make their
comparative analyses available to the
Departments or an applicable State
authority upon request. Plans and
issuers are required to make
comparative analyses and other
applicable information required by the
CAA, 2021 available to participants and
beneficiaries in plans subject to ERISA
upon request and to make this
information available to participants,
beneficiaries, and enrollees in all nongrandfathered group health plans and
non-grandfathered group or individual
health insurance coverage upon request
in connection with an adverse benefit
determination.202 This regulatory
impact analysis (RIA) therefore does not
include benefits or costs for performing
and making available the comparative
analyses, as these are already required
by the provisions of the CAA, 2021 and
are in the baseline, but does take into
account the expected impacts of these
proposed rules on the preparation of
plans’ and issuers’ comparative analyses
and how these proposed rules would
impact parity and, in turn, access for
participants and beneficiaries needing
mental health and substance use
disorder treatments.
Similarly, existing guidance that has
already generated benefits and costs is
not accounted for here. Rather, only
those changes resulting from these
proposed rules are captured in this
analysis.
1.4. Summary of Impacts
These proposed rules propose to
define certain terms associated with
MHPAEA’s requirements for NQTLs and
provide that a group health plan (or
health insurance issuer offering
202 FAQs
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coverage in connection with a group
health plan) may not apply any NQTL
to mental health or substance use
disorder benefits in any classification
that is more restrictive, as written or in
operation, than the predominant NQTL
that applies to substantially all medical/
surgical benefits in the same
classification. These proposed rules
would require that plans and issuers
determine the portion of plan payments
for medical/surgical benefits subject to
an NQTL based on the dollar amount of
all plan payments for medical/surgical
benefits in the classification expected to
be paid under the plan or coverage for
the plan year (or the portion of the plan
year after a change in benefits that
affects the applicability of the NQTL).
Plans and issuers would next be
required to determine whether the
NQTL applies to substantially all
medical/surgical benefits in the
classification based on the portion of
plan payments for medical/surgical
benefits subject to the NQTL to
determine whether the NQTL applies to
at least two-thirds of all medical/
surgical benefits in that classification.
Plans and issuers would then need to
determine which variation of a given
NQTL is predominant (that is, the most
common or frequent variation). Once
this is determined, plans and issuers
may not apply any NQTL to mental
health or substance use disorder
benefits in any classification that is
more restrictive, as written or in
operation, than the predominant NQTL
applicable to substantially all medical/
surgical benefits in the same
classification. An NQTL is restrictive if
it imposes conditions, terms, or
requirements that limit access to
benefits under the terms of the plan or
coverage.
These proposed rules also set data
requirements and clarify proper
documentation of NQTL comparative
analyses, which plans and issuers have
struggled with, as detailed in the
Departments’ 2022 Report to
Congress 203 and the 2023 Report to
Congress,204 released
contemporaneously with these proposed
rules. Accordingly, the Departments are
of the view that these proposed rules
would increase plan and issuer
compliance with the requirements for
imposing NQTLs under MHPAEA,
203 2022 MHPAEA Report to Congress, available
at https://www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
report-to-congress-2022-realizing-parity-reducingstigma-and-raising-awareness.pdf.
204 2023 MHPAEA Report to Congress, available
at www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2023-mhpaea-comparative-analysis.pdf.
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which would in turn expand access to
mental health and substance use
disorder benefits and help ensure that
limitations on mental health and
substance use disorder benefits are no
more restrictive than the predominant
limitations applicable to substantially
all medical/surgical benefits in the same
classification. In doing so, access to innetwork medically necessary treatments
would increase for a significant segment
of individuals whose health coverage
would be affected by these proposed
rules,205 which would ultimately result
in better mental health outcomes and
lower out-of-pocket costs related to
mental health and substance use
disorder benefits for participants,
beneficiaries, and enrollees.
Plans and issuers would incur costs to
comply with the requirements in these
proposed rules. However, the
Departments have determined that the
benefits of these proposed rules justify
the costs. In accordance with OMB
Circular A–4, Table 1 depicts an
accounting statement summarizing the
Departments’ assessment of the benefits,
costs, and transfers associated with
these regulatory actions. The
Departments are unable to quantify all
benefits, costs, and transfers of these
proposed rules, but have sought, where
possible, to describe these nonquantified impacts.
The effects in Table 1 reflect nonquantified impacts and estimated direct
monetary costs resulting from the
provisions of these proposed rules.
TABLE 1—ACCOUNTING STATEMENT
Benefits:
• Better understanding of and compliance with MHPAEA by plans and issuers.
• Better health outcomes for those with mental health conditions or substance use disorders, and a reduction in the negative impacts on
families, friends, and coworkers of those with untreated or poorly managed mental health conditions or substance use disorders based
on their improved access to treatment.
• Better frameworks for determining whether plans and issuers are making decisions and taking actions with respect to mental health and
substance use disorder benefits in parity with their decisions and actions regarding medical/surgical benefits.
Costs:
• Costs to plans and issuers to implement changes associated with the revision of plan provisions.
• Increased costs to plans and issuers from expanded coverage and utilization of mental health and substance use disorder services.
• Costs to plans and issuers from collecting and analyzing data and documenting NQTL comparative analyses consistent with the requirements of these proposed rules of approximately $291.0 million in the first year and approximately $117.6 million in subsequent years or
between 0.04 percent and 0.01 percent of health insurance premiums.
• Costs to plans and issuers for preparing and mailing the comparative analyses to participants, beneficiaries, and enrollees of approximately $12.1 million annually.
• One-time regulatory review costs to plans and issuers of approximately $64.3 million.
• Potential increase in cost-sharing requirements and/or treatment limitations for medical/surgical care for participants, beneficiaries, and
enrollees, if plans and issuers try to achieve parity by imposing new restrictions on medical/surgical coverage, rather than by reducing restrictions on access to mental health or substance use disorder benefits.
• Potential costs to self-funded, non-Federal governmental plans that currently opt out of MHPAEA to come into compliance with requirements under MHPAEA.
• Cost savings to self-funded, non-Federal governmental plans of approximately $11,351 in total from no longer having to send opt-out notices regarding a plan’s MHPAEA opt-out election.
• Cost savings for the Federal Government of approximately $2,469 from fewer opt-out notices being submitted by self-funded, non-Federal governmental plans.
Costs
Estimate
Annualized Monetized .....................................................................................
Year dollar
$161.29
2023
Discount rate
(percent)
7
Period
covered
2023–2032
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($million/Year) ..................................................................................................
156.71
2023
3
2023–2032
Transfers:
• Potential transfers from plans and issuers to participants, beneficiaries, and enrollees resulting in lower out-of-pocket spending on mental
health and substance use disorder services.
• Potential transfers from participants, beneficiaries, and enrollees to plans and issuers caused by higher premiums associated with lower
cost-sharing requirements, increased utilization of mental health and substance use disorder services, provider network improvements,
and increased provider reimbursement rates.
• Potential transfers from primary care providers to mental health providers for the treatment of mental health and substance use disorders
as a result of decisions by participants, beneficiaries, and enrollees to obtain treatment from a specialist instead of a primary care provider.
205 Wen, Hefei, Janet R. Cummings, Jason M.
Hockenberry, Laura M. Gaydos, and Benjamin G.
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Druss. ‘‘State Parity Laws and Access to Treatment
for Substance Use Disorder in the United States:
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Implications for Federal Parity Legislation.’’ JAMA
Psychiatry 70, no. 12 (2013): 1355–1362.
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1.5. Affected Entities
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1.5.1. Plans
Employers with 50 or more employees
are required to comply with MHPAEA.
Employers with less than 50 employees
are required to comply with MHPAEA
as part of the EHB requirements of the
Affordable Care Act. In this analysis,
plan size is used as a proxy for
employer size to determine if a plan is
affected. The Departments estimate that
1,488,000 fully-insured, nongrandfathered plans with less than 50
participants and approximately 409,800
ERISA-covered group health plans with
50 or more participants, of which
approximately 250,000 are self-insured
group health plans, would be affected
by these proposed rules.206 In addition,
the Departments estimate that these
proposed rules would affect
approximately 90,100 non-Federal
governmental health plans,207 of which
approximately 14,400 are plans with 50
or more participants.208 The
206 Employers with less than 50 employees are
required to comply with MHPAEA as part of the
EHB requirements of the ACA. The Departments
estimate that there are 2,134,934 ERISA-covered
group health plans with less than 50 participants
based on data from the 2021 Medical Expenditure
Panel Survey—Insurance Component and the 2019
County Business Patterns from the Census Bureau.
The Departments also estimate that 83 percent of
group health plans with less than 50 participants
are fully insured based on data from the 2021
Medical Expenditure Panel Survey Insurance
Component (MEPS–IC) and the 2019 County
Business Patterns from the Census Bureau. The
2020 Kaiser Employer Health Benefits Survey
reported that in 2020, 16 percent of firms offering
health benefits offered at least one grandfathered
health plan (Kaiser Employer Health Benefits
Survey (Source: KFF. 2020 Kaiser Employer Health
Benefits Survey. https://files.kff.org/attachment/
Report-Employer-Health-Benefits-2020-AnnualSurvey.pdf)). Thus, the Departments have
calculated the number of fully insured, nongrandfathered plans with less than 50 participants
in the following manner: 2,134,934 small ERISAcovered group health plans × 83% × (100% minus
16%) = 1,488,476. MHPAEA only applies to ERISA
plans in the group market with 50 or more
participants that offer mental health or substance
use disorder benefits. The Departments have not
identified what share of plans with 50 or more
participants offer mental health or substance use
disorder benefits and so has assumed that all of
these plans offer them. Based on the 2021 MEPS–
IC and the 2019 County Business Patterns from the
Census Bureau, the Departments estimate 61
percent of ERISA-covered group health plans with
50 or more participants are self-insured. Thus, the
Departments calculate the number of self-insured
group health plans in the following manner:
409,822 ERISA-covered group health plans with 50
or more participants × 61% = 249,991.
207 Based on the 2017 Census of Governments,
there are 90,126 State and local entities. The
Departments assume there is one plan per entity on
average. Therefore, the Departments estimate that
there are 90,126 non-Federal governmental health
plans.
208 MHPAEA applies to non-Federal
governmental employers with 50 or more
employees that offer mental health or substance use
disorder benefits. The Departments have not
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Departments seek comment on these
estimates.
HHS estimates that 230 self-funded,
non-Federal governmental plans would
be affected by the implementation of the
CAA, 2023 provision that sunsets the
MHPAEA opt-out election.209 HHS is
aware of at least four plans with
collective bargaining agreements whose
sponsors’ MHPAEA opt-out elections
could be in effect beyond 2024.
However, other plans might be similarly
situated. HHS does not have precise
information about the number of
participants and beneficiaries of the
plans that have elected to opt out of
requirements under MHPAEA, as those
plans are not required to report this
information to HHS. However, HHS
estimates that there are approximately
253 participants, on average, in each
self-funded, non-Federal governmental
plan.210 HHS also estimates that there is
one beneficiary for each plan participant
on average. Therefore, approximately
116,500 participants and beneficiaries
would be affected by this proposed
provision.211 HHS seeks comments on
identified what share of non-Federal governmental
plans with 50 or more participants offer mental
health or substance use disorder benefits and so
have assumed that all of these plans offer them.
Using data from the 2021 Medical Expenditure
Panel Survey Insurance Component (MEPS–IC) and
the 2019 County Business Patterns from the Census
Bureau, the Departments estimates that 16 percent
of ERISA-covered group health plans have 50 or
more participants. The Departments use the percent
of ERISA-covered group plans with 50 or more
participants as a proxy for the percent of nonFederal governmental plans with 50 or more
participants. Therefore, the Departments estimate
that there are 14,420 public, non-Federal employer
group health plans with 50 or more participants
that offer mental health or substance use disorder
benefits. (90,126 non-Federal governmental health
plans × 16 percent of plans with 50 or more
employees = 14,420).
209 Based on the HIPAA opt-out elections for selffunded, non-Federal governmental plans, as of
January 6, 2023. Available at https://www.cms.gov/
files/document/hipaaoptouts03182021.pdf.
210 According to data from the Medical
Expenditure Panel Survey—Insurance Component
(2021) (available at: https://meps.ahrq.gov/
mepsweb/https://meps.ahrq.gov/mepsweb/), there
are 18,828,246 State and local government
employees, and 69.1 percent of these employees
(13,010,318) are enrolled in health coverage through
their jobs. Of these employees, 64.4 percent
(8,378,645 employees) are participants in selffunded plans. Based on data from the 2017 Census
of Governments (available at: https://
www.census.gov/data/tables/2017/econ/gus/2017governments.html), there are 90,126 State and local
government entities, and according to the Medical
Expenditure Panel Survey (2021), 36.7 percent, or
33,076, of State and local government entities selffund at least one plan. Therefore, the average
number of participants per self-funded, non-Federal
governmental plan is (8,378,645/33,076) 253.3.
Since HHS also estimates that there is 1 beneficiary
for each plan participant on average, the average
number of participants and beneficiaries per selffunded non-Federal governmental plan is (253.3 ×
2) 506.6.
211 230 self-funded, non-Federal governmental
plans that have elected to opt out of the
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the estimated number of self-funded,
non-Federal governmental plans and the
estimated number of plan participants
and beneficiaries that would be affected
by the implementation of the CAA, 2023
provision that sunsets the MHPAEA
opt-out election.
1.5.2. Participants, Beneficiaries, and
Enrollees Receiving Mental Health and
Substance Use Disorder Treatment
There are approximately 55,403,000
participants and 47,990,000
beneficiaries in ERISA-covered group
health plans with 50 or more
participants,212 approximately
17,841,000 participants and 15,198,000
beneficiaries in non-Federal
governmental plans with 50 or more
participants,213 an estimated 11,187,000
participants and 10,914,000
beneficiaries in ERISA covered, nongrandfathered, fully insured health
plans with less than 50 participants,214
and approximately 11,000,000
individual health insurance coverage
requirements under MHPAEA × approximately
506.6 participants and beneficiaries for each selffunded, non-Federal governmental plan on average
= 116,500.
212 Employers with 50 or more employees are
required to comply with MHPAEA. Employers with
less than 50 employees are required to comply with
MHPAEA as part of the EHB requirements of the
Affordable Care Act. The Departments have not
identified what share of plans with 50 or more
participants offer mental health or substance use
disorder benefits and so has assumed that all of
these plans offer them. The Departments estimate
that there are 55,402,568 participants in ERISAcovered group health plans with 50 or more
participants. Estimates are based off Department
tabulations of the March 2021 Current Population
Survey (CPS) Auxiliary Data. https://www.dol.gov/
agencies/ebsa/researchers/data/auxiliary-data.
213 MHPAEA only applies to non-Federal
governmental health plans with 50 or more
participants that offer mental health or substance
use disorder benefits. The Departments have not
identified what share of plans with 50 or more
participants offer mental health or substance use
disorder benefits and so has assumed that all of
these plans offer them. The Departments estimate
that there are 17,840,590 participants in nonFederal governmental health plans with 50 or more
participants. Estimates are based on Department
tabulations of the March 2021 CPS Auxiliary Data.
https://www.dol.gov/agencies/ebsa/researchers/
data/auxiliary-data.
214 The Departments estimate that there are
26,311,273 participants and beneficiaries in fully
insured, private-sector health plans with less than
50 participants based off Department tabulations of
the March 2021 CPS Auxiliary Data. https://
www.dol.gov/agencies/ebsa/researchers/data/
auxiliary-data. Assuming, based on Kaiser Family
Foundation (KFF) assumptions that 84 percent of
participant and beneficiaries are in nongrandfathered plans (Source: KFF. 2020 KFF
Employer Health Benefits Survey. https://
files.kff.org/attachment/Report-Employer-HealthBenefits-2020-Annual-Survey.pdf), this would
translate into an estimated 22,101,470 participants
and beneficiaries in fully-insured, private-sector,
non-grandfathered plans with less than 50
participants.
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ddrumheller on DSK120RN23PROD with PROPOSALS2
policyholders (with approximately
15,000,000 total enrollees).215
The receipt of behavioral health
services has been increasing since the
enactment of MHPAEA. Between 2007
and 2017, private insurance claim lines
for behavioral health diagnoses
increased by 320 percent.216 Claims data
show that between 2013 and 2019, the
percentage of the employment-based
coverage population under the age of 65
diagnosed with major depressive
disorder increased from 4.1 percent to
5.3 percent, and the percentage of the
population diagnosed with anxiety
increased from 4.8 percent to 8.1
percent.217 In 2020, 41 million
Americans enrolled in employmentbased coverage, including 6 million
children, received mental health
support, which constituted nearly 25
percent of employment-based health
plan participants and beneficiaries.218 A
2021 survey by the Substance Abuse
and Mental Health Services
Administration (SAMHSA) indicated
that among adults aged 18 or older, 22.8
percent (or 57.8 million people) had any
mental illness and 5.5 percent (or 14.1
million people) had serious mental
illness in the past year.219
The COVID–19 PHE has exacerbated
the need for mental health and
substance use disorder treatment.
During the pandemic, many adults
consistently reported anxiety and
depressive disorders symptoms, with 4
in 10 adults reporting symptoms in
February 2021. Two years later, even as
the pandemic receded from its peak,
approximately 3 in 10 adults were still
reporting symptoms of anxiety and
215 Based on medical loss ratio reports submitted
by issuers for the 2021 reporting year, the number
of policyholders in individual health insurance
coverage offered in the individual market is
approximately 11 million, and the number of
enrollees was approximately 15,000,000. https://
www.cms.gov/CCIIO/Resources/Data-Resources/
mlr.
216 Gelburd, Robin. ‘‘The Mental Health Parity
Act: 10 Years Later.’’ American Journal of Managed
Care (Nov. 22, 2018). https://www.ajmc.com/view/
the-mental-health-parity-act-10-years-later.
217 Fronstin, Paul and Christopher Roebuck.
‘‘How Do High-Deductible Health Plans Affect Use
of Health Care Services and Spending Among
Enrollees with Mental Health Disorders?’’ EBRI
Issue. No. 555, Figure 3. (March 10, 2022) Available
at https://www.ebri.org/docs/default-source/ebriissue-brief/ebri_ib_555_mentalhealth10mar22.pdf?sfvrsn=aec3b2f_2.
218 America’s Health Insurance Plans. ‘‘How
Employer-Provided Coverage Improves Access to
Mental Health Support,’’ May 2022. https://
www.ahip.org/documents/202205-CaW_
MentalHealth-v03.pdf.
219 SAMHSA. ‘‘Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2021 National Survey on Drug Use and Health.’’
pp. 39–40. https://www.samhsa.gov/data/sites/
default/files/reports/rpt39443/2021NSDUHFFR
Rev010323.pdf.
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depression.220 A 2021 study also found
that a COVID–19 diagnosis increased
the incidence of a psychiatric diagnosis
within the following 14 to 90 days.
Specifically, the study found that
approximately 20 percent of adults who
received a COVID–19 diagnosis,
including adults with and without a
past psychiatric diagnosis, were later
diagnosed with a mental health
disorder.221
The pandemic may have long-term
effects on mental health and substance
use disorders. A 2022 study examined
the chronic effects of the pandemic on
the mental health of veterans and found
that COVID–19 survivors were
associated with a higher risk of
developing mental health disorders,
including anxiety, stress, depression,
substance use, and neurocognitive
decline, compared to individuals who
did not have COVID–19.222 Another
2022 study examined the mental health
outcomes of COVID–19 survivors during
the twelve months following their
infection and found that COVID–19
survivors reported a high prevalence of
depression, anxiety, and PTSD at both
the six- and twelve-months follow-up,
indicating that the pandemic has longterm adverse mental health impacts on
COVID–19 survivors.223 Finally, a 2023
study found that the pandemic resulted
in a long-term increase in the number of
psychiatric inpatient admissions,
suggesting that there is a post-pandemic
need to prioritize psychiatric care.224
1.5.3. Issuers and TPAs
The Departments estimate that these
proposed rules would affect 476 health
220 Panchal, Nirmita, Heather Saunders, Robin
Rudowitz, and Cynthia Cox. ‘‘The Implications of
COVID–19 for Mental Health and Substance Use,’’
KFF Issue Brief March 20, 2023. https://
www.kff.org/coronavirus-covid-19/issue-brief/theimplications-of-covid-19-for-mental-health-andsubstance-use/.
221 Taquet, Maxime, Sierra Luciano, John R.
Geddes, and Paul J. Harrison. ‘‘Bidirectional
Associations Between COVID–19 and Psychiatric
Disorder: Retrospective Cohort Studies Of 62,354
COVID–19 Cases in the USA.’’ The Lancet
Psychiatry 8, no. 2 (2021): 130–140.
222 Xie, Yan, Evan Xu, and Ziyad Al-Aly. ‘‘Risks
of Mental Health Outcomes in People with Covid–
19: Cohort Study.’’ The BMJ 376 (2022), available
at https://www.bmj.com/content/376/bmj-2021068993.
223 Mazza, Mario Gennaro, Mariagrazia Palladini,
Rebecca De Lorenzo, Beatrice Bravi, Sara Poletti,
Roberto Furlan, Fabio Ciceri et al. ‘‘One-Year
Mental Health Outcomes in a Cohort of COVID–19
Survivors.’’ Journal of Psychiatric Research 145
(2022): 118–124.
224 Warwicker, Sean, Denise Sant, Adrian
Richard, Jake Cutajar, Annalise Bellizzi, Gertrude
Micallef, Daniel Refalo, Liberato Camilleri, and
Anton Grech. ‘‘A Retrospective Longitudinal
Analysis of Mental Health Admissions: Measuring
the Fallout of the Pandemic.’’ International Journal
of Environmental Research and Public Health 20,
no. 2 (2023): 1194.
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insurance issuers that provide benefits
in the group and individual health
insurance markets, with 1,500 issuer/
State combinations.225 There are an
estimated 205 TPAs that provide
services to health plans.226 Finally, the
Departments estimate that these
proposed rules would affect at least 40
managed behavioral healthcare
organizations providing mental health
and substance use disorder benefits to
group health plans.227
Issuers and TPAs provide key support
for plan compliance with laws and
regulations, including MHPAEA. The
Departments’ understanding, based on
discussions with the regulated
community and numerous direct
investigations of plans, specifically the
review of comparative analyses, is that
issuers of fully insured health plans
provide a menu of coverage designs
from which interested parties select
their coverage. The issuers, as the
designers of the products and,
commonly, the claims administrators,
make decisions about what NQTLs to
use and how to implement them.
Issuers, along with TPAs, are also
typically the owners of claims and other
data related to plan administration.
Even for plans that self-insure, it is
common practice to have issuers and
TPAs provide expertise in plan design,
administer the claims and networks,
and drive compliance (or noncompliance) with MHPAEA. Selfinsured plans rarely build independent
provider networks and instead rely on
those built by issuers and TPAs.
According to the 2019 KFF Employer
Benefits Survey, only 8 percent of large,
self-insured plans with 200 or more
employees reported that they directly
contracted with hospitals and health
systems, independent of the plan’s TPA,
in order to provide health care and
services separate from the provider
networks included in the plan
network.228 The Departments analyzed
225 The Departments’ estimate of the number of
health insurance insurers and the number of issuer/
State combinations is based on medical loss ratio
reports submitted by issuers for the 2021 reporting
year. (Source: Centers for Medicare & Medicaid
Services. ‘‘Medical Loss Ratio Data and System
Resources’’ (2021). https://www.cms.gov/CCIIO/
Resources/Data-Resources/mlr.)
226 Non-issuer TPAs based on data derived from
the 2016 benefit year reinsurance program
contributions.
227 The Departments’ estimate of the number of
insurers is based on industry trade association
membership, including the National Behavioral
Consortium (https://www.nbcgroup.org/memberdirectory/) and the Association for Behavioral
Health and Wellness (https://abhw.org/about/).
Please note that these estimates could undercount
small State-regulated insurers.
228 KFF. ‘‘KFF Employer Health Benefits Survey,
2019.’’ (September 25, 2019) Table 14.15. See
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2020 Form 5500 Schedule C (Service
Provider Information) filings of selfinsured health plans and determined
that 89 percent of those plans indicated
that they contracted with a TPA.229 This
statistic provides the Departments with
an estimate for the percent of selfinsured plans that could perform the
work for themselves.
Issuers and TPAs are therefore the
ones mostly likely, and the ones the
Departments have overwhelmingly
observed, performing the work to
evaluate NQTLs and provide the
comparative analysis and required data.
These proposed rules are expected to
continue this trend of issuers and TPAs
performing the required work for plans.
While plans could be charged for these
services, this arrangement provides for
economies of scale in compliance as
issuers evaluate NQTLs, produce or
assist in producing the comparative
analyses for their products and, in
combination with TPAs, provide
support for other requirements. Because
TPAs and insurance companies
providing administrative services only
(ASO) overwhelmingly design the plans,
administer the networks, manage
claims, provide plan services, maintain
and hold the data relevant to the
comparative analyses, and drive
MHPAEA compliance, they are in the
best position to conduct comparative
analyses, and to provide the analyses in
an efficient and cost-effective manner.
The Departments expect, as reflected in
their own direct observations of the
comparative analyses process, that TPAs
and issuers would perform most of the
work associated with the analyses
because they can do so at the lowest
cost and greatest scale. Particularly for
self-insured plans, however, there may
be some additional work required by
individual plans to complete the
comparative analysis prepared by the
issuer to address unique plan issues.
The Departments seek comments on
these observations.
ddrumheller on DSK120RN23PROD with PROPOSALS2
1.6. Benefits
The Departments expect that these
proposed rules, if finalized, would
improve the quality of the comparative
analyses conducted by plans and
issuers, as required by the CAA, 2021,
help plans and issuers better understand
https://www.kff.org/report-section/ehbs-2019section-14-employer-practices-and-health-plannetworks/.
229 Because many plans are exempt from filing a
Form 5500, the Department only identified 37,934
self-insured health plan filings for 2020. Of these,
only 5,537 plans (or roughly 15 percent) attached
a Schedule C. Of those plans, 4,920 (or roughly 89
percent) indicated they paid compensation, either
directly or indirectly, of at least $5,000 for either
claims processing, contract administration, or both.
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and fulfill their obligations under
MHPAEA, and promote greater
transparency regarding discrepancies
between mental health and substance
use disorder benefits and medical/
surgical benefits. By specifying more
details on how to perform and
document their NQTL comparative
analyses, these proposed rules would
increase plan and issuer compliance
with the requirements for imposing
NQTLs under MHPAEA, and by doing
so, increase access to mental health and
substance use disorder services. Thus,
these proposed rules would generate the
following economic and societal
benefits for participants, beneficiaries,
and enrollees:
• better understanding of and
compliance with MHPAEA by plans and
issuers,
• greater access to mental health and
substance use disorder services,
• better health outcomes among those
with mental health conditions or
substance use disorders,
• reduced adverse impacts on the
families, friends, and coworkers of
people who suffer from untreated or
poorly managed mental health
conditions or substance use disorders,
and
• better frameworks for the
Departments, plans, and issuers to
determine whether plans’ and issuers’
decisions and actions with respect to
mental health and substance use
disorder treatments are in parity with
their decisions and actions regarding
medical/surgical treatments.
This analysis provides a mainly
qualitative discussion of the benefits
associated with the proposed
amendments to the existing MHPAEA
regulations, as the Departments do not
have the data necessary to quantify the
likely benefits associated with ensuring
that NQTLs for mental health and
substance use disorder benefits are in
parity with medical/surgical benefits.
Similarly, this analysis provides a
qualitative discussion of the benefits of
these proposed rules and discusses how
the proposed additional guidance would
result in better compliance with the
rules related to NQTLs and access to
mental health and substance use
disorder benefits. The Departments
invite comments and data related to
how it might quantify these benefits as
part of these proposed rules.
1.6.1. Better Understanding of and
Compliance With MHPAEA by Plans
and Issuers
By placing renewed focus on the
elimination of more restrictive barriers
to access mental health and substance
use disorder benefits, standardizing the
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definitions associated with parity
calculations for mental health and
substance use disorder benefits and
medical/surgical benefits, providing
examples of the application of MHPAEA
to NQTLs, and setting forth the content,
and data documentation requirements of
the NQTL comparative analyses, these
proposed rules would clarify and
strengthen the obligations of plans and
issuers, and promote compliance with
MHPAEA. In the course of
implementing these proposed rules,
parties would adjust their policies and
procedures in order to come into
compliance and better serve
participants, beneficiaries, and
enrollees. These proposed rules also
help the Departments identify when
they need to intervene.
The Departments have already seen,
in response to reviews of comparative
analyses and requests for additional
information, revisions to policies that
remove treatment limitations. These
proposed rules would help parties better
understand what they need to do to
comply with MHPAEA, reduce
uncertainty about compliance status,
and help plans and issuers better
identify areas they need to improve.
By improving compliance with
MHPAEA, these proposed rules would
have the greatest direct impact on
individuals who currently forego
treatments for a mental health condition
or substance use disorder because their
health plan imposes barriers to coverage
of these services. The Departments
cannot estimate how large this impact
would be, though a 2021 survey by
SAMHSA indicated that 19 percent of
U.S. adults with mental illness that did
not receive treatment in the past year at
least partially attributed foregoing these
services to their health insurance
offering insufficient coverage for mental
health services.230
These proposed rules would also
directly benefit individuals who are
currently enrolled in a plan with
inadequate or narrow networks with
regard to mental health and substance
use disorder providers compared to the
networks for medical/surgical benefits,
which prevent participants,
beneficiaries, and enrollees from being
able to make appointments with innetwork providers and timely accessing
needed care. A 2017 study of Affordable
Care Act Marketplace provider networks
230 SAMHSA. ‘‘Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2021 National Survey on Drug Use and Health.’’
Table 6.50B. The question does not distinguish
between sources of insurance, available at https://
www.samhsa.gov/data/sites/default/files/reports/
rpt39443/2021NSDUHNNR122322/
2021NSDUHNNR122322.htm.
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found that mental health networks were
significantly narrower on average than
primary care networks, providing less
than half the share of providers
practicing within a State-level
market.231 A 2022 survey of private and
non-Federal public employers found
that while 82 percent of employers
believed that there is a sufficient
number of primary care providers in the
plan networks, only 44 percent of
employers believed there is a sufficient
number of behavioral health providers
in the plan networks.232 Moreover, a
2022 study of Medicaid patients in
Oregon found that mental health
services remained inaccessible for many
patients due to phantom networks,
which are rosters of network providers
that list, as in-network providers,
mental health and substance use
disorder professionals and facilities who
are not, in fact, available to participants,
beneficiaries, and enrollees for network
treatment.233 Phantom networks are also
reportedly an issue for participants and
beneficiaries of group health plans.234 A
national survey of privately insured
individuals that received mental health
care treatment found that more than half
of those patients that used a provider
directory encountered inaccuracies
which made them more likely to be
treated by an out-of-network provider,
and four times as likely to receive a
surprise, out-of-network bill.235 In light
of this concern, these proposed rules
particularly highlight parity in network
composition as an area that requires
clarification in the NQTL space.
ddrumheller on DSK120RN23PROD with PROPOSALS2
1.6.2. Greater Access to Mental Health
and Substance Use Disorder Treatments
By improving plan and issuer
understanding of and compliance with
the requirements under MHPAEA,
clarifying when and how comparative
231 Zhu, Jane M., Yuehan Zhang, and Daniel
Polsky. ‘‘Networks in ACA Marketplaces are
Narrower for Mental Health Care than for Primary
Care.’’ Health Affairs 36, no. 9 (September 2017):
1624–1631.
232 Kaiser Family Foundation. ‘‘KFF Employer
Benefits Survey, 2022.’’ (October 17, 2022) https://
www.kff.org/report-section/ehbs-2022-summary-offindings.
233 Zhu, Jane M., Christina J. Charlesworth, Daniel
Polsky, and K. John McConnell. ‘‘Phantom
Networks: Discrepancies Between Reported and
Realized Mental Health Care Access in Oregon
Medicaid.’’ Health Affairs 41, no. 7 (2022): 1013–
1022.
234 See Ellison, Katherine, ‘‘73 Doctors and None
Available: How Ghost Networks Hamper Mental
Health Care.’’ The Washington Post (Feb. 19, 2022),
available at https://www.washingtonpost.com/
health/2022/02/19/mental-health-ghost-network/.
235 Busch, Susan H. and Kelly A. Kyanko.
‘‘Incorrect Provider Directories Associated with
Out-of-Network Mental Health Care and Outpatient
Surprise Bills.’’ Health Affairs, Vol. 39 No. 6 (June
2020): 975–083.
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analyses of NQTLs should be
conducted, and ensuring that the
NQTLs are no more restrictive for
mental health and substance use
disorder benefits than for medical/
surgical benefits, these proposed rules
would improve compliance and, in turn,
expand access to and utilization of
mental health and substance use
disorder services.236 Utilization-related
evidence is reviewed in section 1.7,
below. The implementation of the CAA,
2023 provision that sunsets the
MHPAEA opt-out election would reduce
financial and non-financial barriers to
accessing mental health and substance
use disorder treatment for participants
and beneficiaries of plans sponsored by
self-funded, non-Federal governmental
entities that currently elect to opt out of
requirements under MHPAEA. This
would result in increased access to care
and lead, as discussed in more detail in
the next section, to better health
outcomes for plan participants and
beneficiaries with a need for mental
health care or substance use disorder
services.
1.6.3. Better Health Outcomes Among
Those With Mental Health Conditions
and Substance Use Disorders
By expanding access to mental health
and substance use disorder services,
these proposed rules may also result in
better mental health and substance use
disorder outcomes. A 2013 study found
that State parity laws were associated
with a five percent decrease in
suicides.237 A 2022 study found that
severe maternal morbidity (SMM)
among childbearing individuals with
commercial insurance decreased by 53
percent between 2008 and 2019. The
authors suggested implementation of
MHPAEA may have had a role in the
decreasing rates of SMM.238 An
improvement in mental health and
substance use disorder outcomes can
also improve overall physical health
outcomes. A 2017 study found that
better past mental health was associated
with more physical activity and social
interactions, which resulted in an
236 Wen, Hefei, Janet R. Cummings, Jason M.
Hockenberry, Laura M. Gaydos, and Benjamin G.
Druss. ‘‘State Parity Laws and Access to Treatment
for Substance Use Disorder in the United States:
Implications for Federal Parity Legislation.’’ JAMA
Psychiatry 70, no. 12 (2013): 1355–1362.
237 Lang, Matthew. ‘‘The Impact of Mental Health
Insurance Laws on State Suicide Rates.’’ Health
Economics 22, no. 1 (2013).
238 Admon, Lindsay, Vanessa Dalton, Giselle
Kolenic, Anca Tilea, Stephanie V. Hall, and Kara
Zivin. ‘‘MHPAEA/ACA Policy Implementation and
Severe Maternal Morbidity Among Commercially
Insured Individuals, 2008–2019 [A192].’’ Obstetrics
& Gynecology 139 (2022): 56S.
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improvement in the present physical
health.239
1.6.4. Reduced Adverse Impacts on the
Families, Friends, and Coworkers of
People Who Suffer From Untreated or
Poorly Managed Mental Health
Conditions and Substance Use Disorders
These proposed rules would help
employees and their families meet their
mental health care needs, and thus, may
improve the productivity and resulting
earnings of workers dealing with mental
health and substance use disorder
issues. Among adults with any mental
health condition in 2021, only 47.2
percent received treatment.240
Moreover, while 15.6 percent of
National Survey on Drug Use and
Health respondents 12 and older were
classified as needing substance use
disorder treatment in 2021, only 6.3
percent received treatment that year.241
One survey found that more than 85
percent of individuals that did not
receive needed mental health or
substance use care reported negative
impacts, including personal relationship
issues, job issues and performing poorly
or dropping out of school.242
The economic impact of untreated
mental health and substance use
disorders can be significant. A 2021
study found that the high prevalence of
major depressive disorder among U.S.
adults has increased workplace costs
from $114.6 billion in 2010 to $198.6
billion in 2018.243 A 2022 study found
that, in low and middle-income
countries, mental health interventions
significantly improved work-related
outcomes. Relative to a control group,
participants receiving a mental health
intervention experienced a 26 percent
decrease in their inability to work and
participant absence rates declined by 16
percent. The authors noted that these
economic effects are ‘‘somewhat larger’’
for populations with severe mental
239 Ohrnberger, Julius, Eleonora Fichera, and Matt
Sutton. ‘‘The Relationship between Physical and
Mental Health: A Mediation Analysis.’’ Social
Science & Medicine 195 (2017): 42–49.
240 SAMHSA. ‘‘Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2021 National Survey on Drug Use and Health.’’
Figure 65.
241 SAMHSA. ‘‘Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2021 National Survey on Drug Use and Health.’’
Figure 54 and 57.
242 National Council for Mental Wellbeing. ‘‘2022
Access to Care Survey Results,’’ May 11, 2022.
https://www.thenationalcouncil.org/wp-content/
uploads/2022/05/2022-Access-To-Care-SurveyResults.pdf.
243 Greenberg, Paul E., Andree-Anne Fournier,
Tammy Sisitsky, Mark Simes, Richard Berman,
Sarah H. Koenigsberg, and Ronald C. Kessler. ‘‘The
Economic Burden of Adults with Major Depressive
Disorder in the United States (2010 and 2018).’’
Pharmacoeconomics 39, no. 6 (2021): 653–665.
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health disorders, compared to
populations with mild mental health
disorders.244 Finally, a 2015 study
examined the impact of State parity
laws on individuals with moderate
levels of mental distress and found that
State parity laws were associated with
an increase in overall employment,
weekly wages, and the number of hours
worked per week, and attributed these
changes to the increased productivity of
these workers.245
These proposed rules would also have
significant indirect impacts on families
and social networks of individuals with
untreated or poorly managed mental
health conditions and substance use
disorders, as well as society at large. By
increasing access to services, these
proposed rules would lead to more
people receiving treatment, reducing the
burden on family members and other
support systems. This includes
untreated maternal mental health
conditions (MMHCs) which can lead to
a reduced ability to work, increased risk
of suicide, increased use of public
services such as Medicaid, and worse
maternal and child health. A 2022 study
of the cost of MMHC to Texas women
and their children projected costs for
the 2019 birth cohort from the time of
conception through five years
postpartum to total $2.2 billion.246
Untreated MMHCs include untreated
perinatal mood and anxiety disorders
(PMADs), which have been found to
account for approximately $48 million
in societal costs in Vermont for the
average annual birth cohort from
conception through five years
postpartum, including $12.5 million in
productivity loss and $9.4 million in
non-obstetric health expenditures.247
The cost in missed productivity due to
workers’ fair or poor mental health was
estimated as $47.6 billion annually in
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244 Lund,
Crick, Kate Orkin, Marc Witte, Thandi
Davies, John Walker, Johannes Haushofer, Sarah
Murray, Judy Bass, Laura Murray, and Vikram Patel.
‘‘Treating Mental Health Conditions Improves Labor
Market and Other Economic Outcomes in Low and
Middle-Income Countries.’’ University of Oxford,
Working Paper (2022).
245 Andersen, Martin. ‘‘Heterogeneity and the
Effect of Mental Health Parity Mandates on the
Labor Market.’’ Journal of Health Economics 43
(2015).
246 Margiotta, Caroline, Jessica Gao, So O’Neil,
Divya Vohra and Kara Zivin. ‘‘The Economic
Impact of Untreated Maternal Mental Health
Conditions in Texas.’’ BMC Pregnancy Childbirth
22, 700 (2022). https://doi.org/10.1186/s12884-02205001-6.
247 Platt, Isabel, Emma Pendl-Robinson, Eric
Dehus, So O’Neil, Divya Vohra, Kara Zivin, Michael
Kenny and Laura Pentenrieder. ‘‘Estimating the
Costs of Untreated Perinatal Mood and Anxiety
Disorders in Vermont.’’ Mathematica. May 2023.
https://www.mathematica.org/publications/
societal-costs-of-perinatal-mood-and-anxietydisorders-in-vermont.
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2022.248 A 2022 study found that
households with a family member
diagnosed with a mental health disorder
had lower health status scores compared
to households without a mental illness
diagnosis, suggesting evidence of family
spillover effects on mental illness.249
Finally, a 2020 study estimated that the
societal costs of untreated opioid use
disorder was approximately $1.02
trillion, which includes $35 billion in
health care costs and $92 billion in lost
productivity.250
1.7. Costs
These proposed rules aim to promote
access to mental health and substance
use disorder services under MHPAEA,
while seeking to limit costs on plans
and issuers. The costs incurred in these
activities are discussed below.
A 2019 study which examined the
impact of MHPAEA on the utilization of
mental health and substance use
disorder services in the private, large
group employer-sponsored insurance
market from 2005 to 2015 found that
MHPAEA is positively associated with
the utilization of outpatient mental
health and substance use disorder
benefits.251 A 2020 study of MHPAEA,
using 2007 and 2011–12 data from the
National Survey of Children’s Health,
found that among children and
adolescents with family income
between 150 and 400 percent of the
Federal poverty level in States without
prior parity laws, the enactment of
MHPAEA resulted in a 2.8 percentage
point increase in mental health care
utilization.252 In addition, a 2019 study
examined the effectiveness of the
national primary care-mental health
integration (PC–MHI) initiative of the
Veterans Health Administration, which
aimed to improve access to mental
248 Witters, Dan and Sangeeta Agrawal. ‘‘The
Economic Cost of Poor Employee Mental Health’’
Gallup Workplace (December 13, 2022). https://
www.gallup.com/workplace/404174/economic-costpoor-employee-mental-health.aspx?version=print.
249 Lee, Donghoon, Yeonil Kim, and Beth Devine.
‘‘Spillover Effects of Mental Health Disorders on
Family Members’ Health-related Quality of Life:
Evidence from a US Sample.’’ Medical Decision
Making 42, no. 1 (2022): 80–93.
250 Florence, Curtis, Feijun Luo, and Ketra Rice.
‘‘The Economic Burden of Opioid Use Disorder and
Fatal Opioid Overdose in the United States, 2017.’’
Drug and Alcohol Dependence 218 (2021): 108350.
251 Mulvaney-Day, Norah, Brent J. Gibbons,
Shums Alikhan, and Mustafa Karakus. ‘‘Mental
Health Parity and Addiction Equity Act and the Use
of Outpatient Behavioral Health services in the
United States, 2005–2016.’’ American Journal of
Public Health 109, no. S3 (2019): S190–S196.
252 Li, Xiaoxue, and Jie Ma. ‘‘Does Mental Health
Parity Encourage Mental Health Utilization Among
Children and Adolescents? Evidence From The
2008 Mental Health Parity and Addiction Equity
Act (MHPAEA).’’ The Journal of Behavioral Health
Services & Research 47, no. 1 (2020): 38–53.
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health services by embedding
specialists, care managers, or both in
primary care clinics to collaboratively
care for veterans with psychiatric
illness. It found that each percentagepoint increase in the proportion of
clinic patients seen by the PC–MHI
providers was associated with an 11
percent increase in the average total
mental health visits per year.253 Finally,
another 2019 study, which examined
the effectiveness of hybrid psychiatric
care, a combination of in-person and
telepsychiatry services, found that
hybrid care increased the total number
of outpatient encounters and increased
the timeliness of care in mental health
patients, compared to patients with inperson visits only.254
1.7.1. Proposed Amendments to the
Existing MHPAEA Regulations (26 CFR
54.9812–1, 29 CFR 2590.712, 45 CFR
146.136)
These proposed rules focus plans and
issuers on the impact of NQTLs and
associated practices on access to mental
health and substance use disorder
benefits. The regulations further stress
the importance of avoiding NQTLs and
practices that impose greater limits on
access for participants, beneficiaries,
and enrollees for mental health or
substance use disorder benefits.
For example, as discussed in section
II.A.2 of the preamble, the definition of
‘‘substance use disorders’’ must include
all disorders covered under the plan or
coverage that fall under any of the
diagnostic categories listed in the
mental, behavioral, and
neurodevelopmental disorders chapter
(or equivalent chapter) of the most
current version of the ICD as a mental
or behavioral disorder due to
psychoactive substance use (or
equivalent category) or that are listed in
the most current version of the DSM as
a Substance-Related and Addictive
Disorder (or equivalent category). Plans
and issuers would also be required to
use reasonable methods and analysis to
determine if a limitation complies with
the requirements of these proposed
rules. The Departments believe that the
proposed amendments could cause
plans and issuers to revise their policies
and remove treatment limitations in
response to the Departments’
253 Leung, Lucinda B., Lisa V. Rubenstein, Jean
Yoon, Edward P. Post, Erin Jaske, Kenneth B. Wells,
and Ranak B. Trivedi. ‘‘Veterans Health
Administration Investments in Primary Care and
Mental Health Integration Improved Care Access.’’
Health Affairs 38, no. 8 (2019): 1281–1288.
254 Hughes, M. Courtney, Jack M. Gorman,
Yingqian Ren, Sana Khalid, and Carol Clayton.
‘‘Increasing Access to Rural Mental Health Care
Using Hybrid Care that Includes Telepsychiatry.’’
Journal of Rural Mental Health 43, no. 1 (2019): 30.
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clarifications and examples. For
instance, a 2016 study examined how
private health plans responded to the
2010 interim final regulations and found
that the majority of plans had
eliminated annual limits related to
behavioral health treatments. The
percentage of health insurance products
with special annual limits on mental
health treatments decreased from 28
percent in 2009 to 4 percent in 2010,
and a similar decrease was observed for
health insurance products with special
annual limits on substance use disorder
treatments (from 26 percent in 2009 to
3 percent in 2010).255 Therefore, plans
and issuers could incur costs to
implement changes associated with
coverage revision of plan provisions,
which might result in increased costs
from expanded utilization of mental
health and substance use disorder
services. The Departments face
uncertainty in quantifying these costs as
they cannot estimate the potential
increase in utilization and which
services might see the largest increase in
utilization.
1.7.2. New Regulations (26 CFR
54.9812–2, 29 CFR 2590.712–1, 45 CFR
146.137; 45 CFR 146.180)
These proposed rules would amend
the content and data, and
documentation requirements for
comparative analyses required by the
CAA, 2021 and outline the timeframes
and processes for plans and issuers to
provide their comparative analyses to
the Departments upon request. These
proposed rules would require plans and
issuers to collect and evaluate relevant
data with each comparative analysis
requested by the Departments for all
NQTLs, including but not limited to the
number and percentage of relevant
claims denials and any other data
required by State law or private
accreditation standards, and for NQTLs
related to network composition, data
including, but not limited to, in-network
and out-of-network utilization rates
(including time and distance data, data
on providers, network adequacy metrics
(including time and distance data, and
data on providers accepting new
patients), and provider reimbursement
rates (including as compared to billed
charges).
Plans and issuers would incur costs
associated with collecting, processing,
and analyzing data under the new
255 Horgan, Constance M., Dominic Hodgkin,
Maureen T. Stewart, Amity Quinn, Elizabeth L.
Merrick, Sharon Reif, Deborah W. Garnick, and
Timothy B. Creedon. ‘‘Health Plans’ Early Response
to Federal Parity Legislation for Mental Health and
Addiction Services.’’ Psychiatric Services 67, no. 2
(2016): 162–168.
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proposed data requirements, including
data on claims denials, data relevant to
NQTLs as required by State law or
private accreditation standards, innetwork and out-of-network utilization
rates, network adequacy metrics,
provider reimbursement rates and other
relevant data. As discussed in section
1.5.3 of this RIA, issuers and TPAs
provide key support for plan
compliance with MHPAEA and would
incur most of the burden given their
large involvement in the plan design
and NQTL analyses. The Departments
request comments on whether plans,
issuers, and TPAs already collect and
examine this data.
To meet the proposed new content
requirements for the comparative
analyses, the Departments, based on
internal discussion, expect that on
average, plans would need to analyze 4
NQTLs and issuers would need to
analyze 8 NQTLs. Plans and issuers
preparing their own comparative
analyses would incur an incremental
burden of 10 hours per NQTL in the first
year, with 2 hours for a general or
operations manager to review the
requirements and outline the changes
needed for the comparative analyses
and 8 hours for a business operations
specialist to prepare the comparative
analyses. In the first year, this would
result in a cost burden of approximately
$291.0 million.256 The amount of time
spent by plans preparing their own
comparative analyses could vary
depending on the level of cooperation
by the TPA. Once the comparative
analyses are performed and
documented, plans would need to
update the analyses when making
256 A labor rate of $132.38 is used for a general
or operations manager and a labor rate of $109.96
is used for a business operations specialist. (Source:
Estimates for total compensation are based on mean
hourly wages by occupation from the 2021
Occupational Employment Statistics and estimates
of wages and salaries as a percentage of total
compensation by occupation are from the December
2021 National Compensation Survey’s Employee
Cost for Employee Compensation. Estimates for
overhead costs for services are imputed from the
2020 Service Annual Survey. To obtain overhead
cost on an occupational basis, the estimate allocates
total industry overhead cost to unique occupations
using a matrix of detailed occupational employment
for each NAICS industry. All values are in 2023
dollars.) The labor rate is applied in the calculation
as: [(27,499 ERISA self-insured group health plans
× 4 NQTLs × 2 hours × $132.38 for a general or
operations manager) + (27,499 ERISA self-insured
group health plans × 4 NQTLs × 8 hours × $109.96
for a business operations specialist) + (1,500 issuers
× 8 NQTLs × 2 hours × $132.38 for a general or
operations manager) + (1,500 issuers × 8 NQTLs ×
8 hours × $109.96 for a general or operations
manager) + (33,076 self-funded, non-Federal
governmental health plans × 4 NQTLs × 2 hours ×
$132.38 for a general or operations manager) +
(33,076 self-funded, non-Federal governmental
health plans × 4 NQTLs × 2 hours × $109.96 for a
business operations specialist)] = $291,031,092.
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changes to the terms of the plan or
coverage, including changes to the way
NQTLs are applied to mental health and
substance use disorder benefits. In
subsequent years, the Departments
estimate plans would incur an
incremental burden of 4 hours annually
per NQTL to update the analyses, with
1 hour for a general or operations
manager and 3 hours for a business
operations specialist. In subsequent
years, this would result in a cost burden
of approximately $117.6 million.257 The
Departments seek comments on these
assumptions.
Additionally, plans and issuers must
make the comparative analyses and
other applicable information required
by the CAA, 2021 available upon
request to participants and beneficiaries
in plans subject to ERISA and to
participants, beneficiaries, and enrollees
in all non-grandfathered group health
plans and non-grandfathered group or
individual health insurance coverage
upon request in connection with an
appeal of an adverse benefit
determination. The Departments
estimate that on average each plan or
issuer would receive one request
annually and that plans and issuers
would annually incur a burden of 5
minutes for a clerical worker to prepare
and send the comparative analyses to
each requesting participant or
beneficiary. This would result in an
annual cost burden of approximately
$10.5 million.258 The Departments also
assume that 58.2 percent of requests
would be delivered electronically,
resulting in a de minimis cost.259 The
257 A labor rate of $132.38 is used for a general
or operations manager and a labor rate of $109.96
is used for a business operations specialist. The
labor rate is applied in the calculation as: [(27,499
ERISA self-insured group health plans × 4 NQTLs
× 1 hour × $132.38 for a general or operations
manager) + (27,499 ERISA self-insured group health
plans x× 4 NQTLs × 3 hours × $109.96 for a
business operations specialist) + (1,500 × 8 NQTLs
× 1 hour × $132.38 for a general or operations
manager) + (1,500 issuers × 8 NQTLs × 3 hours ×
$109.96 for a general or operations manager) +
(33,076 self-funded, non-Federal governmental
health plans × 4 NQTLs × 1 hours × $132.38 for a
general or operations manager) + (33,076 selffunded, non-Federal governmental health plans × 4
NQTLs × 3 hours × $109.96 for a business
operations specialist)] = $117,552,718.
258 The Departments estimate that there are 476
issuers with 1,500 issuer/State combinations
offering individual and group health coverage
nationwide. A labor rate of $63.45 is used for a
clerical worker. The labor rate is applied in the
calculation as: (1,898,298 ERISA group health plans
+ 90,126 non-Federal governmental health plans +
1,500 issuers/State combinations providing
coverage in the group and individual market) × 5
minutes × $63.45 = $10,521,787.
259 According to data from the National
Telecommunications and Information Agency
(NTIA), 40.0 percent of individuals aged 25 and
over have access to the internet at work. According
to a Greenwald & Associates survey, 84 percent of
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remaining 41.8 percent of requests
would be mailed, at a cost of $1.14 each,
which is postage for a 3-ounce letter.
The annual cost burden to mail the
comparative analyses to the participants
and beneficiaries requesting them
would therefore be approximately $1.6
million.260
In the first year, group health plans
and issuers would need time to
familiarize themselves with these
proposed rules and amendments. The
Departments assume that on average it
would require six and a half hours for
an attorney to review these proposed
rules and amendments. This would
result in a one-time cost burden of $64.3
million.261
According to the 2021 National
Health Expenditure Data, the total
contribution of private employers to
health insurance premiums is $554.1
billion. The total contribution of State
and local employers to health insurance
premiums is $179.7 billion.262 The total
plan participants find it acceptable to make
electronic delivery the default option, which is
used as the proxy for the number of participants
who will not opt-out of electronic disclosure that
are automatically enrolled (for a total of 33.6
percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 40.4 percent of
individuals aged 25 and over have access to the
internet outside of work. According to a Pew
Research Center survey, 61.0 percent of internet
users use online banking, which is used as the
proxy for the number of internet users who will
affirmatively consent to receiving electronic
disclosures (for a total of 24.7 percent receiving
electronic disclosure outside of work). Combining
the 33.6 percent who have access to electronic
disclosure at work with the 24.7 percent who have
access to electronic disclosure outside of work
produces a total of 58.2 percent who will receive
to electronic disclosure overall.
260 The Departments assume one request per
entity and that each mailed response will cost $1.89
in materials and postage, on average. The mailing
and postage cost assume $.05 per printed page, an
average document length of 15 pages and $1.14 in
postage for a 3-ounce parcel. Therefore, the cost is
estimated as (1,488,476 fully-insured, nongrandfathered plans with less than 50 participants
+ 409,822 ERISA-covered group health plans with
50 or more participants + 1,500 issuers/State
Combinations + 90,126 non-Federal governmental
health plans) × 41.8% × ($1.14 + (15 pages × $0.05))
= $1,572,080.
261 A labor rate of $159.34 is used for an attorney
(this figure reflects the median hourly wage of
lawyers according to the DOL Bureau of Labor
Statistics Occupational Employment and Wage
Statistics for May 2022, doubled to account for
overhead costs and benefits). The reading time is
calculated based on an average 250 words per
minute reading rate. The labor rate is applied in the
calculation as: (27,499 self-funded, ERISA group
health plans + 33,076 self-funded, non-Federal
governmental health plans + 1,500 issuers/State
combinations providing coverage in the group and
individual market) × 6.5 hours × $159.34 =
$64,291,778.
262 Centers for Medicare and Medicaid Services.
‘‘National Health Expenditure Data.’’ NHE Tables—
Table 24. https://www.cms.gov/Research-StatisticsData-and-Systems/Statistics-Trends-and-Reports/
NationalHealthExpendData/
nationalhealthaccountshistorical.
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health expenditure on the individual
market is $80.9 billion.263 In the first
year, the cost to comply with these
proposed rules is estimated to be
approximately $367.4 million,264 which
represents 0.05 percent of total
premiums in these markets. In
subsequent years, the cost to comply
with these proposed rules is estimated
to be approximately $129.6 million,265
which represents 0.02 percent of total
premiums in these markets. The
Departments request comments
regarding the costs associated with these
proposed rules and amendments. To be
most useful, comments should
distinguish between the cost to comply
with existing parity requirements and
the cost to comply with the
requirements of these proposed rules.
HHS assumes that most of the selffunded, non-Federal governmental
plans that would be affected by the
implementation of the CAA, 2023
provision that sunsets the MHPAEA
opt-out election currently offer mental
health and substance use disorder
benefits, but that many of these plans
might not be complying with MHPAEA.
These plans would incur costs to come
into compliance. In particular, some
plans might have to remove limits on or
offer more generous mental health and
substance use disorder benefits, which
would likely increase utilization of
mental health and substance use
disorder services, increasing the number
of claims submitted, and the overall
costs incurred by these plans. Plans that
have opted out of requirements under
MHPAEA would also need to conduct
NQTL comparative analyses if they are
not already doing so. HHS is unable to
estimate the potential costs to these
plans because the extent to which these
plans are currently out of compliance is
unknown, and costs associated with
coming into compliance would vary
from plan to plan. HHS seeks comments
on the potential costs to these plans to
come into compliance with MHPAEA.
263 Centers for Medicare and Medicaid Services.
‘‘National Health Expenditure Data.’’ NHE Tables—
Table 21. https://www.cms.gov/Research-StatisticsData-and-Systems/Statistics-Trends-and-Reports/
NationalHealthExpendData/
nationalhealthaccountshistorical.
264 The cost is estimated as follows: $291.0
million for preparing the comparative analyses +
$64.3 million for reviewing the proposed rules and
amendments + $10.5 million to prepare the
comparative analyses upon request to participants
and beneficiaries + $1.6 million to distribute the
comparative analyses to participants and
beneficiaries = $367.4 million.
265 The cost is estimated as follows: $117.6
million for preparing the comparative analyses +
$10.5 million for preparing the comparative
analyses upon request to participants and
beneficiaries + $1.6 million to distribute the
comparative analyses to participants and
beneficiaries = $129.6 million.
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HHS estimates that the
implementation of the CAA, 2023
provision that sunsets the MHPAEA
opt-out election would generate a total
cost savings of approximately $11,351
for plans (as discussed in section 2.2 of
this RIA), as these plans would no
longer be required to submit an opt-out
notice to the Federal Government or
prepare and disseminate an opt-out
notice to plan participants regarding the
plan’s opt-out election, as long as the
plans do not elect to permissibly opt-out
of other requirements. This proposed
provision would also generate cost
savings of approximately $2,469 for the
Federal Government, as discussed in
section 2.2 of this RIA, as HHS would
no longer have to process the opt-out
notices submitted by several of these
plans.
1.8. Transfers
Improving parity in coverage of
mental health and substance use
disorder benefits has the potential to
increase premiums, change the
spending patterns of plans and issuers,
and change the utilization patterns of
participants, beneficiaries, and
enrollees. The Departments recognize
these as transfers among participants,
beneficiaries, and enrollees, plans and
issuers, and mental health and
substance use disorder providers and
facilities. Specifically, the Departments
expect these proposed rules would
result in: (1) transfers from plans and
issuers to participants, beneficiaries,
and enrollees caused by lower out-ofpocket spending; (2) transfers from
participants, beneficiaries, and enrollees
to plans and issuers caused by higher
premiums; and (3) transfers between
primary care providers and mental
health providers for the treatment of
mental health and substance use
disorders resulting from the anticipated
shift of participants, beneficiaries, and
enrollees choosing to obtain treatment
from a specialist instead of a primary
care provider. The Departments request
comment or data on how large these
transfers might be.
1.8.1. Transfers From Plans and Issuers
to Participants, Beneficiaries, and
Enrollees Caused by Lower Out-ofPocket Spending
These proposed rules could result in
a transfer from plans and issuers to
participants, beneficiaries, and enrollees
through lower out-of-pocket spending
for mental health and substance use
disorder services. For example, a 2013
study examined the impact of the 2001
parity directive in the Federal
Employees Health Benefits (FEHB)
Program and found that the annual out-
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of-pocket spending for FEHB enrollees
diagnosed with bipolar disorder, major
depression, or adjustment disorder
decreased by between $78 and $86.266
Furthermore, a 2018 study compared
commercially-insured children ages 3 to
18 years in 2008 who were continuously
enrolled in plans newly subject to parity
under MHPAEA to children
continuously enrolled in plans never
subject to MHPAEA. The 2018 study
found that children with mental health
conditions who were enrolled in plans
subject to parity had, on average, $140
lower annual out-of-pocket mental
health spending than expected
compared to the comparison group. The
study further found that children in or
above the 85th percentile in total mental
health spending who were enrolled in
plans subject to MHPAEA had, on
average, $234 lower annual out-ofpocket mental health spending than
those in the comparison group.267
Finally, a 2019 study examined the
impact of MHPAEA on mental health
services spending in a commerciallyinsured population diagnosed with
mental health disorders and found that
MHPAEA resulted in a decrease in the
mean out-of-pocket spending per mental
health outpatient visit.268
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1.8.2. Transfers From Participants,
Beneficiaries, and Enrollees to Plans
and Issuers Caused by Higher Premiums
These proposed rules might also
result in a transfer from participants,
beneficiaries, and enrollees to plans and
issuers in the form of higher premiums.
By limiting the ability of plans and
issuers to avoid costs of certain mental
health and substance use disorder
treatments, while increasing access to
and utilization of these services, plans
and issuers might increase premiums
and change cost-sharing requirements
(for example, by raising deductibles) to
offset these costs. Similarly, by
incorporating the statutory requirement
that NQTLs be no more restrictive for
mental health and substance use
266 Busch, Alisa B., Frank Yoon, Colleen L. Barry,
Vanessa Azzone, Sharon-Lise T. Normand, Howard
H. Goldman, and Haiden A. Huskamp. ‘‘The Effects
of Parity on Mental Health and Substance Use
Disorder Spending and Utilization: Does Diagnosis
Matter?’’ The American Journal of Psychiatry 170,
no. 2 (2013): 180.
267 Kennedy-Hendricks, Alene, Andrew J.
Epstein, Elizabeth A. Stuart, Rebecca L. Haffajee,
Emma E. McGinty, Alisa B. Busch, Haiden A.
Huskamp, and Colleen L. Barry. ‘‘Federal Parity and
Spending for Mental Illness.’’ Pediatrics 142, no. 2
(2018).
268 Haffajee, Rebecca L., Michelle M. Mello, Fang
Zhang, Alisa B. Busch, Alan M. Zaslavsky, and J.
Frank Wharam. ‘‘Association Of Federal Mental
Health Parity Legislation with Health Care Use and
Spending Among High Utilizers of Service.’’
Medical Care 57, no. 4 (2019): 245.
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disorder benefits than for medical/
surgical benefits, plans and issuers
might reduce the number of NQTLs
employed and increase premiums in
order to offset the costs of participants
utilizing more mental health and
substance disorder benefits.
Many studies attempt to isolate the
changes in health costs associated with
implementing parity. For example, in
2007 the Congressional Budget Office
estimated that MHPAEA would increase
premiums for group health insurance by
0.4 percent on average.269 Another
study by the Society of Actuaries on
mental health parity found in 2005 that,
‘‘overall health care costs increased
minimally and in some cases were even
reduced.’’ 270 The Departments
anticipate that these proposed rules
would have a minimal impact on
premiums, but there may be instances in
which plans and issuers may impose
higher premiums. The Departments
request comments or data on this
transfer.
1.8.3. Transfers Between Primary Care
Providers and Mental Health Providers
Finally, these proposed rules may
result in a transfer from primary care
providers to mental health and
substance use disorder providers. More
specifically, patients may be more likely
to visit a mental health or substance use
disorder specialist compared to a
primary care provider, as these
proposed rules clarify the manner in
which plans and issuers must provide
parity in coverage for mental health and
substance use disorder benefits and
medical/surgical benefits. A 2012 study
that examined the impact of Oregon’s
2007 parity law on the choice of
provider found that the law was
associated with a slight increase in the
likelihood of patients seeking care with
masters-level specialists, and relatively
little change for generalist physicians,
psychiatrists, and psychologists. The
findings suggest that these proposed
rules may lead to a slight shift in the use
of nonphysician specialists, including
masters-level specialists, and away from
generalist physicians.271
269 Congressional Budget Office. Congressional
Budget Office Cost Estimate: S558. March 20, 2007.
https://www.cbo.gov/sites/default/files/cbofiles/
ftpdocs/78xx/doc7894/s558.pdf.
270 Melek, Steve. ‘‘The Cost of Mental Health
Parity.’’ Health Section News. Issue 49. (2005) As
presented to the Society of Actuaries. https://
www.soa.org/globalassets/assets/library/
newsletters/health-section-news/2005/march/hsn2005-iss49-melek-b.pdf.
271 McConnell, K. John, Samuel HN Gast, and
Bentson H. McFarland. ‘‘The Effect of
Comprehensive Behavioral Health Parity on Choice
of Provider.’’ Medical Care 50, no. 6 (2012): 527.
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1.8.4. Transfers Associated With the
Implementation of the CAA, 2023
Provision That Sunsets the MHPAEA
Opt-Out Election for Self-Funded, NonFederal Governmental Plans
HHS anticipates that the proposed
amendments to implement the CAA,
2023 provision that sunsets the
MHPAEA opt-out election for selffunded, non-Federal governmental
plans would have similar effects as the
other provisions examined in this
subsection of the RIA. These proposed
amendments might lead to improved
coverage of and lower cost-sharing
requirements for mental health and
substance use disorder benefits for
participants and beneficiaries of selffunded, non-Federal governmental
plans. This would lead to lower out-ofpocket costs for plan participants and
beneficiaries who receive mental health
or substance use disorder services. This
would be viewed as a transfer from selffunded, non-Federal governmental
plans to participants and beneficiaries.
On the other hand, as noted in section
1.7 of this RIA, if the proposed
amendments cause plans to remove
limits on or offer more generous mental
health and substance use disorder
benefits, utilization of mental health
and substance use disorder services
might increase, which may result in the
number of claims submitted and the
overall costs incurred by plans to also
increase. This, in turn, might lead to
higher premiums and/or deductibles for
plan participants, which may seem to be
a transfer from plan participants to selffunded, non-Federal governmental
plans, but is instead an indication of
who bears the societal cost presented in
section 1.7.
1.9. Uncertainty
It is unclear what percentage of
participants, beneficiaries, and enrollees
experience more restrictive NQTLs and
more stringent practices related to the
design and implementation of mental
health and substance use disorder
benefits, as compared to medical/
surgical benefits. Similarly, it is unclear
what percentage of plans and issuers
impose greater limitations on mental
health and substance use disorder
benefits than on medical/surgical
benefits. This frequency may differ
among small and large plans and
issuers. Examining some plans’
comparative analyses shows that they
are not in full compliance with
MHPAEA’s requirements for NQTL’s
although the extent across all plans is
not known. As documented in the 2022
MHPAEA Report to Congress, DOL
completed a compliance review of 48
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NQTLs (36 unique NQTLs),
corresponding to 30 plans and issuers as
of October 31, 2021. All of these reviews
resulted in an initial determination of
noncompliance with MHPAEA.272
While the Departments expect that
these proposed rules would result in
plans and issuers expanding coverage of
mental health and substance use
benefits, it is possible that instead of
relaxing the use of NQTLs on mental
health and substance use disorder
benefits, some plans and issuers may
impose additional NQTLs on medical/
surgical benefits. As a result, some types
of medical/surgical benefits may
become less accessible for some
participants, beneficiaries, and
enrollees, which could lead to an
increase in out-of-pocket costs.
There is also a possibility that some
plans and issuers would stop offering
mental health and substance use
disorder benefits. In 2010, 2 percent of
employers reported discontinuing their
coverage of mental health and substance
use disorder treatments.273
Nevertheless, as discussed in section 1.6
of this RIA, the Departments anticipate
that these proposed rules would expand
the level of coverage for mental health
and substance use disorder benefits,
which would result in reduced out-ofpocket spending for plan participants,
beneficiaries, and enrollees. The
Departments face uncertainty in
estimating the magnitude of savings and
welcome any comments and data that
can help estimate the amount of
decrease in out-of-pocket spending. The
Departments also invite comments and
data related to other issues identified in
this section.
Further, there may be some possible
societal spillover effects which may
occur as a result of these proposed rules.
For example, increasing access to
mental health and substance use
disorder services may improve public
safety in the long-term. A 2017 study on
whether State parity laws for substance
use disorder treatments was associated
with reduced fatal traffic accidents
found that passage of State parity laws
was associated with reduced annual
total traffic fatality rates by 4.1 to 5.4
percent.274 In addition, a 2021 study
272 2022 MHPAEA Report to Congress, available
at https://www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
report-to-congress-2022-realizing-parity-reducingstigma-and-raising-awareness.pdf.
273 Government Accountability Office. ‘‘Mental
Health and Substance Use: Employers’ Insurance
Coverage Maintained or Enhanced Since Parity Act,
but Effect of Coverage on Enrollees Varied,’’ GAO–
12–63, November 2011.
274 Popovici, Ioana, Johanna Catherine Maclean,
and Michael T. French (2017). ‘‘The Effects of
Health Insurance Parity Laws for Substance Use
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which examined the impact of State
parity laws on crime between 1994 and
2010 found that the passage of State
parity laws was associated with a
reduction of violent crimes by 5 to 7
percent and that the resulting lower
crime rates were associated with an
annual savings of $3 billion.275 These
studies may suggest that the benefits of
these proposed rules may go beyond the
listed benefits discussed in this RIA.
HHS is unable to precisely forecast
how many participants and
beneficiaries would be affected by the
proposed amendments to implement the
CAA, 2023 provision that sunsets the
MHPAEA opt-out election for selffunded, non-Federal governmental
plans, as plan sponsors that have
elected to opt out of requirements under
MHPAEA were not required to report
that information to HHS as part of their
HIPAA opt-out filings.
It is possible that some self-funded,
non-Federal governmental plans would
stop offering mental health and
substance use disorder benefits in
response to the proposed amendments.
However, HHS is unable to estimate the
potential number of self-funded, nonFederal governmental plans that might
do so. It is also possible that some selffunded, non-Federal governmental
plans might increase the financial
requirements and treatment limitations
that apply to medical/surgical benefits
in response to this proposed provision,
to ensure that these financial
requirements and treatment limitations
are comparable to those for mental
health and substance use disorder
benefits. HHS anticipates that this is a
less likely outcome of these proposed
amendments.
HHS seeks comments on the potential
number of self-funded, non-Federal
governmental plans that might stop
offering mental health and substance
use disorder benefits, as well as the
potential number of self-funded, nonFederal governmental plans that might
increase financial requirements and
treatment limitations for medical/
surgical benefits in response to the
proposed amendments. HHS also seeks
comments on the potential number of
participants and beneficiaries that might
be affected by these potential plan
changes.
Disorder Treatment on Traffic Fatalities: Evidence
of Unintended Benefits.’’ National Bureau of
Economic Research. https://www.nber.org/system/
files/working_papers/w23388/revisions/
w23388.rev0.pdf?sy=388.
275 Sharma, Keshob. ‘‘Do Mental Health Parity
Laws Reduce Crime?’’ (2021).
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1.10. Alternatives
In addition to the regulatory approach
outlined in these proposed rules, the
Departments considered alternatives
when developing policy regarding the
implementation of MHPAEA. The
Departments considered not expressly
incorporating the statutory requirement
that NQTLs be no more restrictive for
mental health and substance use
disorder benefits than for medical/
surgical benefits. However, as described
in section I.E of this preamble, it is clear
that plans and issuers too often fail to
consider the impact of their NQTLs on
access to mental health and substance
use disorder benefits, consistent with
MHPAEA’s fundamental purpose. While
the Departments have seen some
promising results in response to their
reviews of plans’ and issuers’
comparative analyses under the CAA,
2021’s requirements, they have also
seen a great deal of confusion about the
application of the current regulation to
NQTLs and about the parity obligation
generally. Based on the Departments’
experience with plans’ and issuers’
attempts to comply with the existing
regulations and guidance and the CAA,
2021, they have concluded that the
existing MHPAEA regulations failed to
sufficiently focus attention on the
obligation to ensure that NQTLs, and
associated processes, strategies, factors,
and evidentiary standards, avoid
placing disparate burdens on
participants’, beneficiaries’, and
enrollees’ access to covered mental
health and substance use disorder
treatment. Accordingly, the
Departments believe that the proposed
amendments would be beneficial to
participants, beneficiaries, and
enrollees, as plans and issuers revise
their policies and remove or amend
NQTLs that are inconsistent with
MHPAEA.
The Departments also considered not
requiring plans and issuers to use
specific data elements in preparing their
comparative analyses or to provide the
data to the Departments upon request.
However, during their review of
comparative analyses as part of their
reporting requirements to Congress, the
Departments found that many plans and
issuers did not initially provide
sufficient information to demonstrate
compliance of an NQTL either by
design, application, or both. It is often
difficult, to assess compliance in
operation without such data. By
requiring the consideration, use, and
production of this data, the regulation
should result in improved review of
plans’ and issuers’ policies and
processes, and improved parity
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outcomes for participants, beneficiaries,
and enrollees.
1.11. Conclusion
The Departments expect that these
proposed rules, if finalized, would
provide plans and issuers with a better
understanding of the requirements of
MHPAEA and improve how they
measure, analyze, document, and
demonstrate parity with regard to
NQTLs. The Departments are of the
view that these proposed rules and
corresponding associated Technical
Release, if finalized, would help plans
and issuers produce NQTL comparative
analyses that meet the requirements of
the CAA, 2021, resulting in improved
access to and coverage of mental health
and substance use disorder treatments,
which should ultimately result in better
mental health outcomes.
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2. Paperwork Reduction Act
2.1. Paperwork Reduction Act—
Departments of Labor and the Treasury
As part of their continuing effort to
reduce paperwork and respondent
burden, the Departments conduct a
preclearance consultation program to
allow the general public and Federal
agencies to comment on proposed and
continuing collections of information in
accordance with the Paperwork
Reduction Act of 1995 (PRA).276 This
helps to ensure that the public
understands the Departments’ collection
instructions, respondents can provide
the requested data in the desired format,
reporting burden (time and financial
resources) is minimized, collection
instruments are clearly understood, and
the Departments can properly assess the
impact of collection requirements on
respondents.
Currently, the Departments are
soliciting comments concerning the
proposed information collection request
(ICR) included in the MHPAEA Notices.
To obtain a copy of the ICR, contact the
PRA addressee shown below or go to
https://www.RegInfo.gov.
The Departments have submitted a
copy of these proposed rules to OMB in
accordance with 44 U.S.C. 3507(d) for
review of its information collections.
The Departments and OMB are
particularly interested in comments
that:
• Evaluate whether the collection of
information is necessary for the
functions of the agency, including
whether the information will have
practical utility;
• Evaluate the accuracy of the
agency’s estimate of the burden of the
collection of information, including the
276 44
U.S.C. 3506(c)(2)(A) (1995).
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validity of the methodology and
assumptions used;
• Enhance the quality, utility, and
clarity of the information to be
collected; and
• Minimize the burden of the
collection of information on those who
are to respond, including through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology
(for example, permitting electronically
delivered responses).
Commenters may send their views on
the Department’s PRA analysis in the
same way they send comments in
response to these proposed rules (for
example, through the
www.regulations.gov website), including
as part of a comment responding to the
broader NPRM.
PRA Addressee: Address requests for
copies of the ICR to James Butikofer,
Office of Research and Analysis, U.S.
Department of Labor, Employee Benefits
Security Administration, 200
Constitution Avenue NW, Room N–
5718, Washington, DC 20210; ebsa.opr@
dol.gov (https://www.reginfo.gov/public/
do/PRAMain).
Readers should note that the PRA
requires a non-incremental analysis of
information collections, and hence the
overall summary of the paperwork
burden estimates in this section
includes the entire on-going burden
imposed by information collections
required by MHPAEA, the CAA, and
subsequent guidance. The incremental
hour and cost burdens of these proposed
rules are discussed in detail below. For
a full discussion of all burden related to
this information collection please see
the supporting statement which is part
of the ICR available at https://
www.reginfo.gov/public/do/PRAMain.
2.1.1. Amendment to Existing MHPAEA
Regulations (29 CFR 2590.712; 26 CFR
54.9812–1)
The proposed amendments to the
existing MHPAEA regulations would
add new definitions, amend existing
definitions, specify new requirements
related to NQTLs, amend existing
examples of NQTLs, and add new
examples of NQTLs, providing clarity to
interested parties. The proposed
amendments would also specify that
mental health and substance use
disorder definitions must be consistent
with generally recognized independent
standards of current medical practice
and would add more specificity as to
what conditions or disorders plans and
issuers would be required to treat as
mental health and substance use
conditions or disorders.
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2.1.2. New Regulation (29 CFR
2590.712–1; 26 CFR 54.9812–2)
These proposed rules set more
specific content and data requirements
for the NQTL comparative analyses
required by MHPAEA as amended by
the CAA, 2021, clarify when the
comparative analyses need to be
performed, and outline the timeframes
and process for plans and issuers to
provide their comparative analyses to
the Departments or applicable State
authority upon request. These proposed
rules would also require plans and
issuers to collect and evaluate relevant
data as part of each comparative
analysis, including but not limited to
claims denials, data relevant to NQTLs
as required by State law or private
accreditation standards, utilization
rates, network adequacy metrics, and
provider reimbursement rates, in
fulfillment of the existing requirement
that they evaluate and document their
evaluation as part of the analysis of the
application of NQTLs related to network
composition and provider
reimbursement.
For the purpose of this analysis, it is
assumed that health insurance issuers
would fulfill the data request for fully
insured group health plans. This burden
is accounted for under HHS’ OMB
Control number 0938–1393 and is
discussed later in this document. It is
also assumed that TPAs and other
service providers would fulfill the
requirements for the vast majority of
self-insured group health plans.
2.1.3. Burden Estimates for Both
Existing Requirements and Proposed
Requirements
The Departments estimate that there
are approximately 250,000 ERISA selfinsured group health plans with 50 or
more participants that are affected by
these proposed rules.277 The
Departments believe that the number of
self-insured group health plans that
actually perform the analysis
themselves and incur the full estimated
compliance costs may be much smaller.
The Departments analyzed 2020 Form
5500 Schedule C (Service Provider
277 MHPAEA only applies to ERISA plans in the
group market with 50 or more participants that offer
mental health or substance use disorder (MH/SUD)
benefits. The Departments have not identified what
share of plans with 50 or more participants offer
MH/SUD benefits and has therefore assumed that
all of these plans offer them. Based on the 2021
Medical Expenditure Survey, 61 percent of ERISAcovered group health plans with 50 or more
participants are self-insuring. Thus, the Department
calculates the number of ERISA self-insured group
health plans with 50 or more participants based on
the following manner: 409,822 ERISA group health
plans with 50 or more participants × 61% =
249,991.
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Information) filings of self-insured
health plans and determined that 89
percent of those plans indicated that
they contracted with a TPA.278 Selfinsured group health plans could fulfill
the requirements with the help of TPAs
and other service providers.
To the extent self-insured plans use
plan designs provided by TPAs or
service providers responsible for nearly
identical fully insured plans, those
TPAs or service providers could utilize
the analysis already performed for those
fully insured plans, while helping these
self-insured plans comply with the
requirements. The Departments assume
that most self-insured health plans
would utilize service providers to
perform the analysis and that only 11
percent 279 (27,499) of the affected selfinsured group health plans, primarily
the largest, would need to conduct the
analyses themselves for their plan
specific design.280 The Departments
request comments on the percent of selfinsured group health plans that would
rely on analyses that TPAs and other
service providers have already
performed for their other plans, thus
reducing estimated burden on plans.
The Departments expect that even
these numbers may overestimate the
number of self-insured plans that would
perform the analysis themselves,
without assistance from TPAs or service
providers. For example, in DOL’s review
of comparative analyses, which has
focused on self-funded plans, the
reliance on insurance companies, TPAs,
and other service providers for much or
all of the work has been nearly
universal. As noted above, this is not
surprising because of the outsized role
insurance companies, TPAs and other
service providers tend to play in
designing the plans, administering the
networks, managing claims, providing
plan services, maintaining and holding
the data relevant to the comparative
analyses, and driving MHPAEA
compliance or noncompliance.
Non-grandfathered, fully insured
ERISA plans with less than 50
participants that are subject to MHPAEA
278 Because many plans are exempt from filing a
Form 5500, the Department only identified 37,934
self-insured health plan filings for 2020. Of these,
only 5,537 plans (or roughly 15 percent) attached
a Schedule C. Of those plans, 4,920 (or roughly 89
percent) indicated they paid compensation, either
directly or indirectly, of at least $5,000 for either
claims processing, contract administration, or both.
279 Based on the 2020 Form 5500, 89 percent of
self-insured plans filed a Schedule C and indicated
using either a Claims Processor, Contract
Administrator, or both.
280 The Departments assume only large plans,
defined as a plan with 50 or more participants
would self-administer. 249,991 self-funded ERISA
plans with 50 or more participants × 11 percent of
plans that self-administer = 27,499.
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under the Essential Health Benefits
(EHB) requirements of the Affordable
Care Act are likely to have their issuers
prepare their comparative analyses.
Issuers can take advantage of economies
of scale by preparing the required
documents for those plans purchasing
coverage. HHS has jurisdiction over
issuers and therefore is accounting for
this portion of the burden in their
analysis, in addition to the burden
related to non-Federal governmental
plans. Accordingly, this analysis
considers only the burden associated
with ERISA self-insured group health
plans, which are under the jurisdiction
of the DOL and Treasury.
These proposed rules require that
group health plans offering group health
insurance coverage must make a
comparative analysis available upon
request by DOL. The CAA, 2021
requires DOL to collect no fewer than 20
comparative analyses per year, but it
also provides that DOL shall request
that a group health plan or issuer submit
the comparative analyses for plans that
involve potential MHPAEA violations or
complaints regarding noncompliance
with MHPAEA that concern NQTLs,
and any other instances in which the
DOL determines appropriate. Based on
its prior experience and current
funding, DOL expects to request 100
comparative analyses each year.281 To
provide DOL with their comparative
analyses and associated documentation,
DOL estimates, based on internal
discussion, it would take a total of five
hours for plans, with one hour for a
general or operations manager and four
hours for a business operations
specialist. This would result in a total
hour burden of 500 hours with an
equivalent cost burden of $57,222 in
each year.282
281 It should be emphasized, however, that DOL
currently relies on supplemental appropriations
passed as part of CAA, 2021, to fund these
enforcement efforts. The supplemental
appropriations are currently scheduled to expire at
the end of FY 2024 with the consequence that DOL
would lose funds for between a quarter and a third
of its enforcement program and EBSA would have
to commensurately reduce its staff size by
approximately 120 full-time employees (FTEs). As
a result, its MHPAEA enforcement efforts would
necessarily decline, and the estimates of associated
expenses would correspondingly decline.
282 The burden is calculated as follows: (100
ERISA self-insured group health plans × 1 hour for
a general or operations manager) + (100 ERISA selfinsured group health plans × 4 hours for a business
operations specialist) = 500 hours. A labor rate of
$132.38 is used for a general or operations manager
and a labor rate of $109.96 is used for a business
operations specialist. The labor rate is applied in
the calculation as: (100 ERISA self-insured group
health plans × 1 hour for a general or operations
manager × $132.38) + (100 ERISA self-insured
group health plans × 4 hours for a business
operations specialist × $109.96) = $57,222
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These proposed rules require that a
plan or issuer document the action that
has been or is being taken by the plan
or issuer to mitigate any material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits,
as required in the demonstration of
comparability and stringency in
operation requirement in § 2590.712–
1(c)(5)(iv) of these proposed rules. To
meet the format, content, data, and
documentation requirements for the
comparative analysis, DOL expects that
plans preparing their own comparative
analyses would on average annually
perform four NQTL analyses across
benefit classifications, based on DOL’s
experience in reviewing comparative
analyses, and assumes that each NQTL
analysis would require 20 hours in the
first year, with 4 hours for a general or
operations manager and 16 hours for a
business operations specialist.283 In the
first year, this results in a total hour
burden of 2,199,921 hours with an
equivalent cost burden of
$251,767,736.284 Once the comparative
analyses are performed or documented,
plans would need to update the
analyses when making changes to the
terms of the plan or coverage, including
changes to the way NQTLs are applied
to mental health and substance use
disorder benefits. In subsequent years,
283 The estimated hour burden is consistent with
the hour burden estimated in the previous PRA
supporting statement for 1210–0138. In the PRA
supporting statement, the Departments estimated
that it would take a total of 20 hours for plans to
update each comparative analysis as required by the
CAA, 2021 (https://omb.report/icr/202108-1210015/doc/114767500). This estimate differs by
accounting for plans needing to evaluate multiple
NQTLs.
284 The burden is calculated as follows: (27,499
ERISA self-insured group health plans × 4 NQTLs
× 4 hours for a general or operations manager) +
(27,499 ERISA self-insured group health plans × 4
NQTLs × 16 hours for a business operations
specialist) = 2,199,921 hours. A labor rate of
$132.38 is used for a general or operations manager
and a labor rate of $109.96 is used for a business
operations specialist. The labor rate is applied in
the calculation as: (27,499 ERISA self-insured group
health plans × 4 NQTLs × 4 hours for a general or
operations manager × $132.38) + (27,499 ERISA
self-insured group health plans × 4 NQTLs × 16
hours for a business operations specialist × $109.96)
= $251,767,736. DOL estimates of labor costs by
occupation reflect estimates of total compensation
and overhead costs. Estimates for total
compensation are based on mean hourly wages by
occupation from the 2021 Occupational
Employment Statistics and estimates of wages and
salaries as a percentage of total compensation by
occupation from the December 2021 National
Compensation Survey’s Employee Cost for
Employee Compensation. Estimates for overhead
costs for services are imputed from the 2020 Service
Annual Survey. To obtain overhead cost on an
occupational basis, the estimate allocates total
industry overhead cost to unique occupations using
a matrix of detailed occupational employment for
each NAICS industry. All values are in 2023
dollars.
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DOL estimates it would take a total of
10 hours annually per NQTL to update
the analyses, with 2 hours for a general
or operations manager and 8 hours for
a business operations specialist. In
subsequent years, this results in a total
hour burden of 1,099,960 hours with an
equivalent cost burden of
$125,883,822.285
These proposed rules would also
require plans and issuers to make the
comparative analyses and other
applicable information required by the
CAA, 2021 available upon request to
participants and beneficiaries in plans
subject to ERISA and to participants,
beneficiaries, and enrollees in all nongrandfathered group health plans and
non-grandfathered group or individual
health insurance coverage upon request
in connection with an appeal of an
adverse benefit determination. The
Departments estimate that each plan
would l receive one request per covered
health plan annually and that plans
would annually incur a burden of five
minutes for a clerical worker to prepare
and send the comparative analyses to
each requesting participant or
beneficiary. This results in an hour
burden of 158,192 hours with an
equivalent cost of $10,037,282.286 DOL
also assumes that 58.2 percent of
requests would be delivered
electronically, resulting in a de minimis
cost.287 The remaining 41.8 percent of
285 The burden is calculated as follows: (27,499
ERISA self-insured group health plans × 4 NQTLs
× 2 hours for a general or operations manager) +
(27,499 ERISA self-insured group health plans × 4
NQTLs × 8 hours for a business operations
specialist) = 1,099,960 hours. A labor rate of
$132.38 is used for a general or operations manager
and a labor rate of $109.96 is used for a business
operations specialist. The labor rate is applied in
the calculation as: (27,499 ERISA self-insured group
health plans × 4 NQTLs × 2 hours for a general or
operations manager × $132.38) + (27,499 ERISA
self-insured group health plans × 4 NQTLs × 8
hours for a business operations specialist × $109.96)
= $125,883,822.
286 The hour burden is estimated as: (1,488,476
fully-insured, non-grandfathered plans with less
than 50 participants + 409,822 ERISA-covered
group health plans with 50 or more participants) ×
5 minutes = 158,192 hours. A labor rate of $63.45
is used for a clerical worker. The labor rate is
applied in the calculation as: (1,488,476 fullyinsured, non-grandfathered plans with less than 50
participants + 409,822 ERISA-covered group health
plans with 50 or more participants) × 5 minutes ×
$63.45 = $10,037,282.
287 According to data from the National
Telecommunications and Information Agency
(NTIA), 40.0 percent of individuals age 25 and over
have access to the internet at work. According to
a Greenwald & Associates survey, 84 percent of
plan participants find it acceptable to make
electronic delivery the default option, which is
used as the proxy for the number of participants
who will not opt out of electronic disclosure that
are automatically enrolled (for a total of 33.6
percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 40.4 percent of
individuals age 25 and over have access to the
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requests would be mailed, the cost of
postage for a 3-ounce letter is $1.14. The
annual cost burden to mail the
comparative analyses to the participants
and beneficiaries is $1,499,693.288
2.1.4. Recordkeeping Requirement
The Departments posit that plans and
issuers already maintain records as part
of their regular business practices.
Further, ERISA section 107 includes a
general six-year retention requirement.
For these reasons the Departments
estimate a minimal additional burden.
The Departments estimate that, on
average, any additional recordkeeping
requirements would take clerical
personnel five minutes annually. This
results in an hour burden of 158,192
hours with an equivalent cost of
$10,037,282.289
2.1.5. Overall Summary
In summary, the total burden,
including that associated with prior
requirements and by these proposed
rules, has a three-year average hour
burden of 1,883,110 hours with an
equivalent cost of 205,897,135 and a
cost burden of $2,182,094.
A summary of paperwork burden
estimates follows:
Type of Review: Revision.
Agency: Employee Benefits Security
Administration, U.S. Department of
Labor; Internal Revenue Service, U.S.
Department of the Treasury.
Title: MHPAEA Notices.
OMB Control Number: 1210–0138.
Affected Public: Businesses or other
for-profits, Not-for-profit institutions.
internet outside of work. According to a Pew
Research Center survey, 61.0 percent of internet
users use online banking, which is used as the
proxy for the number of internet users who will
affirmatively consent to receiving electronic
disclosures (for a total of 24.7 percent receiving
electronic disclosure outside of work). Combining
the 33.6 percent who receive electronic disclosure
at work with the 24.7 percent who receive
electronic disclosure outside of work produces a
total of 58.2 percent who will receive electronic
disclosure overall.
288 The Departments assume one request per
entity and that each mailed response will cost $1.89
in materials and postage, on average. The mailing
and postage cost assume $.05 per printed page, an
average document length of 15 pages and $1.14 in
postage for a 3-ounce parcel. Therefore, the cost
burden is calculated as follows: (1,488,476 fullyinsured, non-grandfathered plans with less than 50
participants + 409,822 ERISA-covered group health
plans with 50 or more participants) × 41.8% ×
($1.14 + (15 pages × $0.05)) = $1,499,693.
289 The hour burden is estimated as: (1,488,476
fully-insured, non-grandfathered plans with less
than 50 participants + 409,822 ERISA-covered
group health plans with 50 or more participants) ×
5 minutes = 158,192 hours. A labor rate of $63.45
is used for a clerical worker. The labor rate is
applied in the calculation as: (1,488,476 fullyinsured, non-grandfathered plans with less than 50
participants + 409,822 ERISA-covered group health
plans with 50 or more participants) × 5 minutes ×
$63.45 = $10,037,282.
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Estimated Number of Respondents:
2,646,306.
Estimated Number of Annual
Responses: 2,646,306.
Frequency of Response: Annual.
Estimated Total Annual Burden
Hours: 1,883,110 (941,555 for DOL,
941,555 for Treasury).
Estimated Total Annual Burden Cost:
$2,182,094 ($1,091,047 for DOL,
$1,091,047 for Treasury).
2.2. Paperwork Reduction Act—
Department of HHS
As part of its continuing effort to
reduce paperwork and respondent
burden, HHS conducts a preclearance
consultation program to allow the
general public and Federal agencies to
comment on proposed and continuing
collections of information in accordance
with the Paperwork Reduction Act of
1995 (PRA).290 This helps to ensure that
the public understands HHS’s collection
instructions, respondents can provide
the requested data in the desired format,
reporting burden (time and financial
resources) is minimized, collection
instruments are clearly understood, and
HHS can properly assess the impact of
collection requirements on respondents.
Currently, HHS is soliciting
comments concerning the proposed
(revised) information collection request
(ICR) included in the Non-Quantitative
Treatment Limitation Analyses and
Compliance Under MHPAEA and the
proposed (revised) ICR included in the
Compliance with Individual and Group
Market Reforms under title XXVII of the
Public Health Service Act. To obtain a
copy of either ICR, contact the PRA
addressee shown below or go to https://
www.RegInfo.gov.
HHS has submitted a copy of these
proposed rules to OMB in accordance
with 44 U.S.C. 3507(d) for review of its
information collections. HHS and OMB
are particularly interested in comments
that:
• Evaluate whether the collection of
information is necessary for the
functions of the agency, including
whether the information will have
practical utility;
• Evaluate the accuracy of the
agency’s estimate of the burden of the
collection of information, including the
validity of the methodology and
assumptions used;
• Enhance the quality, utility, and
clarity of the information to be
collected; and
• Minimize the burden of the
collection of information on those who
are to respond, including through the
use of appropriate automated,
290 44
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U.S.C. 3506(c)(2)(A) (1995).
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electronic, mechanical, or other
technological collection techniques or
other forms of information technology
(e.g., permitting electronically delivered
responses).
Commenters may send their views on
HHS PRA analysis in the same way they
send comments in response to the
NPRM as a whole (e.g., through the
www.regulations.gov website), including
as part of a comment responding to the
broader NPRM.
To obtain copies of the supporting
statement and any related forms for the
proposed collections, please visit CMS’s
website at https://www.cms.gov/
Regulations-and-Guidance/Legislation/
PaperworkReductionActof1995/PRAListing.
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2.2.1. Amendments to Existing
MHPAEA Regulations (45 CFR 146.136)
The proposed amendments to the
existing MHPAEA regulations would
add new definitions, amend existing
definitions, clarify the rules for NQTLs,
amend existing examples of NQTLs, and
add new examples of NQTLs, providing
clarity to the regulated community. The
proposed amendments would also
clarify that mental health and substance
use disorder definitions must be
consistent with generally recognized
standards of care and would add more
specificity as to what conditions or
disorders plans and issuers would be
required to treat as mental health
conditions and substance use disorders.
2.2.2. New Regulations (45 CFR
146.137)
These proposed rules set forth content
and data requirements for the NQTL
comparative analyses required by
MHPAEA as amended by the CAA,
2021, clarify when the comparative
analyses need to be performed, and
outline the timeframes and process for
plans and issuers to provide their
comparative analyses to the
Departments or an applicable State
authority upon request. These proposed
rules would also require plans and
issuers to collect and evaluate relevant
data as part of each comparative
analysis, including but not limited to
claims denials, data relevant to NQTLs
as required by State law or private
accreditation standards, utilization
rates, network adequacy metrics, and
provider reimbursement rates, in
fulfillment of the existing requirement
that they evaluate and document their
evaluation as part of the analysis of the
application of NQTLs related to network
composition and provider
reimbursement. As discussed above,
HHS enforces applicable provisions of
Title XXVII of the PHS Act, including
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the provisions added by MHPAEA, with
respect to health insurance issuers
offering group and individual health
insurance coverage in States that elect
not to enforce or fail to substantially
enforce MHPAEA or another PHS Act
provision and therefore HHS is
accounting for this portion of the
burden in their analysis, in addition to
accounting for the burden on sponsors
of non-Federal governmental plans.
2.2.3. Burden Estimates for Both
Existing Requirements and Proposed
Requirements
Issuers offering individual or group
health insurance coverage usually have
multiple products offered in multiple
States. HHS estimates a total of 476
issuers offering individual and group
health coverage nationwide, with 1,500
issuer/State combinations offering
coverage in multiple States.
These proposed rules require that
health insurance issuers offering group
health insurance coverage make their
comparative analyses available upon
request by HHS. The CAA, 2021
requires HHS to collect not fewer than
20 comparative analyses per year, but it
also provides that HHS shall request
that a group health plan or issuer submit
the comparative analyses for plans that
involve potential MHPAEA violations or
complaints regarding noncompliance
with MHPAEA that concern NQTLs,
and any other instances in which HHS
determines appropriate. Thus, HHS
expects to request at least 20
comparative analyses each year. HHS
estimates that to provide the
comparative analyses and associated
documentation, it would take a total of
5 hours for each plan or issuer, with 1
hour for a general or operations manager
and 4 hours for a business operations
specialist. This would result in a total
hour burden of 100 hours with an
equivalent cost burden of $11,444 in
each year.291 HHS seeks comment on
the average number of NQTLs for plans
offered by non-Federal governmental
plans and issuers.
These proposed rules would require
that issuers document the action that
has been or is being taken by the issuer
to mitigate any material differences in
access to mental health and substance
use disorder benefits as compared to
291 The burden is calculated as follows: (20 plans
and issuers × 1 hour for a general or operations
manager) + (20 plans and issuers × 4 hours for a
business operations specialist) = 100 hours. A labor
rate of $132.38 is used for a general or operations
manager and a labor rate of $109.96 is used for a
business operations specialist. The labor rate is
applied in the calculation as: (20 plans and issuers
× 1 hour for a general or operations manager ×
$132.38) + (20 plans and issuers × 4 hours for a
business operations specialist × $109.96) = $11,444.
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51615
medical/surgical benefits, as required by
45 CFR 146.137(c)(5)(iv). To meet the
proposed new content and data, and
documentation requirements for the
comparative analyses, HHS expects that
each issuer will on average annually
perform 8 NQTL comparative analyses,
based on the Departments’ experience in
reviewing comparative analyses, and
assumes that each NQTL comparative
analysis would require 20 hours in the
first year, with 4 hours for a general or
operations manager and 16 hours for a
business operations specialist. In the
first year, this would result in a total
hour burden of 240,000 hours with an
equivalent cost burden of
$27,466,560.292 Once the comparative
analyses are performed or documented,
issuers would need to update the
analyses when making changes to the
terms of the plan or coverage, including
changes to the way NQTLs are applied
to mental health and substance use
disorder benefits. In subsequent years,
HHS estimates it would take a total of
10 hours annually to update the
analyses, with 2 hours for a general or
operations manager and 8 hours for a
business operations specialist. In
subsequent years, this would result in a
total hour burden of 120,000 hours with
an equivalent cost burden of
$13,733,280.293
Sponsors of self-funded, non-Federal
governmental plans are responsible for
performing and documenting their
NQTL comparative analyses. HHS
estimates that there are 33,076 selffunded, non-Federal governmental
health plans.294 To meet the proposed
292 The burden is estimated as follows: (1,500
issuers × 8 NQTLs × 4 hours for a general or
operations manager) + (1,500 issuers × 8 NQTLs ×
16 hours for a business operations specialist) =
240,000 hours. A labor rate of $132.38 is used for
general or operations manager and a labor rate of
$109.96 is used for a business operations specialist.
The labor rates are applied in the calculation as:
(1,500 issuers × 8 NQTLs × 4 hours for a general
or operations manager × $132.38) + (1,500 issuers
× 8 NQTLs × 16 hours for a business operations
specialist × $109.96) = $27,466,560.
293 The burden is estimated as follows: (1,500
issuers × 8 NQTLs × 2 hours for a general or
operations manager) + (1,500 issuers × 8 NQTLs ×
8 hours for a business operations specialist) =
120,000 hours. A labor rate of $132.38 is used for
general or operations manager and a labor rate of
$109.96 is used for a business operations specialist.
The labor rates are applied in the calculation as:
(1,500 issuers × 8 NQTLs × 2 hours for a general
or operations manager × $132.38) + (1,500 issuers
× 8 NQTLs × 2 hours for a business operations
specialist × $109.96) = $13,733,280.
294 Based on the 2017 Census of Governments,
there are 90,126 non-Federal governmental health
plans. Based on the 2021 Medical Expenditure
Panel Survey, the Department estimates that 36.7
percent of non-Federal governmental health plans
are self-funded. Thus, 90,126 plans × 36.7 percent
= 33,076 self-funded, non-Federal governmental
health plans.
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ddrumheller on DSK120RN23PROD with PROPOSALS2
new, content, data, and documentation
requirements for NQTL comparative
analyses, HHS expects that each plan
sponsor would on average annually
perform 4 NQTL analyses and assumes
that each NQTL comparative analysis
would require a total of 20 hours in the
first year, with 4 hours for a general or
operations manager and 16 hours for a
business operations specialist. In the
first year, this would result in a total
hour burden of 2,646,080 hours with an
equivalent cost burden of
$302,827,980.295 Once the comparative
analyses are performed or documented,
plan sponsors would need to update the
analyses when making changes to the
terms of the plan or coverage, including
changes to the way NQTLs are applied
to mental health and substance use
disorder benefits. In subsequent years,
HHS estimates it would take a total of
10 hours annually to update the
analyses, 2 hours for a general or
operations manager and 8 hours for a
business operations specialist. In
subsequent years, this would result in a
total hour burden of 1,323,040 hours
with an equivalent cost burden of
approximately $151,413,990.296
These proposed rules would also
require plans and issuers to make the
comparative analyses and other
applicable information required by the
CAA, 2021 available upon request to
participants and beneficiaries in plans
subject to ERISA and to participants,
beneficiaries, and enrollees in all nongrandfathered group health plans and
non-grandfathered group or individual
health insurance coverage upon request
in connection with an appeal of an
295 The burden is estimated as follows: (33,076
self-funded non-Federal governmental plans × 4
NQTLs × 4 hours for a general or operations
manager) + (33,076 self-funded non-Federal
governmental plans × 4 NQTLs × 16 hours for a
business operations specialist) = 2,646,080 hours. A
labor rate of $132.38 is used for general or
operations manager and a labor rate of $109.96 is
used for a business operations specialist. The labor
rates are applied in the calculation as: (33,076 selffunded non-Federal governmental plans × 4 NQTLs
× 4 hours for a general or operations manager ×
$132.38) + (33,076 self-funded non-Federal
governmental plans × 4 NQTLs × 16 hours for a
business operations specialist × $109.96) =
$302,827,980.
296 The burden is estimated as follows: (33,076
self-funded non-Federal governmental plans × 4
NQTLs × 2 hours for a general or operations
manager) + (33,076 self-funded non-Federal
governmental plans × 4 NQTLs × 8 hours for a
business operations specialist) = 1,323,040 hours. A
labor rate of $132.38 is used for general or
operations manager and a labor rate of $109.96 is
used for a business operations specialist. The labor
rates are applied in the calculation as: (33,076 selffunded non-Federal governmental plans × 4 NQTLs
× 2 hours for a general or operations manager ×
$132.38) + (33,076 self-funded non-Federal
governmental plans × 4 NQTLs × 8 hours for a
business operations specialist × $109.96) =
$151,413,990.
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adverse benefit. HHS estimates that each
non-Federal governmental plan and
each issuer would receive one request
annually and that plans and issuers
would annually incur a burden of 5
minutes for a clerical worker to prepare
and send the comparative analyses to
each requesting participant, beneficiary,
or enrollee. This would result in a total
burden of approximately 7,636 hours
annually with an equivalent cost of
approximately $484,504.297 HHS also
assumes that 58.2 percent of requests
would be delivered electronically,
resulting in a de minimis cost.298 The
remaining 41.8 percent of requests
would be mailed, and the cost of
postage for a 3-ounce letter is $1.14. The
annual cost burden to mail the
comparative analyses to the participants
and beneficiaries would therefore be
approximately $72,386.299
2.2.4. Recordkeeping Requirement
HHS posits that plans and issuers
already maintain records as part of their
regular business practices. HHS
therefore estimates a minimal additional
burden associated with these proposed
rules. HHS estimates that each nonFederal governmental plan and issuer
would annually incur a burden of 5
minutes, on average, for clerical
personnel to meet the additional
297 The hour burden is calculated as (90,126 nonFederal governmental plans + 1,500 issuer/State
combinations) × 5 minutes = 7,636 hours. A labor
rate of $63.45 is used for a clerical worker. The
labor rate is applied in the calculation as: (90,126
non-Federal governmental plans + 1,500 issuer/
State combinations) × 5 minutes × $63.45 =
$484,504.
298 According to data from the National
Telecommunications and Information Agency
(NTIA), 40.0 percent of individuals age 25 and over
have access to the internet at work. According to
a Greenwald & Associates survey, 84 percent of
plan participants find it acceptable to make
electronic delivery the default option, which is
used as the proxy for the number of participants
who will not opt-out of electronic disclosure that
are automatically enrolled (for a total of 33.6
percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 40.4 percent of
individuals age 25 and over have access to the
internet outside of work. According to a Pew
Research Center survey, 61.0 percent of internet
users use online banking, which is used as the
proxy or the number of internet users who will
affirmatively consent to receiving electronic
disclosures (for a total of 24.7 percent receiving
electronic disclosure outside of work). Combining
the 33.6 percent who receive electronic disclosure
at work with the 24.7 percent who receive
electronic disclosure outside of work produces a
total of 58.2 percent who will receive electronic
disclosure overall.
299 The Departments assume one request per
entity and that each mailed response will cost $1.89
in materials and postage, on average. The mailing
and postage cost assume $.05 per printed page, an
average document length of 15 pages and $1.14 in
postage for a 3-ounce parcel. Therefore, the cost
burden is calculated as follows: (1,500 issuers +
90,126 non-Federal governmental health plans) ×
41.8% × ($1.14 + (15 pages × $0.05)) = $72,386.
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recordkeeping requirements, resulting
in a total burden of approximately 7,636
hours annually with an equivalent cost
of approximately $484,504.300
HHS will revise the information
collection approved under OMB Control
Number 0938–1393 to account for this
burden.301
2.2.5. ICRs Regarding the Self-Funded,
Non-Federal Governmental Plan OptOut Provisions (45 CFR 146.180)
2.2.5.1. Notice to Federal Government of
Self-Funded, Non-Federal
Governmental Plan Opt-Out: Plan
Burden Reduction—Preparation and
Processing of Opt-Out Election Notice
The proposed amendments to
implement the CAA, 2023 provision
that sunsets the MHPAEA opt-out
election for sponsors of self-funded,
non-Federal governmental plans would
eliminate the need for sponsors to
submit a notice to the Federal
Government regarding their plan’s optout election (or, for sponsors of multiple
plans, their plans’ opt-out elections), as
long as the sponsors do not elect to
permissibly opt out of other
requirements.302 Based on the HIPAA
opt-out filings, HHS estimates that the
sponsors of 185 plans would no longer
be required to submit a notice to the
Federal Government regarding their
plan’s opt-out election (or, for sponsors
of multiple plans, notices regarding
their plans’ opt-out elections).
Previously, HHS estimated that for each
self-funded, non-Federal governmental
plan whose sponsor has elected to opt
out of the requirements, a compensation
and benefits manager would need 15
minutes annually to fill out and
electronically submit the model
notification form to HHS, with an
equivalent cost of approximately $34.303
Therefore, these proposed amendments
would result in a total annual burden
reduction (related to the need to submit
300 The hour burden is calculated as (90,126 nonFederal governmental plans + 1,500 issuer/State
combinations) × 5 minutes = 7,636 hours. A labor
rate of $63.45 is used for a clerical worker. The
labor rate is applied in the calculation as: (90,126
non-Federal governmental plans + 1,500 issuer/
State combinations) × 5 minutes × $63.45 =
$484,504.
301 CMS–10773, ‘‘Non-Quantitative Treatment
Limitation Analyses and Compliance Under
MHPAEA.’’
302 Based on the HIPAA opt-out filings, sponsors
of 46 self-funded, non-Federal governmental plans
permissibly opt out of other requirements
(standards relating to benefits for mothers and
newborns, required coverage for reconstructive
surgery following mastectomies, and/or coverage of
dependent students on medically necessary leave of
absence).
303 This includes the time required by the
individual signing the certification to conduct a
thorough review of the election contents.
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a notice to the Federal Government) for
sponsors of 185 plans of 46 hours (at a
wage rate of $137.64 per hour), with an
equivalent annual cost savings of
approximately $6,331.304
These proposed amendments would
also generate cost savings for the
Federal Government, as HHS would no
longer have to process the opt-out
notices submitted by plan sponsors. The
processing of the opt-out notices is
performed by an HHS employee. The
average salary of the employee who
completes this task, which includes the
locality pay adjustment for the area of
Washington-Baltimore-Arlington, is
$53.67 per hour for a GS–13, step 1
employee.305 HHS estimates that on
average it takes an HHS employee 15
minutes to process an opt-out notice
submitted by a plan sponsor, with an
equivalent cost of approximately $13.
Because sponsors of 185 plans in total
would no longer be required to submit
a notice to the Federal Government on
behalf of their plan(s), this proposed
provision would therefore result in a
total annual burden reduction for the
Federal Government of 46 hours, with
equivalent annual cost savings of
approximately $2,469.306
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2.2.5.2. Notice to Plan Participants of
Self-Funded, Non-Federal
Governmental Plan Opt-Out: Plan
Burden Reduction—Preparation and
Processing of Opt-Out Election Notice
The proposed amendments to
implement the CAA, 2023 provision
that sunsets the MHPAEA opt-out
election for sponsors of self-funded nonFederal governmental plans would also
eliminate the need for those sponsors to
prepare and disseminate an opt-out
notice to plan participants regarding
their plan sponsors’ opt-out election, as
long as the sponsors do not elect to
permissibly opt out of other
requirements. Previously, HHS
estimated that for each self-funded, nonFederal governmental plan whose
sponsor has elected to opt out of the
requirements, an administrative
assistant would need 15 minutes to
304 The total annual burden reduction is
calculated as: 185 plans × 15 minutes = 46 hours.
A labor rate of $137.64 is used for a compensation
and benefits manager. The labor rate is applied in
the calculation as: 185 plans × 15 minutes × $137.64
= $6,331.
305 See Office of Personnel Management 2023
General Schedule (GS) Locality Pay Tables,
available at: https://www.opm.gov/policy-dataoversight/pay-leave/salaries-wages/salary-tables/
pdf/2023/DCB_h.pdf.
306 The total annual burden reduction for the
Federal government is calculated as: 185 plans × 15
minutes = 46 hours. A labor rate of $53.67 is used
for an HHS employee. The labor rate is applied in
the calculation as: 185 plans × 15 minutes × $53.67
= $2,469.
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develop and update the HHS
standardized disclosure statement
annually, with an equivalent cost of
approximately $10. Therefore, this
proposed provision would result in a
total annual burden reduction (related
to the need to prepare and disseminate
opt-out notices to plan participants) for
sponsors of 185 plans of 46 hours (at a
wage rate of $41.74), with an equivalent
annual cost savings of approximately
$1,920.307 Further, self-funded, nonFederal governmental plan sponsors
would no longer be required to print
and mail the opt-out notice to plan
participants and would therefore no
longer incur costs associated with this
requirement. As noted earlier in this
section 1.5.1, HHS estimates that there
are approximately 253 participants in
each self-funded, non-Federal
governmental plan, and therefore
approximately 46,863 notices 308 would
no longer have to be printed and mailed.
Because plan sponsors would no longer
need to print the 1-page notice (at an
estimated cost of $0.05 per page), plan
sponsors would experience a total cost
savings of approximately $2,343.309
The burden related to HIPAA opt-outs
is currently approved under OMB
Control Number 0938–0702.310 HHS
will update the information collection
to account for this burden reduction.
2.2.6. Overall Summary
In summary, the total new burden
imposed by these proposed rules
regarding NQTL comparative analyses
and compliance, has a three-year
average hour burden of approximately
1,939,425 hours with an equivalent cost
of approximately $221,176,812 and a
total cost burden of approximately
$72,386. The proposed amendments to
implement the CAA, 2023 provision
that sunsets the MHPAEA opt-out
election for sponsors of self-funded,
non-Federal governmental plans would
result in an annual burden reduction of
approximately 92 hours with an
equivalent annual cost savings of
approximately $8,251.
A summary of the change in
paperwork burden estimates follows:
307 The total annual burden reduction is
calculated as: 185 plans × 15 minutes = 46 hours.
A labor rate of $41.74 is used for an administrative
assistant. The labor rate is applied in the
calculation as: 185 plans × 15 minutes × $41.74 =
$1,920.
308 185 plans × slightly more than 253
participants per plan on average ≈46,863 notices in
total.
309 The total cost savings is calculated as: 46,863
notices × $0.05 = $2,343.
310 CMS–10430, ‘‘Information Collection
Requirements for Compliance with Individual and
Group Market Reforms under Title XXVII of the
Public Health Service Act.’’
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Type of Review: Revision.
Agency: Centers for Medicare &
Medicaid Services, U.S. Department of
Health and Human Services.
Title: Non-Quantitative Treatment
Limitation Analyses and Compliance
Under MHPAEA.
OMB Control Number: 0938–1393.
Affected Public: Businesses or other
for-profits, Not-for-profit institutions,
State, Local, or Tribal Governments.
Estimated Number of Respondents:
91,626.
Estimated Number of Annual
Responses: 91,626.
Frequency of Response: Annual.
Estimated Total Annual Burden
Hours: 1,939,425.
Estimated Total Annual Burden Cost:
$72,386.
Title: Requirements for Compliance
with Individual and Group Market
Reforms under Title XXVII of the Public
Health Service Act.
OMB Control Number: 0938–0702.
Affected Public: State, Local, or Tribal
Governments.
Estimated Number of Respondents:
(185).
Estimated Number of Annual
Responses: (185).
Frequency of Response: Annual.
Estimated Total Annual Burden
Hours: (92).
Estimated Total Annual Burden Cost:
($2,343).
Note: Numbers in parentheses denote a
burden reduction.
3. Regulatory Flexibility Act
The Regulatory Flexibility Act
(RFA) 311 imposes certain requirements
with respect to Federal rules that are
subject to the notice and comment
requirements of section 553(b) of the
Administrative Procedure Act 312 and
are likely to have a significant economic
impact on a substantial number of small
entities. Unless an agency determines
that a proposal is not likely to have a
significant economic impact on a
substantial number of small entities,
section 603 of the RFA requires the
agency to present an initial regulatory
flexibility analysis of the proposed rule.
The Departments have limited data to
determine if these proposed
amendments would have a significant
impact on a substantial number of small
entities. The Departments have prepared
this initial regulatory flexibility analysis
and request data or other information it
would need to make a determination.
The Departments request data or
information on the number of plans and
issuers that are not conducting adequate
311 5
312 5
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U.S.C. 551 et seq. (1946).
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comparative analyses and how the
proposed additional guidance would
result in better compliance and access to
those benefits.
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3.1. Need for and Objectives of the Rule
As documented in the 2022 MHPAEA
Report to Congress and the 2023
MHPAEA Report to Congress,313 the
Departments found that none of the
NQTL comparative analyses they
reviewed upon initial receipt contained
sufficient information and
documentation.
The proposed amendments to the
existing MHPAEA regulations would
clarify existing definitions, add new
definitions of key terms, require plans
and issuers to determine which NQTLs
apply to substantially all medical/
surgical benefit classifications and what
variation of a given NQTL is the
predominant (that is, most common or
frequent) variation, ensure that the
application of the parity requirements to
NQTLs is no more restrictive for mental
health and substance use disorder
benefits than for medical/surgical
benefits, and provide additional
examples of the application of MHPAEA
to NQTLs to improve the understanding
and ability of the regulated community
to comply with MHPAEA. The proposed
amendments would also clarify that
mental health and substance use
disorder definitions must be consistent
with generally recognized independent
standards of current medical practice
and would add more specificity as to
what plans and issuers must treat as
mental health conditions or substance
use disorders.
These proposed rules would amend
existing guidance, set more specific
content requirements for comparative
analyses required by the CAA, 2021,
clarify when a comparative analysis
needs to be performed and for which
NQTLs, and outline the process for
plans and issuers to provide their
comparative analyses to the
Departments upon request. These
proposed rules would also require plans
and issuers to collect and evaluate
relevant data with each comparative
analysis requested by the Departments,
including but not limited to claims
denials, data relevant to NQTLs as
required by State law or private
accreditation standards, utilization
313 2022 MHPAEA Report to Congress, available
at https://www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
report-to-congress-2022-realizing-parity-reducingstigma-and-raising-awareness.pdf; 2023 MHPAEA
Report to Congress, available at www.dol.gov/sites/
dolgov/files/EBSA/laws-and-regulations/laws/
mental-health-parity/report-to-congress-2023mhpaea-comparative-analysis.pdf.
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rates, network adequacy metrics, and
provider reimbursement rates, in
fulfillment of the existing requirement
that they evaluate and document their
evaluation as part of the analysis of the
application of NQTLs related to network
composition and provider
reimbursement. The data would be
further defined in future guidance,
which will allow the Departments to
adjust the data requirements as needed
to account for enforcement experience
and industry trends. The Departments
also anticipate that future guidance
would also set forth an enforcement safe
harbor for NQTLs related to network
composition for plans and issuers that
meet certain standards with the data
they submit.
The Departments expect that these
proposed rules would result in plans
and issuers having a better
understanding of the MHPAEA
requirements with respect to NQTLs.
These proposed rules would also
improve the manner in which parity is
measured, compared, and demonstrated
by plans and issuers. The Departments
believe these proposed rules and future
guidance would improve the
compliance of plans and issuers with
these requirements, resulting in greater
access to and utilization of treatment for
mental health and substance use
disorders, as intended by MHPAEA.
3.2. Affected Small Entities
For purposes of analysis under the
RFA, DOL considers employee benefit
plans with fewer than 100 participants
to be small entities. The basis of this
definition is found in section 104(a)(2)
of ERISA, which permits the Secretary
of Labor to prescribe simplified annual
reports for plans that cover fewer than
100 participants. Under section
104(a)(3) of ERISA, the Secretary may
also provide for exemptions or
simplified annual reporting and
disclosure for welfare benefit plans.
Pursuant to the authority of section
104(a)(3), DOL has previously issued
(see 29 CFR 2520.104–20, 2520.104–21,
2520.104–41, 2520.104–46, and
2520.104b–10) simplified reporting
provisions and limited exemptions from
reporting and disclosure requirements
for small plans, including unfunded or
insured welfare plans, that cover fewer
than 100 participants and satisfy certain
requirements. While some large
employers have small plans, small plans
are maintained generally by small
employers. Thus, the Departments
believe that assessing the impact of
these proposed rules on small plans is
an appropriate substitute for evaluating
the effect on small entities. The
definition of small entity considered
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appropriate for this purpose differs,
however, from a definition of small
business based on size standards
promulgated by the Small Business
Administration (SBA) pursuant to the
Small Business Act.
As discussed in subsection 1.5.1 of
the RIA, these proposed rules would
affect all small ERISA-covered group
health plans, including fully-insured
group health plans and self-insured
group health plans, as well as small
health insurance issuers and nonFederal governmental plans. The
Departments estimate that these
proposed rules would affect
approximately 114,200 fully insured
plans with 50 to 100 participants,314
and approximately 1,488,000 fully
insured, non-grandfathered plans with
less than 50 participants.315
The Departments also estimate that
approximately 38,000 self-insured group
health plans with 50 to 100 participants
would be affected by these proposed
rules.316 The Departments estimate that
314 The Departments estimate that there are
152,254 ERISA-covered group health plans with 50
to 100 participants based on the 2021 Medical
Expenditure Survey—Insurance Component
(MEPS–IC) and the 2019 County Business Patterns
from the Census Bureau. The Departments also
estimate that 75 percent of ERISA-covered group
health plans with 50 to 100 participants are fully
insured based on assumptions referencing this same
data. Thus, the Departments have calculated the
number of fully insured plans with 50 to 100
participants in the following manner: 152,254
ERISA-covered group health plans with 50 to 100
participants × 75% = 114,191.
315 Employers with less than 50 employees are
required to comply with MHPAEA as part of the
Essential Health Benefits requirements. The
Departments estimate that there are 2,134,934
ERISA-covered group health plans with less than 50
participants based on data from the 2021 MEPS–IC
and the 2019 County Business Patterns from the
Census Bureau. The Departments also estimate that
83 percent of group health plans with less than 50
participants are fully insured based on data from
the 2021 MEPS–IC. The 2020 Kaiser Employer
Health Benefits Survey reported that in 2020, 16
percent of firms offering health benefits offered at
least one grandfathered health plan, therefore, the
Departments assume the percent of firms offering at
least one non-grandfathered health plan is 84%
(100% minus 16%). (Source: KFF. 2020 Kaiser
Employer Health Benefits Survey.) https://
files.kff.org/attachment/Report-Employer-HealthBenefits-2020-Annual-Survey.pdf). Thus, the
Departments have calculated the number of fully
insured, non-grandfathered plans with less than 50
participants in the following manner: 2,134,934
small ERISA-covered group health plans × 83% ×
84% = 1,488,475.
316 MHPAEA only applies to ERISA plans in the
group market with 50 or more participants that offer
mental health or substance use disorder benefits.
The Departments have not identified what share of
plans with 50 or more participants offer mental
health or substance use disorder benefits and so
have assumed that all of these plans offer them. The
Departments seeks comments on this assumption.
Based on the 2021 MEPS–IC, 25 percent of ERISAcovered group health plans with 50 to 100
participants are self-insured. Thus, the Departments
calculate the number of self-insured group health
plans with 50 to 100 participants based on the
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approximately 27,000 self-insured group
health plans would not utilize a service
provider, and would incur the cost
directly,317 and the other self-insured
health plans would utilize service
providers to perform the analysis. The
largest would need to conduct the
analyses themselves for their planspecific design. Finally, the
Departments estimate that
approximately 14,400 non-Federal
governmental health plans would be
affected by these proposed rules, of
which the majority of plans are assumed
to be large.318
As discussed in subsection 1.5.3 of
the RIA, these proposed rules would
also affect health insurance issuers. The
Departments estimate that these
proposed rules would affect 476 health
insurance issuers providing mental
health and substance use disorder
benefits in the group and individual
health insurance markets, with 1,500
issuer/State combinations offering
coverage in multiple States.319
Health insurance issuers are generally
classified under the North American
Industry Classification System (NAICS)
code 524114 (Direct Health and Medical
Insurance Carriers). According to SBA
following manner: 152,254 ERISA-covered group
health plans with less than 100 participants × 25%
of ERISA-covered group health plans with 50 to 100
participants are self-insured = 38,064.
317 Based on the 2020 Form 5500, 89 percent of
self-insured plans filed a Schedule C and indicated
using either a Claims Processor, Contract
Administrator, or both.
318 Based on the 2017 Census of Government,
there are 90,126 State and local entities. The
Departments assume that there is one plan per
entity, on average. Therefore, the Departments
estimate that there are 90,126 non-Federal
governmental health plans. MHPAEA applies to
non-Federal governmental employers with 50 or
more employees that offer mental health or
substance use disorder benefits. The Departments
have not identified what share of plans with 50 or
more participants offer mental health or substance
use disorder benefits and so has have assumed that
all of these plans offer them. The Departments seek
comments on this assumption. Based on the 2021
Medical Expenditure Survey Insurance Component
(MEPS–IC) and the 2019 County Business Patterns
from the Census Bureau, 16 percent of ERISAcovered group health plans have 50 or more
participants. The Departments use the percent of
ERISA-covered group plans with more than 50
participants as a proxy for the percent of nonFederal governmental plans with more than 50
participants. Therefore, the Departments estimate
there are 14,420 public, non-Federal employer
group health plans with 50 or more participants
that offer mental health or substance use disorder
benefits (90,126 non-Federal governmental health
plans × 16 percent of plans with 50 or more
employees).
319 The Departments’ estimate of the number of
health insurance insurers and the number of issuer/
State combinations is based on medical loss ratio
reports submitted by issuers for the 2021 reporting
year. (Source: Centers for Medicare & Medicaid
Services. ‘‘Medical Loss Ratio Data and System
Resources’’ (2021). https://www.cms.gov/CCIIO/
Resources/Data-Resources/mlr.)
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size standards, entities with average
annual receipts of $47 million or less
are considered small entities for this
NAICS code.320 The Departments expect
that few, if any, insurance companies
underwriting health insurance policies
fall below these size thresholds. Based
on data from medical loss ratio (MLR)
annual report submissions for the 2021
MLR reporting year, approximately 87
out of 483 issuers of health insurance
coverage nationwide had total premium
revenue of $47 million or less.321
However, it should be noted that over
77 percent of these small companies
belong to larger holding groups, and
many, if not all, of these small
companies, are likely to have non-health
lines of business that would result in
their revenues exceeding $47 million.
To produce a conservative estimate, for
the purposes of this analysis, the
Departments assume 8.6 percent,322 or
129 issuer/State combinations are
considered small entities.323
The proposed amendments to
implement the CAA, 2023 provision
that sunsets the MHPAEA opt-out
election would affect sponsors of selffunded, non-Federal governmental
plans, some of which might be small
entities. As noted in section 1.10 of this
RIA, the extent to which these plans are
out of compliance is unknown, and the
costs for them to come into compliance
are expected to vary from plan to plan.
HHS seeks comments on the number of
small entities that would be impacted
by the implementation of the sunset
provision and the potential effects on
small entities.
3.3. Impact of the Rule
3.3.1. Amendments to Existing
MHPAEA Regulation (26 CFR 54.9812–
1, 29 CFR 2590.712, 45 CFR 146.136)
The proposed amendments to the
existing MHPAEA regulations would
clarify existing definitions, add new
definitions, require plans and issuers to
determine which NQTLs apply to
substantially all medical/surgical
benefit classifications and what level or
variation of a given NQTL is the most
common or frequent, ensure that the
application of NQTLs is generally no
320 Available at: https://www.sba.gov/document/
support--table-size-standards, as of March 2023.
321 Available at: https://www.cms.gov/CCIIO/
Resources/Data-Resources/mlr.html.
322 Based on data from the NAICS Association for
NAICS code 524114, the Departments estimate the
percent of businesses within the industry of Direct
Health and Medical Insurer Carriers with less than
$47 million in annual sales. (See NAICS
Association. ‘‘Market Analysis Profile: NAICS Code
Annual Sales.’’ https://www.naics.com/businesslists/counts-by-naics-code/.)
323 1,500 issuers/State combination × 8.6 percent
= 129 small issuers.
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more restrictive for mental health and
substance use disorder benefits than for
medical/surgical benefits, and provide
additional examples of the application
of MHPAEA to NQTLs to improve the
understanding and ability of the
regulated community to comply with
MHPAEA. The proposed amendments
would also clarify that mental health
benefits and substance use disorder
benefits must be defined to be
consistent with generally recognized
independent standards of current
medical practice and would add more
specificity as to what plans and issuers
must treat as mental health conditions
or substance use disorders. The
Departments believe that the proposed
amendments might cause small plans
and issuers to revise their policies and
remove treatment limitations. Therefore,
small plans and issuers could incur
costs to revise plan provisions which
may result in increased costs from
expanded utilization of mental health
and substance use disorder services.
The Departments face uncertainty in
quantifying these costs as they cannot
estimate the increase in utilization and
which particular services may see the
largest increase in utilization.
3.3.2. New Regulations (26 CFR
54.9812–2, 29 CFR 2590.712–1, and 45
CFR 146.137 and 146.180)
These proposed rules would amend
existing guidance, set more specific
content requirements for comparative
analyses required by the CAA, 2021,
clarify when the comparative analysis
needs to be performed and for which
NQTLs, and outline the timeframes and
process for plans and issuers to provide
their comparative analyses to the
Departments upon request. Participants,
beneficiaries, and enrollees may also
request the comparative analyses at any
time. These proposed rules would also
require plans and issuers to collect and
evaluate relevant data as part of each
comparative analysis, including but not
limited to claims denials, data relevant
to NQTLs as required by State law or
private accreditation standards,
utilization rates, network adequacy
metrics, and provider reimbursement
rates, in fulfillment of the existing
requirement that they evaluate and
document their evaluation as part of the
analysis of the application of NQTLs
related to network composition and
provider reimbursement. The
Departments believe that plans and
issuers would incur costs in collecting,
preparing, and analyzing the data. The
Departments request comments on
whether plans and issuers already
collect and examine this data.
Additionally, in these proposed rules,
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HHS proposes regulatory amendments
to implement the provision in the CAA,
2023 that sunsets the election option for
self-funded, non-Federal governmental
plans to opt out of requirements under
MHPAEA.
In the first year, the Departments
estimate that self-insured group health
plans and health insurance issuers
would incur an incremental per-entity
cost of approximately $5,600 and
$5,800, respectively associated with
these proposed rules and amendments.
In the subsequent years, the
Departments estimate that self-insured
group health plans and health insurance
issuers would both incur an incremental
per-entity cost of approximately $1,900
associated with these proposed rules
and amendments. The Departments note
that these per-entity costs are the
average costs, and these costs are
expected to vary by plan or issuer
depending on the number of NQTL
analyses performed.
3.4. Duplicate, Overlapping, or Relevant
Federal Rules
There are no duplicate, overlapping,
or relevant Federal rules.
4. Special Analyses—Department of the
Treasury
Pursuant to the Memorandum of
Agreement, Review of Treasury
Regulations under Executive Order
12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject
to the requirements of section 6 of
Executive Order 12866, as amended.
Therefore, a regulatory impact
assessment is not required. Pursuant to
section 7805(f) of the Code, these
regulations have been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on their impact on small business.
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5. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 requires each
Federal agency to prepare a written
statement assessing the effects of any
Federal mandate in a proposed or final
agency rule that may result in an
expenditure of $100 million or more
(adjusted annually for inflation with the
base year 1995) in any 1 year by State,
local, and Tribal governments, in the
aggregate, or by the private sector.324 In
2023, that threshold is approximately
$177 million. For purposes of the
Unfunded Mandates Reform Act, as well
as Executive Order 12875,325 this
proposal includes Federal mandates that
324 2
U.S.C. 1501 et seq. (1995).
the Intergovernmental Partnership,
58 FR 58093 (Oct. 28, 1993).
the Departments expect would result in
such expenditures by State, local, or
Tribal governments, or the private
sector. UMRA requires that regulations
including such Federal mandates
provide a qualitative and quantitative
assessment of the anticipated costs and
benefits of the regulations. For the
purposes of these proposed rules, the
RIA shall meet this obligation.
6. Federalism Statement
Executive Order 13132 outlines
fundamental principles of federalism,
and requires the adherence to specific
criteria by Federal agencies in the
process of their formulation and
implementation of policies that have
‘‘substantial direct effects’’ on the
States, the relationship between the
Federal Government and States, or on
the distribution of power and
responsibilities among the various
levels of government.326 Federal
agencies promulgating regulations that
have federalism implications must
consult with State and local officials
and describe the extent of their
consultation and the nature of the
concerns of State and local officials in
the preamble to these proposed rules.
In the Departments’ view, these
proposed rules could have federalism
implications because they would have
direct effects on the States, on the
relationship between the Federal
Government and the States, and on the
distribution of power and
responsibilities among various levels of
government. These proposed rules
could also have federalism implications
because the Departments propose to
remove the reference to State guidelines
in the definition of medical/surgical
benefits, mental health benefits, and
substance use disorder benefits, and
amend the definition to provide that any
condition or procedure defined by the
plan or coverage as being or not being
a medical condition or surgical
procedure, mental health condition, or
substance use disorder must be defined
to be consistent with generally
recognized independent standards of
current medical practice, such as the
ICD or DSM. Finally, these proposed
rules could have federalism
implications because the
implementation of the CAA, 2023
provision that sunsets the MHPAEA
opt-out election would require State and
local government sponsors of selffunded plans that currently opt out of
requirements under MHPAEA to come
into compliance.
In general, through section 514,
ERISA supersedes State laws to the
325 Enhancing
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326 Federalism,
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64 FR 153 (Aug. 4, 1999).
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extent that they relate to any covered
employee benefit plan, and preserves
State laws that regulate insurance,
banking, or securities. While ERISA
prohibits States from regulating a plan
as an insurance or investment company
or bank, the preemption provisions of
section 731 of ERISA and section 2724
of the PHS Act (implemented in 29 CFR
2590.731(a) and 45 CFR 146.143(a))
apply so that the MHPAEA
requirements are not to be ‘‘construed to
supersede any provision of State law
which establishes, implements, or
continues in effect any standard or
requirement solely relating to health
insurance issuers in connection with
individual or group health insurance
coverage except to the extent that such
standard or requirement prevents the
application of a requirement’’ of
MHPAEA. The conference report
accompanying HIPAA indicates that
this is intended to be the ‘‘narrowest’’
preemption of State laws. (See House
Conf. Rep. No. 104–736, at 205,
reprinted in 1996 U.S. Code Cong. &
Admin. News 2018.)
States may continue to apply State
law requirements except to the extent
that such requirements prevent the
application of the MHPAEA
requirements that are the subject of this
rulemaking. State insurance laws that
are more stringent than the Federal
requirements are unlikely to ‘‘prevent
the application of’’ MHPAEA and be
preempted. Accordingly, States have
significant latitude to impose
requirements on health insurance
issuers that are more restrictive than the
Federal law.
Throughout the process of developing
these proposed rules, to the extent
feasible within the specific preemption
provisions of HIPAA as it applies to
MHPAEA, the Departments have
attempted to balance the States’
interests in regulating health insurance
issuers, and Congress’ intent to provide
uniform minimum protections to
consumers in every State. By doing so,
it is the Departments’ view that they
have complied with the requirements of
Executive Order 13132.
The Departments welcome input from
affected States regarding this
assessment.
List of Subjects
26 CFR Part 54
Excise taxes, Pensions, Reporting and
recordkeeping requirements.
29 CFR Part 2590
Continuation coverage, Disclosure,
Employee benefit plans, Group health
plans, Health care, Health insurance,
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Medical child support, Reporting and
recordkeeping requirements.
45 CFR Part 146
Health care, Health insurance,
Reporting and recordkeeping
requirements.
45 CFR Part 147
Aged, Citizenship and naturalization,
Civil rights, Health care, Health
insurance, Individuals with disabilities,
Intergovernmental relations, Reporting
and recordkeeping requirements, Sex
discrimination.
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement, Internal Revenue Service.
Lisa M. Gomez,
Assistant Secretary, Employee Benefits
Security Administration, Department of
Labor.
Xavier Becerra,
Secretary, Department of Health and Human
Services.
DEPARTMENT OF THE TREASURY
Internal Revenue Service
Accordingly, the Treasury Department
and the IRS propose to amend 26 CFR
part 54 as follows:
PART 54—PENSION EXCISE TAXES
1. The authority citation for part 54
continues to read in part as follows:
■
Authority: 26 U.S.C. 7805 * * *
2. Amend § 54.9812–1 by:
a. Redesignating paragraph (a) as
paragraph (a)(2) and adding paragraphs
(a) heading and (a)(1);
■ b. In newly redesignated paragraph
(a)(2):
■ i. Revising the introductory text;
■ ii. Adding the definitions of ‘‘DSM,’’
‘‘Evidentiary standards,’’ ‘‘Factors,’’ and
‘‘ICD’’ in alphabetical order;
■ iii. Revising the definitions of
‘‘Medical/surgical benefits’’ and
‘‘Mental health benefits’’;
■ iv. Adding the definitions of
‘‘Processes’’ and ‘‘Strategies’’ in
alphabetical order; and
■ v. Revising the definitions of
‘‘Substance use disorder benefits’’ and
‘‘Treatment limitations’’;
■ c. Revising paragraphs (c)(1)(ii),
(c)(2)(i), and (c)(2)(ii)(A) introductory
text;
■ d. In paragraph (c)(2)(ii)(C),
designating Examples 1 through 4 as
paragraphs (c)(2)(ii)(C)(1) through (4)
and revising newly designated
paragraphs (c)(2)(ii)(C)(1) through (4);
■ e. Adding paragraphs (c)(2)(ii)(C)(5)
and (6);
■ f. Revising paragraphs (c)(3)(i)(A), (C),
and (D);
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■
■
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g. In paragraph (c)(3)(iii), adding
introductory text;
■ h. Revising paragraphs (c)(3)(iii)(A)
and (B), (c)(3)(iv), (c)(4), (d)(3), (e)(4),
and (i)(1); and
■ i. Adding paragraph (j).
The revisions and additions read as
follows:
■
§ 54.9812–1 Parity in mental health and
substance use disorder benefits.
(a) Purpose and meaning of terms—
(1) Purpose. This section and § 54.9812–
2 set forth rules to ensure parity in
aggregate lifetime and annual dollar
limits, financial requirements, and
quantitative and nonquantitative
treatment limitations between mental
health and substance use disorder
benefits and medical/surgical benefits,
as required under Code section 9812. A
fundamental purpose of Code section
9812, this section, and § 54.9812–2 is to
ensure that participants and
beneficiaries in a group health plan that
offers mental health or substance use
disorder benefits are not subject to more
restrictive lifetime or annual dollar
limits, financial requirements, or
treatment limitations with respect to
those benefits than the predominant
dollar limits, financial requirements, or
treatment limitations that are applied to
substantially all medical/surgical
benefits covered by the plan, as further
provided in this section and § 54.9812–
2. Accordingly, in complying with the
provisions of Code section 9812, this
section, and § 54.9812–2, plans must not
design or apply financial requirements
and treatment limitations that impose a
greater burden on access (that is, are
more restrictive) to mental health and
substance use disorder benefits under
the plan than they impose on access to
generally comparable medical/surgical
benefits. The provisions of Code section
9812, this section, and § 54.9812–2
should be interpreted in a manner that
is consistent with the purpose described
in this paragraph (a)(1).
(2) Meaning of terms. For purposes of
this section and § 54.9812–2, except
where the context clearly indicates
otherwise, the following terms have the
meanings indicated:
*
*
*
*
*
DSM means the American Psychiatric
Association’s Diagnostic and Statistical
Manual of Mental Disorders. For the
purpose of this definition, the most
current version of the DSM is the
version that is applicable no earlier than
on the date that is 1 year before the first
day of the applicable plan year.
Evidentiary standards are any
evidence, sources, or standards that a
group health plan considered or relied
upon in designing or applying a factor
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51621
with respect to a nonquantitative
treatment limitation, including specific
benchmarks or thresholds. Evidentiary
standards may be empirical, statistical,
or clinical in nature, and include:
sources acquired or originating from an
objective third party, such as recognized
medical literature, professional
standards and protocols (which may
include comparative effectiveness
studies and clinical trials), published
research studies, payment rates for
items and services (such as publicly
available databases of the ‘‘usual,
customary and reasonable’’ rates paid
for items and services), and clinical
treatment guidelines; internal plan data,
such as claims or utilization data or
criteria for assuring a sufficient mix and
number of network providers; and
benchmarks or thresholds, such as
measures of excessive utilization, cost
levels, time or distance standards, or
network participation percentage
thresholds.
Factors are all information, including
processes and strategies (but not
evidentiary standards), that a group
health plan considered or relied upon to
design a nonquantitative treatment
limitation, or to determine whether or
how the nonquantitative treatment
limitation applies to benefits under the
plan. Examples of factors include, but
are not limited to: provider discretion in
determining a diagnosis or type or
length of treatment; clinical efficacy of
any proposed treatment or service;
licensing and accreditation of providers;
claim types with a high percentage of
fraud; quality measures; treatment
outcomes; severity or chronicity of
condition; variability in the cost of an
episode of treatment; high cost growth;
variability in cost and quality; elasticity
of demand; and geographic location.
*
*
*
*
*
ICD means the World Health
Organization’s International
Classification of Diseases adopted by the
Department of Health and Human
Services through 45 CFR 162.1002. For
the purpose of this definition, the most
current version of the ICD is the version
that is applicable no earlier than on the
date that is 1 year before the first day
of the applicable plan year.
Medical/surgical benefits means
benefits with respect to items or services
for medical conditions or surgical
procedures, as defined under the terms
of the group health plan and in
accordance with applicable Federal and
State law, but does not include mental
health benefits or substance use
disorder benefits. Notwithstanding the
preceding sentence, any condition or
procedure defined by the plan as being
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or as not being a medical condition or
surgical procedure must be defined
consistent with generally recognized
independent standards of current
medical practice (for example, the most
current version of the ICD). To the
extent generally recognized
independent standards of current
medical practice do not address whether
a condition or procedure is a medical
condition or surgical procedure, plans
may define the condition or procedure
in accordance with applicable Federal
and State law.
Mental health benefits means benefits
with respect to items or services for
mental health conditions, as defined
under the terms of the group health plan
and in accordance with applicable
Federal and State law, but does not
include medical/surgical benefits or
substance use disorder benefits.
Notwithstanding the preceding
sentence, any condition defined by the
plan as being or as not being a mental
health condition must be defined
consistent with generally recognized
independent standards of current
medical practice. For the purpose of this
definition, to be consistent with
generally recognized independent
standards of current medical practice,
the definition must include all
conditions covered under the plan,
except for substance use disorders, that
fall under any of the diagnostic
categories listed in the mental,
behavioral, and neurodevelopmental
disorders chapter (or equivalent
chapter) of the most current version of
the ICD or that are listed in the most
current version of the DSM. To the
extent generally recognized
independent standards of current
medical practice do not address whether
a condition is a mental health condition,
plans may define the condition in
accordance with applicable Federal and
State law.
Processes are actions, steps, or
procedures that a group health plan uses
to apply a nonquantitative treatment
limitation, including actions, steps, or
procedures established by the plan as
requirements in order for a participant
or beneficiary to access benefits,
including through actions by a
participant’s or beneficiary’s authorized
representative or a provider or facility.
Processes include but are not limited to:
procedures to submit information to
authorize coverage for an item or service
prior to receiving the benefit or while
treatment is ongoing (including
requirements for peer or expert clinical
review of that information); provider
referral requirements; and the
development and approval of a
treatment plan. Processes also include
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the specific procedures used by staff or
other representatives of a plan (or the
service provider of a plan) to administer
the application of nonquantitative
treatment limitations, such as how a
panel of staff members applies the
nonquantitative treatment limitation
(including the qualifications of staff
involved, number of staff members
allocated, and time allocated),
consultations with panels of experts in
applying the nonquantitative treatment
limitation, and reviewer discretion in
adhering to criteria hierarchy when
applying a nonquantitative treatment
limitation.
Strategies are practices, methods, or
internal metrics that a plan considers,
reviews, or uses to design a
nonquantitative treatment limitation.
Examples of strategies include but are
not limited to: the development of the
clinical rationale used in approving or
denying benefits; deviation from
generally accepted standards of care; the
selection of information deemed
reasonably necessary to make a medical
necessity determination; reliance on
treatment guidelines or guidelines
provided by third-party organizations;
and rationales used in selecting and
adopting certain threshold amounts,
professional protocols, and fee
schedules. Strategies also include the
creation and composition of the staff or
other representatives of a plan (or the
service provider of a plan) that
deliberates, or otherwise makes
decisions, on the design of
nonquantitative treatment limitations,
including the plan’s decisions related to
the qualifications of staff involved,
number of staff members allocated, and
time allocated; breadth of sources and
evidence considered; consultations with
panels of experts in designing the
nonquantitative treatment limitation;
and the composition of the panels used
to design a nonquantitative treatment
limitation.
Substance use disorder benefits
means benefits with respect to items or
services for substance use disorders, as
defined under the terms of the group
health plan and in accordance with
applicable Federal and State law, but
does not include medical/surgical
benefits or mental health benefits.
Notwithstanding the preceding
sentence, any disorder defined by the
plan as being or as not being a substance
use disorder must be defined consistent
with generally recognized independent
standards of current medical practice.
For the purpose of this definition, to be
consistent with generally recognized
independent standards of current
medical practice, the definition must
include all disorders covered under the
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plan that fall under any of the
diagnostic categories listed as a mental
or behavioral disorder due to
psychoactive substance use (or
equivalent category) in the mental,
behavioral and neurodevelopmental
disorders chapter (or equivalent
chapter) of the most current version of
the ICD or that are listed as a SubstanceRelated and Addictive Disorder (or
equivalent category) in the most current
version of the DSM. To the extent
generally recognized independent
standards of current medical practice do
not address whether a disorder is a
substance use disorder, plans may
define the disorder in accordance with
applicable Federal and State law.
Treatment limitations include limits
on benefits based on the frequency of
treatment, number of visits, days of
coverage, days in a waiting period, or
other similar limits on the scope or
duration of treatment. Treatment
limitations include both quantitative
treatment limitations, which are
expressed numerically (such as 50
outpatient visits per year), and
nonquantitative treatment limitations,
which otherwise limit the scope or
duration of benefits for treatment under
a plan. (See paragraph (c)(4)(iii) of this
section for an illustrative, nonexhaustive list of nonquantitative
treatment limitations.) A complete
exclusion of all benefits for a particular
condition or disorder, however, is not a
treatment limitation for purposes of this
definition.
*
*
*
*
*
(c) * * *
(1) * * *
(ii) Type of financial requirement or
treatment limitation. When reference is
made in this paragraph (c) to a type of
financial requirement or treatment
limitation, the reference to type means
its nature. Different types of financial
requirements include deductibles,
copayments, coinsurance, and out-ofpocket maximums. Different types of
quantitative treatment limitations
include annual, episode, and lifetime
day and visit limits. See paragraph
(c)(4)(iii) of this section for an
illustrative, non-exhaustive list of
nonquantitative treatment limitations.
*
*
*
*
*
(2) * * *
(i) General rule. A group health plan
that provides both medical/surgical
benefits and mental health or substance
use disorder benefits may not apply any
financial requirement or treatment
limitation to mental health or substance
use disorder benefits in any
classification that is more restrictive
than the predominant financial
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requirement or treatment limitation of
that type applied to substantially all
medical/surgical benefits in the same
classification. Whether a financial
requirement or treatment limitation is a
predominant financial requirement or
treatment limitation that applies to
substantially all medical/surgical
benefits in a classification is determined
separately for each type of financial
requirement or treatment limitation. A
plan may not impose any financial
requirement or treatment limitation that
is applicable only with respect to
mental health or substance use disorder
benefits and not to any medical/surgical
benefits in the same benefit
classification. The application of the
rules of this paragraph (c)(2) to financial
requirements and quantitative treatment
limitations is addressed in paragraph
(c)(3) of this section; the application of
the rules of this paragraph (c)(2) to
nonquantitative treatment limitations is
addressed in paragraph (c)(4) of this
section.
(ii) * * *
(A) In general. If a plan provides any
benefits for a mental health condition or
substance use disorder in any
classification of benefits described in
this paragraph (c)(2)(ii), benefits for that
mental health condition or substance
use disorder must be provided in every
classification in which medical/surgical
benefits are provided. For purposes of
this paragraph (c)(2)(ii), a plan
providing any benefits for a mental
health condition or substance use
disorder in any classification of benefits
does not provide benefits for the mental
health condition or substance use
disorder in every classification in which
medical/surgical benefits are provided
unless the plan provides meaningful
benefits for treatment for that condition
or disorder in each such classification,
as determined in comparison to the
benefits provided for medical/surgical
conditions in the classification. In
determining the classification in which
a particular benefit belongs, a plan must
apply the same standards to medical/
surgical benefits and to mental health or
substance use disorder benefits. To the
extent that a plan provides benefits in
a classification and imposes any
separate financial requirement or
treatment limitation (or separate level of
a financial requirement or treatment
limitation) for benefits in the
classification, the rules of this paragraph
(c) apply separately with respect to that
classification for all financial
requirements or treatment limitations
(illustrated in examples in paragraph
(c)(2)(ii)(C) of this section). The
following classifications of benefits are
the only classifications used in applying
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the rules of this paragraph (c), in
addition to the permissible subclassifications described in paragraph
(c)(3)(iii) of this section:
*
*
*
*
*
(C) * * *
(1) Example 1—(i) Facts. A group
health plan offers inpatient and
outpatient benefits and does not
contract with a network of providers.
The plan imposes a $500 deductible on
all benefits. For inpatient medical/
surgical benefits, the plan imposes a
coinsurance requirement. For outpatient
medical/surgical benefits, the plan
imposes copayments. The plan imposes
no other financial requirements or
treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(1) (Example 1), because the
plan has no network of providers, all
benefits provided are out-of-network.
Because inpatient, out-of-network
medical/surgical benefits are subject to
separate financial requirements from
outpatient, out-of-network medical/
surgical benefits, the rules of this
paragraph (c) apply separately with
respect to any financial requirements
and treatment limitations, including the
deductible, in each classification.
(2) Example 2—(i) Facts. A plan
imposes a $500 deductible on all
benefits. The plan has no network of
providers. The plan generally imposes a
20 percent coinsurance requirement
with respect to all benefits, without
distinguishing among inpatient,
outpatient, emergency care, or
prescription drug benefits. The plan
imposes no other financial requirements
or treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(2) (Example 2), because the
plan does not impose separate financial
requirements (or treatment limitations)
based on classification, the rules of this
paragraph (c) apply with respect to the
deductible and the coinsurance across
all benefits.
(3) Example 3—(i) Facts. Same facts
as in paragraph (c)(2)(ii)(C)(2)(i) of this
section (Example 2), except the plan
exempts emergency care benefits from
the 20 percent coinsurance requirement.
The plan imposes no other financial
requirements or treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(3) (Example 3), because the
plan imposes separate financial
requirements based on classifications,
the rules of this paragraph (c) apply
with respect to the deductible and the
coinsurance separately for benefits in
the emergency care classification and all
other benefits.
(4) Example 4—(i) Facts. Same facts
as in paragraph (c)(2)(ii)(C)(2)(i) of this
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51623
section (Example 2), except the plan
also imposes a preauthorization
requirement for all inpatient treatment
in order for benefits to be paid. No such
requirement applies to outpatient
treatment.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(4) (Example 4), because the
plan has no network of providers, all
benefits provided are out-of-network.
Because the plan imposes a separate
treatment limitation based on
classifications, the rules of this
paragraph (c) apply with respect to the
deductible and coinsurance separately
for inpatient, out-of-network benefits
and all other benefits.
(5) Example 5—(i) Facts. A plan
generally covers treatment for autism
spectrum disorder (ASD), a mental
health condition, and covers outpatient,
out-of-network developmental
evaluations for ASD but excludes all
other benefits for outpatient treatment
for ASD, including applied behavioral
analysis (ABA) therapy, when provided
on an out-of-network basis. The plan
generally covers the full range of
outpatient treatments and treatment
settings for medical conditions and
surgical procedures when provided on
an out-of-network basis.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(5) (Example 5), the plan
violates the rules of this paragraph
(c)(2)(ii). Because the plan only covers
one type of benefit for ASD in the
outpatient, out-of-network classification
and excludes all other benefits for ASD
in the classification, but generally
covers the full range of medical/surgical
benefits in the classification, it fails to
provide meaningful benefits for
treatment of ASD in the classification.
(6) Example 6—(i) Facts. A plan
generally covers diagnosis and
treatment for eating disorders, a mental
health condition, but specifically
excludes coverage for nutrition
counseling to treat eating disorders,
including in the outpatient, in-network
classification. Nutrition counseling is
one of the primary treatments for eating
disorders. The plan generally provides
benefits for the primary treatments for
medical/surgical conditions in the
outpatient, in-network classification.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(6) (Example 6), the plan
violates the rules of this paragraph
(c)(2)(ii). The exclusion of coverage for
nutrition counseling for eating disorders
results in the plan failing to provide
meaningful benefits for the treatment of
eating disorders in the outpatient, innetwork classification, as determined in
comparison to the benefits provided for
medical/surgical conditions in the
classification.
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(3) * * *
(i) * * *
(A) Substantially all. For purposes of
this paragraph (c)(3), a type of financial
requirement or quantitative treatment
limitation is considered to apply to
substantially all medical/surgical
benefits in a classification of benefits if
it applies to at least two-thirds of all
medical/surgical benefits in that
classification. (For purposes of this
paragraph (c)(3)(i)(A), benefits
expressed as subject to a zero level of a
type of financial requirement are treated
as benefits not subject to that type of
financial requirement, and benefits
expressed as subject to a quantitative
treatment limitation that is unlimited
are treated as benefits not subject to that
type of quantitative treatment
limitation.) If a type of financial
requirement or quantitative treatment
limitation does not apply to at least twothirds of all medical/surgical benefits in
a classification, then that type cannot be
applied to mental health or substance
use disorder benefits in that
classification.
*
*
*
*
*
(C) Portion based on plan payments.
For purposes of this paragraph (c)(3),
the determination of the portion of
medical/surgical benefits in a
classification of benefits subject to a
financial requirement or quantitative
treatment limitation (or subject to any
level of a financial requirement or
quantitative treatment limitation) is
based on the dollar amount of all plan
payments for medical/surgical benefits
in the classification expected to be paid
under the plan for the plan year (or for
the portion of the plan year after a
change in plan benefits that affects the
applicability of the financial
requirement or quantitative treatment
limitation).
(D) Clarifications for certain threshold
requirements. For any deductible, the
dollar amount of plan payments
includes all plan payments with respect
to claims that would be subject to the
deductible if it had not been satisfied.
For any out-of-pocket maximum, the
dollar amount of plan payments
includes all plan payments associated
with out-of-pocket payments that are
taken into account towards the out-ofpocket maximum as well as all plan
payments associated with out-of-pocket
payments that would have been made
towards the out-of-pocket maximum if it
had not been satisfied. Similar rules
apply for any other thresholds at which
the rate of plan payment changes. (See
also PHS Act section 2707 and
Affordable Care Act section 1302(c),
which establish annual limitations on
out-of-pocket maximums for all nongrandfathered health plans.)
*
*
*
*
*
(iii) Special rules. Unless specifically
permitted under this paragraph
(c)(3)(iii), sub-classifications are not
permitted when applying the rules of
paragraph (c)(3) of this section.
(A) Multi-tiered prescription drug
benefits. If a plan applies different levels
of financial requirements to different
tiers of prescription drug benefits based
on reasonable factors determined in
accordance with the rules in paragraph
(c)(4) of this section (relating to
requirements for nonquantitative
treatment limitations) and without
regard to whether a drug is generally
prescribed with respect to medical/
surgical benefits or with respect to
mental health or substance use disorder
benefits, the plan satisfies the parity
requirements of this paragraph (c) with
respect to prescription drug benefits.
Reasonable factors include cost,
efficacy, generic versus brand name, and
mail order versus pharmacy pick-up.
(B) Multiple network tiers. If a plan
provides benefits through multiple tiers
of in-network providers (such as an innetwork tier of preferred providers with
more generous cost-sharing to
participants than a separate in-network
tier of participating providers), the plan
may divide its benefits furnished on an
in-network basis into sub-classifications
that reflect network tiers, if the tiering
is based on reasonable factors
determined in accordance with the rules
in paragraph (c)(4) of this section (such
as quality, performance, and market
standards) and without regard to
whether a provider provides services
with respect to medical/surgical benefits
or mental health or substance use
disorder benefits. After the subclassifications are established, the plan
may not impose any financial
requirement or treatment limitation on
mental health or substance use disorder
benefits in any sub-classification that is
more restrictive than the predominant
financial requirement or treatment
limitation that applies to substantially
all medical/surgical benefits in the subclassification using the methodology set
forth in paragraph (c)(3)(i) of this
section.
*
*
*
*
*
(iv) Examples. The rules of
paragraphs (c)(3)(i) through (iii) of this
section are illustrated by the following
examples. In each example, the group
health plan is subject to the
requirements of this section and
provides both medical/surgical benefits
and mental health and substance use
disorder benefits.
(A) Example 1—(1) Facts. (i) For
inpatient, out-of-network medical/
surgical benefits, a group health plan
imposes five levels of coinsurance.
Using a reasonable method, the plan
projects its payments for the upcoming
year as follows:
TABLE 1 TO PARAGRAPH (c)(3)(IV)(A)(1)(i)
ddrumheller on DSK120RN23PROD with PROPOSALS2
Coinsurance rate ..............
Projected payments .........
Percent of total plan costs
Percent subject to coinsurance level ................
0%
$200x
20
10%
$100x
10
15%
$450x
45
20%
$100x
10
30%
$150x
15
Total
$1,000x
........................
N/A
12.5 (100x/800x)
56.25 (450x/800x)
12.5 (100x/800x)
18.75 (150x/800x)
........................
(ii) The plan projects plan costs of
$800x to be subject to coinsurance
($100x + $450x + $100x + $150x =
$800x). Thus, 80 percent ($800x/
$1,000x) of the benefits are projected to
be subject to coinsurance, and 56.25
percent of the benefits subject to
coinsurance are projected to be subject
to the 15 percent coinsurance level.
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(2) Conclusion. In this paragraph
(c)(3)(iv)(A) (Example 1), the two-thirds
threshold of the substantially all
standard is met for coinsurance because
80 percent of all inpatient, out-ofnetwork medical/surgical benefits are
subject to coinsurance. Moreover, the 15
percent coinsurance is the predominant
level because it is applicable to more
than one-half of inpatient, out-of-
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network medical/surgical benefits
subject to the coinsurance requirement.
The plan may not impose any level of
coinsurance with respect to inpatient,
out-of-network mental health or
substance use disorder benefits that is
more restrictive than the 15 percent
level of coinsurance.
(B) Example 2—(1) Facts. (i) For
outpatient, in-network medical/surgical
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benefits, a plan imposes five different
copayment levels. Using a reasonable
method, the plan projects payments for
the upcoming year as follows:
TABLE 2 TO PARAGRAPH (c)(3)(IV)(B)(1)(i)
Copayment amount ..........
Projected payments .........
Percent of total plan costs
Percent subject to copayments ............................
$0
$200x
20
$10
$200x
20
$15
$200x
20
$20
$300x
30
$50
$100x
10
Total
$1,000x
........................
N/A
25 (200x/800x)
25 (200x/800x)
37.5 (300x/800x)
12.5 (100x/800x)
........................
(ii) The plan projects plan costs of
$800x to be subject to copayments
($200x + $200x +$300x + $100x =
$800x). Thus, 80 percent ($800x/
$1,000x) of the benefits are projected to
be subject to a copayment.
(2) Conclusion. In this paragraph
(c)(3)(iv)(B) (Example 2), the two-thirds
threshold of the substantially all
standard is met for copayments because
80 percent of all outpatient, in-network
medical/surgical benefits are subject to
a copayment. Moreover, there is no
single level that applies to more than
one-half of medical/surgical benefits in
the classification subject to a copayment
(for the $10 copayment, 25%; for the
$15 copayment, 25%; for the $20
copayment, 37.5%; and for the $50
copayment, 12.5%). The plan can
combine any levels of copayment,
including the highest levels, to
determine the predominant level that
can be applied to mental health or
substance use disorder benefits. If the
plan combines the highest levels of
copayment, the combined projected
payments for the two highest copayment
levels, the $50 copayment and the $20
copayment, are not more than one-half
of the outpatient, in-network medical/
surgical benefits subject to a copayment
because they are exactly one-half ($300x
+ $100x = $400x; $400x/$800x = 50%).
The combined projected payments for
the three highest copayment levels—the
$50 copayment, the $20 copayment, and
the $15 copayment—are more than onehalf of the outpatient, in-network
medical/surgical benefits subject to the
copayments ($100x + $300x + $200x =
$600x; $600x/$800x = 75%). Thus, the
plan may not impose any copayment on
outpatient, in-network mental health or
substance use disorder benefits that is
more restrictive than the least restrictive
copayment in the combination, the $15
copayment.
(C) Example 3—(1) Facts. A plan
imposes a $250 deductible on all
medical/surgical benefits for self-only
coverage and a $500 deductible on all
medical/surgical benefits for family
coverage. The plan has no network of
providers. For all medical/surgical
benefits, the plan imposes a coinsurance
requirement. The plan imposes no other
financial requirements or treatment
limitations.
(2) Conclusion. In this paragraph
(c)(3)(iv)(C) (Example 3), because the
plan has no network of providers, all
benefits are provided out-of-network.
Because self-only and family coverage
are subject to different deductibles,
whether the deductible applies to
substantially all medical/surgical
benefits is determined separately for
self-only medical/surgical benefits and
family medical/surgical benefits.
Because the coinsurance is applied
without regard to coverage units, the
predominant coinsurance that applies to
substantially all medical/surgical
benefits is determined without regard to
coverage units.
(D) Example 4—(1) Facts. A plan
applies the following financial
requirements for prescription drug
benefits. The requirements are applied
without regard to whether a drug is
generally prescribed with respect to
medical/surgical benefits or with
respect to mental health or substance
use disorder benefits. Moreover, the
process for certifying a particular drug
as ‘‘generic’’, ‘‘preferred brand name’’,
‘‘non-preferred brand name’’, or
‘‘specialty’’ complies with the rules of
paragraph (c)(4) of this section (relating
to requirements for nonquantitative
treatment limitations).
TABLE 3 TO PARAGRAPH (c)(3)(iv)(D)(1)
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Tier 1
Tier 2
Tier 3
Tier description ..................
Generic drugs ...................
Preferred brand name
drugs.
Percent paid by plan .........
90 ......................................
80 ......................................
(2) Conclusion. In this paragraph
(c)(3)(iv)(D) (Example 4), the financial
requirements that apply to prescription
drug benefits are applied without regard
to whether a drug is generally
prescribed with respect to medical/
surgical benefits or with respect to
mental health or substance use disorder
benefits; the process for certifying drugs
in different tiers complies with
paragraph (c)(4) of this section; and the
bases for establishing different levels or
types of financial requirements are
reasonable. The financial requirements
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Non-preferred brand name
drugs (which may have
Tier 1 or Tier 2 alternatives).
60 ......................................
applied to prescription drug benefits do
not violate the parity requirements of
this paragraph (c)(3).
(E) Example 5—(1) Facts. A plan has
two-tiers of network of providers: a
preferred provider tier and a
participating provider tier. Providers are
placed in either the preferred tier or
participating tier based on reasonable
factors determined in accordance with
the rules in paragraph (c)(4) of this
section, such as accreditation, quality
and performance measures (including
customer feedback), and relative
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Tier 4
Specialty drugs.
50.
reimbursement rates. Furthermore,
provider tier placement is determined
without regard to whether a provider
specializes in the treatment of mental
health conditions or substance use
disorders, or medical/surgical
conditions. The plan divides the innetwork classifications into two subclassifications (in-network/preferred
and in-network/participating). The plan
does not impose any financial
requirement or treatment limitation on
mental health or substance use disorder
benefits in either of these sub-
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classifications that is more restrictive
than the predominant financial
requirement or treatment limitation that
applies to substantially all medical/
surgical benefits in each subclassification.
(2) Conclusion. In this paragraph
(c)(3)(iv)(E) (Example 5), the division of
in-network benefits into subclassifications that reflect the preferred
and participating provider tiers does not
violate the parity requirements of this
paragraph (c)(3).
(F) Example 6—(1) Facts. With
respect to outpatient, in-network
benefits, a plan imposes a $25
copayment for office visits and a 20
percent coinsurance requirement for
outpatient surgery. The plan divides the
outpatient, in-network classification
into two sub-classifications (in-network
office visits and all other outpatient, innetwork items and services). The plan
does not impose any financial
requirement or quantitative treatment
limitation on mental health or substance
use disorder benefits in either of these
sub-classifications that is more
restrictive than the predominant
financial requirement or quantitative
treatment limitation that applies to
substantially all medical/surgical
benefits in each sub-classification.
(2) Conclusion. In this paragraph
(c)(3)(iv)(F) (Example 6), the division of
outpatient, in-network benefits into subclassifications for office visits and all
other outpatient, in-network items and
services does not violate the parity
requirements of this paragraph (c)(3).
(G) Example 7—(1) Facts. Same facts
as in paragraph (c)(3)(iv)(F)(1) of this
section (Example 6), but for purposes of
determining parity, the plan divides the
outpatient, in-network classification
into outpatient, in-network generalists
and outpatient, in-network specialists.
(2) Conclusion. In this paragraph
(c)(3)(iv)(G) (Example 7), the division of
outpatient, in-network benefits into any
sub-classifications other than office
visits and all other outpatient items and
services violates the requirements of
paragraph (c)(3)(iii)(C) of this section.
*
*
*
*
*
(4) Nonquantitative treatment
limitations. Subject to paragraph
(c)(4)(v) of this section, a group health
plan may not impose a nonquantitative
treatment limitation with respect to
mental health or substance use disorder
benefits in a classification unless the
plan’s imposition of the limitation
meets the requirements of paragraphs
(c)(4)(i), (ii), and (iv) of this section. If
a group health plan fails to meet any of
these requirements with respect to a
nonquantitative treatment limitation,
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the limitation violates Code section
9812(a)(3)(A)(ii) and may not be
imposed by the plan.
(i) Requirement that nonquantitative
treatment limitations be no more
restrictive for mental health benefits
and substance use disorder benefits. A
group health plan may not apply any
nonquantitative treatment limitation
with respect to mental health or
substance use disorder benefits in any
classification that is more restrictive, as
written or in operation, than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the same
classification.
(A) Restrictive. For purposes of this
paragraph (c)(4)(i), a nonquantitative
treatment limitation is restrictive to the
extent it imposes conditions, terms, or
requirements that limit access to
benefits under the terms of the plan.
Conditions, terms, or requirements
include, but are not limited to, those
that compel an action by or on behalf of
a participant or beneficiary to access
benefits or limit access to the full range
of treatment options available for a
condition or disorder under the plan.
(B) Substantially all. For purposes of
this paragraph (c)(4)(i), a
nonquantitative treatment limitation is
considered to apply to substantially all
medical/surgical benefits in a
classification if it applies to at least twothirds of all medical/surgical benefits in
that classification, consistent with
paragraph (c)(4)(i)(D) of this section.
Whether the nonquantitative treatment
limitation applies to at least two-thirds
of all medical/surgical benefits is
determined without regard to whether
the nonquantitative treatment limitation
was triggered based on a particular
factor or evidentiary standard. If a
nonquantitative treatment limitation
does not apply to at least two-thirds of
all medical/surgical benefits in a
classification, then that limitation
cannot be applied to mental health or
substance use disorder benefits in that
classification.
(C) Predominant. For purposes of this
paragraph (c)(4)(i), the term
predominant means the most common
or most frequent variation of the
nonquantitative treatment limitation
within a classification, determined in
accordance with the method outlined in
paragraph (c)(4)(i)(D) of this section, to
the extent the plan imposes multiple
variations of a nonquantitative
treatment limitation within the
classification. For example, multiple
variations of inpatient concurrent
review include review commencing 1
day, 3 days, or 7 days after admission,
depending on the reason for the stay.
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(D) Portion based on plan payments.
For purposes of paragraphs (c)(4)(i)(B)
and (C) of this section, the
determination of the portion of medical/
surgical benefits in a classification of
benefits subject to a nonquantitative
treatment limitation is based on the
dollar amount of all plan payments for
medical/surgical benefits in the
classification expected to be paid under
the plan for the plan year (or the portion
of the plan year after a change in
benefits that affects the applicability of
the nonquantitative treatment
limitation). Any reasonable method may
be used to determine the dollar amount
expected to be paid under a plan for
medical/surgical benefits.
(E) Exceptions for independent
professional medical or clinical
standards and standards to detect or
prevent and prove fraud, waste, and
abuse. Notwithstanding paragraphs
(c)(4)(i)(A) through (D) of this section, a
plan that applies a nonquantitative
treatment limitation that impartially
applies independent professional
medical or clinical standards or applies
standards to detect or prevent and prove
fraud, waste, and abuse, as described in
paragraph (c)(4)(v)(A) or (B) of this
section, to mental health or substance
use disorder benefits in any
classification will not be considered to
violate this paragraph (c)(4)(i) with
respect to such nonquantitative
treatment limitation.
(ii) Additional requirements related to
design and application of the
nonquantitative treatment limitation—
(A) In general. Consistent with
paragraph (a)(1) of this section, a plan
may not impose a nonquantitative
treatment limitation with respect to
mental health or substance use disorder
benefits in any classification unless,
under the terms of the plan as written
and in operation, any processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits in the
classification are comparable to, and are
applied no more stringently than, the
processes, strategies, evidentiary
standards, or other factors used in
designing and applying the limitation
with respect to medical/surgical benefits
in the classification.
(B) Prohibition on discriminatory
factors and evidentiary standards. For
purposes of determining comparability
and stringency under paragraph
(c)(4)(ii)(A) of this section, a plan may
not rely upon any factor or evidentiary
standard if the information, evidence,
sources, or standards on which the
factor or evidentiary standard is based
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discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
For purposes of this paragraph
(c)(4)(ii)(B):
(1) Impartially applied generally
recognized independent professional
medical or clinical standards described
in paragraph (c)(4)(v)(A) of this section
are not considered to discriminate
against mental health or substance use
disorder benefits.
(2) Standards reasonably designed to
detect or prevent and prove fraud,
waste, and abuse described in paragraph
(c)(4)(v)(B) of this section are not
considered to discriminate against
mental health or substance use disorder
benefits.
(3) Information is considered to
discriminate against mental health or
substance use disorder benefits if it is
biased or not objective, in a manner that
results in less favorable treatment of
mental health or substance use disorder
benefits, based on all the relevant facts
and circumstances including, but not
limited to, the source of the information,
the purpose or context of the
information, and the content of the
information.
(iii) Illustrative, non-exhaustive list of
nonquantitative treatment limitations.
Nonquantitative treatment limitations
include—
(A) Medical management standards
(such as prior authorization) limiting or
excluding benefits based on medical
necessity or medical appropriateness, or
based on whether the treatment is
experimental or investigative;
(B) Formulary design for prescription
drugs;
(C) For plans with multiple network
tiers (such as preferred providers and
participating providers), network tier
design;
(D) Standards related to network
composition, including but not limited
to, standards for provider and facility
admission to participate in a network or
for continued network participation,
including methods for determining
reimbursement rates, credentialing
standards, and procedures for ensuring
the network includes an adequate
number of each category of provider and
facility to provide services under the
plan;
(E) Plan methods for determining outof-network rates, such as allowed
amounts; usual, customary, and
reasonable charges; or application of
other external benchmarks for out-ofnetwork rates;
(F) Refusal to pay for higher-cost
therapies until it can be shown that a
lower-cost therapy is not effective (also
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known as fail-first policies or step
therapy protocols);
(G) Exclusions based on failure to
complete a course of treatment; and
(H) Restrictions based on geographic
location, facility type, provider
specialty, and other criteria that limit
the scope or duration of benefits for
services provided under the plan.
(iv) Required use of outcomes data—
(A) In general. When designing and
applying a nonquantitative treatment
limitation, a plan must collect and
evaluate relevant data in a manner
reasonably designed to assess the
impact of the nonquantitative treatment
limitation on access to mental health
and substance use disorder benefits and
medical/surgical benefits, and consider
the impact as part of the plan’s analysis
of whether the limitation, in operation,
complies with paragraphs (c)(4)(i) and
(ii) of this section. The Secretary, jointly
with the Secretary of the Department of
Labor and the Secretary of Health and
Human Services, may specify in
guidance the type, form, and manner of
collection and evaluation for the data
required under this paragraph
(c)(4)(iv)(A).
(1) For purposes of this paragraph
(c)(4)(iv)(A), relevant data includes, but
is not limited to, the number and
percentage of claims denials and any
other data relevant to the
nonquantitative treatment limitation
required by State law or private
accreditation standards.
(2) In addition to the relevant data set
forth in paragraph (c)(4)(iv)(A)(1) of this
section, relevant data for
nonquantitative treatment limitations
related to network composition
standards includes, but is not limited to,
in-network and out-of-network
utilization rates (including data related
to provider claim submissions), network
adequacy metrics (including time and
distance data, and data on providers
accepting new patients), and provider
reimbursement rates (including as
compared to billed charges).
(B) Material differences. Subject to
paragraph (c)(4)(iv)(C) of this section, to
the extent the relevant data evaluated
pursuant to paragraph (c)(4)(iv)(A) of
this section show material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits, the
differences will be considered a strong
indicator that the plan violates
paragraph (c)(4)(i) or (ii) of this section.
In such instances, the plan:
(1) Must take reasonable action to
address the material differences in
access as necessary to ensure
compliance, in operation, with
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51627
paragraphs (c)(4)(i) and (ii) of this
section; and
(2) Must document the action that has
been or is being taken by the plan to
mitigate any material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits, as required by
§ 54.9812–2(c)(5)(iv).
(C) Special rule for nonquantitative
treatment limitations related to network
composition. Notwithstanding
paragraph (c)(4)(iv)(B) of this section,
when designing and applying one or
more nonquantitative treatment
limitation(s) related to network
composition standards, a plan fails to
meet the requirements of paragraphs
(c)(4)(i) and (ii) of this section, in
operation, if the relevant data show
material differences in access to innetwork mental health and substance
use disorder benefits as compared to innetwork medical/surgical benefits in a
classification.
(D) Exception for independent
professional medical or clinical
standards. A plan designing and
applying a nonquantitative treatment
limitation with respect to mental health
or substance use disorder benefits in
any classification that impartially
applies independent professional
medical or clinical standards, as
described in paragraph (c)(4)(v)(A) of
this section, is not required to comply
with the requirements of this paragraph
(c)(4)(iv) with respect to that
classification.
(v) Independent professional medical
or clinical standards and standards to
detect or prevent and prove fraud,
waste, and abuse. (A) To qualify for the
exceptions in paragraphs (c)(4)(i)(E),
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this
section for independent professional
medical or clinical standards, a
nonquantitative treatment limitation
must impartially apply generally
recognized independent professional
medical or clinical standards (consistent
with generally accepted standards of
care) to medical/surgical benefits and
mental health or substance use disorder
benefits, and may not deviate from those
standards in any way, such as by
imposing additional or different
requirements.
(B) To qualify for the exceptions in
paragraphs (c)(4)(i)(E) and (c)(4)(ii)(B) of
this section to detect or prevent and
prove fraud, waste, and abuse, a
nonquantitative treatment limitation
must be reasonably designed to detect or
prevent and prove fraud, waste, and
abuse, based on indicia of fraud, waste,
and abuse that have been reliably
established through objective and
unbiased data, and also be narrowly
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designed to minimize the negative
impact on access to appropriate mental
health and substance use disorder
benefits.
(vi) Prohibition on separate
nonquantitative treatment limitations
applicable only to mental health or
substance use disorder benefits.
Consistent with paragraph (c)(2)(i) of
this section, a group health plan may
not apply any nonquantitative treatment
limitation that is applicable only with
respect to mental health or substance
use disorder benefits and does not apply
with respect to any medical/surgical
benefits in the same benefit
classification.
(vii) Effect of final determination of
noncompliance under § 54.9812–2. If a
group health plan receives a final
determination from the Secretary that
the plan is not in compliance with the
requirements of § 54.9812–2 with
respect to a nonquantitative treatment
limitation, the nonquantitative
treatment limitation violates this
paragraph (c)(4) and the Secretary may
direct the plan not to impose the
nonquantitative treatment limitation,
unless and until the plan demonstrates
to the Secretary compliance with the
requirements of this section or takes
appropriate action to remedy the
violation.
(viii) Examples. The rules of this
paragraph (c)(4) are illustrated by the
following examples. In each example,
the group health plan is subject to the
requirements of this section and
provides both medical/surgical benefits
and mental health and substance use
disorder benefits. Additionally, in
examples that conclude that the plan
violates one provision of this paragraph
(c)(4), such examples do not necessarily
imply compliance with other provisions
of this paragraph (c)(4), as these
examples do not analyze compliance
with all other provisions of this
paragraph (c)(4).
(A) Example 1 (More restrictive prior
authorization requirement in
operation)—(1) Facts. A plan requires
prior authorization from the plan’s
utilization reviewer that a treatment is
medically necessary for all inpatient, innetwork medical/surgical benefits and
for all inpatient, in-network mental
health and substance use disorder
benefits. While inpatient, in-network
benefits for medical/surgical conditions
are approved for periods of 1, 3, and 7
days, after which a treatment plan must
be submitted by the patient’s attending
provider and approved by the plan, the
approvals for 7 days are most common
under this plan. For inpatient, innetwork mental health and substance
use disorder benefits, routine approval
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is most commonly given only for one
day, after which a treatment plan must
be submitted by the patient’s attending
provider and approved by the plan. The
difference in the duration of approvals
is not the result of independent
professional medical or clinical
standards or standards to detect or
prevent and prove fraud, waste, and
abuse, but rather reflects the application
of a heightened standard to the
provision of the mental health and
substance use disorder benefits in the
relevant classification.
(2) Conclusion. In this paragraph
(c)(4)(viii)(A) (Example 1), the plan
violates the rules of paragraph (c)(4)(i)
of this section. Under the terms of the
plan, prior authorization applies to at
least two-thirds of all medical/surgical
benefits in the relevant classification
(inpatient, in-network), since it applies
to all benefits in the relevant
classification. Further, the most
common or frequent variation of the
nonquantitative treatment limitation
applied to medical/surgical benefits in
the relevant classification (the
predominant nonquantitative treatment
limitation) is the routine approval of
inpatient, in-network benefits for 7 days
before the patient’s attending provider
must submit a treatment plan. However,
the plan routinely approves inpatient,
in-network benefits for mental health
and substance use disorder conditions
for only 1 day before the patient’s
attending provider must submit a
treatment plan (and, in doing so, does
not impartially apply independent
professional medical or clinical
standards or apply standards to detect
or prevent and prove fraud, waste, and
abuse that qualify for the exceptions in
paragraph (c)(4)(i)(E) of this section). In
operation, therefore, the prior
authorization requirement imposed on
inpatient, in-network mental health and
substance use disorder benefits is more
restrictive than the predominant prior
authorization requirement applicable to
substantially all medical/surgical
benefits in the inpatient, in-network
classification because the practice of
approving only 1 day of inpatient
benefits limits access to the full range of
treatment options available for a
condition or disorder under the plan as
compared to the routine 7-day approval
that is given for inpatient, in-network
medical/surgical benefits. Because the
plan violates the rules of paragraph
(c)(4)(i) of this section, this example
does not analyze compliance with
paragraph (c)(4)(ii) or (iv) of this section.
(B) Example 2 (More restrictive peerto-peer concurrent review requirements
in operation)—(1) Facts. A plan follows
a written process for the concurrent
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review of all medical/surgical benefits
and mental health and substance use
disorder benefits within the inpatient,
in-network classification. Under the
process, a first-level review is
conducted in every instance in which
concurrent review applies and an
authorization request is approved by the
first-level reviewer only if the clinical
information submitted by the facility
meets the plan’s criteria for a continued
stay. If the first-level reviewer is unable
to approve the authorization request
because the clinical information
submitted by the facility does not meet
the plan’s criteria for a continued stay,
it is sent to a second-level reviewer who
will either approve or deny the request.
While the written process only requires
review by the second-level reviewer to
either deny or approve the request, in
operation, second-level reviewers for
mental health and substance use
disorder benefits conduct a peer-to-peer
review with a provider (acting as the
authorized representative of a
participant or beneficiary) before
coverage of the treatment is approved.
The peer-to-peer review requirement is
not the result of independent
professional medical or clinical
standards or standards to detect or
prevent and prove fraud, waste, and
abuse. The plan does not impose a peerto-peer review, as written or in
operation, as part of the second-level
review for medical/surgical benefits.
(2) Conclusion. In this paragraph
(c)(4)(viii)(B) (Example 2), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The concurrent review
nonquantitative treatment limitation
applies to at least two-thirds of all
medical/surgical benefits within the
inpatient, in-network classification
because the plan follows the concurrent
review process for all medical/surgical
benefits. The most common or frequent
variation of this nonquantitative
treatment limitation (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is that peer-to-peer
review is not imposed as part of secondlevel review. The plan does not
impartially apply independent
professional medical or clinical
standards or apply standards to detect
or prevent and prove fraud, waste, and
abuse that qualify for the exceptions in
paragraph (c)(4)(i)(E) of this section. As
written, the plan’s concurrent review
requirements are the same for medical/
surgical benefits and mental health and
substance use disorder benefits.
However, in operation, by compelling
an additional action (peer-to-peer
review as part of second-level review) to
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access only mental health or substance
use disorder benefits, the plan applies
the limitation to mental health and
substance use disorder benefits in a
manner that is more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
inpatient, in-network classification.
Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this
example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this
section.
(C) Example 3 (More restrictive peerto-peer review medical necessity
standard in operation; deviation from
independent professional medical and
clinical standards)—(1) Facts. A plan
generally requires that all treatment be
medically necessary in the inpatient,
out-of-network classification. For both
medical/surgical benefits and mental
health and substance use disorder
benefits, the written medical necessity
standards are based on independent
professional medical or clinical
standards that do not require peer-topeer review. In operation, the plan
covers out-of-network benefits for
medical/surgical or mental health
inpatient treatment outside of a hospital
if the physician documents medical
appropriateness, but for out-of-network
benefits for substance use disorder
inpatient treatment outside of a
hospital, the plan requires a physician
to also complete peer-to-peer review.
(2) Conclusion. In this paragraph
(c)(4)(viii)(C) (Example 3), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The medical necessity
nonquantitative treatment limitation
applies to at least two-thirds of all
medical/surgical benefits in the
inpatient, out-of-network classification.
The most common or frequent variation
of the nonquantitative treatment
limitation (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is the requirement that
a physician document medical
appropriateness without peer-to-peer
review. The plan purports to impartially
apply independent professional medical
or clinical standards that would
otherwise qualify for the exception in
paragraph (c)(4)(i)(E) of this section, but
deviates from those standards by
imposing the additional requirement to
complete peer-to-peer review for
inpatient, out-of-network benefits for
substance use disorder outside of a
hospital. Therefore, the exception in
paragraph (c)(4)(i)(E) of this section does
not apply. As written, the plan
provisions apply the nonquantitative
treatment limitation to mental health
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and substance use disorder benefits in
the inpatient, out-of-network
classification in the same manner as for
medical/surgical benefits. However, in
operation, the nonquantitative treatment
limitation imposed with respect to outof-network substance use disorder
benefits for treatment outside of a
hospital is more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
classification because it limits access to
the full range of treatment options
available for a condition or disorder
under the plan or coverage as compared
to medical/surgical benefits in the same
classification. Because the plan violates
the rules of paragraph (c)(4)(i) of this
section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(D) Example 4 (Not comparable and
more stringent methods for determining
reimbursement rates in operation)—(1)
Facts. A plan’s base reimbursement
rates for outpatient, in-network
providers are determined based on a
variety of factors, including the
providers’ required training, licensure,
and expertise. For purposes of this
example, the plan’s nonquantitative
treatment limitations for determining
reimbursement rates for mental health
and substance use disorder benefits are
not more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
classification under paragraph (c)(4)(i)
of this section. As written, for mental
health, substance use disorder, and
medical/surgical benefits, all
reimbursement rates for physicians and
non-physician practitioners for the same
Current Procedural Terminology (CPT)
code vary based on a combination of
factors, such as the nature of the service,
provider type, number of providers
qualified to provide the service in a
given geographic area, and market need
(demand). As a result, reimbursement
rates for mental health, substance use
disorder, and medical/surgical benefits
furnished by non-physician providers
are generally less than for physician
providers. In operation, the plan
reduces the reimbursement rate for
mental health and substance use
disorder non-physician providers from
that paid to mental health and substance
use disorder physicians by the same
percentage for every CPT code but does
not apply the same reductions for nonphysician medical/surgical providers.
(2) Conclusion. In this paragraph
(c)(4)(viii)(D) (Example 4), the plan
violates the rules of paragraph (c)(4)(ii)
of this section. Because the plan
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51629
reimburses non-physician providers of
mental health and substance use
disorder services by reducing their
reimbursement rate from the rate to
physician providers by the same
percentage for every CPT code but does
not apply the same reductions to nonphysician providers of medical/surgical
services, in operation, the factors used
in applying the nonquantitative
treatment limitation to mental health
and substance use disorder benefits are
not comparable to, and are applied more
stringently than, the factors used in
applying the limitation with respect to
medical/surgical benefits. Because the
facts assume that the plan’s methods for
determining reimbursement rates
comply with paragraph (c)(4)(i) of this
section and the plan violates the rules
of paragraph (c)(4)(ii) of this section,
this example does not analyze
compliance with paragraph (c)(4)(iv) of
this section.
(E) Example 5 (Exception for
impartially applied generally recognized
independent professional medical or
clinical standards)—(1) Facts. A group
health plan develops a medical
management requirement for all
inpatient, out-of-network benefits for
both medical/surgical benefits and
mental health and substance use
disorder benefits to ensure treatment is
medically necessary. The medical
management requirement impartially
applies independent professional
medical or clinical standards in a
manner that qualifies for the exception
in paragraph (c)(4)(i)(E) of this section.
The plan does not rely on any other
factors or evidentiary standards and the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the medical
management requirement to mental
health and substance use disorder
benefits are comparable to, and are
applied no more stringently than, the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the requirement
with respect to medical/surgical
benefits. Within the inpatient, out-ofnetwork classification, the application
of the medical management requirement
results in a higher percentage of denials
for mental health and substance use
disorder claims than medical/surgical
claims, because the benefits were found
to be medically necessary for a lower
percentage of mental health and
substance use disorder claims based on
the impartial application of the
independent professional medical or
clinical standards by the
nonquantitative treatment limitation.
(2) Conclusion. In this paragraph
(c)(4)(viii)(E) (Example 5), the plan does
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not violate the rules of this paragraph
(c)(4). The medical management
nonquantitative treatment limitation
imposed on mental health and
substance use disorder benefits does not
violate paragraph (c)(4)(i) or (iv) of this
section because it impartially applies
independent professional medical or
clinical standards for both medical/
surgical benefits and mental health and
substance use disorder benefits in a
manner that qualifies for the exceptions
in paragraphs (c)(4)(i)(E) and
(c)(4)(iv)(D) of this section, respectively.
Moreover, the nonquantitative treatment
limitation does not violate paragraph
(c)(4)(ii) of this section because the
independent professional medical or
clinical standards are not considered to
be a discriminatory factor or evidentiary
standard under paragraph (c)(4)(ii)(B) of
this section. Additionally, as written
and in operation, the processes,
strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits in the inpatient,
out-of-network classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, and
other factors used in applying the
limitation with respect to medical/
surgical benefits in the classification,
regardless of the fact that the
application of the nonquantitative
treatment limitation resulted in higher
percentages of claim denials for mental
health and substance use disorder
benefits as compared to medical/
surgical benefits.
(F) Example 6 (More restrictive prior
authorization requirement; exception
for impartially applied generally
recognized independent professional
medical or clinical standards not met)—
(1) Facts. The provisions of a plan state
that it applies independent professional
medical and clinical standards
(consistent with generally accepted
standards of care) for setting prior
authorization requirements for both
medical/surgical and mental health and
substance use disorder prescription
drugs. The relevant generally recognized
independent professional medical
standard for treatment of opioid use
disorder that the plan utilizes—in this
case, the American Society of Addiction
Medicine national practice guidelines—
does not support prior authorization
every 30 days for buprenorphine/
naloxone. However, in operation, the
plan requires prior authorization for
buprenorphine/naloxone combination at
each refill (every 30 days) for treatment
of opioid use disorder.
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(2) Conclusion. In this paragraph
(c)(4)(viii)(F) (Example 6), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The plan does not
qualify for the exception in paragraph
(c)(4)(i)(E) of this section, because,
although the provisions of the plan state
that it applies independent professional
medical and clinical standards, the plan
deviates from the relevant standards
with respect to prescription drugs to
treat opioid use disorder. The prior
authorization nonquantitative treatment
limitation is applied to at least twothirds of all medical/surgical benefits in
the prescription drugs classification.
The most common or frequent variation
of this nonquantitative treatment
limitation (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is following generally
recognized independent professional
medical and clinical standards
(consistent with generally accepted
standards of care). The prior
authorization requirements imposed on
substance use disorder benefits are more
restrictive than the predominant
nonquantitative treatment limitation
applicable to substantially all medical/
surgical benefits in the classification,
because the plan imposes additional
requirements on substance use disorder
benefits that limit access to the full
range of treatment options available for
a condition or disorder under the plan
as compared to medical/surgical
benefits in the same classification.
Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this
example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this
section.
(G) Example 7 (Impermissible
nonquantitative treatment limitation
imposed following a final determination
of noncompliance and direction by the
Secretary)—(1) Facts. Following an
initial request by the Secretary for a
plan’s comparative analysis of a
nonquantitative treatment limitation
pursuant to § 54.9812–2(d), the plan
submits a comparative analysis for the
nonquantitative treatment limitation.
After review of the comparative
analysis, the Secretary makes an initial
determination that the comparative
analysis fails to demonstrate that the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in the relevant classification are
comparable to, and applied no more
stringently than, those used in designing
and applying the limitation to medical/
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surgical benefits in the classification.
Pursuant to § 54.9812–2(d)(3), the plan
submits a corrective action plan and
additional comparative analyses within
45 calendar days after the initial
determination, and the Secretary then
determines that the additional
comparative analyses do not
demonstrate compliance with the
requirements of this paragraph (c)(4).
The plan receives a final determination
of noncompliance from the Secretary,
which informs the plan that it is not in
compliance with this paragraph (c)(4)
and directs the plan not to impose the
nonquantitative treatment limitation by
a certain date, unless and until the plan
demonstrates compliance to the
Secretary or takes appropriate action to
remedy the violation. The plan makes
no changes to its plan terms by that date
and continues to impose the
nonquantitative treatment limitation.
(2) Conclusion. In this paragraph
(c)(4)(viii)(G) (Example 7), the plan
violates the requirements of this
paragraph (c)(4) by imposing the
nonquantitative treatment limitation
after the Secretary directs the plan not
to impose it, pursuant to paragraph
(c)(4)(vii) of this section.
(H) Example 8 (Provider network
admission standards not more
restrictive and compliant with
requirements for design and application
of NQTLs)—(1) Facts. As part of a plan’s
standards for provider admission to its
network, in the outpatient, in-network
classification, any provider seeking to
contract with the plan must have a
certain number of years of supervised
clinical experience. As a result of that
standard, master’s level mental health
therapists are required to obtain
supervised clinical experience beyond
their licensure, while master’s level
medical/surgical providers,
psychiatrists, and Ph.D.-level
psychologists do not require additional
experience beyond their licensure
because their licensure already requires
supervised clinical experience. The plan
collects and evaluates relevant data in a
manner reasonably designed to assess
the impact of the nonquantitative
treatment limitation. This includes innetwork and out-of-network utilization
rates (including data related to provider
claim submissions), network adequacy
metrics (including time and distance
data, and data on providers accepting
new patients), and provider
reimbursement rates (including as
compared to billed charges). This data
demonstrates that participants and
beneficiaries seeking outpatient care are
able to access outpatient, in-network
mental health and substance use
disorder providers at the same
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frequency as outpatient, in-network
medical/surgical providers, that mental
health and substance use disorder
providers are active in the network and
are accepting new patients to the same
extent as medical/surgical providers,
and that mental health and substance
use disorder providers are within
similar time and distances to plan
participants and beneficiaries as are
medical/surgical providers. This data
also does not identify material
differences in what the plan pays
psychiatrists or non-physician mental
health providers, compared to
physicians or non-physician medical/
surgical providers, respectively, both for
the same reimbursement codes and as
compared to Medicare rates.
(2) Conclusion. In this paragraph
(c)(4)(viii)(H) (Example 8), the plan does
not violate this paragraph (c)(4). The
standards for this nonquantitative
treatment limitation, namely provider
admission to the plan’s network, are
applied to at least two-thirds of all
medical/surgical benefits in the
outpatient, in-network classification, as
it applies to all medical/surgical
benefits in the classification. The most
common or frequent variation of this
nonquantitative treatment limitation
(the predominant nonquantitative
treatment limitation) that applies to
substantially all medical/surgical
benefits in the classification is having a
certain number of years of supervised
clinical experience. The standards for
provider admission to the plan’s
network that are imposed with respect
to mental health or substance use
disorder benefits are no more restrictive,
as written or in operation, than the
predominant variation of the
nonquantitative treatment limitation
applicable to substantially all medical/
surgical benefits in the classification,
because the standards do not limit
access to the full range of treatment
options available for a condition or
disorder under the plan as compared to
medical/surgical benefits in the same
classification. The requirement that
providers have a certain number of
years of supervised clinical experience
that the plan relied upon to design and
apply the nonquantitative treatment
limitation is not considered to
discriminate against mental health or
substance use disorder benefits, even
though this results in the requirement
that master’s level mental health
therapists obtain supervised clinical
experience beyond their licensure,
unlike master’s level medical/surgical
providers. In addition, as written and in
operation, the processes, strategies,
evidentiary standards, or other factors
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used in applying the nonquantitative
treatment limitation to mental health or
substance use disorder benefits in the
classification are comparable to, and are
applied no more stringently than, the
processes, strategies, evidentiary
standards, or other factors used in
applying the limitation with respect to
medical/surgical benefits in the
classification, because the plan applies
the same standard to all providers in the
classification. Finally, the plan collects
and evaluates relevant data in a manner
reasonably designed to assess the
impact of the nonquantitative treatment
limitation on access to mental health
and substance use disorder benefits,
which does not show material
differences in access to in-network
mental health and substance use
disorder benefits as compared to innetwork medical/surgical benefits in the
classification.
(I) Example 9 (More restrictive
requirement for primary caregiver
participation applied to ABA therapy)—
(1) Facts. A plan generally applies
medical necessity criteria in
adjudicating claims for coverage of all
outpatient, in-network medical/surgical
and mental health and substance use
disorder benefits, including ABA
therapy for the treatment of ASD, which
is a mental health condition. The plan’s
medical necessity criteria for coverage
of ABA therapy requires evidence that
the participant’s or beneficiary’s
primary caregivers actively participate
in ABA therapy, as documented by
consistent attendance in parent,
caregiver, or guardian training sessions.
In adding this requirement, the plan
deviates from independent professional
medical or clinical standards, and there
are no similar medical necessity criteria
requiring evidence of primary caregiver
participation in order to receive
coverage of any medical/surgical
benefits.
(2) Conclusion. In this paragraph
(c)(4)(viii)(I) (Example 9), the plan
violates paragraph (c)(4)(i) of this
section. The plan applies medical
necessity criteria to at least two-thirds of
all outpatient, in-network medical/
surgical benefits, as they apply to all
medical/surgical benefits in the
classification. The most common or
frequent variation of this
nonquantitative treatment limitation
(the predominant nonquantitative
treatment limitation) that applies to
substantially all medical/surgical
benefits in the classification does not
include the requirement to provide
evidence that the participant’s or
beneficiary’s primary caregivers actively
participate in the treatment. The plan
does not qualify for the exception in
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paragraph (c)(4)(i)(E) of this section in
applying its restriction on coverage for
ABA therapy because the plan deviates
from the independent professional
medical or clinical standards by
imposing a different requirement. As a
result, the nonquantitative treatment
limitation imposed on mental health
and substance use disorder benefits is
more restrictive than the predominant
medical necessity requirement imposed
on substantially all medical/surgical
benefits in the classification (which
does not include the requirement to
provide evidence that primary
caregivers actively participate in
treatment). Because the plan violates the
rules of paragraph (c)(4)(i) of this
section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(J) Example 10 (More restrictive
exclusion for experimental or
investigative treatment applied to ABA
therapy)—(1) Facts. A plan, as written,
generally excludes coverage for all
treatments that are experimental or
investigative for both medical/surgical
benefits and mental health and
substance use disorder benefits in the
outpatient, in-network classification. As
a result, the plan generally excludes
experimental treatment of medical
conditions and surgical procedures,
mental health conditions, and substance
use disorders when no professionally
recognized treatment guidelines define
clinically appropriate standards of care
for the condition or disorder and fewer
than two randomized controlled trials
are available to support the treatment’s
use with respect to the given condition
or disorder. The plan provides benefits
for the treatment of ASD, which is a
mental health condition, but, in
operation, the plan excludes coverage
for ABA therapy to treat children with
ASD, deeming it experimental. More
than one professionally recognized
treatment guideline defines clinically
appropriate standards of care for ASD
and more than two randomized
controlled trials are available to support
the use of ABA therapy to treat certain
children with ASD.
(2) Conclusion. In this paragraph
(c)(4)(viii)(J) (Example 10), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The coverage exclusion
for experimental or investigative
treatment applies to at least two-thirds
of all medical/surgical benefits, as it
applies to all medical/surgical benefits
in the outpatient, in-network
classification. The most common or
frequent variation of this
nonquantitative treatment limitation in
the classification (the predominant
nonquantitative treatment limitation)
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applicable to substantially all medical/
surgical benefits is the exclusion under
the plan for coverage of experimental
treatment of medical/surgical conditions
when no professionally recognized
treatment guidelines define clinically
appropriate standards of care for the
condition or disorder and fewer than
two randomized controlled trials are
available to support the treatment’s use
with respect to the given condition or
procedure. In operation, the exclusion
for experimental or investigative
treatment imposed on ABA therapy is
more restrictive than the predominant
variation of the nonquantitative
treatment limitation for experimental or
investigative treatment imposed on
substantially all medical/surgical
benefits in the classification because the
exclusion limits access to the full range
of treatment options available for a
condition or disorder under the plan as
compared to medical/surgical benefits
in the same classification. Because the
plan violates the rules of paragraph
(c)(4)(i) of this section, this example
does not analyze compliance with
paragraph (c)(4)(ii) or (iv) of this section.
(K) Example 11 (Separate EAP
exhaustion treatment limitation
applicable only to mental health
benefits)—(1) Facts. An employer
maintains both a major medical plan
and an employee assistance program
(EAP). The EAP provides, among other
benefits, a limited number of mental
health or substance use disorder
counseling sessions, which, together
with other benefits provided by the
EAP, are not significant benefits in the
nature of medical care. Participants are
eligible for mental health or substance
use disorder benefits under the major
medical plan only after exhausting the
counseling sessions provided by the
EAP. No similar exhaustion requirement
applies with respect to medical/surgical
benefits provided under the major
medical plan.
(2) Conclusion. In this paragraph
(c)(4)(viii)(K) (Example 11), limiting
eligibility for mental health and
substance use disorder benefits under
the major medical plan until EAP
benefits are exhausted is a
nonquantitative treatment limitation
subject to the parity requirements of this
paragraph (c). Because the limitation
does not apply to medical/surgical
benefits, it is a separate nonquantitative
treatment limitation applicable only to
mental health and substance use
disorder benefits that violates paragraph
(c)(4)(vi) of this section. Additionally,
this EAP would not qualify as excepted
benefits under § 54.9831–
1(c)(3)(vi)(B)(1) because participants in
the major medical plan are required to
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use and exhaust benefits under the EAP
(making the EAP a gatekeeper) before an
individual is eligible for benefits under
the plan.
(L) Example 12 (Separate residential
exclusion treatment limitation
applicable only to mental health
benefits)—(1) Facts. A plan generally
covers inpatient, in-network and
inpatient out-of-network treatment in
any setting, including skilled nursing
facilities and rehabilitation hospitals,
provided other medical necessity
standards are satisfied. The plan also
has an exclusion for residential
treatment, which the plan defines as an
inpatient benefit, for mental health and
substance use disorder benefits. This
exclusion was not generated through
any broader nonquantitative treatment
limitation (such as medical necessity or
other clinical guideline).
(2) Conclusion. In this paragraph
(c)(4)(viii)(L) (Example 12), the plan
violates the rules of paragraph (c)(4)(vi)
of this section. Because the plan does
not apply a comparable exclusion to
inpatient benefits for medical/surgical
conditions, the exclusion of residential
treatment is a separate nonquantitative
treatment limitation applicable only to
mental health and substance use
disorder benefits in the inpatient, innetwork and inpatient, out-of-network
classifications that does not apply with
respect to any medical/surgical benefits
in the same benefit classification.
(M) Example 13 (Standards for
provider admission to a network)—(1)
Facts. A plan applies nonquantitative
treatment limitations related to network
composition in the outpatient innetwork and inpatient, in-network
classifications. The plan’s networks are
constructed by separate service
providers for medical/surgical benefits
and mental health and substance use
disorder benefits. For purposes of this
example, these facts assume that these
nonquantitative treatment limitations
related to network composition for
mental health and substance use
disorder benefits are not more restrictive
than the predominant nonquantitative
treatment limitations applied to
substantially all medical/surgical
benefits in the classifications under
paragraph (c)(4)(i) of this section. The
facts also assume that, as written and in
operation, the processes, strategies,
evidentiary standards, and other factors
used in designing and applying the
nonquantitative treatment limitations
related to network access to mental
health or substance use disorder
benefits in the outpatient in-network
and inpatient in-network classifications
are comparable to, and are applied no
more stringently than, the processes,
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strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitations with respect to medical/
surgical benefits in the classifications,
as required under paragraph (c)(4)(ii) of
this section. The plan collects and
evaluates all relevant data in a manner
reasonably designed to assess the
impact of the nonquantitative treatment
limitations related to network
composition on access to mental health
and substance use disorder benefits as
compared with access to medical/
surgical benefits and considers the
impact as part of the plan’s analysis of
whether the standards, in operation,
comply with paragraphs (c)(4)(i) and (ii)
of this section. The plan determined
that the data did not reveal any material
differences in access. That data
included metrics relating to the time
and distance from plan participants and
beneficiaries to network providers in
rural and urban regions; the number of
network providers accepting new
patients; the proportions of mental
health and substance use disorder and
medical/surgical providers and facilities
that provide services in rural and urban
regions who are in the plan’s network;
provider reimbursement rates; innetwork and out-of-network utilization
rates (including data related to the
dollar value and number of provider
claims submissions); and survey data
from participants on the extent to which
they forgo or pay out-of-pocket for
treatment because of challenges finding
in-network providers. The efforts the
plan made when designing and
applying its nonquantitative treatment
limitations related to network
composition, which ultimately led to its
outcomes data not revealing any
material differences in access to benefits
for mental health or substance use
disorders as compared with medical/
surgical benefits, included making sure
that the plan’s service providers are
making special efforts to enroll available
providers, including by authorizing
greater compensation or other
inducements to the extent necessary,
and expanding telehealth arrangements
as appropriate to manage regional
shortages. The plan also notifies
participants in clear and prominent
language on its website, employee
brochures, and the summary plan
description of a toll-free number
available to help participants find innetwork providers. In addition, when
plan participants submit bills for out-ofnetwork items and services, the plan
directs their service providers to reach
out to the treating providers and
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facilities to see if they will enroll in the
network.
(2) Conclusion. In this paragraph
(c)(4)(viii)(M) (Example 13), the plan
does not violate this paragraph (c)(4). As
stated in the Facts section, the plan’s
nonquantitative treatment limitations
related to network composition comply
with the rules of paragraphs (c)(4)(i) and
(ii) of this section. The plan collects and
evaluates relevant data, as required
under paragraph (c)(4)(iv)(A) of this
section, and the data does not reveal any
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits, as a result of the
actions the plan took (as set forth in the
facts) when initially designing its
nonquantitative treatment limitations
related to network composition. Because
the plan takes comparable actions to
ensure that their mental health and
substance use disorder provider
network is as accessible as their
medical/surgical provider network and
exercises careful oversight over both
their service providers and the
comparative robustness of the networks
with an eye to ensuring that network
composition results in access to innetwork benefits for mental health and
substance use disorder services that is
as generous as for medical/surgical
services, plan participants and
beneficiaries can access covered mental
health and substance use disorder
services and benefits as readily as
medical/surgical benefits. This is
reflected in the plan’s carefully
designed metrics and assessment of
network composition.
*
*
*
*
*
(d) * * *
(3) Provisions of other law.
Compliance with the disclosure
requirements in paragraphs (d)(1) and
(2) of this section is not determinative
of compliance with any other provision
of applicable Federal or State law. In
particular, in addition to those
disclosure requirements, provisions of
other applicable law require disclosure
of information relevant to medical/
surgical, mental health, and substance
use disorder benefits. For example,
ERISA section 104 and 29 CFR
2520.104b–1 provide that, for plans
subject to ERISA, instruments under
which the plan is established or
operated must generally be furnished to
plan participants within 30 days of
request. Instruments under which the
plan is established or operated include
documents with information on medical
necessity criteria for both medical/
surgical benefits and mental health and
substance use disorder benefits; the
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processes, strategies, evidentiary
standards, and other factors used to
apply a nonquantitative treatment
limitation with respect to medical/
surgical benefits and mental health or
substance use disorder benefits under
the plan; and the comparative analyses
and other applicable information
required by § 54.9812–2. In addition, 29
CFR 2560.503–1 and § 54.9815–2719T
set forth rules regarding claims and
appeals, including the right of claimants
(or their authorized representative)
upon appeal of an adverse benefit
determination (or a final internal
adverse benefit determination) to be
provided upon request and free of
charge, reasonable access to and copies
of all documents, records, and other
information relevant to the claimant’s
claim for benefits. This includes
documents with information on medical
necessity criteria for both medical/
surgical benefits and mental health and
substance use disorder benefits, as well
as the processes, strategies, evidentiary
standards, and other factors used to
apply a nonquantitative treatment
limitation with respect to medical/
surgical benefits and mental health or
substance use disorder benefits under
the plan and the comparative analyses
and other applicable information
required by § 54.9812–2.
(e) * * *
(4) Coordination with EHB
requirements. Nothing in paragraph (f)
or (g) of this section or § 54.9812–2(g)
changes the requirements of 45 CFR
147.150 and 156.115, providing that a
health insurance issuer offering nongrandfathered health insurance coverage
in the individual or small group market
providing mental health and substance
use disorder services, including
behavioral health treatment services, as
part of essential health benefits required
under 45 CFR 156.110(a)(5) and
156.115(a), must comply with the
requirements under section 2726 of the
Public Health Service Act and its
implementing regulations to satisfy the
requirement to provide coverage for
mental health and substance use
disorder services, including behavioral
health treatment, as part of essential
health benefits.
*
*
*
*
*
(i) * * *
(1) In general. Except as provided in
paragraph (i)(2) of this section, this
section applies to group health plans on
the first day of the first plan year
beginning on or after January 1, 2025.
Until the applicability date in the
preceding sentence, plans are required
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to continue to comply with 26 CFR
54.9812–1, revised as of April 1, 2023.
*
*
*
*
*
(j) Severability. If any provision of this
section is held to be invalid or
unenforceable by its terms, or as applied
to any person or circumstance, or stayed
pending further agency action, the
provision shall be construed so as to
continue to give the maximum effect to
the provision permitted by law, unless
such holding shall be one of invalidity
or unenforceability, in which event the
provision shall be severable from this
section and shall not affect the
remainder thereof or the application of
the provision to persons not similarly
situated or to dissimilar circumstances.
■ 3. Add § 54.9812–2 to read as follows:
§ 54.9812–2 Nonquantitative treatment
limitation comparative analysis
requirements.
(a) Meaning of terms. Unless
otherwise stated in this section, the
terms of this section have the meanings
indicated in § 54.9812–1(a)(2).
(b) In general. In the case of a group
health plan that provides both medical/
surgical benefits and mental health or
substance use disorder benefits and that
imposes any nonquantitative treatment
limitation on mental health or substance
use disorder benefits, the plan must
perform and document a comparative
analysis of the design and application of
each nonquantitative treatment
limitation applicable to mental health or
substance use disorder benefits. Each
comparative analysis must comply with
the content requirements of paragraph
(c) of this section and be made available
to the Secretary, upon request, in the
manner required by paragraphs (d) and
(e) of this section.
(c) Comparative analysis content
requirements. With respect to each
nonquantitative treatment limitation
applicable to mental health or substance
use disorder benefits under a group
health plan, the comparative analysis
performed by the plan must include, at
minimum, the elements specified in this
paragraph (c). In addition to the
comparative analysis for each
nonquantitative treatment limitation,
each plan must prepare and make
available to the Secretary, upon request,
a written list of all nonquantitative
treatment limitations imposed under the
plan and a general description of any
information considered or relied upon
by the plan in preparing the
comparative analysis for each
nonquantitative treatment limitation.
(1) Description of the nonquantitative
treatment limitation. The comparative
analysis must include, with respect to
the nonquantitative treatment limitation
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that is the subject of the comparative
analysis:
(i) Identification of the
nonquantitative treatment limitation,
including the specific terms of the plan
or other relevant terms regarding the
nonquantitative treatment limitation,
the policies or guidelines (internal or
external) in which the nonquantitative
treatment limitation appears or is
described, and the applicable sections of
any other relevant documents, such as
provider contracts, that describe the
nonquantitative treatment limitation;
(ii) Identification of all mental health
or substance use disorder benefits and
medical/surgical benefits to which the
nonquantitative treatment limitation
applies, including a list of which
benefits are considered mental health or
substance use disorder benefits and
which benefits are considered medical/
surgical benefits;
(iii) A description of which benefits
are included in each classification set
forth in § 54.9812–1(c)(2)(ii)(A); and
(iv) Identification of the predominant
nonquantitative treatment limitation
applicable to substantially all medical/
surgical benefits in each classification,
including an explanation of how the
plan determined which variation is the
predominant nonquantitative treatment
limitation as compared to other
variations, as well as how the plan
identified the variations of the
nonquantitative treatment limitation.
(2) Identification and definition of the
factors used to design or apply the
nonquantitative treatment limitation.
The comparative analysis must include,
with respect to every factor considered
or relied upon to design the
nonquantitative treatment limitation or
apply the nonquantitative treatment
limitation to mental health or substance
use disorder benefits and medical/
surgical benefits:
(i) Identification of all of the factors
considered, as well as the evidentiary
standards considered or relied upon to
design or apply each factor and the
sources from which each evidentiary
standard was derived, in determining
which mental health or substance use
disorder benefits and which medical/
surgical benefits are subject to the
nonquantitative treatment limitation;
and
(ii) A definition of each factor,
including:
(A) A detailed description of the
factor; and
(B) A description of each evidentiary
standard (and the source of each
evidentiary standard) identified under
paragraph (c)(2)(i) of this section.
(3) Description of how factors are
used in the design and application of
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the nonquantitative treatment
limitation. The comparative analysis
must include a description of how each
factor identified and defined pursuant
to paragraph (c)(2) of this section is used
in the design or application of the
nonquantitative treatment limitation to
mental health and substance use
disorder benefits and medical/surgical
benefits in a classification, including:
(i) A detailed explanation of how each
factor identified and defined in
paragraph (c)(2) of this section is used
to determine which mental health or
substance use disorder benefits and
which medical/surgical benefits are
subject to the nonquantitative treatment
limitation;
(ii) An explanation of the evidentiary
standards or other information or
sources (if any) considered or relied
upon in designing or applying the
factors or relied upon in designing and
applying the nonquantitative treatment
limitation, including in the
determination of whether and how
mental health or substance use disorder
benefits or medical/surgical benefits are
subject to the nonquantitative treatment
limitation;
(iii) If the application of the factor
depends on specific decisions made in
the administration of benefits, the
nature of the decisions, the timing of the
decisions, and the professional
designation and qualifications of each
decision maker;
(iv) If more than one factor is
identified and defined in paragraph
(c)(2) of this section, an explanation of:
(A) How all of the factors relate to
each other;
(B) The order in which all the factors
are applied, including when they are
applied;
(C) Whether and how any factors are
given more weight than others; and
(D) The reasons for the ordering or
weighting of the factors; and
(v) Any deviation(s) or variation(s)
from a factor, its applicability, or its
definition (including the evidentiary
standards used to define the factor and
the information or sources from which
each evidentiary standard was derived),
such as how the factor is used
differently to apply the nonquantitative
treatment limitation to mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
and a description of how the plan
establishes such deviation(s) or
variation(s).
(4) Demonstration of comparability
and stringency as written. The
comparative analysis must evaluate
whether, in any classification, under the
terms of the plan as written, any
processes, strategies, evidentiary
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standards, or other factors used in
designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits are comparable to, and are
applied no more stringently than, the
processes, strategies, evidentiary
standards, or other factors used in
designing and applying the
nonquantitative treatment limitation
with respect to medical/surgical
benefits. The comparative analysis must
include, with respect to the
nonquantitative treatment limitation
and the factors used in designing and
applying the nonquantitative treatment
limitation:
(i) Documentation of each factor
identified and defined in paragraph
(c)(2) of this section that was applied to
determine whether the nonquantitative
treatment limitation applies to mental
health or substance use disorder
benefits and medical/surgical benefits in
a classification, including, as relevant:
(A) Quantitative data, calculations, or
other analyses showing whether, in each
classification in which the
nonquantitative treatment limitation
applies, mental health or substance use
disorder benefits and medical/surgical
benefits met or did not meet any
applicable threshold identified in the
relevant evidentiary standard, and the
evaluation of relevant data as required
under § 54.9812–1(c)(4)(iv)(A), to
determine that the nonquantitative
treatment limitation would or would not
apply; and
(B) Records maintained by the plan
documenting the consideration and
application of all factors and evidentiary
standards, as well as the results of their
application;
(ii) In each classification in which the
nonquantitative treatment limitation
applies to mental health or substance
use disorder benefits, a comparison of
how the nonquantitative treatment
limitation, as written, is applied to
mental health or substance use disorder
benefits and to medical/surgical
benefits, including the specific
provisions of any forms, checklists,
procedure manuals, or other
documentation used in designing and
applying the nonquantitative treatment
limitation or that address the
application of the nonquantitative
treatment limitation;
(iii) Documentation demonstrating
how the factors are comparably applied,
as written, to mental health or substance
use disorder benefits and medical/
surgical benefits in each classification,
to determine which benefits are subject
to the nonquantitative treatment
limitation; and
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(iv) An explanation of the reason(s)
for any deviation(s) or variation(s) in the
application of a factor used to apply the
nonquantitative treatment limitation, or
the application of the nonquantitative
treatment limitation, to mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
and how the plan establishes such
deviation(s) or variation(s), including:
(A) In the definition of the factors, the
evidentiary standards used to define the
factors, and the sources from which the
evidentiary standards were derived;
(B) In the design of the factors or
evidentiary standards; or
(C) In the application or design of the
nonquantitative treatment limitation.
(5) Demonstration of comparability
and stringency in operation. The
comparative analysis must evaluate
whether, in any classification, under the
terms of the plan in operation, the
processes, strategies, evidentiary
standards, or other factors used in
designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits are comparable to, and are
applied no more stringently than, the
processes, strategies, evidentiary
standards, or other factors used in
designing and applying the limitation
with respect to medical/surgical
benefits. The comparative analysis must
include, with respect to the
nonquantitative treatment limitation
and the factors used in designing and
applying the nonquantitative treatment
limitation:
(i) A comprehensive explanation of
how the plan ensures that, in operation,
the processes, strategies, evidentiary
standards, or other factors used in
designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in a classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the nonquantitative treatment
limitation with respect to medical/
surgical benefits, including:
(A) An explanation of any
methodology and underlying data used
to demonstrate the application of the
nonquantitative treatment limitation, in
operation; and
(B) The sample period, inputs used in
any calculations, definitions of terms
used, and any criteria used to select the
mental health or substance use disorder
benefits and medical/surgical benefits to
which the nonquantitative treatment
limitation is applicable;
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(ii) Identification of the relevant data
collected and evaluated as required
under § 54.9812–1(c)(4)(iv)(A);
(iii) An evaluation of the outcomes
that resulted from the application of the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits and medical/surgical benefits,
including the relevant data as required
under § 54.9812–1(c)(4)(iv)(A);
(iv) A detailed explanation of material
differences in outcomes evaluated
pursuant to paragraph (c)(5)(iii) of this
section that are not attributable to
differences in the comparability or
relative stringency of the
nonquantitative treatment limitation as
applied to mental health or substance
use disorder benefits and medical/
surgical benefits and the bases for
concluding that material differences in
outcomes are not attributable to
differences in the comparability or
relative stringency of the
nonquantitative treatment limitation;
and
(v) A discussion of any measures that
have been or are being implemented by
the plan to mitigate any material
differences in access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
including the actions the plan is taking
under § 54.9812–1(c)(4)(iv)(B)(1) to
address material differences to ensure
compliance with § 54.9812–1(c)(4)(i)
and (ii).
(6) Findings and conclusions. The
comparative analysis must address the
findings and conclusions as to the
comparability of the processes,
strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits and medical/
surgical benefits within each
classification, and the relative
stringency of their application, both as
written and in operation, and include:
(i) Any findings or conclusions
indicating that the plan is not (or might
not be) in compliance with the
requirements of § 54.9812–1(c)(4),
including any actions the plan has taken
or intends to take to address any
potential areas of concern or
noncompliance;
(ii) A reasoned and detailed
discussion of the findings and
conclusions described in paragraph
(c)(6)(i) of this section;
(iii) Citations to any additional
specific information not otherwise
included in the comparative analysis
that supports the findings and
conclusions described in paragraph
(c)(6)(i) of this section;
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51635
(iv) The date of the analysis and the
title and credentials of all relevant
persons who participated in the
performance and documentation of the
comparative analysis; and
(v) If the comparative analysis relies
upon an evaluation by a reviewer or
consultant considered by the plan to be
an expert, an assessment of each
expert’s qualifications and the extent to
which the plan ultimately relied upon
each expert’s evaluation in performing
and documenting the comparative
analysis of the design and application of
each nonquantitative treatment
limitation applicable to both mental
health or substance use disorder
benefits and medical/surgical benefits.
(d) Requirements related to
submission of comparative analyses to
the Secretary upon request—(1) Initial
request by the Secretary for comparative
analysis. A group health plan must
make the comparative analysis required
by paragraph (b) of this section available
and submit it to the Secretary within 10
business days of receipt of a request
from the Secretary (or an additional
period of time specified by the
Secretary).
(2) Additional information required
after a comparative analysis is deemed
to be insufficient. In instances in which
the Secretary determines that the plan
has not submitted sufficient information
under paragraph (d)(1) of this section for
the Secretary to review the comparative
analysis required in paragraph (b) of this
section, the Secretary will specify to the
plan the additional information the plan
must submit to the Secretary to be
responsive to the request under
paragraph (d)(1) of this section. Any
such information must be provided to
the Secretary by the plan within 10
business days after the Secretary
specifies the additional information to
be submitted (or an additional period of
time specified by the Secretary).
(3) Initial determination of
noncompliance, required action, and
corrective action plan. In instances in
which the Secretary reviewed the
comparative analysis submitted under
paragraph (d)(1) of this section and any
additional information submitted under
paragraph (d)(2) of this section, and
made an initial determination that the
plan is not in compliance with the
requirements of § 54.9812–1(c)(4) or this
section, the plan must respond to the
Secretary and specify the actions the
plan will take to bring the plan into
compliance, and provide to the
Secretary additional comparative
analyses meeting the requirements of
paragraph (b) of this section that
demonstrate compliance with
§ 54.9812–1(c)(4) and this section, not
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later than 45 calendar days after the
Secretary’s initial determination that the
plan is not in compliance.
(4) Requirement to notify participants
and beneficiaries of final determination
of noncompliance—(i) In general. If the
Secretary makes a final determination of
noncompliance, the plan must notify all
participants and beneficiaries enrolled
in the plan that the plan has been
determined to not be in compliance
with the requirements of § 54.9812–
1(c)(4) or this section with respect to
such plan. Such notice must be
provided within 7 calendar days of
receipt of the final determination of
noncompliance, and the plan must
provide a copy of the notice to the
Secretary, and any service provider
involved in the claims process.
(ii) Content of notice. The notice to
participants and beneficiaries required
in paragraph (d)(4)(i) of this section
shall be written in a manner calculated
to be understood by the average plan
participant and must include, in plain
language, the following information in a
standalone notice:
(A) The following statement
prominently displayed on the first page,
in no less than 14-point font:
‘‘Attention! Department of the Treasury
has determined that [insert the name of
group health plan] is not in compliance
with the Mental Health Parity and
Addiction Equity Act.’’;
(B) A summary of changes the plan
has made as part of its corrective action
plan specified to the Secretary following
the initial determination of
noncompliance, including an
explanation of any opportunity for a
participant or beneficiary to have a
claim for benefits reprocessed;
(C) A summary of the Secretary’s final
determination that the plan is not in
compliance with § 54.9812–1(c)(4) or
this section, including any provisions or
practices identified as being in violation
of MHPAEA, additional corrective
actions identified by the Secretary in the
final determination notice, and
information on how participants and
beneficiaries can obtain from the plan a
copy of the final determination of
noncompliance;
(D) Any additional actions the plan is
taking to come into compliance with
§ 54.9812–1(c)(4) or this section, when
the plan will take such actions, and a
clear and accurate statement explaining
whether the Secretary has indicated that
those actions, if completed, will result
in compliance; and
(E) Contact information for questions
and complaints, and a statement
explaining how participants and
beneficiaries can obtain more
information about the notice, including:
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(1) The plan’s phone number and an
email or web portal address; and
(2) The Employee Benefits Security
Administration’s phone number and
email or web portal address.
(iii) Manner of notice. The plan must
make the notice required under
paragraph (d)(4)(i) of this section
available in paper form, or
electronically (such as by email or an
internet posting) if:
(A) The format is readily accessible;
(B) The notice is provided in paper
form free of charge upon request; and
(C) In a case in which the electronic
form is an internet posting, the plan
timely notifies the participant or
beneficiary in paper form (such as a
postcard) or email, that the documents
are available on the internet, provides
the internet address, includes the
statement required in paragraph
(d)(4)(ii)(A) of this section, and notifies
the participant or beneficiary that the
documents are available in paper form
upon request.
(e) Requests for a copy of a
comparative analysis. In addition to
making a comparative analysis available
upon request to the Secretary, a plan
must make available a copy of the
comparative analysis required by
paragraph (b) of this section when
requested by:
(1) Any applicable State authority;
and
(2) A participant or beneficiary (or a
provider or other person acting as a
participant’s or beneficiary’s authorized
representative) who has received an
adverse benefit determination related to
mental health or substance use disorder
benefits.
(f) Rule of construction. Nothing in
this section or § 54.9812–1 shall be
construed to prevent the Secretary from
acting within the scope of existing
authorities to address violations of
§ 54.9812–1 or this section.
(g) Applicability. The provisions of
this section apply to group health plans
described in § 54.9812–1(e), to the
extent the plan is not exempt under
§ 54.9812–1(f) or (g), for plan years
beginning on or after January 1, 2025.
(h) Severability. If any provision of
this section is held to be invalid or
unenforceable by its terms, or as applied
to any person or circumstance, or stayed
pending further agency action, the
provision shall be construed so as to
continue to give the maximum effect to
the provision permitted by law, unless
such holding shall be one of invalidity
or unenforceability, in which event the
provision shall be severable from this
section and shall not affect the
remainder thereof or the application of
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the provision to persons not similarly
situated or to dissimilar circumstances.
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Chapter XXV
For the reasons set forth in the
preamble, the Department of Labor
proposes to amend 29 CFR part 2590 as
set forth below:
PART 2590—RULES AND
REGULATIONS FOR GROUP HEALTH
PLANS
4. The authority citation for part 2590
continues to read as follows:
■
Authority: 29 U.S.C. 1027, 1059, 1135,
1161–1168, 1169, 1181–1183, 1181 note,
1185, 1185a-n, 1191, 1191a, 1191b, and
1191c; sec. 101(g), Pub. L.104–191, 110 Stat.
1936; sec. 401(b), Pub. L. 105–200, 112 Stat.
645 (42 U.S.C. 651 note); sec. 512(d), Pub. L.
110–343, 122 Stat. 3881; sec. 1001, 1201, and
1562(e), Pub. L. 111–148, 124 Stat. 119, as
amended by Pub. L. 111–152, 124 Stat. 1029;
Division M, Pub. L. 113–235, 128 Stat. 2130;
Pub. L. 116–260 134 Stat. 1182; Secretary of
Labor’s Order 1–2011, 77 FR 1088 (Jan. 9,
2012).
5. Amend § 2590.712 by:
a. Redesignating paragraph (a) as
paragraph (a)(2) and adding paragraphs
(a) heading and (a)(1);
■ b. In newly redesignated paragraph
(a)(2):
■ i. Revising the introductory text;
■ ii. Adding the definitions of ‘‘DSM,’’
‘‘Evidentiary standards,’’ ‘‘Factors,’’ and
‘‘ICD’’ in alphabetical order;
■ iii. Revising the definitions of
‘‘Medical/surgical benefits’’ and
‘‘Mental health benefits’’;
■ iv. Adding the definitions of
‘‘Processes’’ and ‘‘Strategies’’ in
alphabetical order; and
■ v. Revising the definitions of
‘‘Substance use disorder benefits’’ and
‘‘Treatment limitations’’;
■ c. Revising paragraphs (c)(1)(ii),
(c)(2)(i), and (c)(2)(ii)(A) introductory
text;
■ d. In paragraph (c)(2)(ii)(C),
designating Examples 1 through 4 as
paragraphs (c)(2)(ii)(C)(1) through (4)
and revising newly designated
paragraphs (c)(2)(ii)(C)(1) through (4);
■ e. Adding paragraphs (c)(2)(ii)(C)(5)
and (6);
■ f. Revising paragraphs (c)(3)(i)(A), (C),
and (D);
■ g. In paragraph (c)(3)(iii), adding
introductory text;
■ h. Revising paragraphs (c)(3)(iii)(A)
and (B), (c)(3)(iv), (c)(4), (d)(3), (e)(4),
and (i)(1); and
■ i. Adding paragraph (j).
The revisions and additions read as
follows:
■
■
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§ 2590.712 Parity in mental health and
substance use disorder benefits
(a) Purpose and meaning of terms—
(1) Purpose. This section and
§ 2590.712–1 set forth rules to ensure
parity in aggregate lifetime and annual
dollar limits, financial requirements,
and quantitative and nonquantitative
treatment limitations between mental
health and substance use disorder
benefits and medical/surgical benefits,
as required under ERISA section 712. A
fundamental purpose of ERISA section
712, this section, and § 2590.712–1 is to
ensure that participants and
beneficiaries in a group health plan (or
health insurance coverage offered by an
issuer in connection with a group health
plan) that offers mental health or
substance use disorder benefits are not
subject to more restrictive lifetime or
annual dollar limits, financial
requirements, or treatment limitations
with respect to those benefits than the
predominant dollar limits, financial
requirements, or treatment limitations
that are applied to substantially all
medical/surgical benefits covered by the
plan or coverage, as further provided in
this section and § 2590.712–1.
Accordingly, in complying with the
provisions of ERISA section 712, this
section, and § 2590.712–1, plans and
issuers must not design or apply
financial requirements and treatment
limitations that impose a greater burden
on access (that is, are more restrictive)
to mental health and substance use
disorder benefits under the plan or
coverage than they impose on access to
generally comparable medical/surgical
benefits. The provisions of ERISA
section 712, this section, and
§ 2590.712–1 should be interpreted in a
manner that is consistent with the
purpose described in this paragraph
(a)(1).
(2) Meaning of terms. For purposes of
this section and § 2590.712–1, except
where the context clearly indicates
otherwise, the following terms have the
meanings indicated:
*
*
*
*
*
DSM means the American Psychiatric
Association’s Diagnostic and Statistical
Manual of Mental Disorders. For the
purpose of this definition, the most
current version of the DSM is the
version that is applicable no earlier than
on the date that is 1 year before the first
day of the applicable plan year.
Evidentiary standards are any
evidence, sources, or standards that a
group health plan (or health insurance
issuer offering coverage in connection
with such a plan) considered or relied
upon in designing or applying a factor
with respect to a nonquantitative
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treatment limitation, including specific
benchmarks or thresholds. Evidentiary
standards may be empirical, statistical,
or clinical in nature, and include:
sources acquired or originating from an
objective third party, such as recognized
medical literature, professional
standards and protocols (which may
include comparative effectiveness
studies and clinical trials), published
research studies, payment rates for
items and services (such as publicly
available databases of the ‘‘usual,
customary and reasonable’’ rates paid
for items and services), and clinical
treatment guidelines; internal plan or
issuer data, such as claims or utilization
data or criteria for assuring a sufficient
mix and number of network providers;
and benchmarks or thresholds, such as
measures of excessive utilization, cost
levels, time or distance standards, or
network participation percentage
thresholds.
Factors are all information, including
processes and strategies (but not
evidentiary standards), that a group
health plan (or health insurance issuer
offering coverage in connection with
such a plan) considered or relied upon
to design a nonquantitative treatment
limitation, or to determine whether or
how the nonquantitative treatment
limitation applies to benefits under the
plan or coverage. Examples of factors
include, but are not limited to: provider
discretion in determining a diagnosis or
type or length of treatment; clinical
efficacy of any proposed treatment or
service; licensing and accreditation of
providers; claim types with a high
percentage of fraud; quality measures;
treatment outcomes; severity or
chronicity of condition; variability in
the cost of an episode of treatment; high
cost growth; variability in cost and
quality; elasticity of demand; and
geographic location.
*
*
*
*
*
ICD means the World Health
Organization’s International
Classification of Diseases adopted by the
Department of Health and Human
Services through 45 CFR 162.1002. For
the purpose of this definition, the most
current version of the ICD is the version
that is applicable no earlier than on the
date that is 1 year before the first day
of the applicable plan year.
Medical/surgical benefits means
benefits with respect to items or services
for medical conditions or surgical
procedures, as defined under the terms
of the group health plan (or health
insurance coverage offered by an issuer
in connection with such a plan) and in
accordance with applicable Federal and
State law, but does not include mental
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51637
health benefits or substance use
disorder benefits. Notwithstanding the
preceding sentence, any condition or
procedure defined by the plan or
coverage as being or as not being a
medical condition or surgical procedure
must be defined consistent with
generally recognized independent
standards of current medical practice
(for example, the most current version
of the ICD). To the extent generally
recognized independent standards of
current medical practice do not address
whether a condition or procedure is a
medical condition or surgical
procedure, plans and issuers may define
the condition or procedure in
accordance with applicable Federal and
State law.
Mental health benefits means benefits
with respect to items or services for
mental health conditions, as defined
under the terms of the group health plan
(or health insurance coverage offered by
an issuer in connection with such a
plan) and in accordance with applicable
Federal and State law, but does not
include medical/surgical benefits or
substance use disorder benefits.
Notwithstanding the preceding
sentence, any condition defined by the
plan or coverage as being or as not being
a mental health condition must be
defined consistent with generally
recognized independent standards of
current medical practice. For the
purpose of this definition, to be
consistent with generally recognized
independent standards of current
medical practice, the definition must
include all conditions covered under
the plan or coverage, except for
substance use disorders, that fall under
any of the diagnostic categories listed in
the mental, behavioral, and
neurodevelopmental disorders chapter
(or equivalent chapter) of the most
current version of the ICD or that are
listed in the most current version of the
DSM. To the extent generally recognized
independent standards of current
medical practice do not address whether
a condition is a mental health condition,
plans and issuers may define the
condition in accordance with applicable
Federal and State law.
Processes are actions, steps, or
procedures that a group health plan (or
health insurance issuer offering
coverage in connection with such a
plan) uses to apply a nonquantitative
treatment limitation, including actions,
steps, or procedures established by the
plan or issuer as requirements in order
for a participant or beneficiary to access
benefits, including through actions by a
participant’s or beneficiary’s authorized
representative or a provider or facility.
Processes include but are not limited to:
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procedures to submit information to
authorize coverage for an item or service
prior to receiving the benefit or while
treatment is ongoing (including
requirements for peer or expert clinical
review of that information); provider
referral requirements; and the
development and approval of a
treatment plan. Processes also include
the specific procedures used by staff or
other representatives of a plan or issuer
(or the service provider of a plan or
issuer) to administer the application of
nonquantitative treatment limitations,
such as how a panel of staff members
applies the nonquantitative treatment
limitation (including the qualifications
of staff involved, number of staff
members allocated, and time allocated),
consultations with panels of experts in
applying the nonquantitative treatment
limitation, and reviewer discretion in
adhering to criteria hierarchy when
applying a nonquantitative treatment
limitation.
Strategies are practices, methods, or
internal metrics that a plan (or health
insurance issuer offering coverage in
connection with such a plan) considers,
reviews, or uses to design a
nonquantitative treatment limitation.
Examples of strategies include but are
not limited to: the development of the
clinical rationale used in approving or
denying benefits; deviation from
generally accepted standards of care; the
selection of information deemed
reasonably necessary to make a medical
necessity determination; reliance on
treatment guidelines or guidelines
provided by third-party organizations;
and rationales used in selecting and
adopting certain threshold amounts,
professional protocols, and fee
schedules. Strategies also include the
creation and composition of the staff or
other representatives of a plan or issuer
(or the service provider of a plan or
issuer) that deliberates, or otherwise
makes decisions, on the design of
nonquantitative treatment limitations,
including the plan’s decisions related to
the qualifications of staff involved,
number of staff members allocated, and
time allocated; breadth of sources and
evidence considered; consultations with
panels of experts in designing the
nonquantitative treatment limitation;
and the composition of the panels used
to design a nonquantitative treatment
limitation.
Substance use disorder benefits
means benefits with respect to items or
services for substance use disorders, as
defined under the terms of the group
health plan (or health insurance
coverage offered by an issuer in
connection with such a plan) and in
accordance with applicable Federal and
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State law, but does not include medical/
surgical benefits or mental health
benefits. Notwithstanding the preceding
sentence, any disorder defined by the
plan or coverage as being or as not being
a substance use disorder must be
defined consistent with generally
recognized independent standards of
current medical practice. For the
purpose of this definition, to be
consistent with generally recognized
independent standards of current
medical practice, the definition must
include all disorders covered under the
plan or coverage that fall under any of
the diagnostic categories listed as a
mental or behavioral disorder due to
psychoactive substance use (or
equivalent category) in the mental,
behavioral and neurodevelopmental
disorders chapter (or equivalent
chapter) of the most current version of
the ICD or that are listed as a SubstanceRelated and Addictive Disorder (or
equivalent category) in the most current
version of the DSM. To the extent
generally recognized independent
standards of current medical practice do
not address whether a disorder is a
substance use disorder, plans and
issuers may define the disorder in
accordance with applicable Federal and
State law.
Treatment limitations include limits
on benefits based on the frequency of
treatment, number of visits, days of
coverage, days in a waiting period, or
other similar limits on the scope or
duration of treatment. Treatment
limitations include both quantitative
treatment limitations, which are
expressed numerically (such as 50
outpatient visits per year), and
nonquantitative treatment limitations,
which otherwise limit the scope or
duration of benefits for treatment under
a plan or coverage. (See paragraph
(c)(4)(iii) of this section for an
illustrative, non-exhaustive list of
nonquantitative treatment limitations.)
A complete exclusion of all benefits for
a particular condition or disorder,
however, is not a treatment limitation
for purposes of this definition.
*
*
*
*
*
(c) * * *
(1) * * *
(ii) Type of financial requirement or
treatment limitation. When reference is
made in this paragraph (c) to a type of
financial requirement or treatment
limitation, the reference to type means
its nature. Different types of financial
requirements include deductibles,
copayments, coinsurance, and out-ofpocket maximums. Different types of
quantitative treatment limitations
include annual, episode, and lifetime
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day and visit limits. See paragraph
(c)(4)(iii) of this section for an
illustrative, non-exhaustive list of
nonquantitative treatment limitations.
*
*
*
*
*
(2) * * *
(i) General rule. A group health plan
(or health insurance coverage offered by
an issuer in connection with a group
health plan) that provides both medical/
surgical benefits and mental health or
substance use disorder benefits may not
apply any financial requirement or
treatment limitation to mental health or
substance use disorder benefits in any
classification that is more restrictive
than the predominant financial
requirement or treatment limitation of
that type applied to substantially all
medical/surgical benefits in the same
classification. Whether a financial
requirement or treatment limitation is a
predominant financial requirement or
treatment limitation that applies to
substantially all medical/surgical
benefits in a classification is determined
separately for each type of financial
requirement or treatment limitation. A
plan or issuer may not impose any
financial requirement or treatment
limitation that is applicable only with
respect to mental health or substance
use disorder benefits and not to any
medical/surgical benefits in the same
benefit classification. The application of
the rules of this paragraph (c)(2) to
financial requirements and quantitative
treatment limitations is addressed in
paragraph (c)(3) of this section; the
application of the rules of this
paragraph (c)(2) to nonquantitative
treatment limitations is addressed in
paragraph (c)(4) of this section.
(ii) * * *
(A) In general. If a plan (or health
insurance coverage) provides any
benefits for a mental health condition or
substance use disorder in any
classification of benefits described in
this paragraph (c)(2)(ii), benefits for that
mental health condition or substance
use disorder must be provided in every
classification in which medical/surgical
benefits are provided. For purposes of
this paragraph (c)(2)(ii), a plan (or
health insurance coverage) providing
any benefits for a mental health
condition or substance use disorder in
any classification of benefits does not
provide benefits for the mental health
condition or substance use disorder in
every classification in which medical/
surgical benefits are provided unless the
plan (or health insurance coverage)
provides meaningful benefits for
treatment for that condition or disorder
in each such classification, as
determined in comparison to the
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benefits provided for medical/surgical
conditions in the classification. In
determining the classification in which
a particular benefit belongs, a plan (or
health insurance issuer) must apply the
same standards to medical/surgical
benefits and to mental health or
substance use disorder benefits. To the
extent that a plan (or health insurance
coverage) provides benefits in a
classification and imposes any separate
financial requirement or treatment
limitation (or separate level of a
financial requirement or treatment
limitation) for benefits in the
classification, the rules of this paragraph
(c) apply separately with respect to that
classification for all financial
requirements or treatment limitations
(illustrated in examples in paragraph
(c)(2)(ii)(C) of this section). The
following classifications of benefits are
the only classifications used in applying
the rules of this paragraph (c), in
addition to the permissible subclassifications described in paragraph
(c)(3)(iii) of this section:
*
*
*
*
*
(C) * * *
(1) Example 1—(i) Facts. A group
health plan offers inpatient and
outpatient benefits and does not
contract with a network of providers.
The plan imposes a $500 deductible on
all benefits. For inpatient medical/
surgical benefits, the plan imposes a
coinsurance requirement. For outpatient
medical/surgical benefits, the plan
imposes copayments. The plan imposes
no other financial requirements or
treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(1) (Example 1), because the
plan has no network of providers, all
benefits provided are out-of-network.
Because inpatient, out-of-network
medical/surgical benefits are subject to
separate financial requirements from
outpatient, out-of-network medical/
surgical benefits, the rules of this
paragraph (c) apply separately with
respect to any financial requirements
and treatment limitations, including the
deductible, in each classification.
(2) Example 2—(i) Facts. A plan
imposes a $500 deductible on all
benefits. The plan has no network of
providers. The plan generally imposes a
20 percent coinsurance requirement
with respect to all benefits, without
distinguishing among inpatient,
outpatient, emergency care, or
prescription drug benefits. The plan
imposes no other financial requirements
or treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(2) (Example 2), because the
plan does not impose separate financial
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requirements (or treatment limitations)
based on classification, the rules of this
paragraph (c) apply with respect to the
deductible and the coinsurance across
all benefits.
(3) Example 3—(i) Facts. Same facts
as in paragraph (c)(2)(ii)(C)(2)(i) of this
section (Example 2), except the plan
exempts emergency care benefits from
the 20 percent coinsurance requirement.
The plan imposes no other financial
requirements or treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(3) (Example 3), because the
plan imposes separate financial
requirements based on classifications,
the rules of this paragraph (c) apply
with respect to the deductible and the
coinsurance separately for benefits in
the emergency care classification and all
other benefits.
(4) Example 4—(i) Facts. Same facts
as in paragraph (c)(2)(ii)(C)(2)(i) of this
section (Example 2), except the plan
also imposes a preauthorization
requirement for all inpatient treatment
in order for benefits to be paid. No such
requirement applies to outpatient
treatment.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(4) (Example 4), because the
plan has no network of providers, all
benefits provided are out-of-network.
Because the plan imposes a separate
treatment limitation based on
classifications, the rules of this
paragraph (c) apply with respect to the
deductible and coinsurance separately
for inpatient, out-of-network benefits
and all other benefits.
(5) Example 5—(i) Facts. A plan
generally covers treatment for autism
spectrum disorder (ASD), a mental
health condition, and covers outpatient,
out-of-network developmental
evaluations for ASD but excludes all
other benefits for outpatient treatment
for ASD, including applied behavioral
analysis (ABA) therapy, when provided
on an out-of-network basis. The plan
generally covers the full range of
outpatient treatments and treatment
settings for medical conditions and
surgical procedures when provided on
an out-of-network basis.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(5) (Example 5), the plan
violates the rules of this paragraph
(c)(2)(ii). Because the plan only covers
one type of benefit for ASD in the
outpatient, out-of-network classification
and excludes all other benefits for ASD
in the classification, but generally
covers the full range of medical/surgical
benefits in the classification, it fails to
provide meaningful benefits for
treatment of ASD in the classification.
(6) Example 6—(i) Facts. A plan
generally covers diagnosis and
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treatment for eating disorders, a mental
health condition, but specifically
excludes coverage for nutrition
counseling to treat eating disorders,
including in the outpatient, in-network
classification. Nutrition counseling is
one of the primary treatments for eating
disorders. The plan generally provides
benefits for the primary treatments for
medical/surgical conditions in the
outpatient, in-network classification.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(6) (Example 6), the plan
violates the rules of this paragraph
(c)(2)(ii). The exclusion of coverage for
nutrition counseling for eating disorders
results in the plan failing to provide
meaningful benefits for the treatment of
eating disorders in the outpatient, innetwork classification, as determined in
comparison to the benefits provided for
medical/surgical conditions in the
classification.
(3) * * *
(i) * * *
(A) Substantially all. For purposes of
this paragraph (c)(3), a type of financial
requirement or quantitative treatment
limitation is considered to apply to
substantially all medical/surgical
benefits in a classification of benefits if
it applies to at least two-thirds of all
medical/surgical benefits in that
classification. (For purposes of this
paragraph (c)(3)(i)(A), benefits
expressed as subject to a zero level of a
type of financial requirement are treated
as benefits not subject to that type of
financial requirement, and benefits
expressed as subject to a quantitative
treatment limitation that is unlimited
are treated as benefits not subject to that
type of quantitative treatment
limitation.) If a type of financial
requirement or quantitative treatment
limitation does not apply to at least twothirds of all medical/surgical benefits in
a classification, then that type cannot be
applied to mental health or substance
use disorder benefits in that
classification.
*
*
*
*
*
(C) Portion based on plan payments.
For purposes of this paragraph (c)(3),
the determination of the portion of
medical/surgical benefits in a
classification of benefits subject to a
financial requirement or quantitative
treatment limitation (or subject to any
level of a financial requirement or
quantitative treatment limitation) is
based on the dollar amount of all plan
payments for medical/surgical benefits
in the classification expected to be paid
under the plan for the plan year (or for
the portion of the plan year after a
change in plan benefits that affects the
applicability of the financial
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requirement or quantitative treatment
limitation).
(D) Clarifications for certain threshold
requirements. For any deductible, the
dollar amount of plan payments
includes all plan payments with respect
to claims that would be subject to the
deductible if it had not been satisfied.
For any out-of-pocket maximum, the
dollar amount of plan payments
includes all plan payments associated
with out-of-pocket payments that are
taken into account towards the out-ofpocket maximum as well as all plan
payments associated with out-of-pocket
payments that would have been made
towards the out-of-pocket maximum if it
had not been satisfied. Similar rules
apply for any other thresholds at which
the rate of plan payment changes. (See
also PHS Act section 2707 and
Affordable Care Act section 1302(c),
which establish annual limitations on
out-of-pocket maximums for all nongrandfathered health plans.)
*
*
*
*
*
(iii) Special rules. Unless specifically
permitted under this paragraph
(c)(3)(iii), sub-classifications are not
permitted when applying the rules of
paragraph (c)(3) of this section.
(A) Multi-tiered prescription drug
benefits. If a plan (or health insurance
coverage) applies different levels of
financial requirements to different tiers
of prescription drug benefits based on
reasonable factors determined in
accordance with the rules in paragraph
(c)(4) of this section (relating to
requirements for nonquantitative
treatment limitations) and without
regard to whether a drug is generally
prescribed with respect to medical/
surgical benefits or with respect to
mental health or substance use disorder
benefits, the plan (or health insurance
coverage) satisfies the parity
requirements of this paragraph (c) with
respect to prescription drug benefits.
Reasonable factors include cost,
efficacy, generic versus brand name, and
mail order versus pharmacy pick-up.
(B) Multiple network tiers. If a plan (or
health insurance coverage) provides
benefits through multiple tiers of innetwork providers (such as an innetwork tier of preferred providers with
more generous cost-sharing to
participants than a separate in-network
tier of participating providers), the plan
may divide its benefits furnished on an
in-network basis into sub-classifications
that reflect network tiers, if the tiering
is based on reasonable factors
determined in accordance with the rules
in paragraph (c)(4) of this section (such
as quality, performance, and market
standards) and without regard to
whether a provider provides services
with respect to medical/surgical benefits
or mental health or substance use
disorder benefits. After the subclassifications are established, the plan
or issuer may not impose any financial
requirement or treatment limitation on
mental health or substance use disorder
benefits in any sub-classification that is
more restrictive than the predominant
financial requirement or treatment
limitation that applies to substantially
all medical/surgical benefits in the subclassification using the methodology set
forth in paragraph (c)(3)(i) of this
section.
*
*
*
*
*
(iv) Examples. The rules of
paragraphs (c)(3)(i) through (iii) of this
section are illustrated by the following
examples. In each example, the group
health plan is subject to the
requirements of this section and
provides both medical/surgical benefits
and mental health and substance use
disorder benefits.
(A) Example 1—(1) Facts. (i) For
inpatient, out-of-network medical/
surgical benefits, a group health plan
imposes five levels of coinsurance.
Using a reasonable method, the plan
projects its payments for the upcoming
year as follows:
TABLE 1 TO PARAGRAPH (C)(3)(IV)(A)(1)(i)
Coinsurance rate ..............
Projected payments .........
Percent of total plan costs
Percent subject to coinsurance level ................
0%
$200x
20
10%
$100x
10
15%
$450x
45
20%
$100x
10
30%
$150x
15
Total
$1,000x
........................
N/A
12.5 (100x/800x)
56.25 (450x/800x)
12.5 (100x/800x)
18.75 (150x/800x)
........................
(ii) The plan projects plan costs of
$800x to be subject to coinsurance
($100x + $450x + $100x + $150x =
$800x). Thus, 80 percent ($800x/
$1,000x) of the benefits are projected to
be subject to coinsurance, and 56.25
percent of the benefits subject to
coinsurance are projected to be subject
to the 15 percent coinsurance level.
(2) Conclusion. In this paragraph
(c)(3)(iv)(A) (Example 1), the two-thirds
threshold of the substantially all
standard is met for coinsurance because
80 percent of all inpatient, out-ofnetwork medical/surgical benefits are
subject to coinsurance. Moreover, the 15
percent coinsurance is the predominant
level because it is applicable to more
than one-half of inpatient, out-ofnetwork medical/surgical benefits
subject to the coinsurance requirement.
The plan may not impose any level of
coinsurance with respect to inpatient,
out-of-network mental health or
substance use disorder benefits that is
more restrictive than the 15 percent
level of coinsurance.
(B) Example 2—(1) Facts. (i) For
outpatient, in-network medical/surgical
benefits, a plan imposes five different
copayment levels. Using a reasonable
method, the plan projects payments for
the upcoming year as follows:
ddrumheller on DSK120RN23PROD with PROPOSALS2
TABLE 2 TO PARAGRAPH (C)(3)(IV)(B)(1)(i)
Copayment amount ..........
Projected payments .........
Percent of total plan costs
Percent subject to copayments ............................
$0
$200x
20
$10
$200x
20
$15
$200x
20
$20
$300x
30
$50
$100x
10
Total
$1,000x
........................
N/A
25 (200x/800x)
25 (200x/800x)
37.5 (300x/800x)
12.5 (100x/800x)
........................
(ii) The plan projects plan costs of
$800x to be subject to copayments
($200x + $200x +$300x + $100x =
$800x). Thus, 80 percent ($800x/
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$1,000x) of the benefits are projected to
be subject to a copayment.
(2) Conclusion. In this paragraph
(c)(3)(iv)(B) (Example 2), the two-thirds
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threshold of the substantially all
standard is met for copayments because
80 percent of all outpatient, in-network
medical/surgical benefits are subject to
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a copayment. Moreover, there is no
single level that applies to more than
one-half of medical/surgical benefits in
the classification subject to a copayment
(for the $10 copayment, 25%; for the
$15 copayment, 25%; for the $20
copayment, 37.5%; and for the $50
copayment, 12.5%). The plan can
combine any levels of copayment,
including the highest levels, to
determine the predominant level that
can be applied to mental health or
substance use disorder benefits. If the
plan combines the highest levels of
copayment, the combined projected
payments for the two highest copayment
levels, the $50 copayment and the $20
copayment, are not more than one-half
of the outpatient, in-network medical/
surgical benefits subject to a copayment
because they are exactly one-half ($300x
+ $100x = $400x; $400x/$800x = 50%).
The combined projected payments for
the three highest copayment levels—the
$50 copayment, the $20 copayment, and
the $15 copayment—are more than onehalf of the outpatient, in-network
medical/surgical benefits subject to the
copayments ($100x + $300x + $200x =
$600x; $600x/$800x = 75%). Thus, the
plan may not impose any copayment on
outpatient, in-network mental health or
substance use disorder benefits that is
more restrictive than the least restrictive
copayment in the combination, the $15
copayment.
(C) Example 3—(1) Facts. A plan
imposes a $250 deductible on all
medical/surgical benefits for self-only
coverage and a $500 deductible on all
medical/surgical benefits for family
coverage. The plan has no network of
providers. For all medical/surgical
benefits, the plan imposes a coinsurance
requirement. The plan imposes no other
financial requirements or treatment
limitations.
(2) Conclusion. In this paragraph
(c)(3)(iv)(C) (Example 3), because the
plan has no network of providers, all
benefits are provided out-of-network.
Because self-only and family coverage
are subject to different deductibles,
whether the deductible applies to
substantially all medical/surgical
benefits is determined separately for
self-only medical/surgical benefits and
family medical/surgical benefits.
Because the coinsurance is applied
without regard to coverage units, the
predominant coinsurance that applies to
substantially all medical/surgical
benefits is determined without regard to
coverage units.
(D) Example 4—(1) Facts. A plan
applies the following financial
requirements for prescription drug
benefits. The requirements are applied
without regard to whether a drug is
generally prescribed with respect to
medical/surgical benefits or with
respect to mental health or substance
use disorder benefits. Moreover, the
process for certifying a particular drug
as ‘‘generic’’, ‘‘preferred brand name’’,
‘‘non-preferred brand name’’, or
‘‘specialty’’ complies with the rules of
paragraph (c)(4) of this section (relating
to requirements for nonquantitative
treatment limitations).
TABLE 3 TO PARAGRAPH (C)(3)(IV)(D)(1)
ddrumheller on DSK120RN23PROD with PROPOSALS2
Tier 1
Tier 2
Tier 3
Tier description ..................
Generic drugs ...................
Preferred brand name
drugs.
Percent paid by plan .........
90 ......................................
80 ......................................
(2) Conclusion. In this paragraph
(c)(3)(iv)(D) (Example 4), the financial
requirements that apply to prescription
drug benefits are applied without regard
to whether a drug is generally
prescribed with respect to medical/
surgical benefits or with respect to
mental health or substance use disorder
benefits; the process for certifying drugs
in different tiers complies with
paragraph (c)(4) of this section; and the
bases for establishing different levels or
types of financial requirements are
reasonable. The financial requirements
applied to prescription drug benefits do
not violate the parity requirements of
this paragraph (c)(3).
(E) Example 5—(1) Facts. A plan has
two-tiers of network of providers: a
preferred provider tier and a
participating provider tier. Providers are
placed in either the preferred tier or
participating tier based on reasonable
factors determined in accordance with
the rules in paragraph (c)(4) of this
section, such as accreditation, quality
and performance measures (including
customer feedback), and relative
reimbursement rates. Furthermore,
provider tier placement is determined
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Non-preferred brand name
drugs (which may have
Tier 1 or Tier 2 alternatives).
60 ......................................
without regard to whether a provider
specializes in the treatment of mental
health conditions or substance use
disorders, or medical/surgical
conditions. The plan divides the innetwork classifications into two subclassifications (in-network/preferred
and in-network/participating). The plan
does not impose any financial
requirement or treatment limitation on
mental health or substance use disorder
benefits in either of these subclassifications that is more restrictive
than the predominant financial
requirement or treatment limitation that
applies to substantially all medical/
surgical benefits in each subclassification.
(2) Conclusion. In this paragraph
(c)(3)(iv)(E) (Example 5), the division of
in-network benefits into subclassifications that reflect the preferred
and participating provider tiers does not
violate the parity requirements of this
paragraph (c)(3).
(F) Example 6—(1) Facts. With
respect to outpatient, in-network
benefits, a plan imposes a $25
copayment for office visits and a 20
percent coinsurance requirement for
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Tier 4
Specialty drugs.
50.
outpatient surgery. The plan divides the
outpatient, in-network classification
into two sub-classifications (in-network
office visits and all other outpatient, innetwork items and services).The plan or
issuer does not impose any financial
requirement or quantitative treatment
limitation on mental health or substance
use disorder benefits in either of these
sub-classifications that is more
restrictive than the predominant
financial requirement or quantitative
treatment limitation that applies to
substantially all medical/surgical
benefits in each sub-classification.
(2) Conclusion. In this paragraph
(c)(3)(iv)(F) (Example 6), the division of
outpatient, in-network benefits into subclassifications for office visits and all
other outpatient, in-network items and
services does not violate the parity
requirements of this paragraph (c)(3).
(G) Example 7—(1) Facts. Same facts
as in paragraph (c)(3)(iv)(F)(1) of this
section (Example 6), but for purposes of
determining parity, the plan divides the
outpatient, in-network classification
into outpatient, in-network generalists
and outpatient, in-network specialists.
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(2) Conclusion. In this paragraph
(c)(3)(iv)(G) (Example 7), the division of
outpatient, in-network benefits into any
sub-classifications other than office
visits and all other outpatient items and
services violates the requirements of
paragraph (c)(3)(iii)(C) of this section.
*
*
*
*
*
(4) Nonquantitative treatment
limitations. Subject to paragraph
(c)(4)(v) of this section, a group health
plan (or health insurance coverage
offered by an issuer in connection with
a group health plan) may not impose a
nonquantitative treatment limitation
with respect to mental health or
substance use disorder benefits in a
classification unless the plan’s or
coverage’s imposition of the limitation
meets the requirements of paragraphs
(c)(4)(i), (ii), and (iv) of this section. If
a group health plan (or health insurance
coverage offered by an issuer in
connection with a group health plan)
fails to meet any of these requirements
with respect to a nonquantitative
treatment limitation, the limitation
violates section 712(a)(3)(A)(ii) of ERISA
and may not be imposed by the plan (or
health insurance coverage).
(i) Requirement that nonquantitative
treatment limitations be no more
restrictive for mental health benefits
and substance use disorder benefits. A
group health plan (or health insurance
issuer offering coverage in connection
with a group health plan) may not apply
any nonquantitative treatment
limitation with respect to mental health
or substance use disorder benefits in
any classification that is more
restrictive, as written or in operation,
than the predominant nonquantitative
treatment limitation applied to
substantially all medical/surgical
benefits in the same classification.
(A) Restrictive. For purposes of this
paragraph (c)(4)(i), a nonquantitative
treatment limitation is restrictive to the
extent it imposes conditions, terms, or
requirements that limit access to
benefits under the terms of the plan or
coverage. Conditions, terms, or
requirements include, but are not
limited to, those that compel an action
by or on behalf of a participant or
beneficiary to access benefits or limit
access to the full range of treatment
options available for a condition or
disorder under the plan or coverage.
(B) Substantially all. For purposes of
this paragraph (c)(4)(i), a
nonquantitative treatment limitation is
considered to apply to substantially all
medical/surgical benefits in a
classification if it applies to at least twothirds of all medical/surgical benefits in
that classification, consistent with
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paragraph (c)(4)(i)(D) of this section.
Whether the nonquantitative treatment
limitation applies to at least two-thirds
of all medical/surgical benefits is
determined without regard to whether
the nonquantitative treatment limitation
was triggered based on a particular
factor or evidentiary standard. If a
nonquantitative treatment limitation
does not apply to at least two-thirds of
all medical/surgical benefits in a
classification, then that limitation
cannot be applied to mental health or
substance use disorder benefits in that
classification.
(C) Predominant. For purposes of this
paragraph (c)(4)(i), the term
predominant means the most common
or most frequent variation of the
nonquantitative treatment limitation
within a classification, determined in
accordance with the method outlined in
paragraph (c)(4)(i)(D) of this section, to
the extent the plan or issuer imposes
multiple variations of a nonquantitative
treatment limitation within the
classification. For example, multiple
variations of inpatient concurrent
review include review commencing 1
day, 3 days, or 7 days after admission,
depending on the reason for the stay.
(D) Portion based on plan payments.
For purposes of paragraphs (c)(4)(i)(B)
and (C) of this section, the
determination of the portion of medical/
surgical benefits in a classification of
benefits subject to a nonquantitative
treatment limitation is based on the
dollar amount of all plan payments for
medical/surgical benefits in the
classification expected to be paid under
the plan or coverage for the plan year (or
the portion of the plan year after a
change in benefits that affects the
applicability of the nonquantitative
treatment limitation). Any reasonable
method may be used to determine the
dollar amount expected to be paid
under a plan or coverage for medical/
surgical benefits.
(E) Exceptions for independent
professional medical or clinical
standards and standards to detect or
prevent and prove fraud, waste, and
abuse. Notwithstanding paragraphs
(c)(4)(i)(A) through (D) of this section, a
plan or issuer that applies a
nonquantitative treatment limitation
that impartially applies independent
professional medical or clinical
standards or applies standards to detect
or prevent and prove fraud, waste, and
abuse, as described in paragraph
(c)(4)(v)(A) or (B) of this section, to
mental health or substance use disorder
benefits in any classification will not be
considered to violate this paragraph
(c)(4)(i) with respect to such
nonquantitative treatment limitation.
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(ii) Additional requirements related to
design and application of the
nonquantitative treatment limitation—
(A) In general. Consistent with
paragraph (a)(1) of this section, a plan
or issuer may not impose a
nonquantitative treatment limitation
with respect to mental health or
substance use disorder benefits in any
classification unless, under the terms of
the plan (or health insurance coverage)
as written and in operation, any
processes, strategies, evidentiary
standards, or other factors used in
designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in the classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the limitation with respect to
medical/surgical benefits in the
classification.
(B) Prohibition on discriminatory
factors and evidentiary standards. For
purposes of determining comparability
and stringency under paragraph
(c)(4)(ii)(A) of this section, a plan or
issuer may not rely upon any factor or
evidentiary standard if the information,
evidence, sources, or standards on
which the factor or evidentiary standard
is based discriminates against mental
health or substance use disorder
benefits as compared to medical/
surgical benefits. For purposes of this
paragraph (c)(4)(ii)(B):
(1) Impartially applied generally
recognized independent professional
medical or clinical standards described
in paragraph (c)(4)(v)(A) of this section
are not considered to discriminate
against mental health or substance use
disorder benefits.
(2) Standards reasonably designed to
detect or prevent and prove fraud,
waste, and abuse described in paragraph
(c)(4)(v)(B) of this section are not
considered to discriminate against
mental health or substance use disorder
benefits.
(3) Information is considered to
discriminate against mental health or
substance use disorder benefits if it is
biased or not objective, in a manner that
results in less favorable treatment of
mental health or substance use disorder
benefits, based on all the relevant facts
and circumstances including, but not
limited to, the source of the information,
the purpose or context of the
information, and the content of the
information.
(iii) Illustrative, non-exhaustive list of
nonquantitative treatment limitations.
Nonquantitative treatment limitations
include—
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(A) Medical management standards
(such as prior authorization) limiting or
excluding benefits based on medical
necessity or medical appropriateness, or
based on whether the treatment is
experimental or investigative;
(B) Formulary design for prescription
drugs;
(C) For plans with multiple network
tiers (such as preferred providers and
participating providers), network tier
design;
(D) Standards related to network
composition, including but not limited
to, standards for provider and facility
admission to participate in a network or
for continued network participation,
including methods for determining
reimbursement rates, credentialing
standards, and procedures for ensuring
the network includes an adequate
number of each category of provider and
facility to provide services under the
plan or coverage;
(E) Plan or issuer methods for
determining out-of-network rates, such
as allowed amounts; usual, customary,
and reasonable charges; or application
of other external benchmarks for out-ofnetwork rates;
(F) Refusal to pay for higher-cost
therapies until it can be shown that a
lower-cost therapy is not effective (also
known as fail-first policies or step
therapy protocols);
(G) Exclusions based on failure to
complete a course of treatment; and
(H) Restrictions based on geographic
location, facility type, provider
specialty, and other criteria that limit
the scope or duration of benefits for
services provided under the plan or
coverage.
(iv) Required use of outcomes data—
(A) In general. When designing and
applying a nonquantitative treatment
limitation, a plan or issuer must collect
and evaluate relevant data in a manner
reasonably designed to assess the
impact of the nonquantitative treatment
limitation on access to mental health
and substance use disorder benefits and
medical/surgical benefits, and consider
the impact as part of the plan’s or
issuer’s analysis of whether the
limitation, in operation, complies with
paragraphs (c)(4)(i) and (ii) of this
section. The Secretary, jointly with the
Secretary of the Treasury and the
Secretary of Health and Human
Services, may specify in guidance the
type, form, and manner of collection
and evaluation for the data required
under this paragraph (c)(4)(iv)(A).
(1) For purposes of this paragraph
(c)(4)(iv)(A), relevant data includes, but
is not limited to, the number and
percentage of claims denials and any
other data relevant to the
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nonquantitative treatment limitation
required by State law or private
accreditation standards.
(2) In addition to the relevant data set
forth in paragraph (c)(4)(iv)(A)(1) of this
section, relevant data for
nonquantitative treatment limitations
related to network composition
standards includes, but is not limited to,
in-network and out-of-network
utilization rates (including data related
to provider claim submissions), network
adequacy metrics (including time and
distance data, and data on providers
accepting new patients), and provider
reimbursement rates (including as
compared to billed charges).
(B) Material differences. Subject to
paragraph (c)(4)(iv)(C) of this section, to
the extent the relevant data evaluated
pursuant to paragraph (c)(4)(iv)(A) of
this section show material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits, the
differences will be considered a strong
indicator that the plan or issuer violates
paragraph (c)(4)(i) or (ii) of this section.
In such instances, the plan or issuer:
(1) Must take reasonable action to
address the material differences in
access as necessary to ensure
compliance, in operation, with
paragraphs (c)(4)(i) and (ii) of this
section; and
(2) Must document the action that has
been or is being taken by the plan or
issuer to mitigate any material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits,
as required by § 2590.712–1(c)(5)(iv).
(C) Special rule for nonquantitative
treatment limitations related to network
composition. Notwithstanding
paragraph (c)(4)(iv)(B) of this section,
when designing and applying one or
more nonquantitative treatment
limitation(s) related to network
composition standards, a plan or issuer
fails to meet the requirements of
paragraphs (c)(4)(i) and (ii) of this
section, in operation, if the relevant data
show material differences in access to
in-network mental health and substance
use disorder benefits as compared to innetwork medical/surgical benefits in a
classification.
(D) Exception for independent
professional medical or clinical
standards. A plan or issuer designing
and applying a nonquantitative
treatment limitation with respect to
mental health or substance use disorder
benefits in any classification that
impartially applies independent
professional medical or clinical
standards, as described in paragraph
(c)(4)(v)(A) of this section, is not
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required to comply with the
requirements of this paragraph (c)(4)(iv)
with respect to that classification.
(v) Independent professional medical
or clinical standards and standards to
detect or prevent and prove fraud,
waste, and abuse. (A) To qualify for the
exceptions in paragraphs (c)(4)(i)(E),
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this
section for independent professional
medical or clinical standards, a
nonquantitative treatment limitation
must impartially apply generally
recognized independent professional
medical or clinical standards (consistent
with generally accepted standards of
care) to medical/surgical benefits and
mental health or substance use disorder
benefits, and may not deviate from those
standards in any way, such as by
imposing additional or different
requirements.
(B) To qualify for the exceptions in
paragraphs (c)(4)(i)(E) and (c)(4)(ii)(B) of
this section to detect or prevent and
prove fraud, waste, and abuse, a
nonquantitative treatment limitation
must be reasonably designed to detect or
prevent and prove fraud, waste, and
abuse, based on indicia of fraud, waste,
and abuse that have been reliably
established through objective and
unbiased data, and also be narrowly
designed to minimize the negative
impact on access to appropriate mental
health and substance use disorder
benefits.
(vi) Prohibition on separate
nonquantitative treatment limitations
applicable only to mental health or
substance use disorder benefits.
Consistent with paragraph (c)(2)(i) of
this section, a group health plan (or
health insurance coverage offered by an
issuer in connection with such a plan)
may not apply any nonquantitative
treatment limitation that is applicable
only with respect to mental health or
substance use disorder benefits and
does not apply with respect to any
medical/surgical benefits in the same
benefit classification.
(vii) Effect of final determination of
noncompliance under § 2590.712–1. If a
group health plan (or health insurance
issuer offering group health insurance
coverage in connection with such a
plan) receives a final determination
from the Secretary that the plan or
issuer is not in compliance with the
requirements of § 2590.712–1 with
respect to a nonquantitative treatment
limitation, the nonquantitative
treatment limitation violates this
paragraph (c)(4) and the Secretary may
direct the plan or issuer not to impose
the nonquantitative treatment
limitation, unless and until the plan or
issuer demonstrates to the Secretary
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compliance with the requirements of
this section or takes appropriate action
to remedy the violation.
(viii) Examples. The rules of this
paragraph (c)(4) are illustrated by the
following examples. In each example,
the group health plan is subject to the
requirements of this section and
provides both medical/surgical benefits
and mental health and substance use
disorder benefits. Additionally, in
examples that conclude that the plan or
issuer violates one provision of this
paragraph (c)(4), such examples do not
necessarily imply compliance with
other provisions of this paragraph (c)(4),
as these examples do not analyze
compliance with all other provisions of
this paragraph (c)(4).
(A) Example 1 (More restrictive prior
authorization requirement in
operation)—(1) Facts. A plan requires
prior authorization from the plan’s
utilization reviewer that a treatment is
medically necessary for all inpatient, innetwork medical/surgical benefits and
for all inpatient, in-network mental
health and substance use disorder
benefits. While inpatient, in-network
benefits for medical/surgical conditions
are approved for periods of 1, 3, and 7
days, after which a treatment plan must
be submitted by the patient’s attending
provider and approved by the plan, the
approvals for 7 days are most common
under this plan. For inpatient, innetwork mental health and substance
use disorder benefits, routine approval
is most commonly given only for one
day, after which a treatment plan must
be submitted by the patient’s attending
provider and approved by the plan. The
difference in the duration of approvals
is not the result of independent
professional medical or clinical
standards or standards to detect or
prevent and prove fraud, waste, and
abuse, but rather reflects the application
of a heightened standard to the
provision of the mental health and
substance use disorder benefits in the
relevant classification.
(2) Conclusion. In this paragraph
(c)(4)(viii)(A) (Example 1), the plan
violates the rules of paragraph (c)(4)(i)
of this section. Under the terms of the
plan, prior authorization applies to at
least two-thirds of all medical/surgical
benefits in the relevant classification
(inpatient, in-network), since it applies
to all benefits in the relevant
classification. Further, the most
common or frequent variation of the
nonquantitative treatment limitation
applied to medical/surgical benefits in
the relevant classification (the
predominant nonquantitative treatment
limitation) is the routine approval of
inpatient, in-network benefits for 7 days
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before the patient’s attending provider
must submit a treatment plan. However,
the plan routinely approves inpatient,
in-network benefits for mental health
and substance use disorder conditions
for only 1 day before the patient’s
attending provider must submit a
treatment plan (and, in doing so, does
not impartially apply independent
professional medical or clinical
standards or apply standards to detect
or prevent and prove fraud, waste, and
abuse that qualify for the exceptions in
paragraph (c)(4)(i)(E) of this section). In
operation, therefore, the prior
authorization requirement imposed on
inpatient, in-network mental health and
substance use disorder benefits is more
restrictive than the predominant prior
authorization requirement applicable to
substantially all medical/surgical
benefits in the inpatient, in-network
classification because the practice of
approving only 1 day of inpatient
benefits limits access to the full range of
treatment options available for a
condition or disorder under the plan or
coverage as compared to the routine 7day approval that is given for inpatient,
in-network medical/surgical benefits.
Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this
example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this
section.
(B) Example 2 (More restrictive peerto-peer concurrent review requirements
in operation)—(1) Facts. A plan follows
a written process for the concurrent
review of all medical/surgical benefits
and mental health and substance use
disorder benefits within the inpatient,
in-network classification. Under the
process, a first-level review is
conducted in every instance in which
concurrent review applies and an
authorization request is approved by the
first-level reviewer only if the clinical
information submitted by the facility
meets the plan’s criteria for a continued
stay. If the first-level reviewer is unable
to approve the authorization request
because the clinical information
submitted by the facility does not meet
the plan’s criteria for a continued stay,
it is sent to a second-level reviewer who
will either approve or deny the request.
While the written process only requires
review by the second-level reviewer to
either deny or approve the request, in
operation, second-level reviewers for
mental health and substance use
disorder benefits conduct a peer-to-peer
review with a provider (acting as the
authorized representative of a
participant or beneficiary) before
coverage of the treatment is approved.
The peer-to-peer review requirement is
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not the result of independent
professional medical or clinical
standards or standards to detect or
prevent and prove fraud, waste, and
abuse. The plan does not impose a peerto-peer review, as written or in
operation, as part of the second-level
review for medical/surgical benefits.
(2) Conclusion. In this paragraph
(c)(4)(viii)(B) (Example 2), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The concurrent review
nonquantitative treatment limitation
applies to at least two-thirds of all
medical/surgical benefits within the
inpatient, in-network classification
because the plan follows the concurrent
review process for all medical/surgical
benefits. The most common or frequent
variation of this nonquantitative
treatment limitation (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is that peer-to-peer
review is not imposed as part of secondlevel review. The plan does not
impartially apply independent
professional medical or clinical
standards or apply standards to detect
or prevent and prove fraud, waste, and
abuse that qualify for the exceptions in
paragraph (c)(4)(i)(E) of this section. As
written, the plan’s concurrent review
requirements are the same for medical/
surgical benefits and mental health and
substance use disorder benefits.
However, in operation, by compelling
an additional action (peer-to-peer
review as part of second-level review) to
access only mental health or substance
use disorder benefits, the plan applies
the limitation to mental health and
substance use disorder benefits in a
manner that is more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
inpatient, in-network classification.
Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this
example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this
section.
(C) Example 3 (More restrictive peerto-peer review medical necessity
standard in operation; deviation from
independent professional medical and
clinical standards)—(1) Facts. A plan
generally requires that all treatment be
medically necessary in the inpatient,
out-of-network classification. For both
medical/surgical benefits and mental
health and substance use disorder
benefits, the written medical necessity
standards are based on independent
professional medical or clinical
standards that do not require peer-topeer review. In operation, the plan
covers out-of-network benefits for
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medical/surgical or mental health
inpatient treatment outside of a hospital
if the physician documents medical
appropriateness, but for out-of-network
benefits for substance use disorder
inpatient treatment outside of a
hospital, the plan requires a physician
to also complete peer-to-peer review.
(2) Conclusion. In this paragraph
(c)(4)(viii)(C) (Example 3), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The medical necessity
nonquantitative treatment limitation
applies to at least two-thirds of all
medical/surgical benefits in the
inpatient, out-of-network classification.
The most common or frequent variation
of the nonquantitative treatment
limitation (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is the requirement that
a physician document medical
appropriateness without peer-to-peer
review. The plan purports to impartially
apply independent professional medical
or clinical standards that would
otherwise qualify for the exception in
paragraph (c)(4)(i)(E) of this section, but
deviates from those standards by
imposing the additional requirement to
complete peer-to-peer review for
inpatient, out-of-network benefits for
substance use disorder outside of a
hospital. Therefore, the exception in
paragraph (c)(4)(i)(E) of this section does
not apply. As written, the plan
provisions apply the nonquantitative
treatment limitation to mental health
and substance use disorder benefits in
the inpatient, out-of-network
classification in the same manner as for
medical/surgical benefits. However, in
operation, the nonquantitative treatment
limitation imposed with respect to outof-network substance use disorder
benefits for treatment outside of a
hospital is more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
classification because it limits access to
the full range of treatment options
available for a condition or disorder
under the plan or coverage as compared
to medical/surgical benefits in the same
classification. Because the plan violates
the rules of paragraph (c)(4)(i) of this
section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(D) Example 4 (Not comparable and
more stringent methods for determining
reimbursement rates in operation)—(1)
Facts. A plan’s base reimbursement
rates for outpatient, in-network
providers are determined based on a
variety of factors, including the
providers’ required training, licensure,
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and expertise. For purposes of this
example, the plan’s nonquantitative
treatment limitations for determining
reimbursement rates for mental health
and substance use disorder benefits are
not more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
classification under paragraph (c)(4)(i)
of this section. As written, for mental
health, substance use disorder, and
medical/surgical benefits, all
reimbursement rates for physicians and
non-physician practitioners for the same
Current Procedural Terminology (CPT)
code vary based on a combination of
factors, such as the nature of the service,
provider type, number of providers
qualified to provide the service in a
given geographic area, and market need
(demand). As a result, reimbursement
rates for mental health, substance use
disorder, and medical/surgical benefits
furnished by non-physician providers
are generally less than for physician
providers. In operation, the plan
reduces the reimbursement rate for
mental health and substance use
disorder non-physician providers from
that paid to mental health and substance
use disorder physicians by the same
percentage for every CPT code but does
not apply the same reductions for nonphysician medical/surgical providers.
(2) Conclusion. In this paragraph
(c)(4)(viii)(D) (Example 4), the plan
violates the rules of paragraph (c)(4)(ii)
of this section. Because the plan
reimburses non-physician providers of
mental health and substance use
disorder services by reducing their
reimbursement rate from the rate to
physician providers by the same
percentage for every CPT code but does
not apply the same reductions to nonphysician providers of medical/surgical
services, in operation, the factors used
in applying the nonquantitative
treatment limitation to mental health
and substance use disorder benefits are
not comparable to, and are applied more
stringently than, the factors used in
applying the limitation with respect to
medical/surgical benefits. Because the
facts assume that the plan’s methods for
determining reimbursement rates
comply with paragraph (c)(4)(i) of this
section and the plan violates the rules
of paragraph (c)(4)(ii) of this section,
this example does not analyze
compliance with paragraph (c)(4)(iv) of
this section.
(E) Example 5 (Exception for
impartially applied generally recognized
independent professional medical or
clinical standards)—(1) Facts. A group
health plan develops a medical
management requirement for all
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51645
inpatient, out-of-network benefits for
both medical/surgical benefits and
mental health and substance use
disorder benefits to ensure treatment is
medically necessary. The medical
management requirement impartially
applies independent professional
medical or clinical standards in a
manner that qualifies for the exception
in paragraph (c)(4)(i)(E) of this section.
The plan does not rely on any other
factors or evidentiary standards and the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the medical
management requirement to mental
health and substance use disorder
benefits are comparable to, and are
applied no more stringently than, the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the requirement
with respect to medical/surgical
benefits. Within the inpatient, out-ofnetwork classification, the application
of the medical management requirement
results in a higher percentage of denials
for mental health and substance use
disorder claims than medical/surgical
claims, because the benefits were found
to be medically necessary for a lower
percentage of mental health and
substance use disorder claims based on
the impartial application of the
independent professional medical or
clinical standards by the
nonquantitative treatment limitation.
(2) Conclusion. In this paragraph
(c)(4)(viii)(E) (Example 5), the plan does
not violate the rules of this paragraph
(c)(4). The medical management
nonquantitative treatment limitation
imposed on mental health and
substance use disorder benefits does not
violate paragraph (c)(4)(i) or (iv) of this
section because it impartially applies
independent professional medical or
clinical standards for both medical/
surgical benefits and mental health and
substance use disorder benefits in a
manner that qualifies for the exceptions
in paragraphs (c)(4)(i)(E) and
(c)(4)(iv)(D) of this section, respectively.
Moreover, the nonquantitative treatment
limitation does not violate paragraph
(c)(4)(ii) of this section because the
independent professional medical or
clinical standards are not considered to
be a discriminatory factor or evidentiary
standard under paragraph (c)(4)(ii)(B) of
this section. Additionally, as written
and in operation, the processes,
strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits in the inpatient,
out-of-network classification are
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comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, and
other factors used in applying the
limitation with respect to medical/
surgical benefits in the classification,
regardless of the fact that the
application of the nonquantitative
treatment limitation resulted in higher
percentages of claim denials for mental
health and substance use disorder
benefits as compared to medical/
surgical benefits.
(F) Example 6 (More restrictive prior
authorization requirement; exception
for impartially applied generally
recognized independent professional
medical or clinical standards not met)—
(1) Facts. The provisions of a plan state
that it applies independent professional
medical and clinical standards
(consistent with generally accepted
standards of care) for setting prior
authorization requirements for both
medical/surgical and mental health and
substance use disorder prescription
drugs. The relevant generally recognized
independent professional medical
standard for treatment of opioid use
disorder that the plan utilizes—in this
case, the American Society of Addiction
Medicine national practice guidelines—
does not support prior authorization
every 30 days for buprenorphine/
naloxone. However, in operation, the
plan requires prior authorization for
buprenorphine/naloxone combination at
each refill (every 30 days) for treatment
of opioid use disorder.
(2) Conclusion. In this paragraph
(c)(4)(viii)(F) (Example 6), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The plan does not
qualify for the exception in paragraph
(c)(4)(i)(E) of this section, because,
although the provisions of the plan state
that it applies independent professional
medical and clinical standards, the plan
deviates from the relevant standards
with respect to prescription drugs to
treat opioid use disorder. The prior
authorization nonquantitative treatment
limitation is applied to at least twothirds of all medical/surgical benefits in
the prescription drugs classification.
The most common or frequent variation
of this nonquantitative treatment
limitation (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is following generally
recognized independent professional
medical and clinical standards
(consistent with generally accepted
standards of care). The prior
authorization requirements imposed on
substance use disorder benefits are more
restrictive than the predominant
nonquantitative treatment limitation
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applicable to substantially all medical/
surgical benefits in the classification,
because the plan imposes additional
requirements on substance use disorder
benefits that limit access to the full
range of treatment options available for
a condition or disorder under the plan
or coverage as compared to medical/
surgical benefits in the same
classification. Because the plan violates
the rules of paragraph (c)(4)(i) of this
section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(G) Example 7 (Impermissible
nonquantitative treatment limitation
imposed following a final determination
of noncompliance and direction by the
Secretary)—(1) Facts. Following an
initial request by the Secretary for a
plan’s comparative analysis of a
nonquantitative treatment limitation
pursuant to § 2590.712–1(d), the plan
submits a comparative analysis for the
nonquantitative treatment limitation.
After review of the comparative
analysis, the Secretary makes an initial
determination that the comparative
analysis fails to demonstrate that the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in the relevant classification are
comparable to, and applied no more
stringently than, those used in designing
and applying the limitation to medical/
surgical benefits in the classification.
Pursuant to § 2590.712–1(d)(3), the plan
submits a corrective action plan and
additional comparative analyses within
45 calendar days after the initial
determination, and the Secretary then
determines that the additional
comparative analyses do not
demonstrate compliance with the
requirements of this paragraph (c)(4).
The plan receives a final determination
of noncompliance from the Secretary,
which informs the plan that it is not in
compliance with this paragraph (c)(4)
and directs the plan not to impose the
nonquantitative treatment limitation by
a certain date, unless and until the plan
demonstrates compliance to the
Secretary or takes appropriate action to
remedy the violation. The plan makes
no changes to its plan terms by that date
and continues to impose the
nonquantitative treatment limitation.
(2) Conclusion. In this paragraph
(c)(4)(viii)(G) (Example 7), the plan
violates the requirements of this
paragraph (c)(4) by imposing the
nonquantitative treatment limitation
after the Secretary directs the plan not
to impose it, pursuant to paragraph
(c)(4)(vii) of this section.
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(H) Example 8 (Provider network
admission standards not more
restrictive and compliant with
requirements for design and application
of NQTLs)—(1) Facts. As part of a plan’s
standards for provider admission to its
network, in the outpatient, in-network
classification, any provider seeking to
contract with the plan must have a
certain number of years of supervised
clinical experience. As a result of that
standard, master’s level mental health
therapists are required to obtain
supervised clinical experience beyond
their licensure, while master’s level
medical/surgical providers,
psychiatrists, and Ph.D.-level
psychologists do not require additional
experience beyond their licensure
because their licensure already requires
supervised clinical experience. The plan
collects and evaluates relevant data in a
manner reasonably designed to assess
the impact of the nonquantitative
treatment limitation. This includes innetwork and out-of-network utilization
rates (including data related to provider
claim submissions), network adequacy
metrics (including time and distance
data, and data on providers accepting
new patients), and provider
reimbursement rates (including as
compared to billed charges). This data
demonstrates that participants and
beneficiaries seeking outpatient care are
able to access outpatient, in-network
mental health and substance use
disorder providers at the same
frequency as outpatient, in-network
medical/surgical providers, that mental
health and substance use disorder
providers are active in the network and
are accepting new patients to the same
extent as medical/surgical providers,
and that mental health and substance
use disorder providers are within
similar time and distances to plan
participants and beneficiaries as are
medical/surgical providers. This data
also does not identify material
differences in what the plan or issuer
pays psychiatrists or non-physician
mental health providers, compared to
physicians or non-physician medical/
surgical providers, respectively, both for
the same reimbursement codes and as
compared to Medicare rates.
(2) Conclusion. In this paragraph
(c)(4)(viii)(H) (Example 8), the plan does
not violate this paragraph (c)(4). The
standards for this nonquantitative
treatment limitation, namely provider
admission to the plan’s network, are
applied to at least two-thirds of all
medical/surgical benefits in the
outpatient, in-network classification, as
it applies to all medical/surgical
benefits in the classification. The most
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common or frequent variation of this
nonquantitative treatment limitation
(the predominant nonquantitative
treatment limitation) that applies to
substantially all medical/surgical
benefits in the classification is having a
certain number of years of supervised
clinical experience. The standards for
provider admission to the plan’s
network that are imposed with respect
to mental health or substance use
disorder benefits are no more restrictive,
as written or in operation, than the
predominant variation of the
nonquantitative treatment limitation
applicable to substantially all medical/
surgical benefits in the classification,
because the standards do not limit
access to the full range of treatment
options available for a condition or
disorder under the plan or coverage as
compared to medical/surgical benefits
in the same classification. The
requirement that providers have a
certain number of years of supervised
clinical experience that the plan relied
upon to design and apply the
nonquantitative treatment limitation is
not considered to discriminate against
mental health or substance use disorder
benefits, even though this results in the
requirement that master’s level mental
health therapists obtain supervised
clinical experience beyond their
licensure, unlike master’s level medical/
surgical providers. In addition, as
written and in operation, the processes,
strategies, evidentiary standards, or
other factors used in applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in the classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in applying the
limitation with respect to medical/
surgical benefits in the classification,
because the plan applies the same
standard to all providers in the
classification. Finally, the plan or issuer
collects and evaluates relevant data in a
manner reasonably designed to assess
the impact of the nonquantitative
treatment limitation on access to mental
health and substance use disorder
benefits, which does not show material
differences in access to in-network
mental health and substance use
disorder benefits as compared to innetwork medical/surgical benefits in the
classification.
(I) Example 9 (More restrictive
requirement for primary caregiver
participation applied to ABA therapy)—
(1) Facts. A plan generally applies
medical necessity criteria in
adjudicating claims for coverage of all
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outpatient, in-network medical/surgical
and mental health and substance use
disorder benefits, including ABA
therapy for the treatment of ASD, which
is a mental health condition. The plan’s
medical necessity criteria for coverage
of ABA therapy requires evidence that
the participant’s or beneficiary’s
primary caregivers actively participate
in ABA therapy, as documented by
consistent attendance in parent,
caregiver, or guardian training sessions.
In adding this requirement, the plan
deviates from independent professional
medical or clinical standards, and there
are no similar medical necessity criteria
requiring evidence of primary caregiver
participation in order to receive
coverage of any medical/surgical
benefits.
(2) Conclusion. In this paragraph
(c)(4)(viii)(I) (Example 9), the plan
violates paragraph (c)(4)(i) of this
section. The plan applies medical
necessity criteria to at least two-thirds of
all outpatient, in-network medical/
surgical benefits, as they apply to all
medical/surgical benefits in the
classification. The most common or
frequent variation of this
nonquantitative treatment limitation
(the predominant nonquantitative
treatment limitation) that applies to
substantially all medical/surgical
benefits in the classification does not
include the requirement to provide
evidence that the participant’s or
beneficiary’s primary caregivers actively
participate in the treatment. The plan
does not qualify for the exception in
paragraph (c)(4)(i)(E) of this section in
applying its restriction on coverage for
ABA therapy because the plan deviates
from the independent professional
medical or clinical standards by
imposing a different requirement. As a
result, the nonquantitative treatment
limitation imposed on mental health
and substance use disorder benefits is
more restrictive than the predominant
medical necessity requirement imposed
on substantially all medical/surgical
benefits in the classification (which
does not include the requirement to
provide evidence that primary
caregivers actively participate in
treatment). Because the plan violates the
rules of paragraph (c)(4)(i) of this
section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(J) Example 10 (More restrictive
exclusion for experimental or
investigative treatment applied to ABA
therapy)—(1) Facts. A plan, as written,
generally excludes coverage for all
treatments that are experimental or
investigative for both medical/surgical
benefits and mental health and
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substance use disorder benefits in the
outpatient, in-network classification. As
a result, the plan generally excludes
experimental treatment of medical
conditions and surgical procedures,
mental health conditions, and substance
use disorders when no professionally
recognized treatment guidelines define
clinically appropriate standards of care
for the condition or disorder and fewer
than two randomized controlled trials
are available to support the treatment’s
use with respect to the given condition
or disorder. The plan provides benefits
for the treatment of ASD, which is a
mental health condition, but, in
operation, the plan excludes coverage
for ABA therapy to treat children with
ASD, deeming it experimental. More
than one professionally recognized
treatment guideline defines clinically
appropriate standards of care for ASD
and more than two randomized
controlled trials are available to support
the use of ABA therapy to treat certain
children with ASD.
(2) Conclusion. In this paragraph
(c)(4)(viii)(J) (Example 10), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The coverage exclusion
for experimental or investigative
treatment applies to at least two-thirds
of all medical/surgical benefits, as it
applies to all medical/surgical benefits
in the outpatient, in-network
classification. The most common or
frequent variation of this
nonquantitative treatment limitation in
the classification (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is the exclusion under
the plan for coverage of experimental
treatment of medical/surgical conditions
when no professionally recognized
treatment guidelines define clinically
appropriate standards of care for the
condition or disorder and fewer than
two randomized controlled trials are
available to support the treatment’s use
with respect to the given condition or
procedure. In operation, the exclusion
for experimental or investigative
treatment imposed on ABA therapy is
more restrictive than the predominant
variation of the nonquantitative
treatment limitation for experimental or
investigative treatment imposed on
substantially all medical/surgical
benefits in the classification because the
exclusion limits access to the full range
of treatment options available for a
condition or disorder under the plan or
coverage as compared to medical/
surgical benefits in the same
classification. Because the plan violates
the rules of paragraph (c)(4)(i) of this
section, this example does not analyze
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compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(K) Example 11 (Separate EAP
exhaustion treatment limitation
applicable only to mental health
benefits)—(1) Facts. An employer
maintains both a major medical plan
and an employee assistance program
(EAP). The EAP provides, among other
benefits, a limited number of mental
health or substance use disorder
counseling sessions, which, together
with other benefits provided by the
EAP, are not significant benefits in the
nature of medical care. Participants are
eligible for mental health or substance
use disorder benefits under the major
medical plan only after exhausting the
counseling sessions provided by the
EAP. No similar exhaustion requirement
applies with respect to medical/surgical
benefits provided under the major
medical plan.
(2) Conclusion. In this paragraph
(c)(4)(viii)(K) (Example 11), limiting
eligibility for mental health and
substance use disorder benefits under
the major medical plan until EAP
benefits are exhausted is a
nonquantitative treatment limitation
subject to the parity requirements of this
paragraph (c). Because the limitation
does not apply to medical/surgical
benefits, it is a separate nonquantitative
treatment limitation applicable only to
mental health and substance use
disorder benefits that violates paragraph
(c)(4)(vi) of this section. Additionally,
this EAP would not qualify as excepted
benefits under § 2590.732(c)(3)(vi)(B)(1)
because participants in the major
medical plan are required to use and
exhaust benefits under the EAP (making
the EAP a gatekeeper) before an
individual is eligible for benefits under
the plan.
(L) Example 12 (Separate residential
exclusion treatment limitation
applicable only to mental health
benefits)—(1) Facts. A plan generally
covers inpatient, in-network and
inpatient out-of-network treatment in
any setting, including skilled nursing
facilities and rehabilitation hospitals,
provided other medical necessity
standards are satisfied. The plan also
has an exclusion for residential
treatment, which the plan defines as an
inpatient benefit, for mental health and
substance use disorder benefits. This
exclusion was not generated through
any broader nonquantitative treatment
limitation (such as medical necessity or
other clinical guideline).
(2) Conclusion. In this paragraph
(c)(4)(viii)(L) (Example 12), the plan
violates the rules of paragraph (c)(4)(vi)
of this section. Because the plan does
not apply a comparable exclusion to
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inpatient benefits for medical/surgical
conditions, the exclusion of residential
treatment is a separate nonquantitative
treatment limitation applicable only to
mental health and substance use
disorder benefits in the inpatient, innetwork and inpatient, out-of-network
classifications that does not apply with
respect to any medical/surgical benefits
in the same benefit classification.
(M) Example 13 (Standards for
provider admission to a network)—(1)
Facts. A plan applies nonquantitative
treatment limitations related to network
composition in the outpatient innetwork and inpatient, in-network
classifications. The plan’s networks are
constructed by separate service
providers for medical/surgical benefits
and mental health and substance use
disorder benefits. For purposes of this
example, these facts assume that these
nonquantitative treatment limitations
related to network composition for
mental health and substance use
disorder benefits are not more restrictive
than the predominant nonquantitative
treatment limitations applied to
substantially all medical/surgical
benefits in the classifications under
paragraph (c)(4)(i) of this section. The
facts also assume that, as written and in
operation, the processes, strategies,
evidentiary standards, and other factors
used in designing and applying the
nonquantitative treatment limitations
related to network access to mental
health or substance use disorder
benefits in the outpatient in-network
and inpatient in-network classifications
are comparable to, and are applied no
more stringently than, the processes,
strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitations with respect to medical/
surgical benefits in the classifications,
as required under paragraph (c)(4)(ii) of
this section. The plan collects and
evaluates all relevant data in a manner
reasonably designed to assess the
impact of the nonquantitative treatment
limitations related to network
composition on access to mental health
and substance use disorder benefits as
compared with access to medical/
surgical benefits and considers the
impact as part of the plan’s or issuer’s
analysis of whether the standards, in
operation, comply with paragraphs
(c)(4)(i) and (ii) of this section. The plan
determined that the data did not reveal
any material differences in access. That
data included metrics relating to the
time and distance from plan
participants and beneficiaries to
network providers in rural and urban
regions; the number of network
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providers accepting new patients; the
proportions of mental health and
substance use disorder and medical/
surgical providers and facilities that
provide services in rural and urban
regions who are in the plan’s network;
provider reimbursement rates; innetwork and out-of-network utilization
rates (including data related to the
dollar value and number of provider
claims submissions); and survey data
from participants on the extent to which
they forgo or pay out-of-pocket for
treatment because of challenges finding
in-network providers. The efforts the
plan made when designing and
applying its nonquantitative treatment
limitations related to network
composition, which ultimately led to its
outcomes data not revealing any
material differences in access to benefits
for mental health or substance use
disorders as compared with medical/
surgical benefits, included making sure
that the plan’s service providers are
making special efforts to enroll available
providers, including by authorizing
greater compensation or other
inducements to the extent necessary,
and expanding telehealth arrangements
as appropriate to manage regional
shortages. The plan also notifies
participants in clear and prominent
language on its website, employee
brochures, and the summary plan
description of a toll-free number
available to help participants find innetwork providers. In addition, when
plan participants submit bills for out-ofnetwork items and services, the plan
directs their service providers to reach
out to the treating providers and
facilities to see if they will enroll in the
network.
(2) Conclusion. In this paragraph
(c)(4)(viii)(M) (Example 13), the plan
does not violate this paragraph (c)(4). As
stated in the Facts section, the plan’s
nonquantitative treatment limitations
related to network composition comply
with the rules of paragraphs (c)(4)(i) and
(ii) of this section. The plan collects and
evaluates relevant data, as required
under paragraph (c)(4)(iv)(A) of this
section, and the data does not reveal any
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits, as a result of the
actions the plan took (as set forth in the
facts) when initially designing its
nonquantitative treatment limitations
related to network composition. Because
the plan takes comparable actions to
ensure that their mental health and
substance use disorder provider
network is as accessible as their
medical/surgical provider network and
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exercises careful oversight over both
their service providers and the
comparative robustness of the networks
with an eye to ensuring that network
composition results in access to innetwork benefits for mental health and
substance use disorder services that is
as generous as for medical/surgical
services, plan participants and
beneficiaries can access covered mental
health and substance use disorder
services and benefits as readily as
medical/surgical benefits. This is
reflected in the plan’s carefully
designed metrics and assessment of
network composition.
*
*
*
*
*
(d) * * *
(3) Provisions of other law.
Compliance with the disclosure
requirements in paragraphs (d)(1) and
(2) of this section is not determinative
of compliance with any other provision
of applicable Federal or State law. In
particular, in addition to those
disclosure requirements, provisions of
other applicable law require disclosure
of information relevant to medical/
surgical, mental health, and substance
use disorder benefits. For example,
ERISA section 104 and § 2520.104b–1 of
this chapter provide that, for plans
subject to ERISA, instruments under
which the plan is established or
operated must generally be furnished to
plan participants within 30 days of
request. Instruments under which the
plan is established or operated include
documents with information on medical
necessity criteria for both medical/
surgical benefits and mental health and
substance use disorder benefits; the
processes, strategies, evidentiary
standards, and other factors used to
apply a nonquantitative treatment
limitation with respect to medical/
surgical benefits and mental health or
substance use disorder benefits under
the plan; and the comparative analyses
and other applicable information
required by § 2590.712–1. In addition,
§ 2560.503–1 of this chapter and
§ 2590.715–2719 set forth rules
regarding claims and appeals, including
the right of claimants (or their
authorized representative) upon appeal
of an adverse benefit determination (or
a final internal adverse benefit
determination) to be provided upon
request and free of charge, reasonable
access to and copies of all documents,
records, and other information relevant
to the claimant’s claim for benefits. This
includes documents with information
on medical necessity criteria for both
medical/surgical benefits and mental
health and substance use disorder
benefits, as well as the processes,
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strategies, evidentiary standards, and
other factors used to apply a
nonquantitative treatment limitation
with respect to medical/surgical benefits
and mental health or substance use
disorder benefits under the plan and the
comparative analyses and other
applicable information required by
§ 2590.712–1.
(e)
*
*
*
*
*
(4) Coordination with EHB
requirements. Nothing in paragraph (f)
or (g) of this section or § 2590.712–1(g)
changes the requirements of 45 CFR
147.150 and 156.115, providing that a
health insurance issuer offering nongrandfathered health insurance coverage
in the individual or small group market
providing mental health and substance
use disorder services, including
behavioral health treatment services, as
part of essential health benefits required
under 45 CFR 156.110(a)(5) and
156.115(a), must comply with the
requirements under section 2726 of the
Public Health Service Act and its
implementing regulations to satisfy the
requirement to provide coverage for
mental health and substance use
disorder services, including behavioral
health treatment, as part of essential
health benefits.
*
*
*
*
*
(i) * * *
(1) In general. Except as provided in
paragraph (i)(2) of this section, this
section applies to group health plans
and health insurance issuers offering
group health insurance coverage on the
first day of the first plan year beginning
on or after January 1, 2025. Until the
applicability date in the preceding
sentence, plans and issuers are required
to continue to comply with 29 CFR
2590.712, revised as of July 1, 2022.
*
*
*
*
*
(j) Severability. If any provision of this
section is held to be invalid or
unenforceable by its terms, or as applied
to any person or circumstance, or stayed
pending further agency action, the
provision shall be construed so as to
continue to give the maximum effect to
the provision permitted by law, unless
such holding shall be one of invalidity
or unenforceability, in which event the
provision shall be severable from this
section and shall not affect the
remainder thereof or the application of
the provision to persons not similarly
situated or to dissimilar circumstances.
■ 6. Add § 2590.712–1 to read as
follows:
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§ 2590.712–1 Nonquantitative treatment
limitation comparative analysis
requirements.
(a) Meaning of terms. Unless
otherwise stated in this section, the
terms of this section have the meanings
indicated in § 2590.712(a)(2).
(b) In general. In the case of a group
health plan (or health insurance issuer
offering group health insurance
coverage in connection with a group
health plan) that provides both medical/
surgical benefits and mental health or
substance use disorder benefits and that
imposes any nonquantitative treatment
limitation on mental health or substance
use disorder benefits, the plan or issuer
must perform and document a
comparative analysis of the design and
application of each nonquantitative
treatment limitation applicable to
mental health or substance use disorder
benefits. Each comparative analysis
must comply with the content
requirements of paragraph (c) of this
section and be made available to the
Secretary, upon request, in the manner
required by paragraphs (d) and (e) of
this section.
(c) Comparative analysis content
requirements. With respect to each
nonquantitative treatment limitation
applicable to mental health or substance
use disorder benefits under a group
health plan (or health insurance
coverage offered in connection with a
group health plan), the comparative
analysis performed by the plan or issuer
must include, at minimum, the elements
specified in this paragraph (c). In
addition to the comparative analysis for
each nonquantitative treatment
limitation, each plan or issuer must
prepare and make available to the
Secretary, upon request, a written list of
all nonquantitative treatment limitations
imposed under the plan or coverage and
a general description of any information
considered or relied upon by the plan or
issuer in preparing the comparative
analysis for each nonquantitative
treatment limitation. This list and
general description must be provided to
the named fiduciaries of the plan who
are required to review the findings or
conclusions of each comparative
analysis, as required under paragraph
(c)(6)(vi) of this section.
(1) Description of the nonquantitative
treatment limitation. The comparative
analysis must include, with respect to
the nonquantitative treatment limitation
that is the subject of the comparative
analysis:
(i) Identification of the
nonquantitative treatment limitation,
including the specific terms of the plan
or coverage or other relevant terms
regarding the nonquantitative treatment
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limitation, the policies or guidelines
(internal or external) in which the
nonquantitative treatment limitation
appears or is described, and the
applicable sections of any other relevant
documents, such as provider contracts,
that describe the nonquantitative
treatment limitation;
(ii) Identification of all mental health
or substance use disorder benefits and
medical/surgical benefits to which the
nonquantitative treatment limitation
applies, including a list of which
benefits are considered mental health or
substance use disorder benefits and
which benefits are considered medical/
surgical benefits;
(iii) A description of which benefits
are included in each classification set
forth in § 2590.712(c)(2)(ii)(A); and
(iv) Identification of the predominant
nonquantitative treatment limitation
applicable to substantially all medical/
surgical benefits in each classification,
including an explanation of how the
plan or issuer determined which
variation is the predominant
nonquantitative treatment limitation as
compared to other variations, as well as
how the plan identified the variations of
the nonquantitative treatment
limitation.
(2) Identification and definition of the
factors used to design or apply the
nonquantitative treatment limitation.
The comparative analysis must include,
with respect to every factor considered
or relied upon to design the
nonquantitative treatment limitation or
apply the nonquantitative treatment
limitation to mental health or substance
use disorder benefits and medical/
surgical benefits:
(i) Identification of all of the factors
considered, as well as the evidentiary
standards considered or relied upon to
design or apply each factor and the
sources from which each evidentiary
standard was derived, in determining
which mental health or substance use
disorder benefits and which medical/
surgical benefits are subject to the
nonquantitative treatment limitation;
and
(ii) A definition of each factor,
including:
(A) A detailed description of the
factor; and
(B) A description of each evidentiary
standard (and the source of each
evidentiary standard) identified under
paragraph (c)(2)(i) of this section.
(3) Description of how factors are
used in the design and application of
the nonquantitative treatment
limitation. The comparative analysis
must include a description of how each
factor identified and defined pursuant
to paragraph (c)(2) of this section is used
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in the design or application of the
nonquantitative treatment limitation to
mental health and substance use
disorder benefits and medical/surgical
benefits in a classification, including:
(i) A detailed explanation of how each
factor identified and defined in
paragraph (c)(2) of this section is used
to determine which mental health or
substance use disorder benefits and
which medical/surgical benefits are
subject to the nonquantitative treatment
limitation;
(ii) An explanation of the evidentiary
standards or other information or
sources (if any) considered or relied
upon in designing or applying the
factors or relied upon in designing and
applying the nonquantitative treatment
limitation, including in the
determination of whether and how
mental health or substance use disorder
benefits or medical/surgical benefits are
subject to the nonquantitative treatment
limitation;
(iii) If the application of the factor
depends on specific decisions made in
the administration of benefits, the
nature of the decisions, the timing of the
decisions, and the professional
designation and qualifications of each
decision maker;
(iv) If more than one factor is
identified and defined in paragraph
(c)(2) of this section, an explanation of:
(A) How all of the factors relate to
each other;
(B) The order in which all the factors
are applied, including when they are
applied;
(C) Whether and how any factors are
given more weight than others; and
(D) The reasons for the ordering or
weighting of the factors; and
(v) Any deviation(s) or variation(s)
from a factor, its applicability, or its
definition (including the evidentiary
standards used to define the factor and
the information or sources from which
each evidentiary standard was derived),
such as how the factor is used
differently to apply the nonquantitative
treatment limitation to mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
and a description of how the plan or
issuer establishes such deviation(s) or
variation(s).
(4) Demonstration of comparability
and stringency as written. The
comparative analysis must evaluate
whether, in any classification, under the
terms of the plan (or health insurance
coverage) as written, any processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits are comparable to,
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and are applied no more stringently
than, the processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
nonquantitative treatment limitation
with respect to medical/surgical
benefits. The comparative analysis must
include, with respect to the
nonquantitative treatment limitation
and the factors used in designing and
applying the nonquantitative treatment
limitation:
(i) Documentation of each factor
identified and defined in paragraph
(c)(2) of this section that was applied to
determine whether the nonquantitative
treatment limitation applies to mental
health or substance use disorder
benefits and medical/surgical benefits in
a classification, including, as relevant:
(A) Quantitative data, calculations, or
other analyses showing whether, in each
classification in which the
nonquantitative treatment limitation
applies, mental health or substance use
disorder benefits and medical/surgical
benefits met or did not meet any
applicable threshold identified in the
relevant evidentiary standard, and the
evaluation of relevant data as required
under § 2590.712(c)(4)(iv)(A), to
determine that the nonquantitative
treatment limitation would or would not
apply; and
(B) Records maintained by the plan or
issuer documenting the consideration
and application of all factors and
evidentiary standards, as well as the
results of their application;
(ii) In each classification in which the
nonquantitative treatment limitation
applies to mental health or substance
use disorder benefits, a comparison of
how the nonquantitative treatment
limitation, as written, is applied to
mental health or substance use disorder
benefits and to medical/surgical
benefits, including the specific
provisions of any forms, checklists,
procedure manuals, or other
documentation used in designing and
applying the nonquantitative treatment
limitation or that address the
application of the nonquantitative
treatment limitation;
(iii) Documentation demonstrating
how the factors are comparably applied,
as written, to mental health or substance
use disorder benefits and medical/
surgical benefits in each classification,
to determine which benefits are subject
to the nonquantitative treatment
limitation; and
(iv) An explanation of the reason(s)
for any deviation(s) or variation(s) in the
application of a factor used to apply the
nonquantitative treatment limitation, or
the application of the nonquantitative
treatment limitation, to mental health or
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substance use disorder benefits as
compared to medical/surgical benefits,
and how the plan or issuer establishes
such deviation(s) or variation(s),
including:
(A) In the definition of the factors, the
evidentiary standards used to define the
factors, and the sources from which the
evidentiary standards were derived;
(B) In the design of the factors or
evidentiary standards; or
(C) In the application or design of the
nonquantitative treatment limitation.
(5) Demonstration of comparability
and stringency in operation. The
comparative analysis must evaluate
whether, in any classification, under the
terms of the plan (or health insurance
coverage) in operation, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits are comparable to,
and are applied no more stringently
than, the processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
limitation with respect to medical/
surgical benefits. The comparative
analysis must include, with respect to
the nonquantitative treatment limitation
and the factors used in designing and
applying the nonquantitative treatment
limitation:
(i) A comprehensive explanation of
how the plan or issuer ensures that, in
operation, the processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in a classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the nonquantitative treatment
limitation with respect to medical/
surgical benefits, including:
(A) An explanation of any
methodology and underlying data used
to demonstrate the application of the
nonquantitative treatment limitation, in
operation; and
(B) The sample period, inputs used in
any calculations, definitions of terms
used, and any criteria used to select the
mental health or substance use disorder
benefits and medical/surgical benefits to
which the nonquantitative treatment
limitation is applicable;
(ii) Identification of the relevant data
collected and evaluated as required
under § 2590.712(c)(4)(iv)(A);
(iii) An evaluation of the outcomes
that resulted from the application of the
nonquantitative treatment limitation to
mental health or substance use disorder
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benefits and medical/surgical benefits,
including the relevant data as required
under § 2590.712(c)(4)(iv)(A);
(iv) A detailed explanation of material
differences in outcomes evaluated
pursuant to paragraph (c)(5)(iii) of this
section that are not attributable to
differences in the comparability or
relative stringency of the
nonquantitative treatment limitation as
applied to mental health or substance
use disorder benefits and medical/
surgical benefits and the bases for
concluding that material differences in
outcomes are not attributable to
differences in the comparability or
relative stringency of the
nonquantitative treatment limitation;
and
(v) A discussion of any measures that
have been or are being implemented by
the plan or issuer to mitigate any
material differences in access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits, including the actions
the plan or issuer is taking under
§ 2590.712(c)(4)(iv)(B)(1) to address
material differences to ensure
compliance with § 2590.712(c)(4)(i) and
(ii).
(6) Findings and conclusions. The
comparative analysis must address the
findings and conclusions as to the
comparability of the processes,
strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits and medical/
surgical benefits within each
classification, and the relative
stringency of their application, both as
written and in operation, and include:
(i) Any findings or conclusions
indicating that the plan or coverage is
not (or might not be) in compliance with
the requirements of § 2590.712(c)(4),
including any actions the plan or issuer
has taken or intends to take to address
any potential areas of concern or
noncompliance;
(ii) A reasoned and detailed
discussion of the findings and
conclusions described in paragraph
(c)(6)(i) of this section;
(iii) Citations to any additional
specific information not otherwise
included in the comparative analysis
that supports the findings and
conclusions described in paragraph
(c)(6)(i) of this section;
(iv) The date of the analysis and the
title and credentials of all relevant
persons who participated in the
performance and documentation of the
comparative analysis;
(v) If the comparative analysis relies
upon an evaluation by a reviewer or
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51651
consultant considered by the plan or
issuer to be an expert, an assessment of
each expert’s qualifications and the
extent to which the plan or issuer
ultimately relied upon each expert’s
evaluation in performing and
documenting the comparative analysis
of the design and application of each
nonquantitative treatment limitation
applicable to both mental health or
substance use disorder benefits and
medical/surgical benefits; and
(vi) A certification by one or more
named fiduciaries who have reviewed
the comparative analysis stating
whether they found the comparative
analysis to be in compliance with the
content requirements of paragraph (c) of
this section.
(d) Requirements related to
submission of comparative analyses to
the Secretary upon request—(1) Initial
request by the Secretary for comparative
analysis. A group health plan or health
insurance issuer offering group health
insurance coverage must make the
comparative analysis required by
paragraph (b) of this section available
and submit it to the Secretary within 10
business days of receipt of a request
from the Secretary (or an additional
period of time specified by the
Secretary).
(2) Additional information required
after a comparative analysis is deemed
to be insufficient. In instances in which
the Secretary determines that the plan
or issuer has not submitted sufficient
information under paragraph (d)(1) of
this section for the Secretary to review
the comparative analysis required in
paragraph (b) of this section, the
Secretary will specify to the plan or
issuer the additional information the
plan or issuer must submit to the
Secretary to be responsive to the request
under paragraph (d)(1) of this section.
Any such information must be provided
to the Secretary by the plan or issuer
within 10 business days after the
Secretary specifies the additional
information to be submitted (or an
additional period of time specified by
the Secretary).
(3) Initial determination of
noncompliance, required action, and
corrective action plan. In instances in
which the Secretary reviewed the
comparative analysis submitted under
paragraph (d)(1) of this section and any
additional information submitted under
paragraph (d)(2) of this section, and
made an initial determination that the
plan or issuer is not in compliance with
the requirements of § 2590.712(c)(4) or
this section, the plan or issuer must
respond to the Secretary and specify the
actions the plan or issuer will take to
bring the plan or coverage into
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compliance, and provide to the
Secretary additional comparative
analyses meeting the requirements of
paragraph (b) of this section that
demonstrate compliance with
§ 2590.712(c)(4) and this section, not
later than 45 calendar days after the
Secretary’s initial determination that the
plan or issuer is not in compliance.
(4) Requirement to notify participants
and beneficiaries of final determination
of noncompliance—(i) In general. If the
Secretary makes a final determination of
noncompliance, the plan or issuer must
notify all participants and beneficiaries
enrolled in the plan or coverage that the
plan or issuer has been determined to
not be in compliance with the
requirements of § 2590.712(c)(4) or this
section with respect to such plan or
coverage. Such notice must be provided
within 7 calendar days of receipt of the
final determination of noncompliance,
and the plan or issuer must provide a
copy of the notice to the Secretary, and
any service provider involved in the
claims process, and any fiduciary
responsible for deciding benefit claims
within the same time frame.
(ii) Content of notice. The notice to
participants and beneficiaries required
in paragraph (d)(4)(i) of this section
shall be written in a manner calculated
to be understood by the average plan
participant and must include, in plain
language, the following information in a
standalone notice:
(A) The following statement
prominently displayed on the first page,
in no less than 14-point font:
‘‘Attention! The Department of Labor
has determined that [insert the name of
group health plan or health insurance
issuer] is not in compliance with the
Mental Health Parity and Addiction
Equity Act.’’;
(B) A summary of changes the plan or
issuer has made as part of its corrective
action plan specified to the Secretary
following the initial determination of
noncompliance, including an
explanation of any opportunity for a
participant or beneficiary to have a
claim for benefits reprocessed;
(C) A summary of the Secretary’s final
determination that the plan or issuer is
not in compliance with § 2590.712(c)(4)
or this section, including any provisions
or practices identified as being in
violation of MHPAEA, additional
corrective actions identified by the
Secretary in the final determination
notice, and information on how
participants and beneficiaries can obtain
from the plan or issuer a copy of the
final determination of noncompliance;
(D) Any additional actions the plan or
issuer is taking to come into compliance
with § 2590.712(c)(4) or this section,
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when the plan or issuer will take such
actions, and a clear and accurate
statement explaining whether the
Secretary has indicated that those
actions, if completed, will result in
compliance; and
(E) Contact information for questions
and complaints, and a statement
explaining how participants and
beneficiaries can obtain more
information about the notice, including:
(1) The plan’s or issuer’s phone
number and an email or web portal
address; and
(2) The Employee Benefits Security
Administration’s phone number and
email or web portal address.
(iii) Manner of notice. The plan or
issuer must make the notice required
under paragraph (d)(4)(i) of this section
available in paper form, or
electronically (such as by email or an
internet posting) if:
(A) The format is readily accessible;
(B) The notice is provided in paper
form free of charge upon request; and
(C) In a case in which the electronic
form is an internet posting, the plan or
issuer timely notifies the participant or
beneficiary in paper form (such as a
postcard) or email, that the documents
are available on the internet, provides
the internet address, includes the
statement required in paragraph
(d)(4)(ii)(A) of this section, and notifies
the participant or beneficiary that the
documents are available in paper form
upon request.
(e) Requests for a copy of a
comparative analysis. In addition to
making a comparative analysis available
upon request to the Secretary, a plan or
issuer must make available a copy of the
comparative analysis required by
paragraph (b) of this section when
requested by:
(1) Any applicable State authority;
(2) A participant or beneficiary (or a
provider or other person acting as a
participant’s or beneficiary’s authorized
representative) who has received an
adverse benefit determination related to
mental health or substance use disorder
benefits; and
(3) Participants and beneficiaries, who
may request the comparative analysis at
any time under ERISA section 104.
(f) Rule of construction. Nothing in
this section or § 2590.712 shall be
construed to prevent the Secretary from
acting within the scope of existing
authorities to address violations of
§ 2590.712 or this section.
(g) Applicability. The provisions of
this section apply to group health plans
and health insurance issuers offering
group health insurance coverage
described in § 2590.712(e), to the extent
the plan or issuer is not exempt under
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§ 2590.712(f) or (g), for plan years
beginning on or after January 1, 2025.
(h) Severability. If any provision of
this section is held to be invalid or
unenforceable by its terms, or as applied
to any person or circumstance, or stayed
pending further agency action, the
provision shall be construed so as to
continue to give the maximum effect to
the provision permitted by law, unless
such holding shall be one of invalidity
or unenforceability, in which event the
provision shall be severable from this
section and shall not affect the
remainder thereof or the application of
the provision to persons not similarly
situated or to dissimilar circumstances.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
For the reasons set forth in the
preamble, the Department of Health and
Human Services proposes to amend 45
CFR parts 146 and 147 as set forth
below:
PART 146—REQUIREMENTS FOR THE
GROUP HEALTH INSURANCE
MARKET
7. The authority citation for part 146
continues to read as follows:
■
Authority: 42 U.S.C. 300gg–1 through
300gg–5, 300gg–11 through 300gg–23, 300gg–
91, and 300gg–92.
8. Amend § 146.136 is amended by:
a. Redesignating paragraph (a) as
paragraph (a)(2) and adding paragraphs
(a) heading and (a)(1);
■ b. In newly redesignated paragraph
(a)(2):
■ i. Revising the introductory text;
■ ii. Adding the definitions of ‘‘DSM,’’
‘‘Evidentiary standards,’’ ‘‘Factors,’’ and
‘‘ICD’’ in alphabetical order;
■ iii. Revising the definitions of
‘‘Medical/surgical benefits’’ and
‘‘Mental health benefits’’;
■ iv. Adding the definitions of
‘‘Processes’’ and ‘‘Strategies’’ in
alphabetical order; and
■ v. Revising the definitions of
‘‘Substance use disorder benefits’’ and
‘‘Treatment limitations’’;
■ c. Revising paragraphs (c)(1)(ii),
(c)(2)(i), and (c)(2)(ii)(A) introductory
text;
■ d. In paragraph (c)(2)(ii)(C),
designating Examples 1 through 4 as
paragraphs (c)(2)(ii)(C)(1) through (4)
and revising newly designated
paragraphs (c)(2)(ii)(C)(1) through (4);
■ e. Adding paragraphs (c)(2)(ii)(C)(5)
and (6);
■ f. Revising paragraphs (c)(3)(i)(A), (C),
and (D);
■ g. In paragraph (c)(3)(iii), adding
introductory text;
■
■
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h. Revising paragraphs (c)(3)(iii)(A)
and (B), (c)(3)(iv), (c)(4), (d)(3), (e)(4),
and (i)(1); and
■ I, Adding paragraph (j).
The revisions and additions read as
follows:
■
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§ 146.136 Parity in mental health and
substance use disorder benefits.
(a) Purpose and meaning of terms—
(1) Purpose. This section and § 146.137
set forth rules to ensure parity in
aggregate lifetime and annual dollar
limits, financial requirements, and
quantitative and nonquantitative
treatment limitations between mental
health and substance use disorder
benefits and medical/surgical benefits,
as required under PHS Act section 2726.
A fundamental purpose of PHS Act
section 2726, this section, and § 146.137
is to ensure that participants and
beneficiaries in a group health plan (or
health insurance coverage offered by an
issuer in connection with a group health
plan) that offers mental health or
substance use disorder benefits are not
subject to more restrictive lifetime or
annual dollar limits, financial
requirements, or treatment limitations
with respect to those benefits than the
predominant dollar limits, financial
requirements, or treatment limitations
that are applied to substantially all
medical/surgical benefits covered by the
plan or coverage, as further provided in
this section and § 146.137. Accordingly,
in complying with the provisions of
PHS Act section 2726, this section, and
§ 146.137, plans and issuers must not
design or apply financial requirements
and treatment limitations that impose a
greater burden on access (that is, are
more restrictive) to mental health and
substance use disorder benefits under
the plan or coverage than they impose
on access to generally comparable
medical/surgical benefits. The
provisions of PHS section 2726, this
section, and § 146.137 should be
interpreted in a manner that is
consistent with the purpose described
in this paragraph (a)(1).
(2) Meaning of terms. For purposes of
this section and § 146.137, except where
the context clearly indicates otherwise,
the following terms have the meanings
indicated:
*
*
*
*
*
DSM means the American Psychiatric
Association’s Diagnostic and Statistical
Manual of Mental Disorders. For the
purpose of this definition, the most
current version of the DSM is the
version that is applicable no earlier than
on the date that is 1 year before the first
day of the applicable plan year.
Evidentiary standards are any
evidence, sources, or standards that a
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group health plan (or health insurance
issuer offering coverage in connection
with such a plan) considered or relied
upon in designing or applying a factor
with respect to a nonquantitative
treatment limitation, including specific
benchmarks or thresholds. Evidentiary
standards may be empirical, statistical,
or clinical in nature, and include:
sources acquired or originating from an
objective third party, such as recognized
medical literature, professional
standards and protocols (which may
include comparative effectiveness
studies and clinical trials), published
research studies, payment rates for
items and services (such as publicly
available databases of the ‘‘usual,
customary and reasonable’’ rates paid
for items and services), and clinical
treatment guidelines; internal plan or
issuer data, such as claims or utilization
data or criteria for assuring a sufficient
mix and number of network providers;
and benchmarks or thresholds, such as
measures of excessive utilization, cost
levels, time or distance standards, or
network participation percentage
thresholds.
Factors are all information, including
processes and strategies (but not
evidentiary standards), that a group
health plan (or health insurance issuer
offering coverage in connection with
such a plan) considered or relied upon
to design a nonquantitative treatment
limitation, or to determine whether or
how the nonquantitative treatment
limitation applies to benefits under the
plan or coverage. Examples of factors
include, but are not limited to: provider
discretion in determining a diagnosis or
type or length of treatment; clinical
efficacy of any proposed treatment or
service; licensing and accreditation of
providers; claim types with a high
percentage of fraud; quality measures;
treatment outcomes; severity or
chronicity of condition; variability in
the cost of an episode of treatment; high
cost growth; variability in cost and
quality; elasticity of demand; and
geographic location.
*
*
*
*
*
ICD means the World Health
Organization’s International
Classification of Diseases adopted by the
Department of Health and Human
Services through § 162.1002 of this
subtitle. For the purpose of this
definition, the most current version of
the ICD is the version that is applicable
no earlier than on the date that is 1 year
before the first day of the applicable
plan year.
Medical/surgical benefits means
benefits with respect to items or services
for medical conditions or surgical
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51653
procedures, as defined under the terms
of the group health plan (or health
insurance coverage offered by an issuer
in connection with such a plan) and in
accordance with applicable Federal and
State law, but does not include mental
health benefits or substance use
disorder benefits. Notwithstanding the
preceding sentence, any condition or
procedure defined by the plan or
coverage as being or as not being a
medical condition or surgical procedure
must be defined consistent with
generally recognized independent
standards of current medical practice
(for example, the most current version
of the ICD). To the extent generally
recognized independent standards of
current medical practice do not address
whether a condition or procedure is a
medical condition or surgical
procedure, plans and issuers may define
the condition or procedure in
accordance with applicable Federal and
State law.
Mental health benefits means benefits
with respect to items or services for
mental health conditions, as defined
under the terms of the group health plan
(or health insurance coverage offered by
an issuer in connection with such a
plan) and in accordance with applicable
Federal and State law, but does not
include medical/surgical benefits or
substance use disorder benefits.
Notwithstanding the preceding
sentence, any condition defined by the
plan or coverage as being or as not being
a mental health condition must be
defined consistent with generally
recognized independent standards of
current medical practice. For the
purpose of this definition, to be
consistent with generally recognized
independent standards of current
medical practice, the definition must
include all conditions covered under
the plan or coverage, except for
substance use disorders, that fall under
any of the diagnostic categories listed in
the mental, behavioral, and
neurodevelopmental disorders chapter
(or equivalent chapter) of the most
current version of the ICD or that are
listed in the most current version of the
DSM. To the extent generally recognized
independent standards of current
medical practice do not address whether
a condition is a mental health condition,
plans and issuers may define the
condition in accordance with applicable
Federal and State law.
Processes are actions, steps, or
procedures that a group health plan (or
health insurance issuer offering
coverage in connection with such a
plan) uses to apply a nonquantitative
treatment limitation, including actions,
steps, or procedures established by the
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plan or issuer as requirements in order
for a participant or beneficiary to access
benefits, including through actions by a
participant’s or beneficiary’s authorized
representative or a provider or facility.
Processes include but are not limited to:
procedures to submit information to
authorize coverage for an item or service
prior to receiving the benefit or while
treatment is ongoing (including
requirements for peer or expert clinical
review of that information); provider
referral requirements; and the
development and approval of a
treatment plan. Processes also include
the specific procedures used by staff or
other representatives of a plan or issuer
(or the service provider of a plan or
issuer) to administer the application of
nonquantitative treatment limitations,
such as how a panel of staff members
applies the nonquantitative treatment
limitation (including the qualifications
of staff involved, number of staff
members allocated, and time allocated),
consultations with panels of experts in
applying the nonquantitative treatment
limitation, and reviewer discretion in
adhering to criteria hierarchy when
applying a nonquantitative treatment
limitation.
Strategies are practices, methods, or
internal metrics that a plan (or health
insurance issuer offering coverage in
connection with such a plan) considers,
reviews, or uses to design a
nonquantitative treatment limitation.
Examples of strategies include but are
not limited to: the development of the
clinical rationale used in approving or
denying benefits; deviation from
generally accepted standards of care; the
selection of information deemed
reasonably necessary to make a medical
necessity determination; reliance on
treatment guidelines or guidelines
provided by third-party organizations;
and rationales used in selecting and
adopting certain threshold amounts,
professional protocols, and fee
schedules. Strategies also include the
creation and composition of the staff or
other representatives of a plan or issuer
(or the service provider of a plan or
issuer) that deliberates, or otherwise
makes decisions, on the design of
nonquantitative treatment limitations,
including the plan’s decisions related to
the qualifications of staff involved,
number of staff members allocated, and
time allocated; breadth of sources and
evidence considered; consultations with
panels of experts in designing the
nonquantitative treatment limitation;
and the composition of the panels used
to design a nonquantitative treatment
limitation.
Substance use disorder benefits
means benefits with respect to items or
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services for substance use disorders, as
defined under the terms of the group
health plan (or health insurance
coverage offered by an issuer in
connection with such a plan) and in
accordance with applicable Federal and
State law, but does not include medical/
surgical benefits or mental health
benefits. Notwithstanding the preceding
sentence, any disorder defined by the
plan or coverage as being or as not being
a substance use disorder must be
defined consistent with generally
recognized independent standards of
current medical practice. For the
purpose of this definition, to be
consistent with generally recognized
independent standards of current
medical practice, the definition must
include all disorders covered under the
plan or coverage that fall under any of
the diagnostic categories listed as a
mental or behavioral disorder due to
psychoactive substance use (or
equivalent category) in the mental,
behavioral and neurodevelopmental
disorders chapter (or equivalent
chapter) of the most current version of
the ICD or that are listed as a SubstanceRelated and Addictive Disorder (or
equivalent category) in the most current
version of the DSM. To the extent
generally recognized independent
standards of current medical practice do
not address whether a disorder is a
substance use disorder, plans and
issuers may define the disorder in
accordance with applicable Federal and
State law.
Treatment limitations include limits
on benefits based on the frequency of
treatment, number of visits, days of
coverage, days in a waiting period, or
other similar limits on the scope or
duration of treatment. Treatment
limitations include both quantitative
treatment limitations, which are
expressed numerically (such as 50
outpatient visits per year), and
nonquantitative treatment limitations,
which otherwise limit the scope or
duration of benefits for treatment under
a plan or coverage. (See paragraph
(c)(4)(iii) of this section for an
illustrative, non-exhaustive list of
nonquantitative treatment limitations.)
A complete exclusion of all benefits for
a particular condition or disorder,
however, is not a treatment limitation
for purposes of this definition.
*
*
*
*
*
(c) * * *
(1) * * *
(ii) Type of financial requirement or
treatment limitation. When reference is
made in this paragraph (c) to a type of
financial requirement or treatment
limitation, the reference to type means
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its nature. Different types of financial
requirements include deductibles,
copayments, coinsurance, and out-ofpocket maximums. Different types of
quantitative treatment limitations
include annual, episode, and lifetime
day and visit limits. See paragraph
(c)(4)(iii) of this section for an
illustrative, non-exhaustive list of
nonquantitative treatment limitations.
*
*
*
*
*
(2) * * *
(i) General rule. A group health plan
(or health insurance coverage offered by
an issuer in connection with a group
health plan) that provides both medical/
surgical benefits and mental health or
substance use disorder benefits may not
apply any financial requirement or
treatment limitation to mental health or
substance use disorder benefits in any
classification that is more restrictive
than the predominant financial
requirement or treatment limitation of
that type applied to substantially all
medical/surgical benefits in the same
classification. Whether a financial
requirement or treatment limitation is a
predominant financial requirement or
treatment limitation that applies to
substantially all medical/surgical
benefits in a classification is determined
separately for each type of financial
requirement or treatment limitation. A
plan or issuer may not impose any
financial requirement or treatment
limitation that is applicable only with
respect to mental health or substance
use disorder benefits and not to any
medical/surgical benefits in the same
benefit classification. The application of
the rules of this paragraph (c)(2) to
financial requirements and quantitative
treatment limitations is addressed in
paragraph (c)(3) of this section; the
application of the rules of this
paragraph (c)(2) to nonquantitative
treatment limitations is addressed in
paragraph (c)(4) of this section.
(ii) * * *
(A) In general. If a plan (or health
insurance coverage) provides any
benefits for a mental health condition or
substance use disorder in any
classification of benefits described in
this paragraph (c)(2)(ii), benefits for that
mental health condition or substance
use disorder must be provided in every
classification in which medical/surgical
benefits are provided. For purposes of
this paragraph (c)(2)(ii), a plan (or
health insurance coverage) providing
any benefits for a mental health
condition or substance use disorder in
any classification of benefits does not
provide benefits for the mental health
condition or substance use disorder in
every classification in which medical/
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surgical benefits are provided unless the
plan (or health insurance coverage)
provides meaningful benefits for
treatment for that condition or disorder
in each such classification, as
determined in comparison to the
benefits provided for medical/surgical
conditions in the classification. In
determining the classification in which
a particular benefit belongs, a plan (or
health insurance issuer) must apply the
same standards to medical/surgical
benefits and to mental health or
substance use disorder benefits. To the
extent that a plan (or health insurance
coverage) provides benefits in a
classification and imposes any separate
financial requirement or treatment
limitation (or separate level of a
financial requirement or treatment
limitation) for benefits in the
classification, the rules of this paragraph
(c) apply separately with respect to that
classification for all financial
requirements or treatment limitations
(illustrated in examples in paragraph
(c)(2)(ii)(C) of this section). The
following classifications of benefits are
the only classifications used in applying
the rules of this paragraph (c), in
addition to the permissible subclassifications described in paragraph
(c)(3)(iii) of this section:
*
*
*
*
*
(C) * * *
(1) Example 1—(i) Facts. A group
health plan offers inpatient and
outpatient benefits and does not
contract with a network of providers.
The plan imposes a $500 deductible on
all benefits. For inpatient medical/
surgical benefits, the plan imposes a
coinsurance requirement. For outpatient
medical/surgical benefits, the plan
imposes copayments. The plan imposes
no other financial requirements or
treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(1) (Example 1), because the
plan has no network of providers, all
benefits provided are out-of-network.
Because inpatient, out-of-network
medical/surgical benefits are subject to
separate financial requirements from
outpatient, out-of-network medical/
surgical benefits, the rules of this
paragraph (c) apply separately with
respect to any financial requirements
and treatment limitations, including the
deductible, in each classification.
(2) Example 2—(i) Facts. A plan
imposes a $500 deductible on all
benefits. The plan has no network of
providers. The plan generally imposes a
20 percent coinsurance requirement
with respect to all benefits, without
distinguishing among inpatient,
outpatient, emergency care, or
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prescription drug benefits. The plan
imposes no other financial requirements
or treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(2) (Example 2), because the
plan does not impose separate financial
requirements (or treatment limitations)
based on classification, the rules of this
paragraph (c) apply with respect to the
deductible and the coinsurance across
all benefits.
(3) Example 3—(i) Facts. Same facts
as in paragraph (c)(2)(ii)(C)(2)(i) of this
section (Example 2), except the plan
exempts emergency care benefits from
the 20 percent coinsurance requirement.
The plan imposes no other financial
requirements or treatment limitations.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(3) (Example 3), because the
plan imposes separate financial
requirements based on classifications,
the rules of this paragraph (c) apply
with respect to the deductible and the
coinsurance separately for benefits in
the emergency care classification and all
other benefits.
(4) Example 4—(i) Facts. Same facts
as in paragraph (c)(2)(ii)(C)(2)(i) of this
section (Example 2), except the plan
also imposes a preauthorization
requirement for all inpatient treatment
in order for benefits to be paid. No such
requirement applies to outpatient
treatment.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(4) (Example 4), because the
plan has no network of providers, all
benefits provided are out-of-network.
Because the plan imposes a separate
treatment limitation based on
classifications, the rules of this
paragraph (c) apply with respect to the
deductible and coinsurance separately
for inpatient, out-of-network benefits
and all other benefits.
(5) Example 5—(i) Facts. A plan
generally covers treatment for autism
spectrum disorder (ASD), a mental
health condition, and covers outpatient,
out-of-network developmental
evaluations for ASD but excludes all
other benefits for outpatient treatment
for ASD, including applied behavioral
analysis (ABA) therapy, when provided
on an out-of-network basis. The plan
generally covers the full range of
outpatient treatments and treatment
settings for medical conditions and
surgical procedures when provided on
an out-of-network basis.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(5) (Example 5), the plan
violates the rules of this paragraph
(c)(2)(ii). Because the plan only covers
one type of benefit for ASD in the
outpatient, out-of-network classification
and excludes all other benefits for ASD
in the classification, but generally
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51655
covers the full range of medical/surgical
benefits in the classification, it fails to
provide meaningful benefits for
treatment of ASD in the classification.
(6) Example 6—(i) Facts. A plan
generally covers diagnosis and
treatment for eating disorders, a mental
health condition, but specifically
excludes coverage for nutrition
counseling to treat eating disorders,
including in the outpatient, in-network
classification. Nutrition counseling is
one of the primary treatments for eating
disorders. The plan generally provides
benefits for the primary treatments for
medical/surgical conditions in the
outpatient, in-network classification.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(6) (Example 6), the plan
violates the rules of this paragraph
(c)(2)(ii). The exclusion of coverage for
nutrition counseling for eating disorders
results in the plan failing to provide
meaningful benefits for the treatment of
eating disorders in the outpatient, innetwork classification, as determined in
comparison to the benefits provided for
medical/surgical conditions in the
classification.
(3) * * *
(i) * * *
(A) Substantially all. For purposes of
this paragraph (c)(3), a type of financial
requirement or quantitative treatment
limitation is considered to apply to
substantially all medical/surgical
benefits in a classification of benefits if
it applies to at least two-thirds of all
medical/surgical benefits in that
classification. (For purposes of this
paragraph (c)(3)(i)(A), benefits
expressed as subject to a zero level of a
type of financial requirement are treated
as benefits not subject to that type of
financial requirement, and benefits
expressed as subject to a quantitative
treatment limitation that is unlimited
are treated as benefits not subject to that
type of quantitative treatment
limitation.) If a type of financial
requirement or quantitative treatment
limitation does not apply to at least twothirds of all medical/surgical benefits in
a classification, then that type cannot be
applied to mental health or substance
use disorder benefits in that
classification.
*
*
*
*
*
(C) Portion based on plan payments.
For purposes of this paragraph (c)(3),
the determination of the portion of
medical/surgical benefits in a
classification of benefits subject to a
financial requirement or quantitative
treatment limitation (or subject to any
level of a financial requirement or
quantitative treatment limitation) is
based on the dollar amount of all plan
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payments for medical/surgical benefits
in the classification expected to be paid
under the plan for the plan year (or for
the portion of the plan year after a
change in plan benefits that affects the
applicability of the financial
requirement or quantitative treatment
limitation).
(D) Clarifications for certain threshold
requirements. For any deductible, the
dollar amount of plan payments
includes all plan payments with respect
to claims that would be subject to the
deductible if it had not been satisfied.
For any out-of-pocket maximum, the
dollar amount of plan payments
includes all plan payments associated
with out-of-pocket payments that are
taken into account towards the out-ofpocket maximum as well as all plan
payments associated with out-of-pocket
payments that would have been made
towards the out-of-pocket maximum if it
had not been satisfied. Similar rules
apply for any other thresholds at which
the rate of plan payment changes. (See
also PHS Act section 2707 and
Affordable Care Act section 1302(c),
which establish annual limitations on
out-of-pocket maximums for all nongrandfathered health plans.)
*
*
*
*
*
(iii) Special rules. Unless specifically
permitted under this paragraph
(c)(3)(iii), sub-classifications are not
permitted when applying the rules of
paragraph (c)(3) of this section.
(A) Multi-tiered prescription drug
benefits. If a plan (or health insurance
coverage) applies different levels of
financial requirements to different tiers
of prescription drug benefits based on
reasonable factors determined in
accordance with the rules in paragraph
(c)(4) of this section (relating to
requirements for nonquantitative
treatment limitations) and without
regard to whether a drug is generally
prescribed with respect to medical/
surgical benefits or with respect to
mental health or substance use disorder
benefits, the plan (or health insurance
coverage) satisfies the parity
requirements of this paragraph (c) with
respect to prescription drug benefits.
Reasonable factors include cost,
efficacy, generic versus brand name, and
mail order versus pharmacy pick-up.
(B) Multiple network tiers. If a plan (or
health insurance coverage) provides
benefits through multiple tiers of innetwork providers (such as an innetwork tier of preferred providers with
more generous cost-sharing to
participants than a separate in-network
tier of participating providers), the plan
may divide its benefits furnished on an
in-network basis into sub-classifications
that reflect network tiers, if the tiering
is based on reasonable factors
determined in accordance with the rules
in paragraph (c)(4) of this section (such
as quality, performance, and market
standards) and without regard to
whether a provider provides services
with respect to medical/surgical benefits
or mental health or substance use
disorder benefits. After the subclassifications are established, the plan
or issuer may not impose any financial
requirement or treatment limitation on
mental health or substance use disorder
benefits in any sub-classification that is
more restrictive than the predominant
financial requirement or treatment
limitation that applies to substantially
all medical/surgical benefits in the subclassification using the methodology set
forth in paragraph (c)(3)(i) of this
section.
*
*
*
*
*
(iv) Examples. The rules of
paragraphs (c)(3)(i) through (iii) of this
section are illustrated by the following
examples. In each example, the group
health plan is subject to the
requirements of this section and
provides both medical/surgical benefits
and mental health and substance use
disorder benefits.
(A) Example 1—(1) Facts. (i) For
inpatient, out-of-network medical/
surgical benefits, a group health plan
imposes five levels of coinsurance.
Using a reasonable method, the plan
projects its payments for the upcoming
year as follows:
TABLE 1 TO PARAGRAPH (c)(3)(iv)(A)(1)(i)
Coinsurance rate ..............
Projected payments .........
Percent of total plan costs
Percent subject to coinsurance level ................
0%
$200x
20
10%
$100x
10
15%
$450x
45
20%
$100x
10
30%
$150x
15
Total
$1,000x
........................
N/A
12.5 (100x/800x)
56.25 (450x/800x)
12.5 (100x/800x)
18.75 (150x/800x)
........................
(ii) The plan projects plan costs of
$800x to be subject to coinsurance
($100x + $450x + $100x + $150x =
$800x). Thus, 80 percent ($800x/
$1,000x) of the benefits are projected to
be subject to coinsurance, and 56.25
percent of the benefits subject to
coinsurance are projected to be subject
to the 15 percent coinsurance level.
(2) Conclusion. In this paragraph
(c)(3)(iv)(A) (Example 1), the two-thirds
threshold of the substantially all
standard is met for coinsurance because
80 percent of all inpatient, out-ofnetwork medical/surgical benefits are
subject to coinsurance. Moreover, the 15
percent coinsurance is the predominant
level because it is applicable to more
than one-half of inpatient, out-ofnetwork medical/surgical benefits
subject to the coinsurance requirement.
The plan may not impose any level of
coinsurance with respect to inpatient,
out-of-network mental health or
substance use disorder benefits that is
more restrictive than the 15 percent
level of coinsurance.
(B) Example 2—(1) Facts. (i) For
outpatient, in-network medical/surgical
benefits, a plan imposes five different
copayment levels. Using a reasonable
method, the plan projects payments for
the upcoming year as follows:
ddrumheller on DSK120RN23PROD with PROPOSALS2
TABLE 2 TO PARAGRAPH (c)(3)(iv)(B)(1)(i)
Copayment amount ..........
Projected payments .........
Percent of total plan costs
Percent subject to copayments ............................
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$0
$200x
20
$10
$200x
20
$15
$200x
20
$20
$300x
30
$50
$100x
10
Total
$1,000x
........................
N/A
25 (200x/800x)
25 (200x/800x)
37.5 (300x/800x)
12.5 (100x/800x)
........................
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(ii) The plan projects plan costs of
$800x to be subject to copayments
($200x + $200x + $300x + $100x =
$800x). Thus, 80 percent ($800x/
$1,000x) of the benefits are projected to
be subject to a copayment.
(2) Conclusion. In this paragraph
(c)(3)(iv)(B) (Example 2), the two-thirds
threshold of the substantially all
standard is met for copayments because
80 percent of all outpatient, in-network
medical/surgical benefits are subject to
a copayment. Moreover, there is no
single level that applies to more than
one-half of medical/surgical benefits in
the classification subject to a copayment
(for the $10 copayment, 25%; for the
$15 copayment, 25%; for the $20
copayment, 37.5%; and for the $50
copayment, 12.5%). The plan can
combine any levels of copayment,
including the highest levels, to
determine the predominant level that
can be applied to mental health or
substance use disorder benefits. If the
plan combines the highest levels of
copayment, the combined projected
payments for the two highest copayment
levels, the $50 copayment and the $20
copayment, are not more than one-half
of the outpatient, in-network medical/
surgical benefits subject to a copayment
because they are exactly one-half ($300x
+ $100x = $400x; $400x/$800x = 50%).
The combined projected payments for
the three highest copayment levels—the
$50 copayment, the $20 copayment, and
the $15 copayment—are more than onehalf of the outpatient, in-network
medical/surgical benefits subject to the
copayments ($100x + $300x + $200x =
$600x; $600x/$800x = 75%). Thus, the
plan may not impose any copayment on
outpatient, in-network mental health or
substance use disorder benefits that is
more restrictive than the least restrictive
copayment in the combination, the $15
copayment.
(C) Example 3—(1) Facts. A plan
imposes a $250 deductible on all
medical/surgical benefits for self-only
coverage and a $500 deductible on all
medical/surgical benefits for family
coverage. The plan has no network of
providers. For all medical/surgical
benefits, the plan imposes a coinsurance
requirement. The plan imposes no other
financial requirements or treatment
limitations.
(2) Conclusion. In this paragraph
(c)(3)(iv)(C) (Example 3), because the
plan has no network of providers, all
benefits are provided out-of-network.
Because self-only and family coverage
are subject to different deductibles,
whether the deductible applies to
substantially all medical/surgical
benefits is determined separately for
self-only medical/surgical benefits and
family medical/surgical benefits.
Because the coinsurance is applied
without regard to coverage units, the
predominant coinsurance that applies to
substantially all medical/surgical
benefits is determined without regard to
coverage units.
(D) Example 4—(1) Facts. A plan
applies the following financial
requirements for prescription drug
benefits. The requirements are applied
without regard to whether a drug is
generally prescribed with respect to
medical/surgical benefits or with
respect to mental health or substance
use disorder benefits. Moreover, the
process for certifying a particular drug
as ‘‘generic’’, ‘‘preferred brand name’’,
‘‘non-preferred brand name’’, or
‘‘specialty’’ complies with the rules of
paragraph (c)(4) of this section (relating
to requirements for nonquantitative
treatment limitations).
TABLE 3 TO PARAGRAPH (c)(3)(iv)(D)(1)
ddrumheller on DSK120RN23PROD with PROPOSALS2
Tier 1
Tier 2
Tier 3
Tier description ..................
Generic drugs ...................
Preferred brand name
drugs.
Percent paid by plan .........
90% ...................................
80% ...................................
(2) Conclusion. In this paragraph
(c)(3)(iv)(D) (Example 4), the financial
requirements that apply to prescription
drug benefits are applied without regard
to whether a drug is generally
prescribed with respect to medical/
surgical benefits or with respect to
mental health or substance use disorder
benefits; the process for certifying drugs
in different tiers complies with
paragraph (c)(4) of this section; and the
bases for establishing different levels or
types of financial requirements are
reasonable. The financial requirements
applied to prescription drug benefits do
not violate the parity requirements of
this paragraph (c)(3).
(E) Example 5—(1) Facts. A plan has
two-tiers of network of providers: a
preferred provider tier and a
participating provider tier. Providers are
placed in either the preferred tier or
participating tier based on reasonable
factors determined in accordance with
the rules in paragraph (c)(4) of this
section, such as accreditation, quality
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Non-preferred brand name
drugs (which may have
Tier 1 or Tier 2 alternatives).
60% ...................................
and performance measures (including
customer feedback), and relative
reimbursement rates. Furthermore,
provider tier placement is determined
without regard to whether a provider
specializes in the treatment of mental
health conditions or substance use
disorders, or medical/surgical
conditions. The plan divides the innetwork classifications into two subclassifications (in-network/preferred
and in-network/participating). The plan
does not impose any financial
requirement or treatment limitation on
mental health or substance use disorder
benefits in either of these subclassifications that is more restrictive
than the predominant financial
requirement or treatment limitation that
applies to substantially all medical/
surgical benefits in each subclassification.
(2) Conclusion. In this paragraph
(c)(3)(iv)(E) (Example 5), the division of
in-network benefits into subclassifications that reflect the preferred
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Tier 4
Specialty drugs.
50%.
and participating provider tiers does not
violate the parity requirements of this
paragraph (c)(3).
(F) Example 6—(1) Facts. With
respect to outpatient, in-network
benefits, a plan imposes a $25
copayment for office visits and a 20
percent coinsurance requirement for
outpatient surgery. The plan divides the
outpatient, in-network classification
into two sub-classifications (in-network
office visits and all other outpatient, innetwork items and services). The plan
or issuer does not impose any financial
requirement or quantitative treatment
limitation on mental health or substance
use disorder benefits in either of these
sub-classifications that is more
restrictive than the predominant
financial requirement or quantitative
treatment limitation that applies to
substantially all medical/surgical
benefits in each sub-classification.
(2) Conclusion. In this paragraph
(c)(3)(iv)(F) (Example 6), the division of
outpatient, in-network benefits into sub-
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classifications for office visits and all
other outpatient, in-network items and
services does not violate the parity
requirements of this paragraph (c)(3).
(G) Example 7—(1) Facts. Same facts
as in paragraph (c)(3)(iv)(F)(1) of this
section (Example 6), but for purposes of
determining parity, the plan divides the
outpatient, in-network classification
into outpatient, in-network generalists
and outpatient, in-network specialists.
(2) Conclusion. In this paragraph
(c)(3)(iv)(G) (Example 7), the division of
outpatient, in-network benefits into any
sub-classifications other than office
visits and all other outpatient items and
services violates the requirements of
paragraph (c)(3)(iii)(C) of this section.
*
*
*
*
*
(4) Nonquantitative treatment
limitations. Subject to paragraph
(c)(4)(v) of this section, a group health
plan (or health insurance coverage
offered by an issuer in connection with
a group health plan) may not impose a
nonquantitative treatment limitation
with respect to mental health or
substance use disorder benefits in a
classification unless the plan’s or
coverage’s imposition of the limitation
meets the requirements of paragraphs
(c)(4)(i), (ii), and (iv) of this section. If
a group health plan (or health insurance
coverage offered by an issuer in
connection with a group health plan)
fails to meet any of these requirements
with respect to a nonquantitative
treatment limitation, the limitation
violates section 2726(a)(3)(A)(ii) of the
PHS Act and may not be imposed by the
plan (or health insurance coverage).
(i) Requirement that nonquantitative
treatment limitations be no more
restrictive for mental health benefits
and substance use disorder benefits. A
group health plan (or health insurance
issuer offering coverage in connection
with a group health plan) may not apply
any nonquantitative treatment
limitation with respect to mental health
or substance use disorder benefits in
any classification that is more
restrictive, as written or in operation,
than the predominant nonquantitative
treatment limitation applied to
substantially all medical/surgical
benefits in the same classification.
(A) Restrictive. For purposes of this
paragraph (c)(4)(i), a nonquantitative
treatment limitation is restrictive to the
extent it imposes conditions, terms, or
requirements that limit access to
benefits under the terms of the plan or
coverage. Conditions, terms, or
requirements include, but are not
limited to, those that compel an action
by or on behalf of a participant or
beneficiary to access benefits or limit
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access to the full range of treatment
options available for a condition or
disorder under the plan or coverage.
(B) Substantially all. For purposes of
this paragraph (c)(4)(i), a
nonquantitative treatment limitation is
considered to apply to substantially all
medical/surgical benefits in a
classification if it applies to at least twothirds of all medical/surgical benefits in
that classification, consistent with
paragraph (c)(4)(i)(D) of this section.
Whether the nonquantitative treatment
limitation applies to at least two-thirds
of all medical/surgical benefits is
determined without regard to whether
the nonquantitative treatment limitation
was triggered based on a particular
factor or evidentiary standard. If a
nonquantitative treatment limitation
does not apply to at least two-thirds of
all medical/surgical benefits in a
classification, then that limitation
cannot be applied to mental health or
substance use disorder benefits in that
classification.
(C) Predominant. For purposes of this
paragraph (c)(4)(i), the term
predominant means the most common
or most frequent variation of the
nonquantitative treatment limitation
within a classification, determined in
accordance with the method outlined in
paragraph (c)(4)(i)(D) of this section, to
the extent the plan or issuer imposes
multiple variations of a nonquantitative
treatment limitation within the
classification. For example, multiple
variations of inpatient concurrent
review include review commencing 1
day, 3 days, or 7 days after admission,
depending on the reason for the stay.
(D) Portion based on plan payments.
For purposes of paragraphs (c)(4)(i)(B)
and (C) of this section, the
determination of the portion of medical/
surgical benefits in a classification of
benefits subject to a nonquantitative
treatment limitation is based on the
dollar amount of all plan payments for
medical/surgical benefits in the
classification expected to be paid under
the plan or coverage for the plan year (or
the portion of the plan year after a
change in benefits that affects the
applicability of the nonquantitative
treatment limitation). Any reasonable
method may be used to determine the
dollar amount expected to be paid
under a plan or coverage for medical/
surgical benefits.
(E) Exceptions for independent
professional medical or clinical
standards and standards to detect or
prevent and prove fraud, waste, and
abuse. Notwithstanding paragraphs
(c)(4)(i)(A) through (D) of this section, a
plan or issuer that applies a
nonquantitative treatment limitation
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that impartially applies independent
professional medical or clinical
standards or applies standards to detect
or prevent and prove fraud, waste, and
abuse, as described in paragraph
(c)(4)(v)(A) or (B) of this section, to
mental health or substance use disorder
benefits in any classification will not be
considered to violate this paragraph
(c)(4)(i) with respect to such
nonquantitative treatment limitation.
(ii) Additional requirements related to
design and application of the
nonquantitative treatment limitation—
(A) In general. Consistent with
paragraph (a)(1) of this section, a plan
or issuer may not impose a
nonquantitative treatment limitation
with respect to mental health or
substance use disorder benefits in any
classification unless, under the terms of
the plan (or health insurance coverage)
as written and in operation, any
processes, strategies, evidentiary
standards, or other factors used in
designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in the classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the limitation with respect to
medical/surgical benefits in the
classification.
(B) Prohibition on discriminatory
factors and evidentiary standards. For
purposes of determining comparability
and stringency under paragraph
(c)(4)(ii)(A) of this section, a plan or
issuer may not rely upon any factor or
evidentiary standard if the information,
evidence, sources, or standards on
which the factor or evidentiary standard
is based discriminates against mental
health or substance use disorder
benefits as compared to medical/
surgical benefits. For purposes of this
paragraph (c)(4)(ii)(B):
(1) Impartially applied generally
recognized independent professional
medical or clinical standards described
in paragraph (c)(4)(v)(A) of this section
are not considered to discriminate
against mental health or substance use
disorder benefits.
(2) Standards reasonably designed to
detect or prevent and prove fraud,
waste, and abuse described in paragraph
(c)(4)(v)(B) of this section are not
considered to discriminate against
mental health or substance use disorder
benefits.
(3) Information is considered to
discriminate against mental health or
substance use disorder benefits if it is
biased or not objective, in a manner that
results in less favorable treatment of
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mental health or substance use disorder
benefits, based on all the relevant facts
and circumstances including, but not
limited to, the source of the information,
the purpose or context of the
information, and the content of the
information.
(iii) Illustrative, non-exhaustive list of
nonquantitative treatment limitations.
Nonquantitative treatment limitations
include—
(A) Medical management standards
(such as prior authorization) limiting or
excluding benefits based on medical
necessity or medical appropriateness, or
based on whether the treatment is
experimental or investigative;
(B) Formulary design for prescription
drugs;
(C) For plans with multiple network
tiers (such as preferred providers and
participating providers), network tier
design;
(D) Standards related to network
composition, including but not limited
to, standards for provider and facility
admission to participate in a network or
for continued network participation,
including methods for determining
reimbursement rates, credentialing
standards, and procedures for ensuring
the network includes an adequate
number of each category of provider and
facility to provide services under the
plan or coverage;
(E) Plan or issuer methods for
determining out-of-network rates, such
as allowed amounts; usual, customary,
and reasonable charges; or application
of other external benchmarks for out-ofnetwork rates;
(F) Refusal to pay for higher-cost
therapies until it can be shown that a
lower-cost therapy is not effective (also
known as fail-first policies or step
therapy protocols);
(G) Exclusions based on failure to
complete a course of treatment; and
(H) Restrictions based on geographic
location, facility type, provider
specialty, and other criteria that limit
the scope or duration of benefits for
services provided under the plan or
coverage.
(iv) Required use of outcomes data—
(A) In general. When designing and
applying a nonquantitative treatment
limitation, a plan or issuer must collect
and evaluate relevant data in a manner
reasonably designed to assess the
impact of the nonquantitative treatment
limitation on access to mental health
and substance use disorder benefits and
medical/surgical benefits, and consider
the impact as part of the plan’s or
issuer’s analysis of whether the
limitation, in operation, complies with
paragraphs (c)(4)(i) and (ii) of this
section. The Secretary, jointly with the
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Secretary of the Treasury and the
Secretary of Labor, may specify in
guidance the type, form, and manner of
collection and evaluation for the data
required under this paragraph
(c)(4)(iv)(A).
(1) For purposes of this paragraph
(c)(4)(iv)(A), relevant data includes, but
is not limited to, the number and
percentage of claims denials and any
other data relevant to the
nonquantitative treatment limitation
required by State law or private
accreditation standards.
(2) In addition to the relevant data set
forth in paragraph (c)(4)(iv)(A)(1) of this
section, relevant data for
nonquantitative treatment limitations
related to network composition
standards includes, but is not limited to,
in-network and out-of-network
utilization rates (including data related
to provider claim submissions), network
adequacy metrics (including time and
distance data, and data on providers
accepting new patients), and provider
reimbursement rates (including as
compared to billed charges).
(B) Material differences. Subject to
paragraph (c)(4)(iv)(C) of this section, to
the extent the relevant data evaluated
pursuant to paragraph (c)(4)(iv)(A) of
this section show material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits, the
differences will be considered a strong
indicator that the plan or issuer violates
paragraph (c)(4)(i) or (ii) of this section.
In such instances, the plan or issuer:
(1) Must take reasonable action to
address the material differences in
access as necessary to ensure
compliance, in operation, with
paragraphs (c)(4)(i) and (ii) of this
section; and
(2) Must document the action that has
been or is being taken by the plan or
issuer to mitigate any material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits,
as required by § 146.137(c)(5)(iv).
(C) Special rule for nonquantitative
treatment limitations related to network
composition. Notwithstanding
paragraph (c)(4)(iv)(B) of this section,
when designing and applying one or
more nonquantitative treatment
limitation(s) related to network
composition standards, a plan or issuer
fails to meet the requirements of
paragraphs (c)(4)(i) and (ii) of this
section, in operation, if the relevant data
show material differences in access to
in-network mental health and substance
use disorder benefits as compared to innetwork medical/surgical benefits in a
classification.
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(D) Exception for independent
professional medical or clinical
standards. A plan or issuer designing
and applying a nonquantitative
treatment limitation with respect to
mental health or substance use disorder
benefits in any classification that
impartially applies independent
professional medical or clinical
standards, as described in paragraph
(c)(4)(v)(A) of this section, is not
required to comply with the
requirements of this paragraph (c)(4)(iv)
with respect to that classification.
(v) Independent professional medical
or clinical standards and standards to
detect or prevent and prove fraud,
waste, and abuse. (A) To qualify for the
exceptions in paragraphs (c)(4)(i)(E),
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this
section for independent professional
medical or clinical standards, a
nonquantitative treatment limitation
must impartially apply generally
recognized independent professional
medical or clinical standards (consistent
with generally accepted standards of
care) to medical/surgical benefits and
mental health or substance use disorder
benefits, and may not deviate from those
standards in any way, such as by
imposing additional or different
requirements.
(B) To qualify for the exceptions in
paragraphs (c)(4)(i)(E) and (c)(4)(ii)(B) of
this section to detect or prevent and
prove fraud, waste, and abuse, a
nonquantitative treatment limitation
must be reasonably designed to detect or
prevent and prove fraud, waste, and
abuse, based on indicia of fraud, waste,
and abuse that have been reliably
established through objective and
unbiased data, and also be narrowly
designed to minimize the negative
impact on access to appropriate mental
health and substance use disorder
benefits.
(vi) Prohibition on separate
nonquantitative treatment limitations
applicable only to mental health or
substance use disorder benefits.
Consistent with paragraph (c)(2)(i) of
this section, a group health plan (or
health insurance coverage offered by an
issuer in connection with such a plan)
may not apply any nonquantitative
treatment limitation that is applicable
only with respect to mental health or
substance use disorder benefits and
does not apply with respect to any
medical/surgical benefits in the same
benefit classification.
(vii) Effect of final determination of
noncompliance under § 146.137. If a
group health plan (or health insurance
issuer offering group health insurance
coverage in connection with such a
plan) receives a final determination
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from the Secretary that the plan or
issuer is not in compliance with the
requirements of § 146.137 with respect
to a nonquantitative treatment
limitation, the nonquantitative
treatment limitation violates this
paragraph (c)(4) and the Secretary may
direct the plan or issuer not to impose
the nonquantitative treatment
limitation, unless and until the plan or
issuer demonstrates to the Secretary
compliance with the requirements of
this section or takes appropriate action
to remedy the violation.
(viii) Examples. The rules of this
paragraph (c)(4) are illustrated by the
following examples. In each example,
the group health plan is subject to the
requirements of this section and
provides both medical/surgical benefits
and mental health and substance use
disorder benefits. Additionally, in
examples that conclude that the plan or
issuer violates one provision of this
paragraph (c)(4), such examples do not
necessarily imply compliance with
other provisions of this paragraph (c)(4),
as these examples do not analyze
compliance with all other provisions of
this paragraph (c)(4).
(A) Example 1 (More restrictive prior
authorization requirement in
operation)—(1) Facts. A plan requires
prior authorization from the plan’s
utilization reviewer that a treatment is
medically necessary for all inpatient, innetwork medical/surgical benefits and
for all inpatient, in-network mental
health and substance use disorder
benefits. While inpatient, in-network
benefits for medical/surgical conditions
are approved for periods of 1, 3, and 7
days, after which a treatment plan must
be submitted by the patient’s attending
provider and approved by the plan, the
approvals for 7 days are most common
under this plan. For inpatient, innetwork mental health and substance
use disorder benefits, routine approval
is most commonly given only for one
day, after which a treatment plan must
be submitted by the patient’s attending
provider and approved by the plan. The
difference in the duration of approvals
is not the result of independent
professional medical or clinical
standards or standards to detect or
prevent and prove fraud, waste, and
abuse, but rather reflects the application
of a heightened standard to the
provision of the mental health and
substance use disorder benefits in the
relevant classification.
(2) Conclusion. In this paragraph
(c)(4)(viii)(A) (Example 1), the plan
violates the rules of paragraph (c)(4)(i)
of this section. Under the terms of the
plan, prior authorization applies to at
least two-thirds of all medical/surgical
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benefits in the relevant classification
(inpatient, in-network), since it applies
to all benefits in the relevant
classification. Further, the most
common or frequent variation of the
nonquantitative treatment limitation
applied to medical/surgical benefits in
the relevant classification (the
predominant nonquantitative treatment
limitation) is the routine approval of
inpatient, in-network benefits for 7 days
before the patient’s attending provider
must submit a treatment plan. However,
the plan routinely approves inpatient,
in-network benefits for mental health
and substance use disorder conditions
for only 1 day before the patient’s
attending provider must submit a
treatment plan (and, in doing so, does
not impartially apply independent
professional medical or clinical
standards or apply standards to detect
or prevent and prove fraud, waste, and
abuse that qualify for the exceptions in
paragraph (c)(4)(i)(E) of this section). In
operation, therefore, the prior
authorization requirement imposed on
inpatient, in-network mental health and
substance use disorder benefits is more
restrictive than the predominant prior
authorization requirement applicable to
substantially all medical/surgical
benefits in the inpatient, in-network
classification because the practice of
approving only 1 day of inpatient
benefits limits access to the full range of
treatment options available for a
condition or disorder under the plan or
coverage as compared to the routine 7day approval that is given for inpatient,
in-network medical/surgical benefits.
Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this
example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this
section.
(B) Example 2 (More restrictive peerto-peer concurrent review requirements
in operation)—(1) Facts. A plan follows
a written process for the concurrent
review of all medical/surgical benefits
and mental health and substance use
disorder benefits within the inpatient,
in-network classification. Under the
process, a first-level review is
conducted in every instance in which
concurrent review applies and an
authorization request is approved by the
first-level reviewer only if the clinical
information submitted by the facility
meets the plan’s criteria for a continued
stay. If the first-level reviewer is unable
to approve the authorization request
because the clinical information
submitted by the facility does not meet
the plan’s criteria for a continued stay,
it is sent to a second-level reviewer who
will either approve or deny the request.
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While the written process only requires
review by the second-level reviewer to
either deny or approve the request, in
operation, second-level reviewers for
mental health and substance use
disorder benefits conduct a peer-to-peer
review with a provider (acting as the
authorized representative of a
participant or beneficiary) before
coverage of the treatment is approved.
The peer-to-peer review requirement is
not the result of independent
professional medical or clinical
standards or standards to detect or
prevent and prove fraud, waste, and
abuse. The plan does not impose a peerto-peer review, as written or in
operation, as part of the second-level
review for medical/surgical benefits.
(2) Conclusion. In this paragraph
(c)(4)(viii)(B) (Example 2), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The concurrent review
nonquantitative treatment limitation
applies to at least two-thirds of all
medical/surgical benefits within the
inpatient, in-network classification
because the plan follows the concurrent
review process for all medical/surgical
benefits. The most common or frequent
variation of this nonquantitative
treatment limitation (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is that peer-to-peer
review is not imposed as part of secondlevel review. The plan does not
impartially apply independent
professional medical or clinical
standards or apply standards to detect
or prevent and prove fraud, waste, and
abuse that qualify for the exceptions in
paragraph (c)(4)(i)(E) of this section. As
written, the plan’s concurrent review
requirements are the same for medical/
surgical benefits and mental health and
substance use disorder benefits.
However, in operation, by compelling
an additional action (peer-to-peer
review as part of second-level review) to
access only mental health or substance
use disorder benefits, the plan applies
the limitation to mental health and
substance use disorder benefits in a
manner that is more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
inpatient, in-network classification.
Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this
example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this
section.
(C) Example 3 (More restrictive peerto-peer review medical necessity
standard in operation; deviation from
independent professional medical and
clinical standards)—(1) Facts. A plan
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generally requires that all treatment be
medically necessary in the inpatient,
out-of-network classification. For both
medical/surgical benefits and mental
health and substance use disorder
benefits, the written medical necessity
standards are based on independent
professional medical or clinical
standards that do not require peer-topeer review. In operation, the plan
covers out-of-network benefits for
medical/surgical or mental health
inpatient treatment outside of a hospital
if the physician documents medical
appropriateness, but for out-of-network
benefits for substance use disorder
inpatient treatment outside of a
hospital, the plan requires a physician
to also complete peer-to-peer review.
(2) Conclusion. In this paragraph
(c)(4)(viii)(C) (Example 3), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The medical necessity
nonquantitative treatment limitation
applies to at least two-thirds of all
medical/surgical benefits in the
inpatient, out-of-network classification.
The most common or frequent variation
of the nonquantitative treatment
limitation (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is the requirement that
a physician document medical
appropriateness without peer-to-peer
review. The plan purports to impartially
apply independent professional medical
or clinical standards that would
otherwise qualify for the exception in
paragraph (c)(4)(i)(E) of this section, but
deviates from those standards by
imposing the additional requirement to
complete peer-to-peer review for
inpatient, out-of-network benefits for
substance use disorder outside of a
hospital. Therefore, the exception in
paragraph (c)(4)(i)(E) of this section does
not apply. As written, the plan
provisions apply the nonquantitative
treatment limitation to mental health
and substance use disorder benefits in
the inpatient, out-of-network
classification in the same manner as for
medical/surgical benefits. However, in
operation, the nonquantitative treatment
limitation imposed with respect to outof-network substance use disorder
benefits for treatment outside of a
hospital is more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
classification because it limits access to
the full range of treatment options
available for a condition or disorder
under the plan or coverage as compared
to medical/surgical benefits in the same
classification. Because the plan violates
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the rules of paragraph (c)(4)(i) of this
section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(D) Example 4 (Not comparable and
more stringent methods for determining
reimbursement rates in operation)—(1)
Facts. A plan’s base reimbursement
rates for outpatient, in-network
providers are determined based on a
variety of factors, including the
providers’ required training, licensure,
and expertise. For purposes of this
example, the plan’s nonquantitative
treatment limitations for determining
reimbursement rates for mental health
and substance use disorder benefits are
not more restrictive than the
predominant nonquantitative treatment
limitation applied to substantially all
medical/surgical benefits in the
classification under paragraph (c)(4)(i)
of this section. As written, for mental
health, substance use disorder, and
medical/surgical benefits, all
reimbursement rates for physicians and
non-physician practitioners for the same
Current Procedural Terminology (CPT)
code vary based on a combination of
factors, such as the nature of the service,
provider type, number of providers
qualified to provide the service in a
given geographic area, and market need
(demand). As a result, reimbursement
rates for mental health, substance use
disorder, and medical/surgical benefits
furnished by non-physician providers
are generally less than for physician
providers. In operation, the plan
reduces the reimbursement rate for
mental health and substance use
disorder non-physician providers from
that paid to mental health and substance
use disorder physicians by the same
percentage for every CPT code but does
not apply the same reductions for nonphysician medical/surgical providers.
(2) Conclusion. In this paragraph
(c)(4)(viii)(D) (Example 4), the plan
violates the rules of paragraph (c)(4)(ii)
of this section. Because the plan
reimburses non-physician providers of
mental health and substance use
disorder services by reducing their
reimbursement rate from the rate to
physician providers by the same
percentage for every CPT code but does
not apply the same reductions to nonphysician providers of medical/surgical
services, in operation, the factors used
in applying the nonquantitative
treatment limitation to mental health
and substance use disorder benefits are
not comparable to, and are applied more
stringently than, the factors used in
applying the limitation with respect to
medical/surgical benefits. Because the
facts assume that the plan’s methods for
determining reimbursement rates
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comply with paragraph (c)(4)(i) of this
section and the plan violates the rules
of paragraph (c)(4)(ii) of this section,
this example does not analyze
compliance with paragraph (c)(4)(iv) of
this section.
(E) Example 5 (Exception for
impartially applied generally recognized
independent professional medical or
clinical standards)—(1) Facts. A group
health plan develops a medical
management requirement for all
inpatient, out-of-network benefits for
both medical/surgical benefits and
mental health and substance use
disorder benefits to ensure treatment is
medically necessary. The medical
management requirement impartially
applies independent professional
medical or clinical standards in a
manner that qualifies for the exception
in paragraph (c)(4)(i)(E) of this section.
The plan does not rely on any other
factors or evidentiary standards and the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the medical
management requirement to mental
health and substance use disorder
benefits are comparable to, and are
applied no more stringently than, the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the requirement
with respect to medical/surgical
benefits. Within the inpatient, out-ofnetwork classification, the application
of the medical management requirement
results in a higher percentage of denials
for mental health and substance use
disorder claims than medical/surgical
claims, because the benefits were found
to be medically necessary for a lower
percentage of mental health and
substance use disorder claims based on
the impartial application of the
independent professional medical or
clinical standards by the
nonquantitative treatment limitation.
(2) Conclusion. In this paragraph
(c)(4)(viii)(E) (Example 5), the plan does
not violate the rules of this paragraph
(c)(4). The medical management
nonquantitative treatment limitation
imposed on mental health and
substance use disorder benefits does not
violate paragraph (c)(4)(i) or (iv) of this
section because it impartially applies
independent professional medical or
clinical standards for both medical/
surgical benefits and mental health and
substance use disorder benefits in a
manner that qualifies for the exceptions
in paragraphs (c)(4)(i)(E) and
(c)(4)(iv)(D) of this section, respectively.
Moreover, the nonquantitative treatment
limitation does not violate paragraph
(c)(4)(ii) of this section because the
independent professional medical or
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clinical standards are not considered to
be a discriminatory factor or evidentiary
standard under paragraph (c)(4)(ii)(B) of
this section. Additionally, as written
and in operation, the processes,
strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits in the inpatient,
out-of-network classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, and
other factors used in applying the
limitation with respect to medical/
surgical benefits in the classification,
regardless of the fact that the
application of the nonquantitative
treatment limitation resulted in higher
percentages of claim denials for mental
health and substance use disorder
benefits as compared to medical/
surgical benefits.
(F) Example 6 (More restrictive prior
authorization requirement; exception
for impartially applied generally
recognized independent professional
medical or clinical standards not met)—
(1) Facts. The provisions of a plan state
that it applies independent professional
medical and clinical standards
(consistent with generally accepted
standards of care) for setting prior
authorization requirements for both
medical/surgical and mental health and
substance use disorder prescription
drugs. The relevant generally recognized
independent professional medical
standard for treatment of opioid use
disorder that the plan utilizes—in this
case, the American Society of Addiction
Medicine national practice guidelines—
does not support prior authorization
every 30 days for buprenorphine/
naloxone. However, in operation, the
plan requires prior authorization for
buprenorphine/naloxone combination at
each refill (every 30 days) for treatment
of opioid use disorder.
(2) Conclusion. In this paragraph
(c)(4)(viii)(F) (Example 6), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The plan does not
qualify for the exception in paragraph
(c)(4)(i)(E) of this section, because,
although the provisions of the plan state
that it applies independent professional
medical and clinical standards, the plan
deviates from the relevant standards
with respect to prescription drugs to
treat opioid use disorder. The prior
authorization nonquantitative treatment
limitation is applied to at least twothirds of all medical/surgical benefits in
the prescription drugs classification.
The most common or frequent variation
of this nonquantitative treatment
limitation (the predominant
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nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is following generally
recognized independent professional
medical and clinical standards
(consistent with generally accepted
standards of care). The prior
authorization requirements imposed on
substance use disorder benefits are more
restrictive than the predominant
nonquantitative treatment limitation
applicable to substantially all medical/
surgical benefits in the classification,
because the plan imposes additional
requirements on substance use disorder
benefits that limit access to the full
range of treatment options available for
a condition or disorder under the plan
or coverage as compared to medical/
surgical benefits in the same
classification. Because the plan violates
the rules of paragraph (c)(4)(i) of this
section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(G) Example 7 (Impermissible
nonquantitative treatment limitation
imposed following a final determination
of noncompliance and direction by the
Secretary)—(1) Facts. Following an
initial request by the Secretary for a
plan’s comparative analysis of a
nonquantitative treatment limitation
pursuant to § 146.137(d), the plan
submits a comparative analysis for the
nonquantitative treatment limitation.
After review of the comparative
analysis, the Secretary makes an initial
determination that the comparative
analysis fails to demonstrate that the
processes, strategies, evidentiary
standards, and other factors used in
designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in the relevant classification are
comparable to, and applied no more
stringently than, those used in designing
and applying the limitation to medical/
surgical benefits in the classification.
Pursuant to § 146.137(d)(3), the plan
submits a corrective action plan and
additional comparative analyses within
45 calendar days after the initial
determination, and the Secretary then
determines that the additional
comparative analyses do not
demonstrate compliance with the
requirements of this paragraph (c)(4).
The plan receives a final determination
of noncompliance from the Secretary,
which informs the plan that it is not in
compliance with this paragraph (c)(4)
and directs the plan not to impose the
nonquantitative treatment limitation by
a certain date, unless and until the plan
demonstrates compliance to the
Secretary or takes appropriate action to
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remedy the violation. The plan makes
no changes to its plan terms by that date
and continues to impose the
nonquantitative treatment limitation.
(2) Conclusion. In this paragraph
(c)(4)(viii)(G) (Example 7), the plan
violates the requirements of this
paragraph (c)(4) by imposing the
nonquantitative treatment limitation
after the Secretary directs the plan not
to impose it, pursuant to paragraph
(c)(4)(vii) of this section.
(H) Example 8 (Provider network
admission standards not more
restrictive and compliant with
requirements for design and application
of NQTLs)—(1) Facts. As part of a plan’s
standards for provider admission to its
network, in the outpatient, in-network
classification, any provider seeking to
contract with the plan must have a
certain number of years of supervised
clinical experience. As a result of that
standard, master’s level mental health
therapists are required to obtain
supervised clinical experience beyond
their licensure, while master’s level
medical/surgical providers,
psychiatrists, and Ph.D.-level
psychologists do not require additional
experience beyond their licensure
because their licensure already requires
supervised clinical experience. The plan
collects and evaluates relevant data in a
manner reasonably designed to assess
the impact of the nonquantitative
treatment limitation. This includes innetwork and out-of-network utilization
rates (including data related to provider
claim submissions), network adequacy
metrics (including time and distance
data, and data on providers accepting
new patients), and provider
reimbursement rates (including as
compared to billed charges). This data
demonstrates that participants and
beneficiaries seeking outpatient care are
able to access outpatient, in-network
mental health and substance use
disorder providers at the same
frequency as outpatient, in-network
medical/surgical providers, that mental
health and substance use disorder
providers are active in the network and
are accepting new patients to the same
extent as medical/surgical providers,
and that mental health and substance
use disorder providers are within
similar time and distances to plan
participants and beneficiaries as are
medical/surgical providers. This data
also does not identify material
differences in what the plan or issuer
pays psychiatrists or non-physician
mental health providers, compared to
physicians or non-physician medical/
surgical providers, respectively, both for
the same reimbursement codes and as
compared to Medicare rates.
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(2) Conclusion. In this paragraph
(c)(4)(viii)(H) (Example 8), the plan does
not violate this paragraph (c)(4). The
standards for this nonquantitative
treatment limitation, namely provider
admission to the plan’s network, are
applied to at least two-thirds of all
medical/surgical benefits in the
outpatient, in-network classification, as
it applies to all medical/surgical
benefits in the classification. The most
common or frequent variation of this
nonquantitative treatment limitation
(the predominant nonquantitative
treatment limitation) that applies to
substantially all medical/surgical
benefits in the classification is having a
certain number of years of supervised
clinical experience. The standards for
provider admission to the plan’s
network that are imposed with respect
to mental health or substance use
disorder benefits are no more restrictive,
as written or in operation, than the
predominant variation of the
nonquantitative treatment limitation
applicable to substantially all medical/
surgical benefits in the classification,
because the standards do not limit
access to the full range of treatment
options available for a condition or
disorder under the plan or coverage as
compared to medical/surgical benefits
in the same classification. The
requirement that providers have a
certain number of years of supervised
clinical experience that the plan relied
upon to design and apply the
nonquantitative treatment limitation is
not considered to discriminate against
mental health or substance use disorder
benefits, even though this results in the
requirement that master’s level mental
health therapists obtain supervised
clinical experience beyond their
licensure, unlike master’s level medical/
surgical providers. In addition, as
written and in operation, the processes,
strategies, evidentiary standards, or
other factors used in applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in the classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in applying the
limitation with respect to medical/
surgical benefits in the classification,
because the plan applies the same
standard to all providers in the
classification. Finally, the plan or issuer
collects and evaluates relevant data in a
manner reasonably designed to assess
the impact of the nonquantitative
treatment limitation on access to mental
health and substance use disorder
benefits, which does not show material
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differences in access to in-network
mental health and substance use
disorder benefits as compared to innetwork medical/surgical benefits in the
classification.
(I) Example 9 (More restrictive
requirement for primary caregiver
participation applied to ABA therapy)—
(1) Facts. A plan generally applies
medical necessity criteria in
adjudicating claims for coverage of all
outpatient, in-network medical/surgical
and mental health and substance use
disorder benefits, including ABA
therapy for the treatment of ASD, which
is a mental health condition. The plan’s
medical necessity criteria for coverage
of ABA therapy requires evidence that
the participant’s or beneficiary’s
primary caregivers actively participate
in ABA therapy, as documented by
consistent attendance in parent,
caregiver, or guardian training sessions.
In adding this requirement, the plan
deviates from independent professional
medical or clinical standards, and there
are no similar medical necessity criteria
requiring evidence of primary caregiver
participation in order to receive
coverage of any medical/surgical
benefits.
(2) Conclusion. In this paragraph
(c)(4)(viii)(I) (Example 9), the plan
violates paragraph (c)(4)(i) of this
section. The plan applies medical
necessity criteria to at least two-thirds of
all outpatient, in-network medical/
surgical benefits, as they apply to all
medical/surgical benefits in the
classification. The most common or
frequent variation of this
nonquantitative treatment limitation
(the predominant nonquantitative
treatment limitation) that applies to
substantially all medical/surgical
benefits in the classification does not
include the requirement to provide
evidence that the participant’s or
beneficiary’s primary caregivers actively
participate in the treatment. The plan
does not qualify for the exception in
paragraph (c)(4)(i)(E) of this section in
applying its restriction on coverage for
ABA therapy because the plan deviates
from the independent professional
medical or clinical standards by
imposing a different requirement. As a
result, the nonquantitative treatment
limitation imposed on mental health
and substance use disorder benefits is
more restrictive than the predominant
medical necessity requirement imposed
on substantially all medical/surgical
benefits in the classification (which
does not include the requirement to
provide evidence that primary
caregivers actively participate in
treatment). Because the plan violates the
rules of paragraph (c)(4)(i) of this
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section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(J) Example 10 (More restrictive
exclusion for experimental or
investigative treatment applied to ABA
therapy)—(1) Facts. A plan, as written,
generally excludes coverage for all
treatments that are experimental or
investigative for both medical/surgical
benefits and mental health and
substance use disorder benefits in the
outpatient, in-network classification. As
a result, the plan generally excludes
experimental treatment of medical
conditions and surgical procedures,
mental health conditions, and substance
use disorders when no professionally
recognized treatment guidelines define
clinically appropriate standards of care
for the condition or disorder and fewer
than two randomized controlled trials
are available to support the treatment’s
use with respect to the given condition
or disorder. The plan provides benefits
for the treatment of ASD, which is a
mental health condition, but, in
operation, the plan excludes coverage
for ABA therapy to treat children with
ASD, deeming it experimental. More
than one professionally recognized
treatment guideline defines clinically
appropriate standards of care for ASD
and more than two randomized
controlled trials are available to support
the use of ABA therapy to treat certain
children with ASD.
(2) Conclusion. In this paragraph
(c)(4)(viii)(J) (Example 10), the plan
violates the rules of paragraph (c)(4)(i)
of this section. The coverage exclusion
for experimental or investigative
treatment applies to at least two-thirds
of all medical/surgical benefits, as it
applies to all medical/surgical benefits
in the outpatient, in-network
classification. The most common or
frequent variation of this
nonquantitative treatment limitation in
the classification (the predominant
nonquantitative treatment limitation)
applicable to substantially all medical/
surgical benefits is the exclusion under
the plan for coverage of experimental
treatment of medical/surgical conditions
when no professionally recognized
treatment guidelines define clinically
appropriate standards of care for the
condition or disorder and fewer than
two randomized controlled trials are
available to support the treatment’s use
with respect to the given condition or
procedure. In operation, the exclusion
for experimental or investigative
treatment imposed on ABA therapy is
more restrictive than the predominant
variation of the nonquantitative
treatment limitation for experimental or
investigative treatment imposed on
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substantially all medical/surgical
benefits in the classification because the
exclusion limits access to the full range
of treatment options available for a
condition or disorder under the plan or
coverage as compared to medical/
surgical benefits in the same
classification. Because the plan violates
the rules of paragraph (c)(4)(i) of this
section, this example does not analyze
compliance with paragraph (c)(4)(ii) or
(iv) of this section.
(K) Example 11 (Separate EAP
exhaustion treatment limitation
applicable only to mental health
benefits)—(1) Facts. An employer
maintains both a major medical plan
and an employee assistance program
(EAP). The EAP provides, among other
benefits, a limited number of mental
health or substance use disorder
counseling sessions, which, together
with other benefits provided by the
EAP, are not significant benefits in the
nature of medical care. Participants are
eligible for mental health or substance
use disorder benefits under the major
medical plan only after exhausting the
counseling sessions provided by the
EAP. No similar exhaustion requirement
applies with respect to medical/surgical
benefits provided under the major
medical plan.
(2) Conclusion. In this paragraph
(c)(4)(viii)(K) (Example 11), limiting
eligibility for mental health and
substance use disorder benefits under
the major medical plan until EAP
benefits are exhausted is a
nonquantitative treatment limitation
subject to the parity requirements of this
paragraph (c). Because the limitation
does not apply to medical/surgical
benefits, it is a separate nonquantitative
treatment limitation applicable only to
mental health and substance use
disorder benefits that violates paragraph
(c)(4)(vi) of this section. Additionally,
this EAP would not qualify as excepted
benefits under § 146.145(b)(3)(vi)(B)(1)
because participants in the major
medical plan are required to use and
exhaust benefits under the EAP (making
the EAP a gatekeeper) before an
individual is eligible for benefits under
the plan.
(L) Example 12 (Separate residential
exclusion treatment limitation
applicable only to mental health
benefits)—(1) Facts. A plan generally
covers inpatient, in-network and
inpatient out-of-network treatment in
any setting, including skilled nursing
facilities and rehabilitation hospitals,
provided other medical necessity
standards are satisfied. The plan also
has an exclusion for residential
treatment, which the plan defines as an
inpatient benefit, for mental health and
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substance use disorder benefits. This
exclusion was not generated through
any broader nonquantitative treatment
limitation (such as medical necessity or
other clinical guideline).
(2) Conclusion. In this paragraph
(c)(4)(viii)(L) (Example 12), the plan
violates the rules of paragraph (c)(4)(vi)
of this section. Because the plan does
not apply a comparable exclusion to
inpatient benefits for medical/surgical
conditions, the exclusion of residential
treatment is a separate nonquantitative
treatment limitation applicable only to
mental health and substance use
disorder benefits in the inpatient, innetwork and inpatient, out-of-network
classifications that does not apply with
respect to any medical/surgical benefits
in the same benefit classification.
(M) Example 13 (Standards for
provider admission to a network)—(1)
Facts. A plan applies nonquantitative
treatment limitations related to network
composition in the outpatient innetwork and inpatient, in-network
classifications. The plan’s networks are
constructed by separate service
providers for medical/surgical benefits
and mental health and substance use
disorder benefits. For purposes of this
example, these facts assume that these
nonquantitative treatment limitations
related to network composition for
mental health and substance use
disorder benefits are not more restrictive
than the predominant nonquantitative
treatment limitations applied to
substantially all medical/surgical
benefits in the classifications under
paragraph (c)(4)(i) of this section. The
facts also assume that, as written and in
operation, the processes, strategies,
evidentiary standards, and other factors
used in designing and applying the
nonquantitative treatment limitations
related to network access to mental
health or substance use disorder
benefits in the outpatient in-network
and inpatient in-network classifications
are comparable to, and are applied no
more stringently than, the processes,
strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitations with respect to medical/
surgical benefits in the classifications,
as required under paragraph (c)(4)(ii) of
this section. The plan collects and
evaluates all relevant data in a manner
reasonably designed to assess the
impact of the nonquantitative treatment
limitations related to network
composition on access to mental health
and substance use disorder benefits as
compared with access to medical/
surgical benefits and considers the
impact as part of the plan’s or issuer’s
analysis of whether the standards, in
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operation, comply with paragraphs
(c)(4)(i) and (ii) of this section. The plan
determined that the data did not reveal
any material differences in access. That
data included metrics relating to the
time and distance from plan
participants and beneficiaries to
network providers in rural and urban
regions; the number of network
providers accepting new patients; the
proportions of mental health and
substance use disorder and medical/
surgical providers and facilities that
provide services in rural and urban
regions who are in the plan’s network;
provider reimbursement rates; innetwork and out-of-network utilization
rates (including data related to the
dollar value and number of provider
claims submissions); and survey data
from participants on the extent to which
they forgo or pay out-of-pocket for
treatment because of challenges finding
in-network providers. The efforts the
plan made when designing and
applying its nonquantitative treatment
limitations related to network
composition, which ultimately led to its
outcomes data not revealing any
material differences in access to benefits
for mental health or substance use
disorders as compared with medical/
surgical benefits, included making sure
that the plan’s service providers are
making special efforts to enroll available
providers, including by authorizing
greater compensation or other
inducements to the extent necessary,
and expanding telehealth arrangements
as appropriate to manage regional
shortages. The plan also notifies
participants in clear and prominent
language on its website, employee
brochures, and the summary plan
description of a toll-free number
available to help participants find innetwork providers. In addition, when
plan participants submit bills for out-ofnetwork items and services, the plan
directs their service providers to reach
out to the treating providers and
facilities to see if they will enroll in the
network.
(2) Conclusion. In this paragraph
(c)(4)(viii)(M) (Example 13), the plan
does not violate this paragraph (c)(4). As
stated in the Facts section, the plan’s
nonquantitative treatment limitations
related to network composition comply
with the rules of paragraphs (c)(4)(i) and
(ii) of this section. The plan collects and
evaluates relevant data, as required
under paragraph (c)(4)(iv)(A) of this
section, and the data does not reveal any
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits, as a result of the
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actions the plan took (as set forth in the
facts) when initially designing its
nonquantitative treatment limitations
related to network composition. Because
the plan takes comparable actions to
ensure that their mental health and
substance use disorder provider
network is as accessible as their
medical/surgical provider network and
exercises careful oversight over both
their service providers and the
comparative robustness of the networks
with an eye to ensuring that network
composition results in access to innetwork benefits for mental health and
substance use disorder services that is
as generous as for medical/surgical
services, plan participants and
beneficiaries can access covered mental
health and substance use disorder
services and benefits as readily as
medical/surgical benefits. This is
reflected in the plan’s carefully
designed metrics and assessment of
network composition.
*
*
*
*
*
(d) * * *
(3) Provisions of other law.
Compliance with the disclosure
requirements in paragraphs (d)(1) and
(2) of this section is not determinative
of compliance with any other provision
of applicable Federal or State law. In
particular, in addition to those
disclosure requirements, provisions of
other applicable law require disclosure
of information relevant to medical/
surgical, mental health, and substance
use disorder benefits. For example,
§ 147.136 of this subchapter sets forth
rules regarding claims and appeals,
including the right of claimants (or their
authorized representative) upon appeal
of an adverse benefit determination (or
a final internal adverse benefit
determination) to be provided upon
request and free of charge, reasonable
access to and copies of all documents,
records, and other information relevant
to the claimant’s claim for benefits. This
includes documents with information
on medical necessity criteria for both
medical/surgical benefits and mental
health and substance use disorder
benefits, as well as the processes,
strategies, evidentiary standards, and
other factors used to apply a
nonquantitative treatment limitation
with respect to medical/surgical benefits
and mental health or substance use
disorder benefits under the plan and the
comparative analyses and other
applicable information required by
§ 146.137.
(e) * * *
(4) Coordination with EHB
requirements. Nothing in paragraph (f)
or (g) of this section or § 146.137(g)
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changes the requirements of §§ 147.150
and 156.115 of this subchapter,
providing that a health insurance issuer
offering non-grandfathered health
insurance coverage in the individual or
small group market providing mental
health and substance use disorder
services, including behavioral health
treatment services, as part of essential
health benefits required under
§§ 156.110(a)(5) and 156.115(a) of this
subchapter, must comply with the
requirements under section 2726 of the
PHS Act and its implementing
regulations in this subchapter to satisfy
the requirement to provide coverage for
mental health and substance use
disorder services, including behavioral
health treatment, as part of essential
health benefits.
*
*
*
*
*
(i) * * *
(1) In general. Except as provided in
paragraph (i)(2) of this section, this
section applies to group health plans
and health insurance issuers offering
group health insurance coverage on the
first day of the first plan year beginning
on or after January 1, 2025. Until the
applicability date in the preceding
sentence, plans and issuers are required
to continue to comply with 45 CFR
146.136, revised as of October 1, 2021.
*
*
*
*
*
(j) Severability. If any provision of this
section is held to be invalid or
unenforceable by its terms, or as applied
to any person or circumstance, or stayed
pending further agency action, the
provision shall be construed so as to
continue to give the maximum effect to
the provision permitted by law, unless
such holding shall be one of invalidity
or unenforceability, in which event the
provision shall be severable from this
section and shall not affect the
remainder thereof or the application of
the provision to persons not similarly
situated or to dissimilar circumstances.
■ 9. Add § 146.137 to read as follows:
§ 146.137 Nonquantitative treatment
limitation comparative analysis
requirements.
(a) Meaning of terms. Unless
otherwise stated in this section, the
terms of this section have the meanings
indicated in § 146.136(a)(2).
(b) In general. In the case of a group
health plan (or health insurance issuer
offering group health insurance
coverage in connection with a group
health plan) that provides both medical/
surgical benefits and mental health or
substance use disorder benefits and that
imposes any nonquantitative treatment
limitation on mental health or substance
use disorder benefits, the plan or issuer
must perform and document a
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comparative analysis of the design and
application of each nonquantitative
treatment limitation applicable to
mental health or substance use disorder
benefits. Each comparative analysis
must comply with the content
requirements of paragraph (c) of this
section and be made available to the
Secretary, upon request, in the manner
required by paragraphs (d) and (e) of
this section.
(c) Comparative analysis content
requirements. With respect to each
nonquantitative treatment limitation
applicable to mental health or substance
use disorder benefits under a group
health plan (or health insurance
coverage offered in connection with a
group health plan), the comparative
analysis performed by the plan or issuer
must include, at minimum, the elements
specified in this paragraph (c). In
addition to the comparative analysis for
each nonquantitative treatment
limitation, each plan or issuer must
prepare and make available to the
Secretary, upon request, a written list of
all nonquantitative treatment limitations
imposed under the plan or coverage and
a general description of any information
considered or relied upon by the plan or
issuer in preparing the comparative
analysis for each nonquantitative
treatment limitation.
(1) Description of the nonquantitative
treatment limitation. The comparative
analysis must include, with respect to
the nonquantitative treatment limitation
that is the subject of the comparative
analysis:
(i) Identification of the
nonquantitative treatment limitation,
including the specific terms of the plan
or coverage or other relevant terms
regarding the nonquantitative treatment
limitation, the policies or guidelines
(internal or external) in which the
nonquantitative treatment limitation
appears or is described, and the
applicable sections of any other relevant
documents, such as provider contracts,
that describe the nonquantitative
treatment limitation;
(ii) Identification of all mental health
or substance use disorder benefits and
medical/surgical benefits to which the
nonquantitative treatment limitation
applies, including a list of which
benefits are considered mental health or
substance use disorder benefits and
which benefits are considered medical/
surgical benefits;
(iii) A description of which benefits
are included in each classification set
forth in § 146.136(c)(2)(ii)(A); and
(iv) Identification of the predominant
nonquantitative treatment limitation
applicable to substantially all medical/
surgical benefits in each classification,
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including an explanation of how the
plan or issuer determined which
variation is the predominant
nonquantitative treatment limitation as
compared to other variations, as well as
how the plan identified the variations of
the nonquantitative treatment
limitation.
(2) Identification and definition of the
factors used to design or apply the
nonquantitative treatment limitation.
The comparative analysis must include,
with respect to every factor considered
or relied upon to design the
nonquantitative treatment limitation or
apply the nonquantitative treatment
limitation to mental health or substance
use disorder benefits and medical/
surgical benefits:
(i) Identification of all of the factors
considered, as well as the evidentiary
standards considered or relied upon to
design or apply each factor and the
sources from which each evidentiary
standard was derived, in determining
which mental health or substance use
disorder benefits and which medical/
surgical benefits are subject to the
nonquantitative treatment limitation;
and
(ii) A definition of each factor,
including:
(A) A detailed description of the
factor; and
(B) A description of each evidentiary
standard (and the source of each
evidentiary standard) identified under
paragraph (c)(2)(i) of this section.
(3) Description of how factors are
used in the design and application of
the nonquantitative treatment
limitation. The comparative analysis
must include a description of how each
factor identified and defined pursuant
to paragraph (c)(2) of this section is used
in the design or application of the
nonquantitative treatment limitation to
mental health and substance use
disorder benefits and medical/surgical
benefits in a classification, including:
(i) A detailed explanation of how each
factor identified and defined in
paragraph (c)(2) of this section is used
to determine which mental health or
substance use disorder benefits and
which medical/surgical benefits are
subject to the nonquantitative treatment
limitation;
(ii) An explanation of the evidentiary
standards or other information or
sources (if any) considered or relied
upon in designing or applying the
factors or relied upon in designing and
applying the nonquantitative treatment
limitation, including in the
determination of whether and how
mental health or substance use disorder
benefits or medical/surgical benefits are
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subject to the nonquantitative treatment
limitation;
(iii) If the application of the factor
depends on specific decisions made in
the administration of benefits, the
nature of the decisions, the timing of the
decisions, and the professional
designation and qualifications of each
decision maker;
(iv) If more than one factor is
identified and defined in paragraph
(c)(2) of this section, an explanation of:
(A) How all of the factors relate to
each other;
(B) The order in which all the factors
are applied, including when they are
applied;
(C) Whether and how any factors are
given more weight than others; and
(D) The reasons for the ordering or
weighting of the factors; and
(v) Any deviation(s) or variation(s)
from a factor, its applicability, or its
definition (including the evidentiary
standards used to define the factor and
the information or sources from which
each evidentiary standard was derived),
such as how the factor is used
differently to apply the nonquantitative
treatment limitation to mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
and a description of how the plan or
issuer establishes such deviation(s) or
variation(s).
(4) Demonstration of comparability
and stringency as written. The
comparative analysis must evaluate
whether, in any classification, under the
terms of the plan (or health insurance
coverage) as written, any processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits are comparable to,
and are applied no more stringently
than, the processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
nonquantitative treatment limitation
with respect to medical/surgical
benefits. The comparative analysis must
include, with respect to the
nonquantitative treatment limitation
and the factors used in designing and
applying the nonquantitative treatment
limitation:
(i) Documentation of each factor
identified and defined in paragraph
(c)(2) of this section that was applied to
determine whether the nonquantitative
treatment limitation applies to mental
health or substance use disorder
benefits and medical/surgical benefits in
a classification, including, as relevant:
(A) Quantitative data, calculations, or
other analyses showing whether, in each
classification in which the
PO 00000
Frm 00116
Fmt 4701
Sfmt 4702
nonquantitative treatment limitation
applies, mental health or substance use
disorder benefits and medical/surgical
benefits met or did not meet any
applicable threshold identified in the
relevant evidentiary standard, and the
evaluation of relevant data as required
under § 146.136(c)(4)(iv)(A), to
determine that the nonquantitative
treatment limitation would or would not
apply; and
(B) Records maintained by the plan or
issuer documenting the consideration
and application of all factors and
evidentiary standards, as well as the
results of their application;
(ii) In each classification in which the
nonquantitative treatment limitation
applies to mental health or substance
use disorder benefits, a comparison of
how the nonquantitative treatment
limitation, as written, is applied to
mental health or substance use disorder
benefits and to medical/surgical
benefits, including the specific
provisions of any forms, checklists,
procedure manuals, or other
documentation used in designing and
applying the nonquantitative treatment
limitation or that address the
application of the nonquantitative
treatment limitation;
(iii) Documentation demonstrating
how the factors are comparably applied,
as written, to mental health or substance
use disorder benefits and medical/
surgical benefits in each classification,
to determine which benefits are subject
to the nonquantitative treatment
limitation; and
(iv) An explanation of the reason(s)
for any deviation(s) or variation(s) in the
application of a factor used to apply the
nonquantitative treatment limitation, or
the application of the nonquantitative
treatment limitation, to mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
and how the plan or issuer establishes
such deviation(s) or variation(s),
including:
(A) In the definition of the factors, the
evidentiary standards used to define the
factors, and the sources from which the
evidentiary standards were derived;
(B) In the design of the factors or
evidentiary standards; or
(C) In the application or design of the
nonquantitative treatment limitation.
(5) Demonstration of comparability
and stringency in operation. The
comparative analysis must evaluate
whether, in any classification, under the
terms of the plan (or health insurance
coverage) in operation, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
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use disorder benefits are comparable to,
and are applied no more stringently
than, the processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
limitation with respect to medical/
surgical benefits. The comparative
analysis must include, with respect to
the nonquantitative treatment limitation
and the factors used in designing and
applying the nonquantitative treatment
limitation:
(i) A comprehensive explanation of
how the plan or issuer ensures that, in
operation, the processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits in a classification are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
other factors used in designing and
applying the nonquantitative treatment
limitation with respect to medical/
surgical benefits, including:
(A) An explanation of any
methodology and underlying data used
to demonstrate the application of the
nonquantitative treatment limitation, in
operation; and
(B) The sample period, inputs used in
any calculations, definitions of terms
used, and any criteria used to select the
mental health or substance use disorder
benefits and medical/surgical benefits to
which the nonquantitative treatment
limitation is applicable;
(ii) Identification of the relevant data
collected and evaluated as required
under § 146.136(c)(4)(iv)(A);
(iii) An evaluation of the outcomes
that resulted from the application of the
nonquantitative treatment limitation to
mental health or substance use disorder
benefits and medical/surgical benefits,
including the relevant data as required
under § 146.136(c)(4)(iv)(A);
(iv) A detailed explanation of material
differences in outcomes evaluated
pursuant to paragraph (c)(5)(iii) of this
section that are not attributable to
differences in the comparability or
relative stringency of the
nonquantitative treatment limitation as
applied to mental health or substance
use disorder benefits and medical/
surgical benefits and the bases for
concluding that material differences in
outcomes are not attributable to
differences in the comparability or
relative stringency of the
nonquantitative treatment limitation;
and
(v) A discussion of any measures that
have been or are being implemented by
the plan or issuer to mitigate any
material differences in access to mental
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health or substance use disorder
benefits as compared to medical/
surgical benefits, including the actions
the plan or issuer is taking under
§ 146.136(c)(4)(iv)(B)(1) to address
material differences to ensure
compliance with § 146.136(c)(4)(i) and
(ii).
(6) Findings and conclusions. The
comparative analysis must address the
findings and conclusions as to the
comparability of the processes,
strategies, evidentiary standards, and
other factors used in designing and
applying the nonquantitative treatment
limitation to mental health or substance
use disorder benefits and medical/
surgical benefits within each
classification, and the relative
stringency of their application, both as
written and in operation, and include:
(i) Any findings or conclusions
indicating that the plan or coverage is
not (or might not be) in compliance with
the requirements of § 146.136(c)(4),
including any actions the plan or issuer
has taken or intends to take to address
any potential areas of concern or
noncompliance;
(ii) A reasoned and detailed
discussion of the findings and
conclusions described in paragraph
(c)(6)(i) of this section;
(iii) Citations to any additional
specific information not otherwise
included in the comparative analysis
that supports the findings and
conclusions described in paragraph
(c)(6)(i) of this section;
(iv) The date of the analysis and the
title and credentials of all relevant
persons who participated in the
performance and documentation of the
comparative analysis; and
(v) If the comparative analysis relies
upon an evaluation by a reviewer or
consultant considered by the plan or
issuer to be an expert, an assessment of
each expert’s qualifications and the
extent to which the plan or issuer
ultimately relied upon each expert’s
evaluation in performing and
documenting the comparative analysis
of the design and application of each
nonquantitative treatment limitation
applicable to both mental health or
substance use disorder benefits and
medical/surgical benefits.
(d) Requirements related to
submission of comparative analyses to
the Secretary upon request—(1) Initial
request by the Secretary for comparative
analysis. A group health plan or health
insurance issuer offering group health
insurance coverage must make the
comparative analysis required by
paragraph (b) of this section available
and submit it to the Secretary within 10
business days of receipt of a request
PO 00000
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51667
from the Secretary (or an additional
period of time specified by the
Secretary).
(2) Additional information required
after a comparative analysis is deemed
to be insufficient. In instances in which
the Secretary determines that the plan
or issuer has not submitted sufficient
information under paragraph (d)(1) of
this section for the Secretary to review
the comparative analysis required in
paragraph (b) of this section, the
Secretary will specify to the plan or
issuer the additional information the
plan or issuer must submit to the
Secretary to be responsive to the request
under paragraph (d)(1) of this section.
Any such information must be provided
to the Secretary by the plan or issuer
within 10 business days after the
Secretary specifies the additional
information to be submitted (or an
additional period of time specified by
the Secretary).
(3) Initial determination of
noncompliance, required action, and
corrective action plan. In instances in
which the Secretary reviewed the
comparative analysis submitted under
paragraph (d)(1) of this section and any
additional information submitted under
paragraph (d)(2) of this section, and
made an initial determination that the
plan or issuer is not in compliance with
the requirements of § 146.136(c)(4) or
this section, the plan or issuer must
respond to the Secretary and specify the
actions the plan or issuer will take to
bring the plan or coverage into
compliance, and provide to the
Secretary additional comparative
analyses meeting the requirements of
paragraph (b) of this section that
demonstrate compliance with
§ 146.136(c)(4) and this section, not later
than 45 calendar days after the
Secretary’s initial determination that the
plan or issuer is not in compliance.
(4) Requirement to notify participants
and beneficiaries of final determination
of noncompliance—(i) In general. If the
Secretary makes a final determination of
noncompliance, the plan or issuer must
notify all participants and beneficiaries
enrolled in the plan or coverage that the
plan or issuer has been determined to
not be in compliance with the
requirements of § 146.136(c)(4) or this
section with respect to such plan or
coverage. Such notice must be provided
within 7 calendar days of receipt of the
final determination of noncompliance,
and the plan or issuer must provide a
copy of the notice to the Secretary, and
any service provider involved in the
claims process.
(ii) Content of notice. The notice to
participants and beneficiaries required
in paragraph (d)(4)(i) of this section
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shall be written in a manner calculated
to be understood by the average plan
participant and must include, in plain
language, the following information in a
standalone notice:
(A) The following statement
prominently displayed on the first page,
in no less than 14-point font:
‘‘Attention! The Department of Health
and Human Services has determined
that [insert the name of group health
plan or health insurance issuer] is not
in compliance with the Mental Health
Parity and Addiction Equity Act.’’;
(B) A summary of changes the plan or
issuer has made as part of its corrective
action plan specified to the Secretary
following the initial determination of
noncompliance, including an
explanation of any opportunity for a
participant or beneficiary to have a
claim for benefits reprocessed;
(C) A summary of the Secretary’s final
determination that the plan or issuer is
not in compliance with § 146.136(c)(4)
or this section, including any provisions
or practices identified as being in
violation of MHPAEA, additional
corrective actions identified by the
Secretary in the final determination
notice, and information on how
participants and beneficiaries can obtain
from the plan or issuer a copy of the
final determination of noncompliance;
(D) Any additional actions the plan or
issuer is taking to come into compliance
with § 146.136(c)(4) or this section,
when the plan or issuer will take such
actions, and a clear and accurate
statement explaining whether the
Secretary has indicated that those
actions, if completed, will result in
compliance; and
(E) Contact information for questions
and complaints, and a statement
explaining how participants and
beneficiaries can obtain more
information about the notice, including:
(1) The plan’s or issuer’s phone
number and an email or web portal
address; and
(2) The Center for Medicare and
Medicaid Services’ phone number and
email or web portal address.
(iii) Manner of notice. The plan or
issuer must make the notice required
under paragraph (d)(4)(i) of this section
available in paper form, or
electronically (such as by email or an
internet posting) if:
(A) The format is readily accessible;
(B) The notice is provided in paper
form free of charge upon request; and
(C) In a case in which the electronic
form is an internet posting, the plan or
issuer timely notifies the participant or
beneficiary in paper form (such as a
postcard) or email, that the documents
are available on the internet, provides
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21:14 Aug 02, 2023
Jkt 259001
the internet address, includes the
statement required in paragraph
(d)(4)(ii)(A) of this section, and notifies
the participant or beneficiary that the
documents are available in paper form
upon request.
(e) Requests for a copy of a
comparative analysis. In addition to
making a comparative analysis available
upon request to the Secretary, a plan or
issuer must make available a copy of the
comparative analysis required by
paragraph (b) of this section when
requested by:
(1) Any applicable State authority;
and
(2) A participant or beneficiary (or a
provider or other person acting as a
participant’s or beneficiary’s authorized
representative) who has received an
adverse benefit determination related to
mental health or substance use disorder
benefits.
(f) Rule of construction. Nothing in
this section or § 146.136 shall be
construed to prevent the Secretary from
acting within the scope of existing
authorities to address violations of
§ 146.136 or this section.
(g) Applicability. The provisions of
this section apply to group health plans
and health insurance issuers offering
group health insurance coverage
described in § 146.136(e), to the extent
the plan or issuer is not exempt under
§ 146.136(f) or (g), for plan years
beginning on or after January 1, 2025.
(h) Severability. If any provision of
this section is held to be invalid or
unenforceable by its terms, or as applied
to any person or circumstance, or stayed
pending further agency action, the
provision shall be construed so as to
continue to give the maximum effect to
the provision permitted by law, unless
such holding shall be one of invalidity
or unenforceability, in which event the
provision shall be severable from this
section and shall not affect the
remainder thereof or the application of
the provision to persons not similarly
situated or to dissimilar circumstances.
■ 9. Amend § 146.180 by:
■ a. Revising paragraph (a)(2);
■ b. Redesignating paragraphs (a)(3)
through (7) as paragraphs (a)(4) through
(8);
■ c. Adding new paragraph (a)(3);
■ d. Revising newly redesignated
paragraphs (a)(5) and (a)(7)(i) and
paragraph (f)(1); and
■ e. Adding paragraph (f)(4)(iii).
The revisions and additions read as
follows:
§ 146.180 Treatment of non-Federal
governmental plans.
(a) * * *
(2) General rule. For plans years
beginning on or after September 23,
PO 00000
Frm 00118
Fmt 4701
Sfmt 4702
2010, a sponsor of a non-Federal
governmental plan may elect to exempt
its plan, to the extent the plan is not
provided through health insurance
coverage (that is self-funded), from one
or more of the requirements described
in paragraphs (a)(1)(iv) through (vii) of
this section, except as provided in
paragraphs (a)(3) and (f)(1) of this
section with respect to the requirements
described in paragraph (a)(1)(v) of this
section.
(3) Sunset of election option related to
parity in mental health and substance
use disorder benefits. A sponsor of a
non-Federal governmental plan may not
newly elect to exempt its plan(s) from
the requirements described in paragraph
(a)(1)(v) of this section on or after
December 29, 2022.
*
*
*
*
*
(5) Examples—(i) Example 1. A nonFederal governmental employer has
elected to exempt its self-funded group
health plan from all of the requirements
described in paragraph (a)(1) of this
section. The plan year commences
September 1 of each year. The plan is
not subject to the provisions of
paragraph (a)(2) of this section until the
plan year that commences on September
1, 2011. Accordingly, for that plan year
and any subsequent plan years, the plan
sponsor may elect to exempt its plan
only from the requirements described in
paragraphs (a)(1)(iv) through (vii) of this
section, subject to paragraphs (a)(3) and
(f)(1) of this section with respect to the
requirements described in paragraph
(a)(1)(v) of this section.
(ii) Example 2. A non-Federal
governmental employer has elected to
exempt its collectively bargained selffunded plan from all of the
requirements described in paragraph
(a)(1) of this section. The collective
bargaining agreement applies to 5 plan
years, October 1, 2009 through
September 30, 2014. For the plan year
that begins on October 1, 2014, the plan
sponsor is no longer permitted to elect
to exempt its plan from the
requirements described in paragraphs
(a)(1)(i) through (iii) of this section.
Accordingly, for that plan year and any
subsequent plan years, the plan sponsor
may elect to exempt its plan only from
the requirements described in
paragraphs (a)(1)(iv) through (vii) of this
section, subject to paragraphs (a)(3) and
(f)(1) of this section with respect to the
requirements described in paragraph
(a)(1)(v) of this section.
*
*
*
*
*
(7) * * *
(i) Subject to paragraph (a)(7)(ii) of
this section, the purchase of stop-loss or
excess risk coverage by a self-funded
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ddrumheller on DSK120RN23PROD with PROPOSALS2
non-Federal governmental plan does not
prevent an election under this section.
*
*
*
*
*
(f) * * *
(1) Election renewal. A plan sponsor
may renew an election under this
section through subsequent elections.
Notwithstanding the previous sentence
and except as provided in paragraph
(f)(4)(iii) of this section, an election with
respect to the requirements described in
paragraph (a)(1)(v) of this section
expiring on or after June 27, 2023, may
not be renewed. The timeliness
standards described in paragraph (c) of
this section apply to election renewals
under paragraph (f) of this section.
*
*
*
*
*
(4) * * *
(iii) In the case of a plan that is subject
to multiple collective bargaining
agreements of varying lengths and that
has an election with respect to the
requirements described in paragraph
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21:14 Aug 02, 2023
Jkt 259001
(a)(1)(v) of this section in effect as of
December 29, 2022, that expires on or
after June 27, 2023, the plan may extend
such election until the date on which
the term of the last such agreement
expires.
*
*
*
*
*
PART 147—HEALTH INSURANCE
REFORM REQUIREMENTS FOR THE
GROUP AND INDIVIDUAL HEALTH
INSURANCE MARKETS
10. The authority citation for part 147
continues to read as follows:
■
Authority: 42 U.S.C. 300gg through 300gg–
63, 300gg–91, 300gg–92, and 300gg–111
through 300gg–139, as amended, and section
3203, Pub. L. 116–136, 134 Stat. 281.
11. Revise § 147.160 to read as
follows:
■
PO 00000
§ 147.160 Parity in mental health and
substance use disorder benefits.
(a) In general. The provisions of
§§ 146.136 and 146.137 of this
subchapter apply to individual health
insurance coverage offered by a health
insurance issuer in the same manner
and to the same extent as such
provisions apply to health insurance
coverage offered by a health insurance
issuer in connection with a group health
plan in the large group market.
(b) Applicability date. The provisions
of this section apply for policy years
beginning on or after January 1, 2026.
Until the applicability date in the
preceding sentence, issuers are required
to continue to comply with 45 CFR
147.160, revised as of October 1, 2021.
This section applies to nongrandfathered and grandfathered health
plans as defined in § 147.140.
[FR Doc. 2023–15945 Filed 7–31–23; 8:45 am]
BILLING CODE 4510–29–P
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]]>Agencies
[Federal Register Volume 88, Number 148 (Thursday, August 3, 2023)]
[Proposed Rules]
[Pages 51552-51669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15945]
[[Page 51551]]
Vol. 88
Thursday,
No. 148
August 3, 2023
Part III
Department of the Treasury
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Internal Revenue Service
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26 CFR Part 54
Department of Labor
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Employee Benefits Security Administration
-----------------------------------------------------------------------
29 CFR Part 2590
Department of Health and Human Services
-----------------------------------------------------------------------
45 CFR Parts 146 and 147
Requirements Related to the Mental Health Parity and Addiction Equity
Act; Proposed Rule
Federal Register / Vol. 88 , No. 148 / Thursday, August 3, 2023 /
Proposed Rules
[[Page 51552]]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[REG-120727-21]
RIN 1545-BQ29
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2590
RIN 1210-AC11
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 146 and 147
[CMS-9902-P]
RIN 0938-AU93
Requirements Related to the Mental Health Parity and Addiction
Equity Act
AGENCY: Internal Revenue Service, Department of the Treasury; Employee
Benefits Security Administration, Department of Labor; Centers for
Medicare & Medicaid Services, Department of Health and Human Services.
ACTION: Proposed rules.
-----------------------------------------------------------------------
SUMMARY: This document proposes amendments to regulations implementing
the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008 (MHPAEA) and proposes new regulations implementing
the nonquantitative treatment limitation (NQTL) comparative analyses
requirements under MHPAEA, as amended by the Consolidated
Appropriations Act, 2021 (CAA, 2021). Specifically, these proposed
rules would amend the existing NQTL standard to prevent plans and
issuers from using NQTLs to place greater limits on access to mental
health and substance use disorder benefits as compared to medical/
surgical benefits. As part of these changes, these proposed rules would
require plans and issuers to collect and evaluate relevant data in a
manner reasonably designed to assess the impact of NQTLs on access to
mental health and substance use disorder benefits and medical/surgical
benefits, and would set forth a special rule with regard to network
composition. These proposed rules would also amend existing examples
and add new examples on the application of the rules for NQTLs to
clarify and illustrate the protections of MHPAEA. Additionally, these
proposed rules would set forth the content requirements for NQTL
comparative analyses and specify how plans and issuers must make these
comparative analyses available to the Department of the Treasury
(Treasury), the Department of Labor (DOL), and the Department of Health
and Human Services (HHS) (collectively, the Departments), as well as to
an applicable State authority, and participants, beneficiaries, and
enrollees. The Departments also solicit comments on whether there are
ways to improve the coverage of mental health and substance use
disorder benefits through other provisions of Federal law. Finally, HHS
proposes regulatory amendments to implement the sunset provision for
self-funded, non-Federal governmental plan elections to opt out of
compliance with MHPAEA, as adopted in the Consolidated Appropriations
Act, 2023 (CAA, 2023).
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than October 2, 2023.
ADDRESSES: Written comments may be submitted to the address specified
below. Any comment that is submitted will be shared with Treasury,
Internal Revenue Service (IRS), and HHS. Please do not submit
duplicates.
Comments will be made available to the public. Warning: Do not
include any personally identifiable information (such as name, address,
or other contact information) or confidential business information that
you do not want publicly disclosed. All comments are posted on the
internet exactly as received and can be retrieved by most internet
search engines. No deletions, modifications, or redactions will be made
to the comments received, as they are public records. Comments may be
submitted anonymously.
In commenting, please refer to file code 1210-AC11. Because of
staff and resource limitations, the Departments cannot accept comments
by facsimile (FAX) transmission.
Comments must be submitted in one of the following two ways (please
choose only one of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By mail. You may mail written comments to the following address
ONLY: Office of Health Plan Standards and Compliance Assistance,
Employee Benefits Security Administration, Room N-5653, U.S. Department
of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention:
1210-AC11.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. The comments are posted on
the following website as soon as possible after they have been
received: https://www.regulations.gov. Follow the search instructions
on that website to view public comments.
FOR FURTHER INFORMATION CONTACT: Shira McKinlay, Internal Revenue
Service, Department of the Treasury, at 202-317-5500; Beth Baum or
David Sydlik, Employee Benefits Security Administration, Department of
Labor, at 202-693-8335; David Mlawsky, Centers for Medicare & Medicaid
Services, Department of Health and Human Services, at 410-786-6851.
Customer Service Information: Individuals interested in obtaining
information from DOL concerning private employment-based health
coverage laws may call the Employee Benefits Security Administration
(EBSA) Toll-Free Hotline at 1-866-444-EBSA (3272) or visit the DOL's
website (www.dol.gov/agencies/ebsa).
In addition, information from HHS on private health insurance
coverage and coverage provided by self-funded, non-Federal governmental
group health plans can be found on the Centers for Medicare & Medicaid
Services (CMS) website (www.cms.gov/cciio), and information on health
care reform can be found at www.Healthcare.gov or https://www.hhs.gov/healthcare/. In addition, information about mental and
behavioral health and addiction is available at https://www.samhsa.gov/mental-health and https://www.samhsa.gov/find-support.
SUPPLEMENTARY INFORMATION:
I. Background
A. Introduction
Mental health is essential to personal and societal wellbeing.
America is experiencing a mental health and substance use disorder
crisis \1\ that worsened during the COVID-19
[[Page 51553]]
pandemic.\2\ This crisis impacts both children and adults across
various demographics nationwide and disproportionately affects
marginalized and underserved communities. Recent data from the Centers
for Disease Control and Prevention (CDC) indicate that, between August
2020 and February 2021, the percentage of adults exhibiting symptoms of
an anxiety or depressive disorder increased significantly, from 36.4
percent to 41.5 percent.\3\
---------------------------------------------------------------------------
\1\ Department of Health and Human Services (2023). SAMHSA
Announces National Survey on Drug Use and Health (NSDUH) Results
Detailing Mental Illness and Substance Use Levels in 2021. Retrieved
from https://www.hhs.gov/about/news/2023/01/04/samhsa-announces-national-survey-drug-use-health-results-detailing-mental-illness-substance-use-levels-2021.html.
\2\ Vahratian, A., Blumberg, S.J., Terlizzi, E.P., Schiller,
J.S. (2021). Symptoms of Anxiety or Depressive Disorder and Use of
Mental Health Care Among Adults During the COVID-19 Pandemic--United
States, August 2020-February 2021. MMWR Morb Mortal Wkly Rep
2021;70:490-494. DOI: https://dx.doi.org/10.15585/mmwr.mm7013e2.
\3\ Id.
---------------------------------------------------------------------------
Similarly, the overdose and substance use disorder epidemic has
worsened in recent years. Overdose death numbers have risen
substantially since 2015, reaching a then-historic high of 70,630
deaths nationally in 2019 and growing to a reported value of 107,421
overdose deaths in the 12-month period ending in July 2022.\4\
Additionally, from 1999 through 2019, the rate of drug overdose deaths
increased from 4.0 per 100,000 to 19.6 in rural counties,\5\ and in
2020, the age-adjusted rate of drug overdose deaths increased to 26.2
per 100,000 in rural counties.\6\ The number of people who died from
drug overdoses in 2021 increased by approximately 36,000 over the prior
2 years.\7\ During the first year of the COVID-19 pandemic, the
overdose death rates were highest for American Indians and Alaska
Natives and Black or African Americans, exceeding the overdose death
rate for White people by about 30 and 16 percent, respectively.\8\
While Hispanic and Latino people saw the lowest overdose death rates,
those rates still increased in 2020.\9\
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\4\ Hedegaard, H., Mini[ntilde]o, A.M., Wagner, M. (2020). Drug
Overdose Deaths in the United States, 1999-2019. NCHS Data Brief No.
304 (December 2020) https://www.cdc.gov/nchs/data/databriefs/db394-H.pdf; Centers for Disease Control and Prevention, National Center
for Health Statistics. Vital Statistics Rapid Release: Provisional
Drug Overdose Death Counts. Available at https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm. Accessed on July 14, 2023.
\5\ Hedegaard H, Spencer MR. Urban-rural differences in drug
overdose death rates, 1999-2019. NCHS Data Brief, no 403.
Hyattsville, MD: National Center for Health Statistics. 2021. DOI:
https://dx.doi.org/10.15620/cdc:102891.
\6\ Spencer MR, Garnett MF, Mini[ntilde]o AM. Urban-rural
differences in drug overdose death rates, 2020. NCHS Data Brief, no
440. Hyattsville, MD: National Center for Health Statistics. 2022.
DOI: https://dx.doi.org/10.15620/cdc:118601.
\7\ National Vital Statistics System. Provisional Drug Overdose
Death Counts. https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/202205.htm.
\8\ Friedman, Joseph R, and Helena Hansen (2022). Research
Letter: Evaluation of Increases in Drug Overdose Mortality Rates in
the US by Race and Ethnicity Before and During the COVID-19
Pandemic. JAMA Psychiatry. https://jamanetwork.com/journals/jamapsychiatry/fullarticle/2789697?utm_campaign=articlePDF&utm_medium=articlePDFlink&utm_source=articlePDF&utm_content=jamapsychiatry.2022.0004.
\9\ Id.
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As noted above, both children and adolescents are also impacted by
this mental health and substance use disorder crisis. Prior to the
COVID-19 public health emergency (PHE), millions of children ages 12 to
17 reported experiencing at least one major depressive episode or
severe major depression.\10\ Suicidal behavior among children has
increased sharply; known suicide attempts by ingestion alone in
children ages 10 to 12 increased by about 450 percent from 2010 to
2020.\11\ Suicide rates among Black or African American children below
age 13 increased rapidly from 2001 to 2015, and those children are
nearly twice as likely to die by suicide than White children of the
same age.\12\ Additionally, one survey, conducted from September 20 to
December 31, 2021, notes that 45 percent of Lesbian, Gay, Bisexual,
Transgender, and Queer (LGBTQ) youth respondents ages 13 to 24
seriously considered attempting suicide in the past year,\13\ including
nearly half of multiracial LGBTQ youth respondents.\14\ A sharp rise in
eating disorders throughout the COVID-19 PHE also demonstrates the
extent of this crisis for young people.\15\ Emergency department visits
for adolescent girls ages 12-17 with eating disorders doubled in
January 2022 as compared to 2019,\16\ and children are beginning to
experience eating disorders at younger ages.\17\ In addition, in 2021,
nearly 3 in 5 teen girls felt persistently sad or hopeless, the highest
level reported over the past decade.\18\
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\10\ Mental Health America (2022). Youth Ranking 2022. https://mhanational.org/issues/2022/mental-health-america-youth-data.
\11\ Sheridan D, Grusing S, Marshall R. (2022) Changes in
Suicidal Ingestion Among Preadolescent Children from 2000 to 2020.
JAMA Pediatrics. https://jamanetwork.com/journals/jamapediatrics/article-abstract/2789948; see also CDC, Youth Risk Behavior Survey,
available at https://www.cdc.gov/healthyyouth/data/yrbs/pdf/YRBS_Data-Summary-Trends_Report2023_508.pdf.
\12\ Bridge JA, Horowitz LM, Fontanella CA, et al. (2018). Age-
Related Racial Disparity in Suicide Rates Among US Youths From 2001
Through 2015. JAMA Pediatrics. https://jamanetwork.com/journals/jamapediatrics/fullarticle/2680952.
\13\ The Trevor Project (2022). 2022 National Survey on LGBTQ
Youth Mental Health. https://www.thetrevorproject.org/survey-2022/.
\14\ The Trevor Project (2022). The Mental Health and Well-Being
of Multiracial LGBTQ Youth. https://www.thetrevorproject.org/research-briefs/the-mental-health-and-well-being-of-multiracial-lgbtq-youth-aug-2022/.
\15\ Radhakrishnan L, Leeb R, Bitsko R, Carey K, Gates A,
Holland K, Hartnett K, Kite-Powell A, DeVies J, Smith A, van Santen
K, Crossen S, Sheppard M, Wotiz S, Lane R, Njai R, Johnson A, Winn
A, Kirking H, Rodgers L, Thomas C, Soetebier K, Adjemian J, Anderson
K. (2022) Pediatric Emergency Department Visits Associated with
Mental Health Conditions Before and During the COVID-19 Pandemic--
United States, January 2019-January 2022. MMWR Morb Mortal Wkly Rep
2022; 71(8);319-324. https://www.cdc.gov/mmwr/volumes/71/wr/mm7108e2.htm.
\16\ Id.
\17\ Stuart B. Murray, Aaron J. Blashill, and Jerel P. Calzo
(2022). Prevalence of Disordered Eating and Associations With Sex,
Pubertal Maturation, and Weight in Children in the US, available at
https://jamanetwork.com/journals/jamapediatrics/article-abstract/2794847.
\18\ Centers for Disease Control and Prevention, National Center
for HIV, Viral Hepatitis, STD, and TB Prevention, U.S. Teen Girls
Experiencing Increased Sadness and Violence (Feb. 13, 2023),
available at https://www.cdc.gov/nchhstp/newsroom/2023/increased-sadness-and-violence-press-release.html.
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Americans are too frequently discouraged from and forgo seeking
mental health and substance use disorders care because of barriers,
both inside and outside of the health care system, such as
discrimination, stigmatization,\19\ inability to find an in-network
provider accepting new patients,\20\ cost, and geography. These
barriers are particularly problematic for young adults ages 18-34, who
are less likely to believe their mental health symptoms are well-
managed than older adults,\21\ and for people seeking substance use
disorder treatment.\22\ One survey reports that less than seven percent
of people in need of substance use disorder treatment received care at
a specialty facility and less than 10 percent received ``any
treatment,'' \23\
[[Page 51554]]
while only about 19 percent of people with opioid use disorder in 2021
received life-saving medications.\24\ Sixty percent of rural Americans
live in mental health professional shortage areas.\25\ Additionally,
non-metropolitan adults were more likely than metropolitan adults
(43.7% vs. 34.5%) to see a general practitioner or family doctor, as
opposed to a mental health specialist, for depressive symptoms, and
among non-metropolitan adults with depression, fewer than 20 percent
received treatment from a mental health professional.\26\
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\19\ Van Boekel, L.C., Brouwers, E.P., van Weeghel, J., &
Garretsen, H.F. (2013). Stigma among health professionals towards
patients with substance use disorders and its consequences for
healthcare delivery: systematic review. Drug and Alcohol Dependence,
131(1-2), 23-35. DOI: 10.1016/j.drugalcdep.2013.02.018, available at
https://pubmed.ncbi.nlm.nih.gov/23490450/.
\20\ Cf. Jack Turbin. Ghost networks of psychiatrists make money
for insurance companies but hinder patients' access to care. Stat
News, June 17, 2019, https://www.statnews.com/2019/06/17/ghost-networks-psychiatrists-hinder-patient-care/.
\21\ National Alliance on Mental Illness (2021). Mood Disorder
Survey Report. https://nami.org/NAMI/media/NAMI-Media/Research/NAMI-Mood-Disorder-Survey-White-Paper.pdf.
\22\ Esther Adeniran, Megan Quinn, Richard Wallace, Rachel R.
Walden, Titilola Labisi, Afolakemi Olaniyan, Billy Brooks, Robert
Pack (2023). A scoping review of barriers and facilitators to the
integration of substance use treatment services into US mainstream
health care, Drug and Alcohol Dependence Reports; Volume 7, 100152
https://www.sciencedirect.com/science/article/pii/S2772724623000227.
\23\ Center for Behavioral Health Statistics and Quality (2022),
Results from the 2021 National Survey on Drug Use and Health:
Detailed Tables, Substance Abuse and Mental Health Services
Administration, available at https://www.samhsa.gov/data/report/2021-nsduh-detailed-tables. For this purpose, ``any treatment''
includes having participated in a mutual aid group, such as
Alcoholics Anonymous, Narcotics Anonymous, or SMART Recovery, and
receiving services in a hospital through primary care.
\24\ Id.
\25\ Health Resources and Services Administration, Designated
Health Professional Shortage Areas Statistics (data updated through
June 30, 2023), available at https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport (last accessed July 18, 2023).
\26\ Borders, TF. Major Depression, Treatment Receipt, and
Treatment Sources among Non-Metropolitan and Metropolitan Adults.
Lexington, KY: Rural and Underserved Health Research Center; 2020.
Available at https://www.ruralhealthresearch.org/publications/1348.
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Moreover, against the backdrop of this mental health and substance
use disorder crisis, when patients seek benefits under their health
plan or coverage, they often find that coverage for treatment of mental
health conditions or substance use disorders operates in a separate--
and too often disparate--system than their health plan's coverage for
treatment of medical/surgical conditions.\27\ These disparities
exacerbate the hardships faced by people living with mental health
conditions and substance use disorders. The disparities also can
magnify the challenges faced by the parents, children, and loved ones
of people living with mental health conditions or substance use
disorders as well as those who care for them, who are profoundly
affected by the person's illness and their difficulties in getting, or
inability to get, coverage for needed care.\28\
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\27\ See, generally, Commonwealth Fund, Behavioral Health Care
in the United States: How It Works and Where It Falls Short,
available at https://www.commonwealthfund.org/publications/explainer/2022/sep/behavioral-health-care-us-how-it-works-where-it-falls-short.
\28\ See National Alliance on Mental Illness, Mental Health By
the Numbers, available at https://www.nami.org/mhstats (showing 8.4
million people in the U.S. provide care to an adult with a mental or
emotional health issue); KFF, KFF/CNN Mental Health In America
Survey, available at https://www.kff.org/other/report/kff-cnn-mental-health-in-america-survey/ (showing half of adults say they
have had a severe mental health crisis in their family); California
Health Care Foundation, In Their Own Words: How Fragmented Care
Harms People with Both Mental Illness and Substance Use Disorder,
available at https://www.chcf.org/publication/fragmented-care-harms-people-mental-illness-substance-use-disorder/.
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Ensuring meaningful access to mental health and substance use
disorder care is vital to addressing the Nation's mental health and
substance use disorder crisis. A key component of access is the
availability of an adequate number of appropriate providers within a
plan's network. A survey of adults with private health coverage found
that plan participants were more likely to perceive their mental health
provider networks as inadequate when compared to medical provider
networks.\29\ Furthermore, another survey noted that most plan
participants reported choosing mental health services from out-of-
network mental health providers based on provider quality issues.\30\
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\29\ See Busch, Susan H. and Kelly Kyanko, Assessment of
Perception of Mental Health vs. Medical Health Plan Networks Among
US Adults with Private Insurance, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8536951/.
\30\ See Kelly A. Kyanko, Leslie A. Curry, and Susan H. Busch,
Out-of-Network Providers Use More Likely in Mental Health than
General Health Care Among Privately Insured, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4707657/.
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A 2019 Milliman report found a growing disparity in the utilization
of out-of-network behavioral health care (which the report uses to
refer to care for mental health conditions and substance use disorders)
providers relative to out-of-network medical/surgical care
providers.\31\ The same report found that the disparity between how
often out-of-network behavioral health inpatient facilities were used
relative to out-of-network medical/surgical inpatient facilities had
increased 85 percent between 2013 and 2017 for people with commercial
preferred provider organization (PPO) health plans. Over the same
period, there were also increasing disparities in the use of out-of-
network outpatient facilities and office visits for mental health and
substance use disorder treatment relative to the use of out-of-network
outpatient facilities and office visits for medical/surgical care.\32\
The report additionally noted a growing disparity in reimbursement
rates (as a percentage of Medicare-allowed amounts) between in-network
mental health and substance use disorder providers and medical/surgical
providers. Primary care reimbursements were, on average, 23.8 percent
higher than behavioral health office visit reimbursements relative to
Medicare allowed amounts in 2017--up from a 20.8 percent difference in
2015.\33\ Low reimbursement rates for behavioral health providers and
high demand for services, among other factors, contribute to this
difficulty finding in-network providers,\34\ which can stifle efforts
to receive necessary care for mental health conditions or substance use
disorders.
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\31\ Melek, S., Davenport, S., Gray, T.J. (2019). Addiction and
mental health vs. physical health: Widening disparities in network
use and provider reimbursement (p. 6). Milliman. https://assets.milliman.com/ektron/Addiction_and_mental_health_vs_physical_health_Widening_disparities_in_network_use_and_provider_reimbursement.pdf.
\32\ Id.
\33\ Id. at pp. 6-7.
\34\ See Busch, Susan H. and Kelly Kyanko, Assessment of
Perception of Mental Health vs. Medical Health Plan Networks Among
US Adults with Private Insurance, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8536951/.
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MHPAEA's fundamental purpose is to ensure that individuals in group
health plans or with group or individual health insurance coverage who
seek treatment for covered mental health conditions or substance use
disorders do not face greater barriers to accessing benefits for such
mental health conditions or substance use disorders than they would
face when seeking coverage for the treatment of a medical condition or
for a surgical procedure.\35\ Such barriers are particularly
problematic when they effectively result in the loss of benefits that
the plan or issuer purports to make available and that individuals
reasonably expect to be covered, and they contravene MHPAEA's clear
mandate that the financial requirements and treatment limitations
applicable to mental health benefits or substance use disorder benefits
be ``no more restrictive'' than the predominant requirements and
limitations applicable to substantially all medical/surgical
benefits.\36\
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\35\ In a floor statement, Representative Patrick Kennedy (D-
RI), one of the chief architects of MHPAEA, made the case for its
passage on the grounds that ``access to mental health services is
one of the most important and most neglected civil rights issues
facing the Nation. For too long, persons living with mental
disorders have suffered from discriminatory treatment at all levels
of society'' 153 Cong. Rec. S1864-5 (daily ed. Feb. 12, 2007). Cf.
H. Rept. 110-374, Part 3, available at https://www.congress.gov/congressional-report/110th-congress/house-report/374. (``The purpose
of H.R. 1424, the `Paul Wellstone Mental Health and Addiction Equity
Act of 2007' is to have fairness and equity in the coverage of
mental health and substance-related disorders vis-a-vis coverage for
medical and surgical disorders.'')
\36\ Internal Revenue Code (Code) section 9812(a)(3)(A),
Employee Retirement Income Security Act of 1974 (ERISA) section
712(a)(3)(A), and Public Health Service Act (PHS Act) section
2726(a)(3)(A).
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MHPAEA was enacted as bipartisan legislation reflecting what
Congress saw as a shared public concern: that it is wrong to place
greater burdens on people in need of mental health and
[[Page 51555]]
substance use disorder treatment than people in need of medical/
surgical treatment under the same health coverage. However, almost 15
years after MHPAEA's enactment, disparities persist, as people face
greater barriers when accessing benefits for mental health and
substance use disorders under their plan or coverage than they do when
accessing medical/surgical benefits. The Departments' experience since
the MHPAEA final regulations were issued in 2013 (2013 final
regulations) (78 FR 68240 (Nov. 13, 2013)) has shown that too often,
group health plans and health insurance issuers offering group or
individual health insurance coverage are not operating in compliance
with MHPAEA, which can have devastating consequences for individuals
with mental health conditions and substance use disorders and their
families. The Departments continue to receive and investigate
complaints that plans and issuers fail to comply with MHPAEA, by
continuing to restrict access to benefits for mental health conditions
and substance use disorders in ways that are more onerous and limiting
than for medical or surgical care. As reflected in recent reports to
Congress on MHPAEA compliance, the Departments found nearly all plans
or issuers audited for MHPAEA compliance could not demonstrate
compliance with the law's obligations in response to an initial request
for NQTL comparative analyses.\37\ As a result of these failures,
participants and beneficiaries routinely encounter additional barriers
to access and are denied needed and potentially lifesaving care for
opioid use disorder, eating disorders, autism spectrum disorder (ASD),
anxiety, depression, and other mental health conditions and substance
use disorders. The harm to these participants and beneficiaries, and to
their families, friends, co-workers, and others, is incalculable.
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\37\ 2022 MHPAEA Report to Congress, p. 4, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf and https://www.cms.gov/files/document/2022-mhpaea-report-congress.pdf; 2023 MHPAEA
Comparative Analysis Report to Congress, July 2023 (2023 MHPAEA
Report to Congress), available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf and https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity.
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In the last 2 years, the Departments have made an unprecedented
commitment to advance parity for mental health and substance use
disorder care by making it a top enforcement priority, especially with
respect to NQTLs.\38\ Specifically, EBSA, which has primary enforcement
jurisdiction over MHPAEA for approximately 2.5 million private,
employment-based group health plans covering approximately 133 million
individuals, is taking extraordinary steps to enforce mental health and
substance use disorder parity requirements and ensure that it is using
its full authority to help participants and beneficiaries receive
equitable coverage for mental health and substance use disorder
treatment. Similarly, CMS continues to prioritize its MHPAEA
enforcement activities with respect to non-Federal governmental plans
nationwide \39\ and health insurance issuers offering group and
individual health insurance coverage in States where CMS is the direct
enforcer of MHPAEA with respect to issuers.40 41
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\38\ As discussed in more detail later in this preamble, NQTLs
are generally non-numerical requirements that limit the scope or
duration of benefits, such as prior authorization requirements, step
therapy, and standards for provider admission to participate in a
network, including methodologies for determining reimbursement
rates.
\39\ PHS Act section 2723(b).
\40\ PHS Act section 2723(a).
\41\ CMS currently enforces MHPAEA with respect to issuers in
Texas and Wyoming. In addition, CMS has collaborative enforcement
agreements with Alabama, Florida, Louisiana, Montana, and Wisconsin.
These States with collaborative enforcement agreements with CMS
perform State regulatory and oversight functions with respect to
some or all of the applicable provisions of title XXVII of the PHS
Act, including MHPAEA. However, if the State finds a potential
violation and is unable to obtain compliance by an issuer, the State
will refer the matter to CMS for possible enforcement action.
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In addition to using their enforcement authority, the Departments
continue to work to reduce the stigma and discrimination that
individuals with mental health conditions and substance use disorders
face, raise awareness so these individuals can receive the treatment
they need and the benefits to which they are entitled, and engage
consumer advocates, members of the regulated community, State
regulators, and other interested parties to inform the Departments'
efforts in addressing the nation's mental illness and substance use
disorder epidemic. These efforts have helped to deepen the Departments'
understanding of the barriers to mental health and substance use
disorder treatment Americans face, inform DOL's and HHS's MHPAEA
enforcement approach, and connect advocacy groups to government
resources.
The Departments have also continued to help plans, issuers,
consumers, providers, States, and other interested parties understand
and comply with MHPAEA's requirements, including the NQTL comparative
analysis requirements. Additionally, the Departments have worked to
help families, caregivers, and individuals understand the law and
benefit from it, as Congress intended.
Since the promulgation of the 2013 final regulations on November
13, 2013,\42\ the Departments have provided extensive guidance and
compliance assistance materials to the regulated community, State
regulators, and other interested parties to facilitate the
implementation and enforcement of MHPAEA, as discussed later in this
preamble, including numerous sets of Frequently Asked Questions
(FAQs),\43\
[[Page 51556]]
fact sheets,\44\ compliance assistance tools,\45\ templates,\46\
reports,\47\ and publications.\48\ Despite this unprecedented outreach,
plans and issuers continue to fall short of MHPAEA's central mandate to
ensure that participants, beneficiaries, and enrollees do not face
greater barriers and restrictions to accessing benefits for mental
health conditions or substance use disorders than they face when
accessing benefits for a medical condition or surgical procedure. This
noncompliance is especially evident with respect to the design and
application of NQTLs that apply to mental health and substance use
disorder benefits. Accordingly, Congress amended MHPAEA in the CAA,
2021, as described later in this preamble.
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\42\ 78 FR 68240 (Nov. 13, 2013).
\43\ See, e.g., FAQs About Affordable Care Act Implementation
Part V and Mental Health Parity Implementation (Dec. 22, 2010),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-v.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-5; FAQs About Affordable Care Act Implementation (Part VII)
and Mental Health Parity Implementation (Nov. 17, 2011), available
at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-vii.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-7; Understanding Implementation of the Mental Health Parity
and Addiction Equity Act of 2008 (May 9, 2012), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/understanding-implementation-of-mhpaea.pdf;
FAQs for Employees about the Mental Health Parity and Addiction
Equity Act (May 18, 2012), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/mhpaea-2.pdf; FAQs About Affordable Care Act Implementation (Part
XVII) and Mental Health Parity Implementation (Nov. 8, 2013),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xvii.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-17; FAQs About Affordable Care Act Implementation (Part
XVIII) and Mental Health Parity Implementation (Jan. 9, 2014),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xviii.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-18; FAQs About Affordable Care Act Implementation (Part
XXIX) and Mental Health Parity Implementation (Oct. 23, 2015),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xxix.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-29 (FAQs Part XXIX); FAQs About Affordable Care Act
Implementation Part 31, Mental Health Parity Implementation, and
Women's Health and Cancer Rights Act Implementation (Apr. 20, 2016),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-31; FAQs About Affordable Care Act Implementation Part 34
and Mental Health and Substance Use Disorder Parity Implementation
(Oct. 27, 2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-34.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-34 (FAQs Part 34); FAQs About Mental
Health and Substance Use Disorder Parity Implementation and the 21st
Century Cures Act Part 38 (June 16, 2017), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-38.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-38
(FAQs Part 38); Proposed FAQs About Mental Health and Substance Use
Disorder Parity Implementation and the 21st Century Cures Act Part
39, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-39-proposed.pdf
(Proposed FAQs Part 39); Final FAQs About Mental Health and
Substance Use Disorder Parity Implementation and the 21st Century
Cures Act Part 39 (Sept. 5, 2019), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-39-final.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-final-set-39 (FAQs
Part 39); FAQs About Families First Coronavirus Response Act and
Coronavirus Aid, Relief, and Economic Security Act Implementation
Part 43 (June 23, 2020), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-43.pdf and https://www.hhs.gov/guidance/document/faqs-about-families-first-coronavirus-response-act-and-coronavirus-aid-relief-and-0 (FAQs part 43); FAQs About Mental Health and Substance
Use Disorder Parity Implementation and the Consolidated
Appropriations Act, 2021 Part 45 (Apr. 2, 2021), available at
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-45.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/MHPAEA-FAQs-Part-45.pdf (FAQs Part 45); and Mental Health Parity and
Addiction Equity Act (MHPAEA) FAQs, available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/mhpaea-1#.
\44\ See, e.g., The Mental Health Parity and Addiction Equity
Act of 2008 (MHPAEA) Fact Sheet (Jan. 2010), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea.pdf; MHPAEA Enforcement Fact
Sheet (Jan. 2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement.pdf; FY 2016 MHPAEA Enforcement Fact Sheet,
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2016.pdf; FY 2017 MHPAEA Enforcement Fact Sheet, available at
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2017.pdf;
FY 2018 MHPAEA Enforcement Fact Sheet, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2018.pdf; FY 2019
MHPAEA Enforcement Fact Sheet, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2019.pdf and https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/mhpaea-enforcement-2019.pdf; FY 2020 MHPAEA Enforcement Fact Sheet,
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2020.pdf
and https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/mhpaea-enforcement-2020.pdf; FY 2021 MHPAEA
Enforcement Fact Sheet, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2021.pdf; and FY 2022 MHPAEA Enforcement Fact
Sheet, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2022.pdf.
\45\ See Self-Compliance Tool for Part 7 of ERISA: Health Care-
Related Provisions, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide-appendix-a.pdf; 2018 Self-Compliance
Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA),
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool-2018.pdf;
and 2020 Self-Compliance Tool for the Mental Health Parity and
Addiction Equity Act (MHPAEA), available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
\46\ See Form to Request Documentation from an Employer-
Sponsored Health Plan or a Group or Individual Market Insurer
Concerning Treatment Limitations, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-disclosure-template.pdf.
\47\ See, e.g., DOL 2012 Report to Congress: Compliance With the
Mental Health Parity and Addiction Equity Act of 2008 (Jan. 1,
2012), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/mhpaea-report-to-congress-2012.pdf; DOL 2014 Report to Congress: Compliance
of Group Health Plans (and Health Insurance Coverage Offered in
Connection with Such Plans With the Requirements of the Mental
Health Parity and Addiction Equity Act of 2008 (Sept. 2014),
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/mhpaea-report-to-congress-2014.pdf; DOL 2016 Report to Congress: Improving
Healoverage for Mental Health and Substance Use Disorder Patients
Including Compliance with the Federal Mental Health and Substance
Use Disorder Parity Provisions (Jan. 2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/improving-health-coverage-for-mental-health-and-substance-use-disorder-patients.pdf; HHS Mental Health Parity
and Addiction Equity Act of 2008 (MHPAEA) Enforcement Report (Dec.
12, 2017), available at https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/HHS-2008-MHPAEA-Enforcement-Period.pdf; DOL 2018 Report to Congress: Pathway to Full Parity,
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/dol-report-to-congress-2018-pathway-to-full-parity.pdf; 21st Century Cures Act: Section 13002
Action Plan for Enhanced Enforcement of Mental Health and Substance
Use Disorder Coverage, available at https://www.hhs.gov/sites/default/files/parity-action-plan-b.pdf; HHS Mental Health Parity and
Addiction Equity Act of 2008 (MHPAEA) Enforcement Report for the
2018 Federal Fiscal Year, available at https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/FY2018-MHPAEA-Enforcement-Report.pdf; DOL 2020 Report to Congress: Parity
Partnerships: Working Together, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/dol-report-to-congress-parity-partnerships-working-together.pdf; 2022 Report to Congress: Realizing Parity, Reducing
Stigma, and Raising Awareness, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf and https://www.cms.gov/files/document/2022-mhpaea-report-congress.pdf; MHPAEA Comparative Analysis Report to
Congress, July 2023, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf and https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity.
\48\ See Consumer Guide to Disclosure Rights: Making the Most of
Your Mental Health and Substance Use Disorder Benefits, available at
https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/disclosure-guide-making-the-most-of-your-mental-health-and-substance-use-disorder-benefits.pdf; Know Your
Rights: Parity for Mental Health and Substance Use Disorder
Benefits, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/know-your-rights-parity-for-mental-health-and-substance-use-disorder-benefits.pdf;
Parity of Mental Health and Substance Use Benefits with Other
Benefits: Using Your Employer-Sponsored Health Plan to Cover
Services, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/parity-of-mental-health-and-substance-use-benefits-with-other-benefits.pdf;
Understanding Parity: A Guide to Resources for Families and
Caregivers, available at https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/laws/mental-health-parity/understanding-parity-a-guide-to-resources-for-families-and-caregivers.pdf; Warning
Signs--Plan or Policy Non-Quantitative Treatment Limitations (NQTLs)
that Require Additional Analysis to Determine Mental Health Parity
Compliance, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/warning-signs-plan-or-policy-nqtls-that-require-additional-analysis-to-determine-mhpaea-compliance.pdf; Mental Health Parity Provisions Questions and
Answers, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide-mhpaea.pdf; Mental Health and Substance use
Disorder Parity: Compliance Assistance Materials Index, available at
https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/compliance-assistance-materials-index.pdf;
The Essential Aspects of Parity: A Training Tool for Policymakers,
available at https://store.samhsa.gov/product/essential-aspects-of-parity-training-tool-for-policymakers/pep21-05-00-001; and
Approaches in Implementing the Mental Health Parity and Addiction
Equity Act: Best Practices from the States, available at https://store.samhsa.gov/product/Approaches-in-Implementing-the-Mental-Health-Parity-and-Addiction-Equity-Act-Best-Practices-from-the-States/SMA16-4983.
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The Departments are proposing these revised rules to reinforce
MHPAEA's fundamental objective, to ensure that limitations on mental
health and substance use disorder benefits are no
[[Page 51557]]
more restrictive than the limitations applicable to medical/surgical
benefits. These proposed rules also would implement important
requirements that Congress enacted in the CAA, 2021 to ensure that
plans and issuers perform and document their NQTL comparative analyses
and provide them to the Departments or an applicable State authority
upon request for evaluation of compliance with MHPAEA. The aim of these
proposed rules is to ensure that individuals benefit from the full
protections afforded to them under MHPAEA, while providing clear
standards for plans and issuers on how to comply with MHPAEA.
Specifically, the proposed regulations would:
Make clear that MHPAEA requires that individuals can
access their mental health and substance use disorder benefits in
parity with medical/surgical benefits.
Provide specific examples that make clear that plans and
issuers cannot use more restrictive prior authorization and other
medical management techniques for mental health and substance use
disorder benefits; standards related to network composition for mental
health and substance use disorder benefits; and factors to determine
out-of-network reimbursement rates for mental health and substance use
disorder providers.
Require plans and issuers to collect and evaluate outcomes
data and take action to address material differences in access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits, with a specific focus on ensuring that there
are not any material differences in access as a result of the
application of their network composition standards.
Codify the requirement that plans and issuers conduct
meaningful comparative analyses to measure the impact of NQTLs. This
includes evaluating standards related to network composition, out-of-
network reimbursement rates, and prior authorization NQTLs.
Implement the sunset provision for self-funded, non-
Federal governmental plan elections to opt out of compliance with
MHPAEA, adopted in the CAA, 2023.
As a result of these proposals, the Departments anticipate changes
in network composition and medical management techniques that would
result in more robust mental health and substance use disorder provider
networks and fewer and less restrictive prior authorization
requirements for individuals seeking mental health and substance use
disorder treatment.
Under a regulatory regime in which MHPAEA's promise of parity is
realized, participants, beneficiaries, and enrollees would experience
financial requirements and treatment limitations for mental health and
substance use disorder benefits that are in parity with those applied
to their medical/surgical benefits. These proposed rules are designed
to achieve MHPAEA's purpose to ensure that participants, beneficiaries,
and enrollees will not face greater restrictions on access to obtaining
mental health and substance use disorder benefits than those for
medical/surgical benefits. At the same time, the proposed rules also
aim to ensure that benefit structures that apply limitations that
reflect independent professional medical or clinical standards or guard
against indicators of fraud, waste, and abuse (while minimizing the
negative impact on access to appropriate benefits) would continue to be
permitted, as the Departments are of the view that such limitations are
premised on standards that generally provide an independent and less
suspect basis for determining access to mental health and substance use
disorder treatment. These proposed rules also aim to ensure that plans
and issuers that offer mental health and substance use disorder
benefits strive to attain and maintain mental health and substance use
disorder treatment provider networks that are as robust as their
medical/surgical provider networks in terms of available in-network
providers and facilities-not just as shown by a list of names in a
provider directory, but as measured by actual provider participation
and as evidenced by participant usage.
In evaluating their compliance with these proposed rules, plans and
issuers would be required to consider whether an NQTL is inhibiting
access to treatment for mental health conditions and substance use
disorders by examining whether the NQTL that applies to mental health
or substance use disorder benefits is more restrictive than the
predominant NQTL that applies to substantially all medical/surgical
benefits within a classification of benefits set forth under the
regulations.\49\ A plan or issuer would also be required to consider
whether the processes, strategies, evidentiary standards, or other
factors that it uses to design or apply an NQTL to mental health or
substance use disorder benefits in a classification are comparable to,
and applied no more stringently than, those used in designing and
applying the NQTL to medical/surgical benefits in the same
classification. Under these proposed rules, plans and issuers would be
required to consider data relevant to an NQTL's impact on participants'
or beneficiaries'\50\ abilities to obtain mental health and substance
use disorder benefits under the plan or coverage relative to its impact
on access to medical/surgical benefits, and to take action to address
the potential causes of material differences in access identified
through the data as necessary to ensure compliance. As the proposal
makes clear, ensuring that people seeking mental health and substance
use disorder treatment do not face greater barriers to access to
benefits for such treatment is central to the fundamental purpose of
MHPAEA. These proposed rules would ensure that NQTLs that apply to
mental health and substance use disorder benefits are ``no more
restrictive,'' and that processes, strategies, evidentiary standards,
and other factors are ``comparable to, and applied no more
stringently,'' than those applicable to medical/surgical benefits.
These proposed rules' focus on access to mental health and substance
use disorder benefits and constraints on obtaining such benefits would
add needed clarity to the statutory requirements for the regulated
community and other interested parties.
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\49\ The required classifications of benefits (and permissible
sub-classifications) used to apply the MHPAEA regulations are
addressed at 26 CFR 54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii),
and 45 CFR 146.136(c)(2)(ii).
\50\ These proposed rules would apply directly to group health
plans or health insurance coverage offered by an issuer in
connection with a group health plan, and would apply to individual
health insurance coverage by cross-reference through 45 CFR 147.160,
which currently provides that the requirements of 45 CFR 146.136
apply to health insurance coverage offered by a health insurance
issuer in the individual market in the same manner and to the same
extent as to health insurance coverage offered by a health insurance
issuer in connection with a group health plan in the large group
market. As noted below, HHS also proposes an amendment to 45 CFR
147.160 to also include a cross-reference to proposed 45 CFR 146.137
to similarly extend the new proposed comparative analysis
requirements to individual health insurance coverage in the same
manner and to the same extent as group health insurance coverage.
For simplicity, this preamble generally refers only to the
applicability on group health plans and health insurance coverage
offered in connection with a group health plan and to participants
and beneficiaries enrolled in such a plan or coverage, but
references to participants and beneficiaries should also be
considered to include enrollees in the individual market, unless
otherwise specified.
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Under the current rules, plans and issuers are generally permitted
to prepare NQTL comparative analyses without regard to the overall
impact of NQTLs on participants and beneficiaries. This has contributed
to plans and issuers looking for ways to
[[Page 51558]]
characterize the processes, strategies, evidentiary standards, and
other factors associated with an NQTL as being ``comparable'' and
``applied no more stringently'' through careful word choice, without
regard to how, in operation, the limitation burdens participants and
beneficiaries by limiting access to, or by limiting the scope and
duration of, the plan's or issuer's mental health and substance use
disorder benefits relative to medical/surgical benefits. Such
limitations on mental health and substance use disorder benefits under
the plan or coverage must be analyzed in terms of the comparative
burden on access they place (that is, whether they are more
restrictive) on individuals.
These proposed rules set forth a number of standards that are
intended to reinforce the proper application of the statutory and
regulatory requirements; promote compliance with the NQTL comparative
analysis requirements; explain how the various components of the
regulation work together; and ensure that the purpose of MHPAEA, to
remove greater barriers to access to mental health and substance use
disorder benefits, is fulfilled. The Departments recognize the value of
input from interested parties and welcome feedback on all aspects of
the approach set forth in these proposed rules, as well as alternative
approaches that would enable the Departments to more effectively
implement MHPAEA.
B. The Mental Health Parity Act, The Mental Health Parity and Addiction
Equity Act, and the Affordable Care Act
In 1996, Congress enacted the Mental Health Parity Act of 1996
(MHPA 1996), which required parity in aggregate lifetime and annual
dollar limits for mental health benefits and medical/surgical benefits.
These mental health parity provisions were codified in Employee
Retirement Income Security Act of 1974 (ERISA) section 712, PHS Act
section 2705, and Internal Revenue Code (Code) section 9812, and
applied to group health plans and health insurance coverage offered in
connection with a group health plan.\51\
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\51\ Public Law 104-204, 110 Stat. 2874 (Sept. 26, 1996). The
Departments published interim final rules implementing MHPA 1996 at
62 FR 66932 (Dec. 22, 1997).
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MHPAEA was enacted on October 3, 2008, as sections 511 and 512 of
the Tax Extenders and Alternative Minimum Tax Relief Act of 2008
(Division C of Pub. L. 110-343, 122 Stat. 3765), to amend ERISA section
712, PHS Act section 2705, and Code section 9812 to add new
requirements, including provisions to apply the mental health parity
requirements to substance use disorder benefits, and make further
amendments to the existing mental health parity provisions.
MHPAEA, as enacted, generally requires that group health plans and
health insurance issuers offering group health insurance coverage
ensure that the financial requirements and treatment limitations
applicable to mental health or substance use disorder benefits be no
more restrictive than those applicable to medical/surgical benefits and
that there be no separate financial requirements and treatment
limitations applicable only with respect to mental health or substance
use disorder benefits. Together with the existing requirements for
parity in aggregate lifetime and annual dollar limits, this is referred
to as providing mental health and substance use disorder benefits ``in
parity'' with medical/surgical benefits.
The Patient Protection and Affordable Care Act (Pub. L. 111-148,
123 Stat. 3028) was enacted on March 23, 2010, and the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152, 124 Stat. 1029)
was enacted on March 30, 2010 (collectively, the Affordable Care Act).
The Affordable Care Act reorganized, amended, and added to the
provisions of part A of title XXVII of the PHS Act relating to group
health plans and health insurance issuers in the group and individual
markets. The Affordable Care Act added section 715(a)(1) to ERISA and
section 9815(a)(1) to the Code to incorporate the provisions of part A
of title XXVII of the PHS Act into ERISA and the Code, and to make them
applicable to group health plans and health insurance issuers providing
health insurance coverage in connection with group health plans. The
PHS Act sections incorporated by these references are sections 2701
through 2728.
The Affordable Care Act extended MHPAEA to apply to individual
health insurance coverage and redesignated MHPAEA in the PHS Act as
section 2726.\52\ Additionally, section 1311(j) of the Affordable Care
Act applies PHS Act section 2726 to qualified health plans (QHPs) \53\
in the same manner and to the same extent as to health insurance
issuers and group health plans. Furthermore, HHS' regulations regarding
essential health benefits (EHBs) \54\ require health insurance issuers
offering non-grandfathered health insurance coverage in the individual
and small group markets to comply with MHPAEA and its implementing
regulations in order to satisfy the requirement to cover ``mental
health and substance use disorder services, including behavioral health
treatment,'' as part of EHBs.\55\
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\52\ The requirements of MHPAEA generally apply to both
grandfathered and non-grandfathered health plans. See section 1251
of the Affordable Care Act and its implementing regulations at 26
CFR 54.9815-1251, 29 CFR 2590.715-1251, and 45 CFR 147.140. Under
section 1251 of the Affordable Care Act, grandfathered health plans
are exempted only from certain Affordable Care Act requirements
enacted in Subtitles A and C of Title I of the Affordable Care Act.
The provisions extending MHPAEA requirements to individual health
insurance coverage and requiring that qualified health plans comply
with MHPAEA are not included in these sections. However, because
MHPAEA requirements apply to health insurance coverage offered in
the small group market only through the requirement to provide EHB,
which does not apply to grandfathered health plans, the requirements
of MHPAEA do not apply to grandfathered health plans offered in the
small group market.
\53\ A QHP is a health insurance plan that is certified by a
health insurance exchange that it meets certain minimum standards
established under the Affordable Care Act and described in subpart C
of 45 CFR part 156. See 45 CFR 155.20.
\54\ Section 1302 of the Affordable Care Act requires non-
grandfathered health plans in the individual and small group markets
to cover essential health benefits (EHB), which include items and
services in the following ten benefit categories: (1) ambulatory
patient services; (2) emergency services; (3) hospitalization; (4)
maternity and newborn care; (5) mental health and substance use
disorder services including behavioral health treatment; (6)
prescription drugs; (7) rehabilitative and habilitative services and
devices; (8) laboratory services; (9) preventive and wellness
services and chronic disease management; and (10) pediatric
services, including oral and vision care. See 45 CFR 156.115 for
description of the benefits a health plan must provide to provide
EHB.
\55\ Section 1302(b)(1)(E) of the Affordable Care Act; 45 CFR
156.115(a)(3).
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On April 28, 2009, the Departments published a request for
information soliciting comments on issues under MHPAEA (2009 RFI).\56\
Over the next few years, the Departments considered comments regarding
MHPAEA and issued further clarifications and guidance. On February 2,
2010, the Departments published interim final regulations implementing
MHPAEA (interim final regulations).\57\ After considering the comments
and other feedback received from interested parties, the Departments
published the 2013 final regulations.\58\
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\56\ 74 FR 19155 (Apr. 28, 2009).
\57\ 75 FR 5410 (Feb. 2, 2010).
\58\ 78 FR 68240 (Nov. 13, 2013).
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The 2013 final regulations established an exhaustive list of six
classifications of benefits (not counting the exhaustive list of
permissible sub-classifications also articulated in the 2013 final
regulations): inpatient, in-network; inpatient, out-of-network;
outpatient, in-network; outpatient, out-of-network; emergency care; and
prescription drugs.
[[Page 51559]]
If a plan or health insurance coverage provides benefits for a mental
health condition or substance use disorder in any of these
classifications of benefits, benefits for that condition or disorder
must be provided in every classification in which medical/surgical
benefits are provided. The 2013 final regulations specify that the
parity requirements apply to financial requirements, such as
deductibles, copayments, and coinsurance; quantitative treatment
limitations that are expressed numerically, such as day or visit
limits; and NQTLs, which are generally non-numerical requirements that
limit the scope or duration of benefits, such as prior authorization
requirements, step therapy requirements, and standards for provider
admission to participate in a network, including methodologies for
determining reimbursement rates.
Under MHPAEA, financial requirements and treatment limitations
imposed on mental health or substance use disorder benefits cannot be
more restrictive than the predominant financial requirements and
treatment limitations that apply to substantially all medical/surgical
benefits in a classification.\59\ The 2013 final regulations defined
the ``substantially all'' numerical standard for a financial
requirement or quantitative treatment limitation as two-thirds, using
the same approach as the regulations implementing MHPA 1996 with
respect to aggregate annual and lifetime limits.\60\ The 2013 final
regulations also quantified ``predominant'' to mean the level of the
financial requirement or quantitative treatment limitation that applies
to more than one-half of medical/surgical benefits in the relevant
classification subject to the financial requirement or quantitative
treatment limitation. Using these numerical standards, the Departments
established a mathematical test by which plans and issuers could
determine if a financial requirement or quantitative treatment
limitation that applies to medical/surgical benefits in a
classification may be applied to mental health and substance use
disorder benefits in that classification, and if so, what level of the
financial requirement or quantitative treatment limitation is the most
restrictive level that could be imposed on mental health or substance
use disorder benefits within the classification.
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\59\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and
PHS Act section 2726(a)(3)(A).
\60\ With respect to aggregate lifetime and annual limits under
MHPA 1996, the regulations in 26 CFR 54.9812-1(b); 29 CFR
2590.712(b), and 45 CFR 146.136(b) set forth rules based on whether
a plan (or health insurance coverage) includes an aggregate lifetime
or annual dollar limit that applies to less than one-third or at
least two-thirds of all medical/surgical benefits. These provisions
do not address the provisions of PHS Act section 2711, as
incorporated by ERISA section 715 and Code section 9815, which
prohibit imposing lifetime and annual limits on the dollar value of
EHBs. As a result, plans and issuers cannot impose lifetime and
annual dollar limits on mental health and substance use disorder
benefits that are not EHBs, if such a limit applies to less than
one-third of all medical/surgical benefits.
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MHPAEA generally prohibits separate financial requirements and
treatment limitations that apply only to mental health and substance
use disorder benefits.\61\ The 2013 final regulations also prohibit
plans and issuers from applying separate cumulative financial
requirements, such as deductibles or out-of-pocket maximums, or
separate cumulative quantitative treatment limitations, such as annual
or lifetime day or visit limits, to mental health or substance use
disorder benefits in a classification.\62\
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\61\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and
PHS Act section 2726(a)(3)(A).
\62\ 26 CFR 54.9812-1(c)(3)(v), 29 CFR 2590.712(c)(3)(v), 45 CFR
146.136(c)(3)(v) and 147.160.
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In addition, the 2013 final regulations require that a group health
plan or health insurance issuer may not impose an NQTL with respect to
mental health and substance use disorder benefits in any classification
unless, under the terms of the plan (or health insurance coverage) as
written and in operation, any processes, strategies, evidentiary
standards, or other factors used in applying the NQTL to mental health
and substance use disorder benefits in the classification are
comparable to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, or other factors used in applying
the limitation to medical/surgical benefits in the same
classification.\63\ The 2013 final regulations also implemented the
statutory disclosure requirements imposed on group health plans and
health insurance issuers that are subject to MHPAEA's requirements.\64\
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\63\ 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), 45 CFR
146.136(c)(4)(i) and 147.160.
\64\ 26 CFR 54.9812-1(d), 29 CFR 2590.712(d), 45 CFR 146.136(d)
and 147.160.
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C. Guidance
As described earlier in this preamble, since the promulgation of
the 2013 final regulations, the Departments have provided extensive
guidance and compliance assistance materials to the regulated
community, State regulators, and other interested parties to facilitate
the implementation and enforcement of MHPAEA. Specifically, the
Departments have jointly issued 15 sets of FAQs with 96 questions,
eight enforcement fact sheets, six compliance assistance tools and
templates, seven reports to Congress, six press releases, and seven
consumer publications. In general, the Departments' FAQs are designed
to provide additional guidance and clarification on how MHPAEA applies
in specific contexts and are informed by questions raised by interested
parties and scenarios encountered in the context of the Departments'
enforcement efforts. For example, FAQs Part 34 addresses how MHPAEA
applies to treatment of substance use disorders (such as treating
opioid use disorder with medication) and provides examples of
impermissible NQTLs (such as more stringent fail-first or step-therapy
requirements, including where an individual cannot reasonably satisfy
if there are no available providers that can provide services related
to the requirement in the participant's geographic area).\65\
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\65\ See FAQs Part 34, Q4-Q9.
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Guidance issued by the Departments also reflects stakeholder
feedback and, in several instances, guidance documents were proposed
before they were issued in final form. For example, the Departments
proposed FAQs Part 39 on April 23, 2018. The finalized FAQs Part 39 was
issued on September 5, 2019, and incorporate insights from the
regulated community regarding compliance issues faced by plans and
issuers, as well as issues faced by plan participants and their
authorized representatives when seeking information about mental health
and substance use disorder benefits. FAQs Part 39 also provides
guidance on how the law and regulations apply to treatments for eating
disorders, opioid use disorder, and ASD, as well as exclusions for
experimental or investigative treatments, and standards for provider
admission to a plan's or issuer's network, including the methodology
for determining reimbursement rates for mental health and substance use
disorder providers.\66\
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\66\ See FAQs Part 39, Q1-8.
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In addition to FAQs issued after the promulgation of the 2013 final
regulations, the Departments have issued, generally every 2 years, an
updated compliance program guidance document (the MHPAEA Self-
Compliance Tool), which is intended to help plans and issuers, State
regulators, and other interested parties comply with and understand
MHPAEA and the additional related requirements under ERISA that apply
to group health plans. The Departments most recently issued
[[Page 51560]]
the MHPAEA Self-Compliance Tool in 2020 (2020 MHPAEA Self-Compliance
Tool).\67\ The 2020 MHPAEA Self-Compliance Tool includes an
illustrative, non-exhaustive list of NQTLs, a process for conducting
NQTL comparative analyses, a list of the types of documents and
information that a plan or issuer should have available to support its
analyses, and illustrations of specific fact patterns to aid in
compliance.\68\
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\67\ Section 13001(a) of the 21st Century Cures Act added
section 2726(a)(6) of the PHS Act, which directs the Departments to
provide a publicly available compliance program guidance document
that is updated every 2 years.
\68\ See Self-Compliance Tool for the Mental Health Parity and
Addiction Equity Act (MHPAEA) (2020), available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf. The Departments
issued the proposed 2020 MHPAEA Self-Compliance Tool on June 19,
2020, and requested comments from interested parties. Engagement
with interested parties through written comments and listening
sessions provided vital feedback for finalizing the 2020 update to
the MHPAEA Self-Compliance Tool, and that final version includes
revisions in response to that feedback.
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The 2020 MHPAEA Self-Compliance Tool includes a stepwise process a
plan or issuer can follow to perform an analysis assessing whether its
NQTLs satisfy MHPAEA's parity requirements.\69\ Under this stepwise
process, the plan or issuer should identify all NQTLs that apply to
benefits under the plan or coverage. The plan or issuer should also
identify all the medical/surgical benefits and mental health and
substance use disorder benefits to which each NQTL applies. After
identifying all NQTLs and the benefits to which each NQTL applies, the
2020 MHPAEA Self-Compliance Tool suggests the plan or issuer identify
the factors considered in the design of each NQTL. The plan or issuer
should also identify the sources used to define those factors. Plans
and issuers have flexibility in determining the factors and sources of
factors to apply to NQTLs, so long as they are comparable and applied
no more stringently to mental health and substance use disorder
benefits than to medical/surgical benefits in the respective benefits
classification. When identifying the sources of the factors considered
in designing an NQTL, the plan or issuer should also identify any
threshold of a factor that will implicate the NQTL.
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\69\ Id. at section F (at pp. 21-28).
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After identifying the plan's NQTLs, their application to mental
health and substance use disorder benefits and to medical/surgical
benefits, the factors used in designing each NQTL, and the sources of
those factors, the plan or issuer should determine whether the
processes, strategies, and evidentiary standards used in applying the
NQTL are comparable and no more stringently applied to mental health
and substance use disorder benefits than to medical/surgical benefits,
both as written and in operation, in the relevant benefit
classification. For instance, if a plan's or issuer's utilization
review is conducted by different entities or individuals for mental
health and substance use disorder benefits and medical/surgical
benefits, the plan or issuer should have measures in place to ensure
comparable application of utilization review policies.
The 2020 MHPAEA Self-Compliance Tool stresses that measuring and
evaluating results and quantitative outcomes can be helpful to identify
potential areas of noncompliance. For example, comparing a plan's or
issuer's average reimbursement rates for both mental health and
substance use disorder providers and medical/surgical providers against
an external benchmark of reimbursement rates, such as Medicare, may
help identify whether the underlying methodology used to determine the
plan's or issuer's reimbursement rates warrants additional review. The
2020 MHPAEA Self-Compliance Tool notes that substantially disparate
results are a red flag that a plan or issuer may be imposing an NQTL on
mental health and substance use disorder benefits in a way that fails
to satisfy the parity requirements. Other warning signs of potential
noncompliance identified in the 2020 MHPAEA Self-Compliance Tool
include generally paying at or near Medicare reimbursement rates for
mental health or substance use disorder benefits, while paying much
more than Medicare reimbursement rates for medical/surgical benefits,
and reimbursing psychiatrists, on average, less than medical/surgical
physicians for the same evaluation and management codes.\70\
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\70\ 2020 MHPAEA Self-Compliance Tool, at p. 21, available at
https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
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The 2020 MHPAEA Self-Compliance Tool also provides many compliance
tips on how an NQTL should be analyzed. For example, a plan or issuer
should have information available to substantiate how factors are used
to design or apply any specific NQTL to both medical/surgical benefits
and mental health or substance use disorder benefits. The plan or
issuer should be clear as to whether and why any factors were given
more weight than others and should be able to explain any variation in
the application of a guideline or evidentiary standard, including the
process and factors relied upon for establishing the variation. To
comply with MHPAEA's parity requirements, plans and issuers must adopt
measures for mental health and substance use disorder providers that
are at least comparable to and no more stringently applied (with regard
to limiting the scope and duration of a participant's, beneficiary's,
or enrollee's benefits under the plan or coverage) than those applied
to medical/surgical providers. This includes taking steps to help
address provider shortages, ensure an adequate network of mental health
and substance use disorder providers, and ensure reasonable patient
wait times to avoid noncompliance with MHPAEA's parity requirements. By
providing a basic framework for plans and issuers to do a stepwise
analysis and providing additional warning signs and tips, the 2020
MHPAEA Self-Compliance Tool has provided additional guidance for plans
and issuers to comply with the requirements of MHPAEA with respect to
NQTLs.
D. The Consolidated Appropriations Act, 2021 and Related Guidance
The CAA, 2021 was enacted on December 27, 2020.\71\ Section 203 of
Title II of Division BB of the CAA, 2021 amended MHPAEA, in part, by
adding Code section 9812(a)(8), ERISA section 712(a)(8), and PHS Act
section 2726(a)(8) to expressly require group health plans and health
insurance issuers offering group or individual health insurance
coverage that include both medical/surgical benefits and mental health
or substance use disorder benefits and impose NQTLs on mental health or
substance use disorder benefits to perform and document their
comparative analyses of the design and application of NQTLs.\72\
Further, plans and issuers are required to make their comparative
analyses and other applicable information available to the Departments
or applicable State authorities, upon request.\73\ The comparative
analysis requirement took effect on February 10, 2021, 45 days after
the date of enactment of the CAA, 2021.
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\71\ Public Law 116-260, 134 Stat. 1182 (Dec. 27, 2020).
\72\ Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A), and
PHS Act section 2726(a)(8)(A).
\73\ Id.
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In order to advance compliance with MHPAEA, the CAA, 2021 states
that the Departments shall request that a group health plan or health
insurance issuer
[[Page 51561]]
offering group or individual health insurance coverage submit
comparative analyses, with respect to a plan or coverage, that involve
potential MHPAEA violations, in response to complaints against a plan
or coverage regarding potentially noncompliant NQTLs, and in any other
instances that the Departments determine appropriate.\74\ These
comparative analyses must include:
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\74\ Code section 9812(a)(8)(B)(i), ERISA section
712(a)(8)(B)(i), and PHS Act section 2726(a)(8)(B)(i).
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(1) the specific plan or coverage terms or other relevant terms
regarding the NQTLs and a description of all mental health and
substance use disorder benefits and medical/surgical benefits to which
each such term applies in each benefit classification;
(2) the factors used to determine how the NQTLs will apply to
mental health or substance use disorder benefits and medical/surgical
benefits;
(3) the evidentiary standards used to develop the identified
factors, when applicable, provided that each factor shall be defined,
and any other source or evidence relied upon to design and apply the
NQTLs to mental health or substance use disorder benefits and medical/
surgical benefits;
(4) the comparative analyses demonstrating that the processes,
strategies, evidentiary standards, and other factors used to apply the
NQTLs to mental health or substance use disorder benefits, as written
and in operation, are comparable to, and are applied no more
stringently than those used to apply the NQTLs to medical/surgical
benefits in the benefits classification; and
(5) the specific findings and conclusions reached by the plan or
issuer, including any results of the analyses that indicate that the
plan or coverage is or is not in compliance with MHPAEA
requirements.\75\
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\75\ Code section 9812(a)(8)(A)(i)-(v), ERISA section
712(a)(8)(A)(i)-(v), and PHS Act section 2726(a)(8)(A)(i)-(v).
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The CAA, 2021 further sets forth a process by which the Departments
must evaluate the requested NQTL comparative analyses and enforce the
comparative analyses requirements. If the relevant Department with
jurisdiction over the group health plan (or health insurance coverage)
determines that a plan or issuer has not provided sufficient
information for the relevant Department to review the comparative
analyses, the CAA, 2021 provides that the Departments shall specify the
information the plan or issuer must submit to be responsive to the
request.\76\ In instances in which the Departments have reviewed the
requested comparative analyses and determined that the plan or issuer
is not in compliance with MHPAEA, the plan or issuer must specify the
actions it will take to come into compliance and submit additional
comparative analyses that demonstrate compliance not later than 45 days
after the initial determination of noncompliance.\77\ Following the 45-
day corrective action period, if the relevant Department makes a final
determination that the plan or issuer is still not in compliance, the
plan or issuer must notify all individuals enrolled in the plan or
coverage of this determination, not later than 7 days after such final
determination.\78\
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\76\ Code section 9812(a)(8)(B)(ii), ERISA section
712(a)(8)(B)(ii), and PHS Act section 2726(a)(8)(B)(ii).
\77\ Code section 9812(a)(8)(B)(iii)(I), ERISA section
712(a)(8)(B)(iii)(I), and PHS Act section 2726(a)(8)(B)(iii)(I).
\78\ Id.
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The CAA, 2021 also requires the Departments, after review of the
comparative analyses, to share information on findings of compliance
and noncompliance with the State where the plan is located or the State
where the issuer is licensed to do business, in accordance with any
information sharing agreement entered into with the State.\79\
Additionally, as explained in more detail later in this preamble, the
CAA, 2021 requires the Departments to submit annually to Congress and
make publicly available a report summarizing the comparative analyses
requested by the Departments. The report must state, in part, whether
each plan or issuer submitted sufficient information to permit review;
whether and why the plan or issuer is in compliance with MHPAEA; the
specific information each plan or issuer needed to submit to allow for
a review of their comparative analysis; and, for each plan or issuer
the Departments determined not to be in compliance, specifications of
the actions that must be taken to come into compliance.\80\
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\79\ Code section 9812(a)(8)(C)(iii), ERISA section
712(a)(8)(C)(iii), and PHS Act section 2726(a)(8)(C)(iii).
\80\ Code section 9812(a)(8)(B)(iv), ERISA section
712(a)(8)(B)(iv), and PHS Act section 2726(a)(8)(B)(iv).
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On April 2, 2021, the Departments issued FAQs Part 45 to provide
guidance on the amendments to MHPAEA made by the CAA, 2021 and to
promote compliance by plans and issuers. FAQs Part 45 underscores that,
for a comparative analysis to be treated as sufficient under the CAA,
2021, it must contain a detailed, written, and reasoned explanation of
the specific plan terms and practices at issue and include the bases
for the plan's or issuer's conclusion that the NQTL complies with
MHPAEA. As FAQs Part 45 explains, at a minimum, a sufficient NQTL
comparative analysis must include a robust discussion of certain
elements, including a clear description of the specific NQTL; plan
terms; policies at issue; and identification of any factors,
evidentiary standards, sources, strategies, and processes considered in
the design and application of the NQTL and in determining which
benefits, including both mental health and substance use disorder
benefits and medical/surgical benefits, are subject to the NQTL. To the
extent a plan or issuer defines any of the factors, evidentiary
standards, strategies, or processes in a quantitative manner, its
analysis should include the precise definitions used and any supporting
sources. The analysis also should explain whether the plan or issuer
imposes any variation in the application of a guideline or standard
between mental health and substance use disorder benefits and medical/
surgical benefits, and if so, should describe the processes and factors
used for establishing that variation. The plan or issuer should provide
a reasoned discussion, including citations or any specific evidence of
its findings and conclusions, as to the comparability of the processes,
strategies, evidentiary standards, factors, and sources identified
within each affected classification and their relative stringency, both
as written and in operation.
FAQs Part 45 highlights that a general statement of compliance by
plans and issuers, coupled with a conclusory reference to broadly
stated processes, strategies, evidentiary standards, or other factors
is insufficient to meet the statutory requirements for an NQTL
comparative analysis. Accordingly, a comparative analysis that consists
of conclusory or generalized statements, without specific supporting
evidence and detailed explanations, or the production of a large volume
of documents without a clear explanation of how and why each document
is relevant to the comparative analysis, fails to satisfy the statutory
requirements.
In addition, FAQs Part 45 provides guidance as to the types of
documents that plans and issuers should be prepared to make available
to support the analysis and conclusions reached in their comparative
analyses. This includes records documenting NQTL processes and
detailing how the plan or
[[Page 51562]]
issuer applies NQTLs to both medical/surgical and mental health or
substance use disorder benefits, documents and other information
relevant to the factors identified, and samples of covered and denied
mental health or substance use disorder and medical/surgical benefits
claims. FAQs Part 45 also highlights several NQTLs that DOL anticipated
focusing on in the near term.
FAQs Part 45 also notes that under the CAA, 2021, plans and issuers
must make available their respective comparative analyses of NQTLs and
other applicable information to the applicable State authority upon
request. Additionally, plans and issuers must make the comparative
analyses and other applicable information required by the CAA, 2021
available upon request to participants and beneficiaries in plans
subject to ERISA and to participants, beneficiaries, and enrollees in
all non-grandfathered group health plans and non-grandfathered group or
individual health insurance coverage upon request in connection with an
appeal of an adverse benefit determination. If a provider or other
individual is acting as a patient's authorized representative, the
provider or other authorized representative may request these
documents.
E. Reports to Congress
DOL is required to send Congress a biennial report on MHPAEA
implementation,\81\ and the Departments are required to send Congress
an annual report on NQTL comparative analyses reviews.\82\ To satisfy
these requirements, on January 25, 2022, the Departments issued the
first report to Congress since the enactment of the CAA, 2021 (2022
MHPAEA Report to Congress).\83\ The 2022 MHPAEA Report to Congress
contains extensive descriptions of the Departments' MHPAEA enforcement
efforts, outreach efforts, consumer and compliance assistance efforts,
and guidance to interested parties, including information related to
the requirement that plans and issuers perform and document comparative
analyses with respect to the design and application of NQTLs.
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\81\ ERISA section 712(f).
\82\ Section 203 of the CAA, 2021 (Pub. L. 116-260, 134 Stat.
1182 (Dec. 27, 2020)). In addition, the Departments were required to
send Congress an annual report on complaints and investigations
concerning compliance with the requirements of MHPAEA from 2017
until 2021. See section 13003 of the 21st Century Cures Act (Cures
Act), Public Law 114-255, 130 Stat. 1033 (Dec. 13, 2016), as amended
by the Substance Use-Disorder Prevention that Promotes Opioid
Recovery and Treatment for Patients and Communities Act, Public Law
115-271, 132 Stat. 3894 (Oct. 24, 2018).
\83\ 2022 MHPAEA Report to Congress, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.
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Contemporaneously with these proposed rules, the Departments are
issuing the second report to Congress since the enactment of the CAA,
2021, the MHPAEA Comparative Analysis Report to Congress, July 2023
(2023 MHPAEA Report to Congress).\84\ The 2023 MHPAEA Report to
Congress details efforts by the Departments to implement and enforce
the amendments to MHPAEA made by the CAA, 2021. The 2023 MHPAEA Report
to Congress focuses on the Departments' enforcement efforts regarding
NQTLs during the second year of CAA, 2021 implementation, looks broadly
at the 18-month period since plans and issuers were first required to
make their comparative analyses and other applicable information
available on request, discusses common deficiencies in comparative
analyses submitted by plans and issuers, and explores examples of
results that the Departments have achieved through enforcement.
---------------------------------------------------------------------------
\84\ 2023 MHPAEA Report to Congress, July 2023, available at
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf and https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity.
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The 2023 MHPAEA Report to Congress notes that nearly all of the
comparative analyses reviewed by the Departments during the relevant
time period contained insufficient information upon initial receipt and
identifies common deficiencies in the comparative analyses prepared by
plans and issuers. Specifically, many initial responders seemed
unprepared to submit their comparative analyses upon request and some
plans did not complete or start a comparative analysis until after one
was requested. Some comparative analyses lacked specific supporting
evidence, detailed explanations, or sufficient detail to draw
meaningful comparisons. For example, many plans' comparative analyses
failed to adequately explain whether or how factors were comparably
applied to mental health and substance use disorder benefits and to
medical/surgical benefits. Also, many plans and issuers provided
supporting documents for which the relevance and probative value was
not readily apparent.
Some plans also failed to identify the specific mental health or
substance use disorder benefits and medical/surgical benefits or MHPAEA
benefit classification to which an NQTL applied. Additionally, some
comparative analyses failed to identify or define every relevant
factor. In other instances, plans failed to demonstrate the application
of identified factors in the design of an NQTL, and most comparative
analyses failed to evaluate the relative stringency of how the NQTL was
applied to mental health or substance use disorder benefits versus
medical/surgical benefits. When data was included in a comparative
analysis, the data often lacked meaning because the plan or issuer did
not provide a description of its source, how the source was selected,
or information about underlying calculations. Many comparative analyses
for standards to participate in a network did not adequately address
apparent differences in access standards for medical/surgical providers
as opposed to mental health and substance use disorder providers, such
as different time and distance standards or provider-to-member ratios.
F. MHPAEA Opt Out for Self-Funded Non-Federal Governmental Plans
Prior to the enactment of the Affordable Care Act, PHS Act section
2721(b)(2), as added by the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), permitted sponsors of self-funded,
non-Federal governmental plans to elect to exempt those plans from
(that is, ``opt out of'') any or all of the following requirements of
title XXVII of the PHS Act:
1. Limitations on preexisting condition exclusion periods under PHS
Act section 2701 (redesignated as section 2704 by the Affordable Care
Act).
2. Requirements for special enrollment periods under PHS Act
section 2701 (redesignated as section 2704 by the Affordable Care Act).
3. Prohibitions against discriminating against individual
participants and beneficiaries based on health status (but not
including provisions added by the Genetic Information Nondiscrimination
Act of 2008) under PHS Act section 2702 (redesignated as section 2705
by the Affordable Care Act).
4. Standards relating to benefits for newborns and mothers under
PHS Act section 2704 (redesignated as section 2725 by the Affordable
Care Act).
5. Parity in the application of certain limits to mental health and
substance use disorder benefits (including requirements of MHPAEA)
under PHS Act section 2705 (redesignated as section 2726 by the
Affordable Care Act).
6. Required coverage for reconstructive surgery following
mastectomies under PHS Act section
[[Page 51563]]
2706 (redesignated as section 2727 by the Affordable Care Act).
7. Coverage of dependent students on a medically necessary leave of
absence under PHS Act section 2707 (redesignated as section 2728 by the
Affordable Care Act).
The Affordable Care Act redesignated PHS Act section 2721 as
section 2722 and amended PHS Act section 2722(a)(2) to allow sponsors
of self-funded, non-Federal governmental plans to only opt out of
requirements categories 4-7 listed above.
In response to the Affordable Care Act amendments, HHS issued
guidance on September 21, 2010, indicating that, for plan years
beginning on or after September 23, 2010, plan sponsors of non-
collectively bargained plans could elect to be exempt only from
requirements categories 4-7 listed above and that requirements
categories 1-3 were no longer available for exemption.\85\ Group health
plans maintained pursuant to a collective bargaining agreement ratified
before March 23, 2010, and that had been exempted from any of the first
three requirements categories listed above, would not have to come into
compliance with those requirements categories until the commencement of
the first plan year following the expiration of the last plan year
governed by the collective bargaining agreement.
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\85\ Office of Consumer Information and Insurance Oversight,
Amendments to the HIPAA opt-out provision (formerly section
2721(b)(2) of the Public Health Service Act) made by the Affordable
Care Act (Sept. 21, 2010), available at www.cms.gov/CCIIO/Resources/Files/Downloads/opt_out_memo.pdf.
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On March 21, 2014, HHS published proposed regulations in the
Federal Register that proposed to revise the provisions of 45 CFR
146.180 to reflect the amendments made by the Affordable Care Act,
consistent with the September 21, 2010, guidance.\86\ On May 27, 2014,
HHS finalized those proposed regulations with modifications related to
how opt out elections must be filed.\87\
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\86\ 79 FR 15808 (Mar. 21, 2014).
\87\ 79 FR 30240 (May 27, 2014).
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The CAA, 2023,\88\ enacted on December 29, 2022, eliminated the
election for self-funded, non-Federal governmental plans to opt out of
MHPAEA.\89\ Specifically, PHS Act section 2722(a)(2), as amended by the
CAA, 2023, provides that no election to opt out of compliance with the
requirements of MHPAEA may be made on or after December 29, 2022 (the
date of enactment of the CAA, 2023) and that generally no such election
with respect to MHPAEA expiring on or after June 27, 2023 (the date
that is 180 days after the date of enactment of the CAA, 2023), may be
renewed.\90\ In addition, PHS Act section 2722(a)(2), as amended by the
CAA, 2023, includes an exception for certain collectively bargained
plans. Specifically, a self-funded, non-Federal governmental plan that
is subject to multiple collective bargaining agreements of varying
lengths and that has a MHPAEA opt-out election in effect on December
29, 2022, that expires on or after June 27, 2023, may extend such
election until the date on which the term of the last collective
bargaining agreement expires.\91\
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\88\ Public Law 117-328, 136 Stat. 4459.
\89\ Division FF, Title I, Subtitle C, Chapter 3, sec. 1321,
Public Law 117-328, 136 Stat. 4459. As a result of the CAA, 2023
amendments to PHS Act section 2722(a)(2), self-funded, non-Federal
governmental plan sponsors may opt out of only the following three
PHS Act requirement categories: Standards relating to benefits for
newborns and mothers (PHS Act section 2725), Required coverage for
reconstructive surgery following mastectomies (PHS Act section
2727), and Coverage for dependent students on a medically necessary
leave of absence (PHS Act section 2728).
\90\ PHS Act section 2722(a)(2)(F)(i).
\91\ PHS Act section 2722(a)(2)(F)(ii).
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HHS issued a Bulletin on June 7, 2023, that informs self-funded,
non-Federal governmental plans and other interested parties about the
CAA, 2023 amendments to PHS Act section 2722(a)(2), outlines when plans
that currently opt out of compliance with MHPAEA are required to come
into compliance with these requirements, and specifies the form and
manner for submission of opt-out renewal election requests \92\ to
operationalize the special rule for certain collectively bargained
plans.\93\
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\92\ See 45 CFR 146.180(b) and (f).
\93\ Center for Consumer Information and Insurance Oversight,
Insurance Standards Bulletin Series--INFORMATION, Sunset of MHPAEA
opt-out provision for self-funded, non-Federal governmental group
health plans (June 7, 2023), available at https://www.cms.gov/files/document/hipaa-opt-out-bulletin.pdf.
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II. Overview of the Proposed Rules--Departments of the Treasury, Labor,
and HHS
The Departments are proposing these rules to further MHPAEA's
fundamental goal of ensuring that limitations on mental health and
substance use disorder benefits provided by group health plans or
health insurance issuers offering group or individual health insurance
coverage are no more restrictive than the predominant limitations
applicable to substantially all medical/surgical benefits, and to
further implement important new statutory requirements to ensure that
plans and issuers document their NQTL comparative analyses and other
applicable information to demonstrate whether the processes,
strategies, evidentiary standards, and other factors used to apply an
NQTL to mental health and substance use disorder benefits are
comparable to, and applied no more stringently than, those used to
apply the limitation with respect to medical/surgical benefits in the
same benefit classification. The goal of these proposed rules is to
ensure that individuals with mental health conditions and substance use
disorders can benefit from the full protections afforded to them under
MHPAEA, while offering clear guidance to plans and issuers on how to
comply with MHPAEA's requirements.
These proposed rules would be codified in 26 CFR part 54, 29 CFR
part 2590, and 45 CFR parts 146 and 147. Specifically, these proposed
rules would amend certain provisions of existing MHPAEA regulations at
26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136 to incorporate
new and revised definitions of key terms, as well as to specify
additional steps that plans and issuers must take to meet their
obligations under MHPAEA. These proposed rules also would add a new
regulation at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137
establishing minimum standards for developing NQTL comparative analyses
to assess whether an NQTL, as written and in operation, complies with
MHPAEA's requirements. In addition, these proposed rules would set
forth the content elements of comparative analyses and the timeframe
for plans and issuers to respond to a request from the Departments to
submit their comparative analyses. Additionally, HHS proposes an
amendment to 45 CFR 147.160 to specify that proposed regulations at 45
CFR 146.137 would apply to individual health insurance coverage offered
by a health insurance issuer in the same manner and to the same extent
that this proposed provision would apply to health insurance coverage
offered by a health insurance issuer in connection with a group health
plan in the large group market.\94\ Consistent with the existing text
at 45 CFR 147.160(a), HHS also proposes to extend the same requirements
and framework outlined in the proposed amendments to 45 CFR
[[Page 51564]]
146.136 in these proposed rules to individual health insurance coverage
in the same manner and to the same extent as such proposed amendments,
if finalized, would apply to group health insurance coverage. Finally,
HHS also proposes amendments to 45 CFR 146.180 to reflect the sunset of
the election option for self-funded, non-Federal governmental plans to
opt out of compliance with MHPAEA, consistent with changes made by the
CAA, 2023 to PHS Act section 2722(a)(2).\95\
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\94\ Non-grandfathered health insurance coverage offered by a
health insurance issuer in connection with a group health plan in
the small group market is required to comply with the requirements
under PHS Act section 2726 to satisfy the requirement to provide
coverage for mental health and substance use disorder services,
including behavioral health treatment, as part of EHB, and as such
would also be required to comply with the comparative analysis
requirements proposed under 45 CFR 146.137. See 45 CFR
156.115(a)(3).
\95\ Division FF, Title I, Subtitle C, Chapter 3, sec. 1321,
Public Law 117-328, 136 Stat. 4459 (Dec. 29. 2022).
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The Departments are soliciting public comment on all aspects of
these proposed rules.
A. Amendments to Existing Regulations at 26 CFR 54.9812-1, 29 CFR
2590.712, and 45 CFR 146.136
1. Purpose Section--26 CFR 54.9812-1(a)(1), 29 CFR 2590.712(a)(1), and
45 CFR 146.136(a)(1)
In general, the fundamental purpose of MHPAEA, its existing
implementing regulations, and these proposed rules is to ensure that
participants and beneficiaries in a group health plan or in group
health insurance coverage offered by a health insurance issuer that
offers mental health or substance use disorder benefits are not subject
to greater restrictions, such as more restrictive lifetime or annual
dollar limits, financial requirements, or treatment limitations, when
seeking those benefits than when they seek medical/surgical benefits
under the terms of the plan or coverage. This should serve as the
guiding principle for group health plans and health insurance issuers
offering group health insurance coverage as they work to comply with
MHPAEA and its implementing regulations. While MHPAEA generally does
not mandate coverage of mental health or substance use disorder
benefits, these proposed rules aim to better ensure that plans and
issuers that cover such benefits implement MHPAEA in accordance with
its express terms and fundamental purpose.
Accordingly, the Departments propose to add a purpose section to
the regulations, specifying that a fundamental purpose of MHPAEA and
its implementing regulations is to ensure that participants and
beneficiaries covered under a plan or health insurance coverage that
offers mental health or substance use disorder benefits are not subject
to more restrictive lifetime or annual dollar limits, financial
requirements, or treatment limitations with respect to covered mental
health and substance use disorder benefits than the predominant dollar
limits, financial requirements, or treatment limitations that are
applied to substantially all medical/surgical benefits covered by the
plan or coverage.\96\ The purpose section would further state that in
complying with the provisions of MHPAEA and its implementing
regulations, plans and issuers must not design or apply financial
requirements and treatment limitations that impose a greater burden on
access (that is, are more restrictive) to mental health and substance
use disorder benefits under the plan or coverage than plans and issuers
impose on access to generally comparable medical/surgical benefits.
Further, these proposed rules provide that MHPAEA and its implementing
regulations should be interpreted in a manner that is consistent with
this purpose. The Departments seek comment on the proposed addition of
a purpose section to the implementing regulations and the proposed
language.
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\96\ While the Departments recognize the relevant statutory text
for dollar limits does not use the term ``predominant'' and
different rules apply, the purpose of MHPA 1996 was similar and
therefore the provisions for dollar limits should generally be read
and applied in a similar manner. See, e.g., Government
Accountability Office (GAO), Mental Health Parity Act, May 2000, at
p. 13, available at https://www.gao.gov/assets/hehs-00-95.pdf (``To
help address the discrepancies in coverage between mental and other
illnesses, the Congress passed the Mental Health Parity Act of
1996.'').
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2. Meaning of Terms--26 CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and
45 CFR 146.136(a)(2)
The Departments propose to amend the 2013 final regulations to
revise several existing definitions, add new definitions of key terms,
and add language to specify that, except where the context clearly
indicates otherwise, the definitions in 26 CFR 54.9812-1(a)(2), 29 CFR
2590.712(a)(2), and 45 CFR 146.136(a)(2) would also apply to the new
proposed comparative analysis requirements set forth in proposed 26 CFR
54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137, which are discussed
in more detail later in this preamble.\97\
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\97\ To accommodate the proposed addition of the ``purpose''
provision in paragraph (a)(1), these proposed rules would also
redesignate the definitions from paragraph (a) to paragraph (a)(2)
of 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136.
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Under MHPAEA, the term ``medical or surgical benefits'' means
benefits with respect to medical or surgical services, as defined under
the terms of the plan or coverage.\98\ This statutory definition
further clarifies that the term does not include mental health or
substance use disorder benefits.\99\ The terms ``mental health
benefits'' and ``substance use disorder benefits'' are defined by the
statute to mean benefits with respect to services for mental health
conditions or substance use disorders, respectively, as defined under
the terms of the plan and in accordance with applicable Federal and
State law.\100\ The definitions of all three of these terms included in
the 2013 final regulations further provide that any condition defined
by the plan or coverage as being or as not being a medical/surgical
condition, mental health condition, or substance use disorder,
respectively, must be defined to be consistent with generally
recognized independent standards of current medical practice (for
example, the most current version of the Diagnostic and Statistical
Manual of Mental Disorders (DSM), the most current version of the
International Classification of Diseases (ICD), or State guidelines).
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\98\ Code section 9812(e)(3), ERISA section 712(e)(3), and PHS
Act section 2726(e)(3).
\99\ Id.
\100\ See Code section 9812(e)(4)-(5), ERISA section 712(e)(4)-
(5), and PHS Act section 2726(e)(4)-(5).
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The Departments have received questions from interested parties
about what it means for a definition of a mental health condition or
substance use disorder to be ``consistent with'' generally recognized
independent standards of current medical practice, and whether, for
purposes of MHPAEA, a condition is a medical condition, a mental health
condition, or a substance use disorder when State insurance law and
generally recognized independent standards of current medical practice
conflict. In response to these requests for further guidance, the
Departments propose to amend the existing regulatory definitions of the
terms ``medical/surgical benefits,'' ``mental health benefits,'' and
``substance use disorder benefits'' to address these questions and help
delineate more clearly what is a medical/surgical benefit, a mental
health benefit, or a substance use disorder benefit for purposes of
complying with MHPAEA.
Specifically, the Departments propose to amend the definition of
the term ``medical/surgical benefits'' to mean benefits with respect to
items or services for medical conditions or surgical procedures, as
defined under the terms of the group health plan (or health insurance
coverage offered by an issuer in connection with such a plan) and in
accordance with applicable Federal and State law, but does not include
mental health benefits or substance use disorder benefits. These
proposed rules
[[Page 51565]]
would also amend this regulatory definition of ``medical/surgical
benefits'' to provide that, notwithstanding the first sentence, any
condition or procedure defined by the plan or coverage as being or not
being a medical condition or surgical procedure must be defined
consistent with generally recognized independent standards of current
medical practice (for example, the most current version of the ICD). To
the extent that generally recognized independent standards of current
medical practice do not address whether a condition or procedure is a
medical condition or surgical procedure, plans and issuers may define
the condition or procedure as medical/surgical benefits, as long as
such definitions are in accordance with applicable Federal and State
law.
The Departments propose to remove the reference to State guidelines
in the definition of medical/surgical benefits. This proposed amendment
is more consistent with the statute, and importantly, would no longer
allow plans and issuers to rely on standards that are not applicable to
the plan or coverage at issue in applying financial requirements or
treatment limitations to mental health and substance use disorder
benefits.\101\ Generally recognized independent standards of current
medical practice more accurately align with how a plan should
characterize benefits for purposes of compliance with MHPAEA, and this
provision would minimize situations where contradictions with State
guidelines create conflicts and improperly limit the protections under
MHPAEA.
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\101\ For example, some self-insured ERISA plans have argued
that they can rely on State insurance law definitions that
characterize a particular condition as a medical condition, mental
health condition, or substance use disorder based on State
guidelines despite the fact that State insurance law is generally
not applicable to self-insured ERISA plans and such plans do not
otherwise consistently comply with State insurance law.
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The Departments propose to make similar changes to the definitions
of ``mental health benefits'' and ``substance use disorder benefits''
by amending the first sentences of these definitions, removing the
reference to State guidelines, and clarifying that, notwithstanding the
terms of a plan or coverage, any condition or disorder defined by the
plan or coverage as being or not being a mental health condition or a
substance use disorder must be defined to be consistent with generally
recognized independent standards of current medical practice.
Specifically, under these proposed rules, to be consistent with
generally recognized independent standards of current medical practice,
the plan's or coverage's definition of ``mental health benefits'' must
include all conditions covered under the plan or coverage, except for
substance use disorders, that fall under any of the diagnostic
categories listed in the mental, behavioral, and neurodevelopmental
disorders chapter (or equivalent chapter) of the most current version
of the ICD or that are listed in the most current version of the DSM.
Similarly, the plan's or coverage's definition of ``substance use
disorders'' must include all disorders covered under the plan or
coverage that fall under any of the diagnostic categories listed as a
mental or behavioral disorder due to psychoactive substance use (or
equivalent category) in the mental, behavioral, and neurodevelopmental
disorders chapter (or equivalent chapter) of the most current version
of the ICD or that are listed as a Substance-Related and Addictive
Disorder (or equivalent category) in the most current version of the
DSM.\102\ Similar to the proposed revisions to the definition of
``medical/surgical benefits,'' the proposed amended definitions of
``mental health benefits'' and ``substance use disorder benefits'' also
provide that, to the extent generally recognized independent standards
of current medical practice do not address whether a condition or
disorder is a mental health condition or substance use disorder,
respectively, plans and issuers may define the condition or disorder in
accordance with applicable Federal and State law.
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\102\ Substance use disorders that fall under any of the
diagnostic categories listed in the mental and behavioral health
disorders chapter of the most current version of the ICD or that are
listed in the most current version of the DSM would be excluded from
the definition of the term ``mental health benefits'' because they
would be included in the definition of the term ``substance use
disorder benefits.''
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The ICD would be defined as the World Health Organization's
International Classification of Diseases adopted by HHS through 45 CFR
162.1002 or successor regulations, and the DSM would be defined as the
American Psychiatric Association's Diagnostic and Statistical Manual of
Mental Disorders. Because the proposed amendments to the definitions of
``medical/surgical benefits,'' ``mental health benefits,'' and
``substance use disorder benefits,'' refer to the most current version
of the ICD or DSM, respectively, these proposed rules also explain how
to determine which version is the most current as of a particular date.
This serves to provide plans and issuers with clarity on when they
would be required to begin to rely on a new version of the ICD or DSM
after it is released, and sufficient time after the adoption of an
updated version of the ICD or DSM to ensure that the terms of their
plan or coverage are consistent with any changes made from the previous
version. The definitions would specify that, for purposes of compliance
with these proposed rules, the most current version of the ICD or DSM,
respectively, would be that which is applicable no earlier than on the
date that is 1 year before the first day of the applicable plan year.
These proposed rules also would permit plans and issuers to use a
more current version of the ICD or DSM than the version in effect 1
year before the first day of the applicable plan year. In addition, the
Departments recognize that future versions of the ICD or DSM may
include revisions to the categories of conditions or disorders or
chapters listed in the proposed amended definitions for ``mental health
benefits'' and ``substance use disorder benefits,'' which could affect
the characterization of a benefit under MHPAEA. Therefore, the proposed
amended definitions for these two terms also refer to ``equivalent
categories'' and ``equivalent chapters'' to help plans and issuers
understand how they would apply the proposed definitions, if finalized,
and how to implement such changes if they are made in the future. The
Departments request comments on this aspect of these proposed amended
definitions.
To ensure parity between mental health and substance use disorder
benefits and medical/surgical benefits, it is critical that plans and
issuers define mental health conditions and substance use disorders in
a manner consistent with the purposes of MHPAEA. While plans and
issuers have some discretion in defining mental health benefits and
substance use disorder benefits, this discretion must be exercised in a
manner that comports with generally recognized independent standards of
current medical practice. Moreover, the proposed amended definitions
for ``medical/surgical benefits,'' ``mental health benefits,'' and
``substance use disorder benefits'' specify that plans and issuers may
use applicable State law to inform their definitions, but only to the
extent that those laws are consistent with and do not contradict
generally recognized independent standards of current medical practice
(or to the extent these standards do not address whether a condition or
disorder is a medical condition or surgical procedure or a mental
health condition or substance use disorder). Under both the
[[Page 51566]]
2013 final regulations and these proposed rules, plans and issuers must
be prepared to provide supporting documentation to demonstrate that the
way the plan or issuer has defined a condition or disorder for purposes
of MHPAEA is consistent with generally recognized independent standards
of current medical practice. The Departments solicit comments on
whether any additional clarification is needed on how State law may
interact with the proposed amended definitions for these key terms.
As discussed earlier in this section of the preamble, the
Departments are proposing these amendments to the definitions of the
terms ``medical/surgical benefits,'' ``mental health benefits,'' and
``substance use disorder benefits'' in part to ensure that the use of
State laws does not prevent the application of MHPAEA's protections
with respect to conditions or disorders that are recognized as mental
health conditions and substance use disorders under generally
recognized independent standards of current medical practice. The
Departments recognize that States may enact various laws for different
purposes. Therefore, the Departments are proposing to make clear that
when a plan or issuer relies upon a State law to inform its definitions
for purposes of MHPAEA, the plan or issuer must ensure that definitions
operate to apply MHPAEA's protections to mental health conditions and
substance use disorders, as they are generally defined by the medical
community. The Departments also clarify that under the proposed
framework, to the extent a State law or generally recognized
independent standards of current medical practice define a condition or
disorder as a mental health condition or substance use disorder, plans
and issuers must treat all benefits for the condition or disorder as
mental health benefits or substance use disorder benefits,
respectively, for purposes of analyzing parity and compliance with
MHPAEA. The Departments solicit comments on any potential challenges of
applying MHPAEA to all benefits for a mental health condition or
substance use disorder where items and services can be delivered for
both medical conditions or surgical procedures and mental health
conditions or substance use disorders, and whether additional
clarifications or modifications to the proposed definitions are
necessary.
Interested parties also have requested that the Departments confirm
whether specific conditions are mental health conditions for purposes
of MHPAEA. Under these proposed rules, as under the existing MHPAEA
regulations and section 13007 of the Cures Act,\103\ the Departments
confirm that eating disorders, such as anorexia nervosa, bulimia
nervosa, and binge-eating disorder, are mental health conditions under
generally recognized independent standards of current medical
practice.\104\ Therefore, benefits for treatment of eating disorders
are mental health benefits for purposes of MHPAEA and may not be
defined as medical/surgical benefits under a plan or coverage.\105\
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\103\ Section 13007 of the Cures Act states that, if a plan or
an issuer offering group or individual health insurance coverage
provides coverage for eating disorder benefits, including
residential treatment, such group health plan or health insurance
issuer shall provide such benefits consistent with the requirements
of MHPAEA.
\104\ See, e.g., Diagnostic and Statistical Manual of Mental
Disorders (5th ed.), section II, Feeding and Eating Disorders; ICD-
10, Chapter 05.
\105\ The Departments previously clarified that eating disorders
are mental health conditions, and therefore treatment of an eating
disorder is a mental health benefit, in FAQs Part 38, Q1. See DSM
(5th ed.), section II, Feeding and Eating Disorders.
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Similarly, in response to questions from interested parties, these
proposed rules would make clear that, for purposes of MHPAEA, ASD is a
mental health condition under generally recognized independent
standards of current medical practice.\106\ Therefore, under the
proposed amended definition and framework established in these proposed
rules, if a plan or issuer generally provides benefits for ASD, ASD may
not be defined by the plan or issuer as a medical/surgical condition.
In addition, the plan or issuer may not impose any financial
requirements or treatment limitations in a classification on benefits
for ASD treatment that are more restrictive than the predominant
financial requirements or treatment limitations that apply to
substantially all medical/surgical benefits in the classification. The
plan or issuer also may not impose any financial requirements or
treatment limitations, including exclusions for Applied Behavior
Analysis (ABA) therapy (one of the primary treatments for ASD), that
are separately applicable to ASD benefits in a classification and not
to any medical/surgical benefits in the same classification. The
Departments propose to incorporate new examples illustrating the
application of MHPAEA to eating disorders and ASD, as discussed later
in this preamble. The Departments solicit comments on other specific
mental health conditions or substance use disorders that may warrant
additional clarification for purposes of analyzing parity and
compliance with MHPAEA.
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\106\ See DSM (5th ed.), section II, Autism Spectrum Disorder.
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In addition to the proposals outlined above to amend certain
existing definitions, these proposed rules also would add several new
definitions to codify the meaning of terms used in paragraph (c)(4)(i)
of the 2013 final regulations, which requires the processes,
strategies, evidentiary standards, and other factors used in applying
an NQTL to mental health or substance use disorder benefits to be
comparable to, and no more stringently applied than those used to apply
the NQTL to medical/surgical benefits in the same classification. These
terms and the standard were incorporated into MHPAEA's statutory
language in the amendments made by the CAA, 2021.\107\ The Departments
propose to add new definitions for the terms ``processes,''
``strategies,'' ``evidentiary standards,'' and ``factors'' to the list
of definitions for key terms proposed to be included in 26 CFR 54.9812-
1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2) of these
proposed rules. These new definitions would provide clarity to plans
and issuers, as well as to State regulators and participants and
beneficiaries, and help facilitate compliance with the provisions of
these proposed rules related to NQTLs and the development of sufficient
comparative analyses required under the CAA, 2021 and proposed 26 CFR
54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137. Although the
Departments have issued guidance with examples that demonstrate how
these terms apply, interested parties have stated that it can be
difficult to determine what constitutes relevant processes, strategies,
evidentiary standards, and other factors. The Departments solicit
comments on these proposed definitions, including any alternate
definitions or additional clarifications that should be considered.
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\107\ See, e.g., Code section 9812(a)(8)(A), ERISA section
712(a)(8)(A), and PHS Act section 2726(a)(8)(A).
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The Departments propose to add a definition of the term
``evidentiary standards'' to mean any evidence, sources, or standards
that a group health plan (or health insurance issuer offering coverage
in connection with such a plan) considered or relied upon in designing
or applying a factor with respect to an NQTL, including specific
benchmarks or thresholds. The proposed definition further provides that
evidentiary standards may be empirical, statistical, or clinical in
nature, and include sources acquired or originating from an objective
third party, such as recognized medical literature, professional
standards and
[[Page 51567]]
protocols (which may include comparative effectiveness studies and
clinical trials), published research studies, payment rates for items
and services (such as publicly available databases of the ``usual,
customary, and reasonable'' rates paid for items and services), and
clinical treatment guidelines. The proposed definition provides that
evidentiary standards would also include internal plan or issuer data,
such as claims or utilization data or criteria for assuring a
sufficient mix and number of network providers, and benchmarks or
thresholds, such as measures of excessive utilization, cost levels,
time or distance standards, or network participation percentage
thresholds.
Under these proposed rules, evidentiary standards generally would
not be considered factors, but instead would be considered or relied
upon in designing or applying a factor. Under the framework established
in the 2013 final regulations, the terms within the phrase ``processes,
strategies, evidentiary standards, and other factors'' were treated as
having overlapping meanings, and specifically, the term ``other
factors'' was treated as a catch-all. The CAA, 2021 codified in the
statute the phrase ``processes, strategies, evidentiary standards, and
other factors.'' \108\ However, the CAA, 2021 added to MHPAEA other
references to factors and evidentiary standards that indicate the
drafters meant to distinguish between factors and evidentiary
standards. For example, Code section 9812(a)(8)(A)(iii), ERISA section
712(a)(8)(A)(iii), and PHS Act 2726(a)(8)(A)(iii) refer to the
evidentiary standards that are used for the factors to determine that
an NQTL will apply to benefits, and those provisions go on to
distinguish between factors and any other sources or evidence relied
upon to design or apply an NQTL. The proposed definition of evidentiary
standards is consistent with the use of these terms by Congress in the
CAA, 2021 amendments to MHPAEA and the Departments' goal of clarifying
the meanings of these terms to help the regulated community comply with
MHPAEA's requirements. The Departments request comments on this
approach, including whether there are any circumstances under which an
evidentiary standard should also be considered a factor under these
proposed rules (such as, for example, when the plan or issuer only
relies upon a single evidentiary standard to design or apply an NQTL,
and no additional processes, strategies, or other factors).
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\108\ Code section 9812(a)(7)(B)(ii)(II) and (8)(A)(iv), ERISA
section 712(a)(7)(B)(ii)(II) and (8)(A)(iv), and PHS Act section
2726(a)(7)(B)(ii)(II) and (8)(A)(iv).
---------------------------------------------------------------------------
The Departments also propose to clarify that the definition of the
term ``factors'' should be read broadly, so that factors are all
information, including processes and strategies (but generally not
evidentiary standards), that a group health plan (or health insurance
issuer offering coverage in connection with such a plan) considered or
relied upon to design an NQTL or used to determine whether or how the
NQTL applies to benefits under the plan or coverage. The proposed
definition of the term ``factors'' also would include information (but
generally not evidentiary standards) that the plan or issuer considered
but rejected, consistent with previous guidance on MHPAEA in the
context of the documents or plan information the Departments consider
relevant to a compliance determination.\109\ The proposed definition
also provides examples of factors, which include, but are not limited
to, provider discretion in determining diagnosis or type or length of
treatment; clinical efficacy of any proposed treatment or service;
licensing and accreditation of providers; claim types with a high
percentage of fraud; quality measures; treatment outcomes; severity or
chronicity of condition; variability in the cost of an episode of
treatment; high cost growth; variability in cost and quality;
elasticity of demand; and geographic location.
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\109\ See FAQs Part 31, Q9, which states that a plan must
provide documents and plan information to a participant or
beneficiary, or their authorized representative, including the
specific underlying processes, strategies, evidentiary standards,
and other factors (including, but not limited to, all evidence)
considered by the plan (including factors that were relied upon and
were rejected) in determining that the NQTL will apply to a
particular mental health and substance use disorder benefit or any
medical/surgical benefits within the benefit classification at
issue.
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Under these proposed rules, factors would include processes and
strategies, but the Departments note that there may be factors that do
not satisfy the proposed definitions of ``processes'' or
``strategies.'' By defining the term ``factor'' broadly, the
Departments intend to capture any information used to design or apply
an NQTL (other than evidentiary standards generally), regardless of
whether a plan or issuer believes that information could also be
characterized as a process or a strategy, as those terms are proposed
to be defined under these proposed rules.
Additionally, the Departments propose to define ``processes'' and
``strategies'' as types of factors, in a manner that makes clear the
differences between the two terms as they relate to the design and
application of an NQTL. Specifically, the Departments would define
``processes'' as relating to the application of an NQTL, while
``strategies'' would relate to the design of an NQTL.
The Departments therefore propose to define ``processes'' to mean
actions, steps, or procedures that a plan or issuer uses to apply an
NQTL. ``Processes'' would include requirements established by the plan
or issuer for a participant or beneficiary to access benefits,
including through actions by a participant's or beneficiary's
authorized representative, or a provider or facility. The proposed
definition further provides that processes include, but are not limited
to: procedures to submit information to authorize coverage for an item
or service prior to receiving the benefit or while treatment is ongoing
(including requirements for peer or expert clinical review of that
information); provider referral requirements; and the development and
approval of a treatment plan. The proposed definition also provides
that processes include the specific procedures used by staff or other
representatives of a plan or issuer (or the service provider of a plan
or issuer) to administer the application of NQTLs, such as: how a panel
of staff members applies the NQTL (including the qualifications of
staff involved, number of staff members allocated, and time allocated);
consultations with panels of experts in applying the NQTL; and reviewer
discretion in adhering to criteria hierarchy when applying an NQTL.
These proposed rules would define ``strategies'' as practices,
methods, or internal metrics that a plan or issuer considers, reviews,
or uses to design an NQTL. The proposed definition provides that
examples of strategies include, but are not limited to: the development
of the clinical rationale used in approving or denying benefits;
deviation from generally accepted standards of care; the selection of
information (such as from medical or clinical guidelines) deemed
reasonably necessary to make a medical necessity determination;
reliance on treatment guidelines or guidelines provided by third-party
organizations; and rationales used in selecting and adopting certain
threshold amounts, professional protocols, and fee schedules. These
proposed rules would further specify that strategies also include the
creation and composition of the staff or other representatives of a
plan or issuer (or the service provider of a plan or issuer) that
deliberates, or otherwise makes decisions, on the design of NQTLs,
including the plan's decisions related to
[[Page 51568]]
qualifications of staff involved, number of staff members allocated,
and time allocated; breadth of sources and evidence considered;
consultations with panels of experts in designing the NQTL; and the
composition of the panels used to design an NQTL.
To illustrate the interaction of the definitions of these terms, a
plan might rely on various combinations of processes, strategies,
evidentiary standards, and other factors in designing and applying a
prior authorization NQTL for in-network, non-hospital-based, inpatient/
residential facilities for non-emergency medical/surgical or mental
health or substance use disorder treatment. For example, the strategies
used by the plan to design the NQTL could include the development of
the clinical rationales the plan used in determining when to approve or
deny benefits for the facility, and the composition of the staff of the
plan that chose what information would be deemed necessary to determine
whether a participant or beneficiary has an immediate, clinically valid
need for treatment at the facility. The processes the plan used in
applying the NQTL could include the specific steps a participant or
beneficiary (or their authorized representative, including their
provider or the facility) would need to take to obtain prior
authorization, such as obtaining a written treatment plan. The
processes would also include the procedures used by staff or other
representatives of the plan (or the service provider of the plan) in
determining whether a particular request for prior authorization would
be approved. These processes and strategies would also be considered
factors, as would the licensing and accreditation requirements for non-
hospital-based, inpatient/residential facilities and the severity or
chronicity of a patient's condition when they are seeking treatment at
such a facility. Finally, the evidentiary standards used to design or
apply the factors would include, for example, the benchmarks or
thresholds the plan uses to inform the number of days of treatment at
the facility that would be authorized at one time, as well as published
research studies on the efficacy of the treatment in this particular
facility setting.
Finally, the Departments propose to amend the definition of
``treatment limitation'' to clarify that the illustrative list of NQTLs
to which the definition refers is non-exhaustive, and to amend the last
sentence to state that a complete exclusion of all benefits for a
particular condition or disorder is not a treatment limitation for
purposes of this definition. By changing the existing reference in the
definition from a ``permanent'' exclusion to a ``complete'' exclusion,
the proposed amended definition of ``treatment limitation'' would
better reflect a plan's or issuer's ability to amend the terms of their
plan or coverage and affirm that this part of the definition refers to
an exclusion of all benefits for a particular condition or disorder.
While NQTLs are generally defined as treatment limitations that are
not expressed numerically, the application of an NQTL in a numerical
way does not modify its nonquantitative character simply because the
NQTL sometimes involves numerical standards. For example, standards to
participate in a network would be NQTLs because such standards are
treatment limitations that typically are not expressed numerically.
Nevertheless, these standards sometimes rely on or involve numerical
standards, such as reimbursement rates. In this case, the numerical
expression of a reimbursement rate does not modify the nonquantitative
character of the standards related to network composition. Therefore,
such standards would still be evaluated in accordance with the rules
for NQTLs under the statute and these proposed rules.
The Departments solicit comments on all aspects of these proposed
amendments to existing definitions, as well as the new proposed
definitions. The Departments also request comment on what additional
clarifications or examples might be helpful in understanding these
amended and new proposed defined terms.
3. Nonquantitative Treatment Limitations--26 CFR 54.9812-1(c)(4), 29
CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4)
As explained earlier in this preamble, the Departments are
proposing changes that are designed to prevent plans and issuers from
designing and implementing NQTLs that impose greater limits on access
to mental health and substance use disorder benefits as compared to
medical/surgical benefits. These proposed rules would add additional
requirements for plans and issuers that apply NQTLs with respect to
mental health and substance use disorder benefits, to prevent the
imposition of a greater burden on participants and beneficiaries
accessing those benefits, while preserving the ability of plans and
issuers to impose those NQTLs to the extent they are consistent with
generally recognized independent professional medical or clinical
standards or standards related to fraud, waste, and abuse. Subject to
those two narrow exceptions, these proposed rules provide that plans
and issuers would not be permitted to impose an NQTL unless (1) the
NQTL is no more restrictive as applied to mental health and substance
use disorder benefits than to medical/surgical benefits (also referred
to in this preamble as the no more restrictive requirement); \110\ (2)
the plan or issuer satisfies requirements related to the design and
application of the NQTL (also referred to in this preamble as the
design and application requirements); \111\ and (3) the plan or issuer
collects, evaluates, and considers the impact of relevant data on
access to mental health and substance use disorder benefits relative to
access to medical/surgical benefits; and subsequently takes reasonable
action as necessary to address any material differences in access shown
in the data to ensure compliance with MHPAEA (also referred to in this
preamble as the relevant data evaluation requirements).\112\
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\110\ Proposed 26 CFR 54.9812-1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i).
\111\ Proposed 26 CFR 54.9812-1(c)(4)(ii), 29 CFR
2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii).
\112\ Proposed 26 CFR 54.9812-1(c)(4)(iv), 29 CFR
2590.712(c)(4)(iv), and 45 CFR 146.136(c)(4)(iv).
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The proposed rules do not require or suggest a particular sequence
to the analysis for evaluating compliance, and no inferences should be
drawn from the order in which each of these independent requirements
appear in the proposed regulatory text. For example, a plan or issuer
designing or applying an NQTL with respect to mental health or
substance use disorder benefits could begin analyzing compliance with
MHPAEA by looking at the design and application requirements under
these proposed rules before fully evaluating whether the NQTL with
respect to mental health or substance use disorder benefits complies
with the no more restrictive requirement. Additionally, if a plan or
issuer, in the process of complying with the relevant data evaluation
requirements, identifies material differences in access to mental
health and substance use disorder benefits as compared to medical/
surgical benefits, those differences would be considered a strong
indicator that the plan or issuer violated the proposed no more
restrictive requirement or the design and application
requirements.\113\ In such
[[Page 51569]]
instances, if the plan or issuer took the additional steps required
under the material differences requirement at 26 CFR 54.9812-
1(c)(4)(iv)(B), 29 CFR 2590.712(c)(4)(iv)(B), or 45 CFR
146.136(c)(4)(iv)(B) (and the special rule for NQTLs related to network
composition at 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR
2590.712(c)(4)(iv)(C), or 45 CFR 146.136(c)(4)(iv)(C) did not apply),
then the plan or issuer would meet all three independent
requirements.\114\ The Departments solicit comments on this proposed
approach.
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\113\ But see the special rule for NQTLs related to network
composition at proposed 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR
2590.712(c)(4)(iv)(C), and 45 CFR 146.136(c)(4)(iv)(C), which states
that, when designing and applying one or more NQTLs related to
network composition standards, a plan fails to meet the no more
restrictive requirement and the design and application requirements,
in operation, if the relevant data show material differences in
access to in-network mental health and substance use disorder
benefits as compared to in-network medical/surgical benefits in a
classification.
\114\ The plan or issuer would also be required to document any
steps taken in accordance with the material differences requirement
(and the special rule for NQTLs related to network composition, if
applicable) as part of its comparative analyses. Even if the plan or
issuer had assessed compliance prior to the steps taken in
accordance with the material differences requirement and the special
rule for NQTLs related to network composition, the plan or issuer
would be required to re-evaluate whether the no more restrictive
requirement and the design and application requirements are met with
respect to the adjusted NQTL.
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If a plan or issuer fails to meet any of the three requirements
with respect to an NQTL in a classification, these proposed rules state
that the NQTL would violate MHPAEA and may not be imposed on mental
health or substance use disorder benefits in the classification. Where
a plan or issuer fails to satisfy the requirements of one part of these
proposed rules for NQTLs, the plan or issuer must make changes to the
terms of the plan or coverage or the way the NQTL is designed or
applied to ensure compliance with MHPAEA.
These proposed rules also would prohibit plans and issuers from
relying upon any factor or evidentiary standard if the information,
evidence, sources, or standards on which the factor or evidentiary
standard is based discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits.\115\
Additionally, the proposed rules would require plans and issuers to
collect and evaluate relevant outcomes data and address any material
differences in access between mental health and substance use disorder
benefits and medical/surgical benefits as necessary to ensure
compliance. This proposed provision also would impose a special rule
for NQTLs related to network composition.\116\
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\115\ Proposed 26 CFR 54.9812-1(c)(4)(ii)(B), 29 CFR
2590.712(c)(4)(ii)(B), and 45 CFR 146.136(c)(4)(ii)(B).
\116\ Proposed 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR
2590.712(c)(4)(iv)(C), and 45 CFR 146.136(c)(4)(iv)(C).
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Finally, these proposed rules would make clear that a plan or
issuer that has received a final determination of noncompliance under
the comparative analysis review process established by the CAA, 2021,
including a final determination of noncompliance based on failure to
provide a sufficient comparative analysis, also could be in violation
of the substantive requirements that apply to NQTLs under MHPAEA, as
determined by the Departments. Upon such a determination, the
Departments would direct the plan or issuer to not impose the NQTL that
is the subject of the comparative analysis, unless and until the plan
or issuer can demonstrate compliance or take appropriate action to
remedy the violation.\117\ The Departments request comments on all
aspects of these proposed amendments and additions to the rules
regarding NQTLs.
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\117\ Proposed 26 CFR 54.9812-1(c)(4)(vii), 29 CFR
2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii).
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a. Requirement That NQTLs be No More Restrictive for Mental Health and
Substance Use Disorder Benefits--26 CFR 54.9812-1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i)
These proposed rules, if finalized, would redesignate, from what is
currently 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45
CFR 146.136(c)(4)(i) to 26 CFR 54.9812-1(c)(4)(ii)(A), 29 CFR 2590.712
(c)(4)(ii)(A), and 45 CFR 146.136(c)(4)(ii)(A), the general rule for
evaluating NQTLs, and add new language to these paragraphs to impose
additional requirements for NQTLs. As noted elsewhere in the preamble,
these proposed rules would provide that a plan or issuer may not apply
any NQTL to mental health or substance use disorder benefits in any
classification that is more restrictive, as written or in operation,
than the predominant NQTL that applies to substantially all medical/
surgical benefits in the same classification.\118\ While the 2013 final
regulations largely relied on an analysis of the processes, strategies,
evidentiary standards, and other factors used in the application of
NQTLs, proposed 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i),
and 45 CFR 146.136(c)(4)(i) is consistent with the fundamental purpose
of MHPAEA and more closely mirrors the statutory language in Code
section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act
2726(a)(3)(A), which states that plans and issuers ``. . . shall ensure
that . . . the treatment limitations applicable to . . . mental health
or substance use disorder benefits are no more restrictive than the
predominant treatment limitations applied to substantially all medical
and surgical benefits covered by the plan ([or coverage]) . . . .''
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\118\ As explained later in this preamble, the Departments are
also proposing to add clarifying language to these proposed rules to
make clear that any references to the term ``classifications'' in
MHPAEA's implementing regulations also includes permissible sub-
classifications, including with respect to NQTLs.
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To that end, the proposed rules provide an explanation of how the
terms ``restrictive,'' ``substantially all,'' and ``predominant'' would
apply in the context of the no more restrictive requirement in proposed
26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i). To comply with these proposed rules, if finalized,
plans and issuers would be required to follow similar steps to those
that apply when analyzing parity with respect to financial requirements
or quantitative treatment limitations under the 2013 final regulations.
These steps would involve determining the portion of plan payments for
medical/surgical benefits subject to an NQTL in a classification;
whether the NQTL applies to substantially all medical/surgical benefits
in the classification; the predominant variation of the NQTL that
applies to medical/surgical benefits in the classification; and whether
the NQTL, as applied to mental health and substance use disorder
benefits in the classification, is more restrictive than the
predominant variation of the NQTL as applied to substantially all
medical/surgical benefits.
First, in determining whether an NQTL applies to substantially all
medical/surgical benefits in a classification, plans and issuers would
be required to determine the portion of plan payments for medical/
surgical benefits expected to be subject to the NQTL based on the
dollar amount of all plan payments for medical/surgical benefits in the
classification expected to be paid under the plan or coverage for the
plan year (or the portion of the plan year after a change in benefits
that affects the applicability of the NQTL). Similar to the
longstanding rules for financial requirements and quantitative
treatment limitations, these proposed rules would provide that for
NQTLs, any reasonable method may be used to determine the dollar amount
expected to be paid under the plan or coverage for medical/surgical
benefits. In the Departments' view, for a method to be reasonable with
respect to large group market and self-insured group health plans, a
plan or issuer would be
[[Page 51570]]
required to consider group health plan-level claims data to perform the
substantially all and predominant analyses, and must rely on such data
if it is credible to perform the required projections.\119\ Similarly,
for small group market plans, an issuer would be required to consider
``plan''-level (as opposed to the ``product''-level) claims data to
perform the substantially all analysis, using the definitions of
``plan'' and ``product'' in 45 CFR 144.103, and would be required to
rely on such data if it is credible to perform the required
projections.\120\ However, if an actuary who is subject to and meets
the qualification standards for the issuance of a statement of
actuarial opinion regarding health plans in the United States,\121\
including having the necessary education and experience to provide the
actuarial opinion, determines that a group health plan or issuer does
not have sufficient data at the plan level for a reasonable projection
of future claims costs for the ``substantially all'' analyses, the
group health plan or issuer should utilize other reasonable claims data
to make a projection to conduct actuarially-appropriate analyses. As
part of using a ``reasonable method'' to make these projections, plans
and issuers should document the assumptions used in choosing a data set
and making projections. Plans and issuers would not be required to
perform the parity analysis under proposed 26 CFR 54.9812-1(c)(4)(i),
29 CFR 2590.712 (c)(4)(i), and 45 CFR 146.136(c)(4)(i) each plan year
unless there is a change in plan benefit design or utilization that
would affect an NQTL within a classification. The Departments solicit
comments on whether there are any challenges or other considerations
with this approach regarding which level of data plans and issuers
should look to in performing this prong of the analysis, and whether
there should be a different standard given the different nature of
NQTLs.
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\119\ See FAQs Part 34, Q3 (interpreting the reasonable method
requirement with respect to financial requirements and quantitative
treatment limits).
\120\ 45 CFR 144.103 generally defines ``product'' as a discrete
package of health insurance coverage benefits offered using a
particular product network type within a service area, and ``plan''
as the pairing of the health insurance coverage benefits under the
product with a particular cost-sharing structure, provider network,
and service area. In this context, the term ``plan'' is not
synonymous with the term ``group health plan.'' This approach would
also apply to individual health insurance coverage under HHS
regulations that incorporate the group market rules by reference.
\121\ The U.S. Qualification Standards apply to members of the
six U.S.-based organizations who issue Statements of Actuarial
Opinion in the United States. The organizations are the American
Academy of Actuaries, American Society of Pension Professionals and
Actuaries, American Society of Enrolled Actuaries, Casualty
Actuarial Society, Conference of Consulting Actuaries, and Society
of Actuaries.
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Second, plans and issuers would be required to determine whether
the NQTL applies to substantially all medical/surgical benefits in the
classification, based on the plan payments for medical/surgical
benefits subject to an NQTL as a portion of the dollar amount of all
plan payments for medical/surgical benefits in the classification
expected to be paid under the plan for the plan year. An NQTL would be
considered to apply to substantially all medical/surgical benefits in a
classification if it applies to at least two-thirds of all medical/
surgical benefits in that classification. Whether the NQTL applies to
at least two-thirds of all medical/surgical benefits would be
determined without regard to whether the NQTL was triggered based on a
particular factor or evidentiary standard. For example, if a plan or
issuer applies a general exclusion for all benefits in a classification
that are for experimental or investigative treatment, and defines
experimental or investigative treatment to be treatments with less than
a certain number of peer-reviewed studies demonstrating efficacy, the
exclusion would be treated as applying to all of the benefits in the
classification--not just those that may be subject to the general
exclusion for experimental or investigative treatment because they lack
the requisite number of peer-reviewed studies (that is, those that
actually triggered the NQTL based on the evidentiary standard). These
proposed rules further provide that if an NQTL does not apply to at
least two-thirds of all medical/surgical benefits in a classification,
then that NQTL would not be permitted to be applied to mental health or
substance use disorder benefits in that classification.
The Departments request comment on whether any additional
clarification is needed for plans and issuers to determine whether an
NQTL applies to substantially all medical/surgical benefits in a
classification. The Departments acknowledge that there are significant
differences between financial requirements or quantitative treatment
limitations and NQTLs and therefore also request comments on whether
plans and issuers maintain systems capable of making such
determinations and the potential administrative burdens that would be
associated with such determinations. Specifically, the Departments are
interested in feedback on the approach under these proposed rules for
determining substantially all medical/surgical benefits in a
classification with respect to certain NQTLs, including those that are
used to exclude benefits under the plan or coverage (such as exclusions
for experimental or investigational treatment). The Departments also
solicit comments on the interaction of this approach with other
statutory requirements for plans and issuers prohibiting certain NQTLs
on medical/surgical benefits (such as the prohibition on prior
authorization for any minimum hospital length of stay after childbirth
under the Newborns' and Mothers' Health Protection Act \122\).
---------------------------------------------------------------------------
\122\ Code section 9811, ERISA section 711, and PHS Act sections
2725 and 2751; 26 CFR 54.9811-1, 29 CFR 2590.711, and 45 CFR 146.130
and 148.170.
---------------------------------------------------------------------------
If an NQTL applies to substantially all medical/surgical benefits
in a classification, the third step would require plans and issuers to
determine the predominant variation of the NQTL that is applied to
substantially all medical/surgical benefits subject to the NQTL in the
classification. The Departments propose that the term ``predominant''
would, for this purpose, mean the most common or most frequent
variation of an NQTL within a benefit classification. For example, if a
plan applies inpatient concurrent review commencing 1 day, 3 days, or 7
days after admission, depending on the reason for a stay in a hospital
or other inpatient facility, or the procedure performed during such a
stay, the plan imposes three different variations of the NQTL within
the benefit classification. Under this example, to determine which
variation is predominant, the plan would determine the portion of
inpatient benefits subject to each of the three different variations of
the NQTL based on the dollar amount of all plan payments expected to be
paid under the plan or coverage for the plan year (or the portion of
the plan year after a change in benefits that affects the applicability
of the NQTL). Similarly, if a plan applies an NQTL such as prior
authorization in a manner that differs based on the manner of review
(auto-adjudication vs. manual review) and the number of levels of
review (first-level review vs. first-level review and peer-to-peer
review), the plan would regard each unique combination as a separate
variation. If the plan or issuer imposes only one variation of an NQTL,
that variation is considered the predominant NQTL for purposes of the
no more restrictive requirement.
Variations of an NQTL for purposes of the determination of which is
[[Page 51571]]
``predominant'' are different than levels of a type of financial
requirement or quantitative treatment limitation. Because of the nature
of NQTLs, the same mathematical principles for combining plan payments
to get to more than one-half for a financial requirement or
quantitative treatment limitation may not always be transferrable when
determining which variation of an NQTL is predominant. Therefore, for
purposes of NQTLs, the ``predominant'' variation would be the most
common or frequent variation of the NQTL. The most common or frequent
variation would be the variation that applies to the highest portion of
all medical/surgical benefits within a classification that are subject
to the NQTL based on expected plan payments. This proposed definition
mirrors the statutory definition of the term ``predominant'' in Code
section 9812(a)(3)(B)(ii), ERISA section 712(a)(3)(B)(ii), and PHS Act
section 2726(a)(3)(B)(ii). However, it is different in some ways from
the 2013 final regulations for financial requirements and quantitative
treatment limitations, because the distinct nature of NQTLs
necessitates looking to the most common or frequent variation rather
than comparing and combining numerical levels. Using the inpatient
concurrent review example described earlier in this section of the
preamble, if the plan had determined that applying concurrent review 7
days after admission was the predominant variation, the plan would be
prohibited from applying a more restrictive variation of that NQTL to
mental health or substance use disorder benefits in the classification.
The Departments request comment on this approach and any additional
clarifications or specificity that is necessary for plans and issuers
to determine the predominant NQTL that applies to substantially all
medical/surgical benefits in a classification, including what
characteristics of a particular NQTL should be considered when
determining the predominant variation when a plan or issuer imposes
multiple variations, and how to distinguish between what might be a
single NQTL without any variations versus what might be variations of a
single NQTL. The Departments also request comment on what should be
considered the predominant variation of an NQTL when multiple
variations are equally common or frequent. Additionally, the
Departments are interested in alternative approaches to determining the
predominant variation of an NQTL that would provide clarity across a
wide variety of NQTLs and ways that plans and issuers design and apply
NQTLs to various types of benefits.
Fourth, under these proposed rules, an NQTL applied to mental
health or substance use disorder benefits cannot be more restrictive
than the predominant NQTL applied to substantially all medical/surgical
benefits in the same classification. An NQTL is restrictive if it
imposes conditions, terms, or requirements that limit access to
benefits under the terms of the plan or coverage. For purposes of
determining whether an NQTL is restrictive, ``conditions, terms, or
requirements'' would include, but would not be limited to, those that
compel an action by or on behalf of a participant or beneficiary
(including by their authorized representative or a provider or
facility) to access benefits and those that limit access to the full
range of treatment options available for a condition or disorder under
the plan or coverage. Thus, if an NQTL applied to mental health or
substance use disorder benefits is determined to be more restrictive,
as written or in operation, than the predominant NQTL applied to
substantially all medical/surgical benefits in the same classification,
the NQTL would violate MHPAEA, subject to certain exceptions for
independent professional medical or clinical standards and standards
related to fraud, waste, and abuse, discussed in more detail later in
this preamble.
The Departments recognize that the term ``restrictive'' is not
specifically defined in MHPAEA or the 2013 final regulations in the
context of the parity analysis for financial requirements and
quantitative treatment limitations. The Departments are of the view
that it is generally apparent when one financial requirement or
quantitative treatment limitation is more restrictive than another. For
example, a $25 copayment is clearly more restrictive than a $15
copayment, and a 5-visit limit is more restrictive than a 10-visit
limit. However, due to the nature of NQTLs, which generally do not
allow for such straightforward comparison, and the fact that many plans
and issuers have designed and applied NQTLs to mental health and
substance use disorder benefits in a manner that limits access to those
benefits as compared to medical/surgical benefits, the Departments are
proposing a definition of ``restrictive'' to clarify how this term
should be interpreted specifically for NQTLs in a manner that is
consistent with MHPAEA's fundamental purpose. The Departments solicit
comments on any additional clarifications necessary for plans and
issuers to apply the no more restrictive requirement with respect to
NQTLs applicable to mental health and substance use disorder benefits.
The Departments also solicit comments on whether there are any specific
NQTLs for which it would be challenging for plans and issuers to
determine whether the NQTL is more restrictive with respect to mental
health and substance use disorder benefits than medical/surgical
benefits, consistent with the proposed definition of ``restrictive.''
The following example applies each of the steps in the analysis
described earlier in this preamble for the proposed no more restrictive
requirement at 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and
45 CFR 146.136(c)(4)(i). Under this example, a self-insured group
health plan imposes a medical management requirement that all
inpatient, in-network medical/surgical and mental health and substance
use disorder facilities have 24-hour onsite nursing services available.
First, the plan would determine the portion of plan payments for
medical/surgical benefits that are subject to the NQTL, based on the
dollar amount of all plan payments for medical/surgical benefits in the
inpatient, in-network classification expected to be paid under the plan
for the plan year. Second, based on this calculation, the plan would
determine whether the NQTL applies to at least two-thirds of inpatient,
in-network medical/surgical benefits. Because all medical/surgical
benefits in the classification are subject to the medical management
requirement, the NQTL would apply to substantially all medical/surgical
benefits in the classification. Third, the plan would identify the
predominant, or most common or frequent, variation of the NQTL based on
the portion of plan payments for medical/surgical benefits that are
subject to each variation of the NQTL. In this case, because there is
only one variation (the requirement that facilities have 24-hour on-
site nursing services available), that variation of the NQTL would be
predominant under the framework in these proposed rules. Finally, the
plan would evaluate whether the NQTL as applied to mental health and
substance use disorder benefits is more restrictive, as written or in
operation, than the predominant NQTL applicable to substantially all
medical/surgical benefits in the inpatient, in-network classification.
Because the requirement that facilities have 24-hour on-site nursing
services available does not impose additional conditions, terms, or
requirements that
[[Page 51572]]
limit access to benefits under the terms of the plan or coverage for
mental health or substance use disorder benefits as compared to
medical/surgical benefits by, for example, compelling an additional
action by a participant or beneficiary to access mental health and
substance use disorder benefits or limiting access to the full range of
treatment options available, for mental health or substance use
disorder benefits as compared to medical/surgical benefits in the
classification, this NQTL would satisfy the no more restrictive
requirement under 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i),
and 45 CFR 146.136(c)(4)(i) of these proposed rules.
If a plan or issuer analyzes an NQTL and determines that it
satisfies the no more restrictive requirement under these proposed
rules, it would also still be required under these proposed rules to
analyze the NQTL under the design and application requirements and the
relevant data evaluation requirements, discussed later in this
preamble, to ensure compliance with MHPAEA. As discussed earlier in
this preamble, the Departments note that, while the no more restrictive
requirement appears first in these proposed rules, nothing in these
proposed rules is intended to require that compliance with the no more
restrictive requirement be assessed before the other requirements for
NQTLs in proposed 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45
CFR 146.136(c)(4). The Departments propose adding several examples,
described later in this preamble, to illustrate how the no more
restrictive requirement, the design and application requirements, and
the relevant data evaluation requirements in these proposed rules apply
to various factual scenarios.
Under these proposed rules, the Departments do not intend to
interfere with a plan's or issuer's attempts to ensure that coverage
for benefits for the treatment of mental health conditions and
substance use disorders is consistent with generally accepted
independent professional medical or clinical standards. Similarly, the
Departments do not intend for the no more restrictive requirement to
prevent plans and issuers from applying reasonably designed and
carefully circumscribed measures adopted for the purpose of detecting
or preventing and proving fraud, waste, and abuse. The Departments
recognize that the application of independent professional medical or
clinical standards and standards related to fraud, waste, and abuse
generally improve and help to ensure appropriate care for participants
and beneficiaries, rather than restrict access to needed benefits. The
Departments also acknowledge that there are instances in which the
application of independent professional medical or clinical standards
might result in plans and issuers applying NQTLs to mental health or
substance use disorder benefits that would otherwise be more
restrictive than the predominant NQTL applied to substantially all
medical/surgical benefits in the same classification when applying the
no more restrictive requirement in proposed 26 CFR 54.9812-
1(c)(4)(i)(A) through (D), 29 CFR 2590.712(c)(4)(i)(A) through (D), and
45 CFR 146.136(c)(4)(i)(A) through (D). Therefore, the Departments
propose that an NQTL applied to mental health or substance use disorder
benefits in any classification would not be considered to violate the
no more restrictive requirement if the NQTL impartially applies
independent professional medical or clinical standards or applies
standards related to fraud, waste, and abuse, that meet specific
requirements, discussed in more detail later in this preamble.
b. Requirements Related to Design and Application of the NQTL--26 CFR
54.9812-1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR
146.136(c)(4)(ii)
As mentioned earlier in this preamble, these proposed rules would
redesignate the requirement currently in 26 CFR 54.9812-1(c)(4)(i), 29
CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i) as paragraph
(c)(4)(ii)(A) and would amend the requirement codified in the 2013
final regulations to align with the Departments' consistent
interpretation that a plan or issuer may not impose an NQTL with
respect to mental health or substance use disorder benefits in any
classification unless, under the terms of the plan (or health insurance
coverage) as written and in operation, any processes, strategies,
evidentiary standards, or other factors used in designing and applying
the NQTL to mental health or substance use disorder benefits in the
classification are comparable to, and are applied no more stringently
than, the processes, strategies, evidentiary standards, or other
factors used in designing and applying the limitation with respect to
medical/surgical benefits in the classification. To codify this
interpretation, and for consistency with statutory language added by
the CAA, 2021, the Departments propose to revise the regulatory text to
make this requirement explicit.
Under these proposed rules, a key consideration in determining
whether, in designing or applying an NQTL to mental health or substance
use disorder benefits, the processes, strategies, evidentiary
standards, or other factors are applied no more stringently than those
used in designing and applying the limitation to medical/surgical
benefits in the classification, would be whether any process, strategy,
evidentiary standard, or other factor restricts access more so to
mental health or substance use disorder benefits than to generally
comparable medical/surgical benefits. This approach is consistent with
the proposed new purpose section set forth in these proposed rules and
discussed earlier in this preamble.
Under these proposed rules, if a plan or issuer imposes an NQTL
that impartially applies independent professional medical or clinical
standards to medical/surgical benefits and mental health or substance
use disorder benefits that would not be considered a violation of the
no more restrictive requirement or the relevant data evaluation
requirements. However, the plan or issuer would still need to comply
with the design and application requirements in proposed 26 CFR
54.49812-1(c)(4)(ii)(A), 29 CFR 2590.712(c)(4)(ii)(A), and 45 CFR
146.136(c)(4)(ii)(A). That is, the plan or issuer would not be
permitted to impose an NQTL with respect to mental health or substance
use disorder benefits in any classification unless, under the terms of
the plan (or health insurance coverage) as written and in operation,
any processes, strategies, evidentiary standards, or other factors used
in designing and applying the NQTL to mental health or substance use
disorder benefits in the classification are comparable to, and are
applied no more stringently than those used in designing and applying
the NQTL with respect to medical/surgical benefits in the
classification. Similarly, if a plan or issuer imposes standards
related to fraud, waste, and abuse in a manner described in the
proposed rules, the plan or issuer would still be required to comply
with the design and application requirements and the relevant data
evaluation requirements in proposed 26 CFR 54.49812-1(c)(4)(ii) and
(iv), 29 CFR 2590.712(c)(4)(ii) and (iv), and 45 CFR 146.136(c)(4)(ii)
and (iv).
The Departments also propose to add a new provision to further
ensure that processes, strategies, evidentiary standards, and other
factors used in designing and applying an NQTL to mental health or
substance use disorder benefits in a classification are comparable to,
and are applied no more stringently than, those used in designing
[[Page 51573]]
and applying an NQTL to medical/surgical benefits in the same
classification. Specifically, for purposes of determining comparability
and stringency under the design and application requirements of 26 CFR
54.49812-1(c)(4)(ii)(A), 29 CFR 2590.712(c)(4)(ii)(A), and 45 CFR
146.136(c)(4)(ii)(A), these proposed rules would prohibit plans and
issuers from relying upon any factor or evidentiary standard if the
information, evidence, sources, or standards on which the factor or
evidentiary standard is based discriminates against mental health or
substance use disorder benefits as compared to medical/surgical
benefits. Various factors and evidentiary standards that plans and
issuers have previously relied on, or currently rely on, to design or
apply NQTLs to mental health or substance use disorder benefits might
themselves discriminate against mental health and substance use
disorder benefits by treating them in a different and less favorable
manner. Consistent with MHPAEA's fundamental purpose, the Departments
are of the view that plans and issuers should not be permitted to rely
on such factors or evidentiary standards to design and apply an NQTL if
the information, evidence, sources, or standards on which the factor or
evidentiary standard is based discriminates against mental health and
substance use disorder benefits as compared to medical/surgical
benefits. These proposed rules establish this requirement as a
threshold component of the analysis that a plan or issuer would be
required to undertake when analyzing an NQTL's compliance with the
design and application requirements under these proposed rules.\123\
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\123\ The Departments note that the prohibition on
discriminatory factors and evidentiary standards in proposed 26 CFR
54.49812-1(c)(4)(ii)(B), 29 CFR 2590.712(c)(4)(ii)(B), and 45 CFR
146.136(c)(4)(ii)(B) is not intended to affect the application of
any other Federal or State laws for other purposes, and solicit
comments on any potential interactions with other such laws that may
warrant additional clarification.
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For purposes of these proposed rules, independent professional
medical or clinical standards described in proposed 26 CFR 54.49812-
1(c)(4)(v)(A), 29 CFR 2590.712(c)(4)(v)(A), and 45 CFR
146.136(c)(4)(v)(A) would not be considered to discriminate against
mental health or substance use disorder benefits, consistent with the
exceptions to other requirements for NQTLs in described elsewhere in
this preamble. Similarly, standards related to fraud, waste, and abuse
under proposed 26 CFR 54.49812-1(c)(4)(v)(B), 29 CFR
2590.712(c)(4)(v)(B), and 45 CFR 146.136(c)(4)(v)(B) would also not be
considered to discriminate against mental health or substance use
disorder benefits. The Departments request comments on this approach.
The Departments also solicit comments on any additional clarifications
necessary for plans and issuers to apply this standard with respect to
NQTLs applicable to mental health and substance use disorder benefits,
as the term ``discriminate'' is proposed to be defined in these
proposed rules.
Under these proposed rules, information is considered to
discriminate against mental health or substance use disorder benefits
if it is biased or not objective, in a manner that results in less
favorable treatment of mental health or substance use disorder
benefits, based on all the relevant facts and circumstances. Such
relevant facts and circumstances include, but are not limited to, the
source of the information, the purpose or context of the information,
and the content of the information. Therefore, plans and issuers would
not be permitted to rely on information that reflects bias, as those
factors or evidentiary standards would be discriminatory under these
proposed rules. For this purpose, the Departments are of the view that
information that results in the less favorable treatment of mental
health and substance use disorder benefits without legitimate
justification or that is otherwise not objective would be considered to
be biased and to discriminate against mental health and substance use
disorder benefits. Under these proposed rules, the determination of
whether information is objective and unbiased would be based on all the
relevant facts and circumstances including, but not limited to, the
source of the information, the purpose or context of the information,
and the content of the information. When determining which information,
evidence, sources, or standards should inform the factors or
evidentiary standards used to design or apply an NQTL, plans and
issuers would not be permitted under these proposed rules to use
information, evidence, sources, or standards if they are biased in
favor of imposing greater restrictions on access to covered mental
health and substance use disorder benefits or not objective, based on
all the relevant facts and circumstances.
More specifically, the proposed rules would prohibit plans and
issuers from relying on historical plan data or other historical
information from a time when the plan or coverage was not subject to
MHPAEA or was in violation of MHPAEA's requirements where the use of
such data results in less favorable treatment of mental health and
substance use disorder benefits. As an example, under these proposed
rules, a plan or issuer would not be permitted to calculate
reimbursement rates based on historical data on total plan spending for
each specialty that is divided between mental health and substance use
disorder providers and medical/surgical providers, when the total
spending by the plan was based on a time period when the plan or
coverage was not subject to MHPAEA or was in violation of MHPAEA, if
the data results in less favorable treatment of mental health and
substance use disorder benefits. Consequently, plans and issuers could
not use such data to develop a factor or evidentiary standard for the
design or application of an NQTL to mental health or substance use
disorder benefits.
Under these proposed rules, to the extent a plan or issuer relies
on any factor or evidentiary standard that discriminates against mental
health or substance use disorder benefits, or any information,
evidence, sources, or standards that inform such factors or evidentiary
standards to design and apply NQTLs, the plan or issuer violates the
requirement set forth in proposed 26 CFR 54.9812-1(c)(4)(ii)(B), 29 CFR
2590.712(c)(4)(ii)(B), and 45 CFR 146.136(c)(4)(ii)(B). The Departments
request comments on all aspects of these provisions of the proposed
rules, including whether additional definitions are necessary to comply
with these requirements.
c. Illustrative, Non-Exhaustive List of NQTLs--26 CFR 54.9812-
1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii)
These proposed rules, if finalized, would move the illustrative,
non-exhaustive list of NQTLs from 26 CFR 54.9812-1(c)(4)(ii), 29 CFR
2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii) to 26 CFR 54.9812-
1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii)
and make several minor changes to this provision. First, these proposed
rules would amend this provision to make clear that this illustrative
list of NQTLs is non-exhaustive and that there are additional NQTLs not
listed in this paragraph.\124\
[[Page 51574]]
As stated in the definition of the term ``treatment limitations'' in
the 2013 final regulations and these proposed rules, an NQTL is any
provision that limits the scope or duration of benefits for treatment
under a plan or coverage that is not a quantitative treatment
limitation. Some interested parties have requested that the Departments
issue an exhaustive list of NQTLs to provide clarity as to the exact
provisions for which plans and issuers are expected to perform and
document comparative analyses pursuant to the CAA, 2021. Others have
asked the Departments not to provide such a list, asserting that doing
so could encourage plans and issuers to create new NQTLs outside the
list or rename NQTLs in an attempt to circumvent MHPAEA's requirements.
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\124\ The Departments are also proposing to add the term ``non-
exhaustive'' to cross-references to the illustrative, non-exhaustive
list of NQTLs, contained in the definition of ``treatment
limitations'' in 26 CFR 54.9812-1(a), 29 CFR 2590.712(a), and 45 CFR
146.136(a) and in the clarification of the term ``type of financial
requirement or treatment limitation'' in 26 CFR 54.9812-1(c)(1)(ii),
29 CFR 2590.712(c)(1)(ii), and 45 CFR 146.136(c)(1)(ii).
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Because of the broad scope of the meaning of the term
``nonquantitative treatment limitation,'' \125\ and the fact that plan
or coverage terms that otherwise limit the scope or duration of
benefits for treatment in similar ways may use different terminology,
the Departments are not proposing to issue an exhaustive list of NQTLs.
However, the Departments are proposing to add examples of additional
NQTLs to these proposed rules, as discussed later in this preamble.
Previous Reports to Congress \126\ also include lists of the NQTLs that
have been the subject of comparative analyses reviewed by the
Departments. Additionally, the 2020 MHPAEA Self-Compliance Tool
provides an illustrative, non-exhaustive list of NQTLs.\127\ As the
Departments encounter additional NQTLs, the Departments expect to
highlight them in future resources. The list of NQTLs, therefore, is
more accurately framed as a non-exhaustive list of examples that can be
updated, as appropriate, as part of the resources the Departments make
available to assist the regulated community and interested parties in
their efforts to understand and comply with MHPAEA.
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\125\ 26 CFR 54.9812-1(a), 29 CFR 2590.712(a), and 45 CFR
146.136(a) state that ``[t]reatment limitations include . . .
nonquantitative treatment limitations, which otherwise limit the
scope or duration of benefits for treatment under a plan or
coverage.''
\126\ See, e.g., 2022 MHPAEA Report to Congress, available at
https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf and https://www.cms.gov/files/document/2022-mhpaea-report-congress.pdf.
\127\ Self-Compliance Tool for the Mental Health Parity and
Addiction Equity Act (MHPAEA) (2020), available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
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These proposed rules would also amend the illustrative, non-
exhaustive list of NQTLs to replace ``[s]tandards for provider
admission to participate in a network, including reimbursement rates''
with ``standards related to network composition, including but not
limited to, standards for provider and facility admission to
participate in a network or for continued network participation,
including methods for determining reimbursement rates, credentialing
standards, and procedures for ensuring the network includes an adequate
number of each category of provider and facility to provide covered
services under the plan or coverage.'' The standards that govern how
the network is constructed and defined are critical limitations on the
availability of benefits under the plan or coverage. Accordingly, the
Departments reaffirm that standards related to network composition are
subject to the requirements applicable to NQTLs, including their design
and application as set forth in these proposed rules. Standards related
to network composition operate to limit the scope or duration of
benefits for treatment--a fundamental characteristic of an NQTL. The
design, administration, and composition of networks that comply with
MHPAEA's requirements are essential to participants and beneficiaries
having access to treatment for mental health conditions and substance
use disorders in parity with medical/surgical benefits.
Additionally, the Departments recognize that some plans and issuers
use other related NQTLs, such as credentialing standards, to help
ensure an adequate number of available providers as part of their
standards related to network composition. Therefore, the Departments
propose to specifically include credentialing standards and procedures
for ensuring the network includes an adequate number of each category
of mental health and substance use disorder providers and facilities
relative to the number of medical/surgical providers and facilities in
the illustrative, non-exhaustive list of NQTLs to make clear that plans
and issuers setting standards to participate in a network through the
application of one or more NQTLs would be required to satisfy the
requirements for NQTLs under these proposed rules.
In the 2013 final regulations, the phrase ``usual, customary, and
reasonable charges,'' found in the illustrative list of NQTLs is often
used to refer to a plan's method for determining out-of-network rates.
However, the Departments are aware that plans and issuers may use other
methods to determine out-of-network rates, such as using a percentage
of Medicare rates.\128\ These proposed rules therefore would amend the
description of this illustrative NQTL to encompass a broader range of
methods for determining out-of-network rates, such as allowed amounts;
usual, customary, and reasonable charges; or application of other
external benchmarks for out-of-network rates.
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\128\ See NY Times, Insurers Alter Cost Formula, and Patients
Pay More, available at https://www.nytimes.com/2012/04/24/nyregion/health-insurers-switch-baseline-for-out-of-network-charges.html;
FairHealth, ``Types of Out-of-Network Reimbursement,'' available at
https://www.fairhealthprovider.org/download/your-costs/Types%20of%20Out-of-Network%20Reimbursement.pdf.
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Finally, these proposed rules would add a specific reference to
prior authorization requirements as an example of a medical management
standard limiting or excluding benefits based on medical necessity or
medical appropriateness, consistent with Example 1 in 26 CFR 54.9812-
1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii)
of the 2013 final regulations. In addition to proposing amendments to
the NQTLs included in the illustrative, non-exhaustive list codified in
this provision, the Departments emphasize that even if an NQTL is not
included on this list, a plan or issuer is not excused from compliance
with the same standards and framework outlined in these proposed rules.
That is, the many other NQTLs not included in the list codified in this
provision would also be subject to the same standards and framework
outlined in these proposed rules. Examples of additional NQTLs not
listed include, but are not limited to, concurrent care review; billing
restrictions, such as a requirement for a licensed provider to bill
through or under the supervision of another type of licensed provider;
retrospective review; treatment plan requirements; refusal to cover
treatment until completion of a comprehensive assessment by specific
providers; outlier management; and limitations based on expectation of
improvement, likelihood of progress, or demonstration of progress. The
Departments request comments on the proposed amendments to this
provision and additional clarifications that may be necessary with
respect to specific NQTLs listed.
[[Page 51575]]
d. Required Use of Outcomes Data and Special Rule for NQTLs Related to
Network Composition--26 CFR 54.9812-1(c)(4)(iv), 29 CFR
2590.712(c)(4)(iv), and 45 CFR 146.136(c)(4)(iv)
As the Departments have highlighted in previous guidance,
substantially disparate results are often a red flag that a plan or
issuer may be imposing an NQTL in a manner that does not comply with
MHPAEA.\129\ The Departments are of the view that relevant outcomes
data should be collected and evaluated as part of analyzing whether an
NQTL with respect to mental health or substance use disorder benefits
in a classification, is more restrictive, in operation, than the
predominant NQTL that is applied to substantially all medical/surgical
benefits in the classification. Additionally, the comparative analysis
requirement added to MHPAEA by the CAA, 2021 requires a demonstration
of whether the processes, strategies, evidentiary standards, and other
factors used to apply an NQTL to mental health or substance use
disorder benefits, as written and in operation, are comparable to, and
are applied no more stringently than, the processes, strategies,
evidentiary standards, and other factors used to apply the NQTL to
medical/surgical benefits in a classification.\130\
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\129\ 2020 MHPAEA Self-Compliance Tool; see FAQs Part 39, Q7.
\130\ See Code section 9812(a)(8)(A)(iv), ERISA section
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
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In evaluating how such processes, strategies, evidentiary
standards, and other factors are applied in operation, it is necessary
to look at how the plan is administered in operation, which in the
Departments' view necessarily requires review and consideration of
quantitative outcomes data to get a sense of how the NQTL functions in
the context of the plan's or issuer's administration and provision of
benefits. For example, the Departments have highlighted in prior
guidance that plans and issuers should have samples of covered and
denied mental health and substance use disorder and medical/surgical
benefit claims available to support the comparative analysis.\131\ It
is critical that a plan or issuer collect information to assess
relevant data that show the outcomes that result from the application
of an NQTL, evaluate those outcomes (which, as stated earlier in this
preamble, may be a red flag that the plan or issuer is imposing an
impermissible NQTL that disparately impacts access to covered mental
health or substance use disorder benefits), and take reasonable action
as necessary to address any material differences in access.
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\131\ See FAQs Part 45, Q4.
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Of particular concern to the Departments are the NQTLs described in
26 CFR 54.9812-1(c)(4)(iii)(D), 29 CFR 2590.712(c)(4)(iii)(D), and 45
CFR 146.136(c)(4)(iii)(D) of these proposed rules. These NQTLs involve
standards related to network composition, which include but are not
limited to, standards for provider and facility admission to
participate in a network or for continued network participation,
including methods for determining reimbursement rates, credentialing
standards, and procedures for ensuring the network includes an adequate
number of each category of provider and facility to provide services
under the plan or coverage. These standards are critical to ensuring
parity in access to mental health and substance use disorder benefits
for participants and beneficiaries. The Departments are also aware that
there is a growing disparity between in-network reimbursement rates for
mental health and substance use disorder providers and medical/surgical
providers, which may more negatively impact access under a plan or
coverage to mental health and substance use disorder benefits as
compared with medical/surgical benefits.\132\ Additionally, there is a
significant disparity between how often participants and beneficiaries
have little or no choice under their plan or coverage but to utilize
out-of-network mental health and substance use disorder providers and
facilities, as compared to medical/surgical providers and
facilities.\133\
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\132\ Melek, S., Davenport, S., Gray, T.J. (2019). Addiction and
mental health vs. physical health: Widening disparities in network
use and provider reimbursement (p. 6). Milliman. https://assets.milliman.com/ektron/Addiction_and_mental_health_vs_physical_health_Widening_disparities_in_network_use_and_provider_reimbursement.pdf.
\133\ Id.
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Therefore, the Departments propose to add a requirement to provide
that, when designing and applying an NQTL, a plan or issuer must
collect and evaluate relevant data in a manner reasonably designed to
assess the impact of the NQTL on access to mental health and substance
use disorder benefits and medical/surgical benefits, and consider the
impact as part of the plan's or issuer's analysis of whether such NQTL,
in operation, complies with proposed 26 CFR 54.9812-1(c)(4)(i) and
(ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45 CFR 146.136(c)(4)(i)
and (ii). These proposed rules would permit the Departments to specify
the type, form, and manner for this data collection and evaluation in
future guidance.
Under these proposed rules, the relevant data that a plan or issuer
would be required to collect and evaluate for all NQTLs (in each
individual comparative analysis) includes, but is not limited to, the
number and percentage of relevant claims denials, as well as any other
data relevant to the NQTLs as required by State law or private
accreditation standards. The Departments seek comments on whether plans
and issuers collect such data as part of their normal business
operations, as well as whether there are NQTLs for which the number and
percentage of relevant claims denials would not be relevant for
evaluating the impact of the NQTL. The Departments also seek comments
on any additional guidance plans and issuers would need to comply with
the requirements of proposed 26 CFR 54.9812-1(c)(4)(iv), 29 CFR
2590.712(c)(4)(iv), and 45 CFR 146.136(c)(4)(iv) for newly imposed
NQTLs or for NQTLs imposed by new plans or issuers, for which relevant
data may not be immediately available.
Moreover, because of the Departments' specific concerns about
standards related to network composition and other related NQTLs, these
proposed rules would require that, in addition to the relevant data
required for all NQTLs, plans and issuers must collect and evaluate
additional relevant data for NQTLs related to network composition. Such
data would include, but would not be limited to, in-network and out-of-
network utilization rates (including data related to provider claim
submissions), network adequacy metrics (including time and distance
data, and data on providers accepting new patients), and provider
reimbursement rates (including as compared to billed charges). While
this list of data for NQTLs related to network composition is not
reflective of the full list of data that plans and issuers often use to
assess their networks, these specific data points provide a cross-
section of relevant data points that the Departments have looked at in
their MHPAEA compliance reviews and investigations, or that States and
other interested parties have found useful.\134\
[[Page 51576]]
The Departments solicit comments on these specific data points,
including whether provider reimbursement rates should be compared to
Medicare reimbursement rates as an alternative to billed charges or
another external benchmark.
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\134\ See, e.g., 2020 MHPAEA Self-Compliance Tool, Appendix II
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf;
Washington State, Model Data Definitions and Methodology Form (used
by Washington State for their Second Market Scan), available at
https://www.mhtari.org/model-data-definitions-method.pdf; Maryland,
Instructions for Completing Data Supplement 1 Report (Utilization
Review) Form, available at https://insurance.maryland.gov/Consumer/Pages/workgroups.aspx.
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Pursuant to these proposed rules, to the extent the relevant data
evaluated under these proposed rules reveal material differences in
access to mental health and substance use disorder benefits as compared
to medical/surgical benefits, the differences would be considered a
strong indicator that the plan or issuer violates proposed 26 CFR
54.9812-1(c)(4)(i) and (ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45
CFR 146.136(c)(4)(i) and (ii). While under this provision, material
differences alone would not be dispositive (except, as discussed below,
for NQTLs related to network composition), and would not automatically
result in a finding of noncompliance, a plan or issuer would be
required to take reasonable action to address any material differences
in access as necessary to ensure compliance, in operation, with 26 CFR
54.9812-1(c)(4)(i) and (ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45
CFR 146.136(c)(4)(i) and (ii) of these proposed rules. Whether any
particular action would be considered reasonable in response to any
given material differences in access resulting from an evaluation of
outcomes data would be determined based on the relevant facts and
circumstances, including the NQTL itself, the relevant data, the extent
of the material differences in access to mental health and substance
use disorder benefits as compared to medical/surgical benefits, and the
impact of the material differences in access on participants and
beneficiaries. The Departments also solicit comments on what additional
information is necessary to clarify what would constitute reasonable
action in response to relevant data that reveals material differences
in access.
In addition to taking reasonable action to address material
differences in access, the plan or issuer would also be required to
document in their comparative analyses any such action that has been or
is being taken by the plan or issuer to mitigate those material
differences, under proposed 26 CFR 54.9812-2(c)(5)(v), 29 CFR 2590.712-
1(c)(5)(v), and 45 CFR 146.137(c)(5)(v), as discussed later in this
preamble. This requirement would allow plans and issuers to explain why
material differences in access demonstrated by the outcomes data should
not result in a violation of the rules for NQTLs. The Departments
solicit comments on all aspects of the material difference standard at
proposed 26 CFR 54.9812-1(c)(4)(iv)(B), 29 CFR 2590.712(c)(4)(iv)(B),
and 45 CFR 146.136(c)(4)(iv)(B), including how to define a material
difference in access. The Departments are particularly interested in
comments regarding how ``material difference'' could be defined in a
manner that translates into tangible quantitative research methods that
would ensure that data is analyzed using statistical tools and results
in meaningful information for plans and issuers to use in addressing
barriers to accessing benefits. Specifically, the Departments seek
comment on whether materiality should be defined in terms of the
results of statistical testing and request feedback from interested
parties on the optimal method for assembling data and statistical
analysis.
Network composition is the result of the design and application of
a myriad of NQTLs and is informed by various processes, strategies,
evidentiary standards, and other factors, many of which interact in
complex ways and are often either difficult to evaluate separately, or
do not portray an adequate picture of the overall relative impact on
access when analyzed separately. For example, plans and issuers may
develop or consult several standards to help inform their network
composition, such as State licensing standards, quality and performance
metrics, patient utilization in particular geographic regions, and
overall provider availability. Because plans and issuers generally look
to the cumulative effect of such standards, practices, and strategies
when designing their networks, it is important that plans and issuers
also look to the cumulative effect of such standards, practices, and
strategies when evaluating any data and standards related to network
composition for compliance with MHPAEA.
The Departments are concerned that some plans or issuers may define
their NQTLs related to network composition in a way that silos
interrelated processes, strategies, and evidentiary standards that
should be evaluated together under a plan's or issuer's standards
related to network composition. In the Departments' view, all NQTLs
related to network composition, taken together, must be designed and
applied in compliance with MHPAEA's parity requirements to ensure that
networks do not materially disfavor access to mental health and
substance use disorder benefits when compared to medical/surgical
benefits. Furthermore, because such NQTLs will inherently impact a
participant's or beneficiary's access to mental health and substance
use disorder benefits, the Departments are of the view that material
differences in access shown by outcomes data related to such NQTLs
should be subject to a higher level of scrutiny than for other NQTLs.
Accordingly, these proposed rules include a special rule for NQTLs
related to network composition. Under these proposed rules at 26 CFR
54.9812-1(c)(4)(iv)(C), 29 CFR 2590.712(c)(4)(iv)(C), and 45 CFR
146.136(c)(4)(iv)(C), when designing and applying one or more NQTLs
related to network composition standards, a plan or issuer fails to
meet the requirements of proposed 26 CFR 54.9812-1(c)(4)(i) and (ii),
29 CFR 2590.712(c)(4)(i) and (ii), and 45 CFR 146.136(c)(4)(i) and
(ii), in operation, if the relevant data show material differences in
access to in-network mental health or substance use disorder benefits
as compared to in-network medical/surgical benefits in a
classification. The Departments also solicit comments on the likely
impacts, costs, and benefits of treating network composition as an NQTL
for purposes of the regulation, as opposed to treating it merely as an
outcome of other NQTLs. To what extent would such an approach better
promote equal access to networks? What are potential unintended
consequences or implementation issues? In soliciting these comments,
the Departments recognize that there is no one established and
universal set of metrics for determining the parity of networks, and
that parity across mental health and substance use disorder and
medical/surgical networks does not necessarily mean equal number of
providers in a classification. As such, the Departments recognize that
different plans and issuers may take different approaches to ensuring
that their mental health and substance use disorder networks are as
robust as their medical/surgical networks. The Departments also
recognize that there may be significant challenges for some plans and
issuers to ensure that their mental health and substance use disorder
networks are not more restrictive in operation than their medical/
surgical networks. Accordingly, in addition to the comments solicited
in the accompanying Technical Release 2023-01P discussed later in this
preamble, the Departments solicit comments in this document on ways to
compare or assess the parity of mental health and substance use
disorder and
[[Page 51577]]
medical/surgical networks, while accommodating the different approaches
and different challenges that plans and issuers face in building strong
mental health and substance use disorder and medical/surgical networks.
The Departments are aware that some plans and issuers rely on
minimum time and distance standards set by a private accreditation
organization or by other Federal or State programs as the basis for a
factor or evidentiary standard for an NQTL related to network
composition. Under these proposed rules, plans and issuers would not be
permitted to solely rely on this information as an evidentiary standard
or to inform a factor used to design and apply an NQTL, unless the plan
or issuer complies with the relevant data evaluation requirements and
the special rule for NQTLs related to network composition to determine
whether the relevant data show material differences in access to in-
network mental health or substance use disorder benefits as compared to
in-network medical/surgical benefits in a classification. The
Departments are of the view that minimum time and distance standards
set by a private accreditation organization or by other Federal or
State programs may provide a helpful starting point for plans and
issuers to develop factors or evidentiary standards but note that these
standards are often not designed with purposes of MHPAEA compliance in
mind. Therefore, to comply with the relevant data evaluation
requirements and the special rule for NQTLs related to network
composition under these proposed rules, a plan or issuer may need to go
beyond the minimum times and distances outlined in such standards, and
also ensure that they do not result in less favorable treatment for
mental health and substance use disorder benefits under the plan or
coverage, based on all the relevant facts and circumstances. The
Departments solicit comments on what additional clarifications are
needed on how this proposed provision would apply to the use of private
accreditation standards and other Federal or State program standards.
Plans and issuers would be required to take action to address
material differences in access or no longer impose the relevant NQTLs.
Such actions could include, for example, ensuring that they or their
service providers (as applicable) make special efforts to contract with
a broad range of mental health and substance use disorder providers who
are available, including authorizing greater compensation or other
inducements to the extent necessary; expanding telehealth arrangements
as appropriate to manage regional shortages; notifying participants and
beneficiaries in clear and prominent language on the website, employee
brochures, and the summary plan description of a toll-free number for
help finding in-network providers; ensuring that the plan's or issuer's
service providers (as applicable) reach out to the treating
professionals and facilities to see if they will enroll in the network;
and ensuring the network directories are accurate and reliable.
The Departments recognize that shortages of mental health and
substance use disorder providers could pose challenges to issuers,
plans, and their service providers.\135\ If, despite taking appropriate
action, the relevant data continues to reveal material differences in
access, such as, because of provider shortages that the plan or issuer
cannot effectively address through no fault of its own, the Departments
would not cite such a plan or issuer for failure to comply with 26 CFR
54.9812-1(c)(4)(iv), 29 CFR 2590.712(c)(4)(iv), and 45 CFR
146.136(c)(4)(iv) with respect to the plan's or issuer's NQTL(s)
related to network composition if the plan or issuer otherwise complied
with the other applicable MHPAEA requirements. Plans and issuers should
be prepared, however, to document the actions they have taken and to
demonstrate why any disparities are attributable to provider shortages
in the geographic area, rather than their NQTLs related to network
composition. The Departments request comments on this provision,
including on whether and how to allow plans and issuers to account for
external circumstances that impact material differences in access. The
Departments specifically request comment on how to ensure that any
permitted allowances would be sufficiently narrow so they do not permit
plans and issuers to inappropriately rely on external circumstances,
including provider shortages, as a reason they cannot comply with this
provision, and similarly welcome comments on the types of external
circumstances, actions, and responses that should be treated as
properly mitigating materially different access shown by outcomes data.
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\135\ See White House Issue Brief, Reducing the Economic Burden
of Unmet Mental Health Needs, available at https://www.whitehouse.gov/cea/written-materials/2022/05/31/reducing-the-economic-burden-of-unmet-mental-health-needs/ (acknowledging that
provider shortages exist and 37% of the population live in areas
with mental health practitioner shortages).
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These proposed rules would also specify that plans and issuers are
not required to comply with the relevant data evaluation requirements
for NQTLs that impartially apply generally recognized independent
professional medical or clinical standards, consistent with the
exceptions to other requirements for NQTLs described elsewhere in this
preamble. The Departments solicit comments regarding the degree to
which such NQTLs would cause material differences in access revealed by
the proposed data that plans and issuers would be required to evaluate
with respect to other NQTLs, and how these rules should address multi-
faceted causation of material differences in access. Proposed 26 CFR
54.49812-1(c)(4)(iv)(D), 29 CFR 2590.712(c)(4)(iv)(D), and 45 CFR
146.136(c)(4)(iv)(D) would not provide a comparable exception for
standards related to fraud, waste, and abuse. As a result, for these
standards, plans and issuers would be required to comply with the
relevant data evaluation requirements under these proposed rules. While
standards related to fraud, waste, and abuse are important tools for
plans and issuers, the Departments are of the view that those tools are
more likely than independent professional medical or clinical standards
to result in NQTLs that improperly restrict access to mental health or
substance use disorder benefits and the impact of those NQTLs on access
to mental health and substance use disorder benefits should be
assessed. Therefore, the Departments propose that plans and issuers
that apply NQTLs to detect or prevent and prove fraud, waste, and abuse
to mental health and substance use disorder benefits in a
classification would be required to comply with the relevant data
evaluation requirements with respect to those NQTLs. The Departments
solicit comments on these proposals related to the relevant data
evaluation requirements and the special rule for NQTLs related to
network composition, including whether plans and issuers (and their
service providers) generally collect this data as part of their normal
business operations.
Contemporaneously with these proposed rules, DOL is issuing
Technical Release 2023-01P that sets out principles and seeks public
comment to inform future guidance with respect to required data
submissions for NQTLs related to network composition and a potential
enforcement safe harbor.\136\ Specifically,
[[Page 51578]]
the Technical Release solicits feedback on the type, form, and manner
for the data that plans and issuers would be required to include, along
with other relevant data as appropriate, as part of their comparative
analyses for NQTLs related to network composition (which must be
submitted to the Departments upon request). The Technical Release also
solicits feedback on how to define certain thresholds for required data
and a potential enforcement safe harbor to be specified in future
guidance that, if satisfied, would demonstrate to the Departments that
a plan or coverage provides comparable access to in-network of
providers for mental health and substance use disorder benefits as
compared to medical/surgical benefits. In turn, if the safe harbor
threshold is met, the plan or issuer would not be subject to Federal
enforcement under MHPAEA with respect to NQTLs related to network
composition for a specified period of time. The Departments encourage
interested parties to review the Technical Release and submit their
comments consistent with the instructions contained in it (separate
from any comments they submit in response to these proposed rules). The
Departments also solicit comments on this approach, including whether
the Departments should incorporate additional specific data elements,
such as those collected by States, into these proposed rules.
---------------------------------------------------------------------------
\136\ The Technical Release was developed in collaboration with
HHS and Treasury, and all comments submitted to DOL will be shared
with them and posted on the EBSA website.
---------------------------------------------------------------------------
e. Independent Professional Medical or Clinical Standards and Standards
to Detect or Prevent and Prove Fraud, Waste, and Abuse--26 CFR 54.9812-
1(c)(4)(v), 29 CFR 2590.712(c)(4)(v), and 45 CFR 146.136(c)(4)(v)
As explained earlier in this preamble, the Departments do not
intend to interfere with a plan's or issuer's attempts to ensure that
NQTLs for benefits for treatment of mental health conditions or
substance use disorders are consistent with generally accepted
independent professional medical or clinical standards of care or are
appropriately designed and carefully circumscribed measures used solely
for the purpose of detecting or preventing and proving fraud, waste,
and abuse. The Departments recognize that the application of generally
recognized independent professional medical or clinical standards and
appropriately designed and carefully circumscribed fraud, waste, and
abuse measures generally improve care and outcomes for participants and
beneficiaries, rather than restrict access to benefits.
Therefore, as discussed earlier in this preamble, the Departments
propose to provide exceptions to the proposed requirements in 26 CFR
54.9812-1(c)(4)(i), (c)(4)(ii)(B), and (c)(4)(iv), 29 CFR
2590.712(c)(4)(i), (c)(4)(ii)(B), and (c)(4)(iv), and 45 CFR
146.136(c)(4)(i), (c)(4)(ii)(B), and (c)(4)(iv) (the no more
restrictive requirements, the prohibition on discriminatory factors and
evidentiary standards, and the relevant data evaluation requirements)
for NQTLs that impartially apply generally recognized independent
professional medical or clinical standards (consistent with generally
accepted standards of care) to medical/surgical benefits and mental
health or substance use disorder benefits. Under these proposed rules,
the exception would not be available to any plan or issuer with respect
to an NQTL that fails to impartially apply such standards, or deviates
from those standards in any way, such as by imposing additional or
different requirements.
The Departments also propose to provide an exception to the
proposed no more restrictive requirements in 26 CFR 54.9812-1(c)(4)(i)
and (c)(4)(ii)(B), 29 CFR 2590.712(c)(4)(i) and (c)(4)(ii)(B), and 45
CFR 146.136(c)(4)(i) and (c)(4)(ii)(B) for NQTLs reasonably designed to
detect or prevent, and prove fraud, waste, and abuse, based on indicia
of fraud, waste, and abuse that have been reliably established through
objective and unbiased data. Additionally, these proposed rules would
require such NQTLs to also be narrowly designed to minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits. The Departments believe NQTLs reasonably
designed to detect or prevent and prove fraud, waste, and abuse can
help improve the overall efficiency of the health care delivery system
and play an important role in safeguarding the interests of
participants and beneficiaries, where narrowly designed to avoid
creating more restrictive limitations on access to mental health and
substance use disorder benefits. To ensure that NQTLs reasonably
designed to detect or prevent and prove fraud, waste, and abuse are
also narrowly designed to minimize the negative impact on access to
appropriate mental health and substance use disorder benefits, such
NQTLs are still subject to the relevant data evaluation requirements.
Additionally, these proposed rules do not provide any exception from
the design and application requirements under 26 CFR 54.9812-
1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii),
although as discussed earlier in this preamble, NQTLs that apply
independent professional medical or clinical standards or standards
related to fraud, waste, and abuse in a manner that meets the
requirements of this section would not be considered to discriminate
against mental health or substance use disorder benefits. The only
circumstances in which plans and issuers would not be required to
satisfy all three of the requirements of proposed 26 CFR 54.9812-
1(c)(4)(i), (ii), and (iv); 29 CFR 2590.712(c)(4)(i), (ii), and (iv);
and 45 CFR 146.136(c)(4)(i), (ii), and (iv) to meet their obligations
to demonstrate compliance with MHPAEA's parity requirements for NQTLs
would be if the NQTL is subject to one of these two exceptions. In
instances that an NQTL qualifies for one of these exceptions, the plan
or issuer would still be required to comply with the requirements for
which the exception or exceptions do not apply.
The Departments stress that these exceptions are not intended to
create potential loopholes that would undermine the statutory
requirement that NQTLs applied to mental health and substance use
disorder benefits be no more restrictive than the predominant NQTLs
applicable to substantially all medical/surgical benefits. If these
rules are finalized as proposed and the Departments become aware of the
creation of new standards for the purpose of imposing NQTLs that are
more restrictive with respect to mental health and substance use
disorder benefits (or the establishment of new organizations that
create such standards), they may provide additional guidance consistent
with MHPAEA's fundamental purpose, as necessary.
The Departments solicit comments on these proposed exceptions,
including ways to better or more specifically frame them (such as, for
example, specifying that generally recognized independent professional
medical or clinical standards must be independent, peer-reviewed, or
unaffiliated with plans and issuers), consistent with the Departments'
view that these exceptions should be narrowly tailored. The Departments
also solicit comments on how the framework outlined in these proposed
rules could be improved to better ensure that individuals with mental
health conditions and substance use disorders benefit from MHPAEA's
consumer protections, while also allowing plans and issuers to apply
generally recognized independent professional medical or clinical
standards and to adopt appropriate, narrowly tailored measures to
detect or
[[Page 51579]]
prevent and prove fraud, waste, and abuse.
f. Effect of Final Determination of Noncompliance--26 CFR 54.9812-
1(c)(4)(vii), 29 CFR 2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii)
The Departments propose to add language to these proposed rules
specifying that, if a plan or issuer receives a final determination
from the relevant Secretary that it is not in compliance with the
requirements of proposed 26 CFR 54.9816-2, 29 CFR 2590.712-1, and 45
CFR 146.137 with respect to an NQTL, the NQTL would violate 26 CFR
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) and
the relevant Secretary may direct the plan or issuer not to impose the
NQTL, unless and until the plan or issuer demonstrates to the relevant
Secretary compliance with the requirements of MHPAEA or takes
appropriate action to remedy the violation. Whereas the requirement in
the introductory paragraph of 26 CFR 54.9812-1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR 146.136(c)(4) states that a plan or issuer
may not impose an NQTL in the first instance unless it meets all of the
applicable substantive requirements for NQTLs under these proposed
rules, this proposed provision addresses the effect of a final
determination of noncompliance with the NQTL comparative analysis
documentation requirements under proposed 26 CFR 54.9812-2, 29 CFR
2590.712-1, and 45 CFR 146.137.
The MHPAEA statute requires ``such plan or coverage shall ensure
that'' the treatment limitations comply with the substantive
requirements of the statute.\137\ The statute further requires that the
plan or issuer perform and document adequate comparative analyses for
NQTLs to ensure compliance.\138\ Accordingly, under these proposed
rules plans and issuers would be required to ensure that they are
complying with MHPAEA's requirements at all times an NQTL is imposed
with respect to mental health or substance use disorder benefits and,
as explained later in this preamble, plans and issuers would be
required to ensure that they have performed and documented comparative
analyses for their NQTLs imposed on mental health or substance use
disorder benefits (regardless of the timing of any request for such
documentation) to ensure compliance. When a plan or issuer has not
substantiated compliance with MHPAEA for an NQTL applied to mental
health and substance use disorder benefits, the application of the NQTL
also would violate MHPAEA. At the same time, the Departments
acknowledge that whether and how to cease the application of an
impermissible NQTL depends on the nature of the NQTL, the impact on
access to mental health or substance use disorder benefits, and other
facts and circumstances that are specific to a particular case.
---------------------------------------------------------------------------
\137\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A),
and PHS Act section 2726(a)(3)(A).
\138\ Code section 9812(a)(8), ERISA section 712(a)(8), and PHS
Act section 2726(a)(8).
---------------------------------------------------------------------------
Therefore, when a plan or issuer receives a final determination
from the Departments with respect to an NQTL based on failure to
demonstrate compliance with proposed 26 CFR 54.9816-2, 29 CFR 2590.712-
1, and 45 CFR 146.137, including because the plan or issuer has not
submitted a sufficient comparative analysis to demonstrate compliance,
these proposed rules would treat such a failure not only as a violation
of the NQTL comparative analysis documentation requirements but also as
a violation of the substantive NQTL rules under proposed 26 CFR
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). The
Departments recognize that an immediate cessation of the application of
an NQTL may not be feasible for all NQTLs; accordingly, a determination
by the Departments of whether to require immediate cessation would be
based on the evaluation of facts and circumstances involved in the
specific violation and nature of the underlying NQTL. Such facts may
include, for example, the level of disruption in the provision of
benefits under the plan or coverage if the NQTL immediately ceased to
apply, the practicality and complexities involved in the cessation of
the NQTL, the effect on participants and beneficiaries and the likely
time period needed to cease or modify the NQTL. The Departments also
note that such determination would take into account feedback from the
plan or issuer. These facts and circumstances would also be relevant to
the Departments' assessment of the plan's or issuer's overall efforts
to come into compliance with MHPAEA. The Departments stress that, as
discussed later in this preamble, the review process for the NQTL
comparative analyses allows multiple opportunities for plans and
issuers to provide additional information to the Departments and
correct a deficient or insufficient comparative analysis. The
application of proposed 26 CFR 54.9812-1(c)(4)(vii), 29 CFR 2590.712
(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii) would be illustrated by a
new proposed Example 7 of 26 CFR 54.9812-1(c)(4)(viii), 29 CFR
2590.712(c)(4)(viii), and 45 CFR 146.136(c)(4)(viii), discussed later
in this preamble. The Departments solicit comments on this proposed
provision, including whether there are specific challenges or
considerations the Departments should be cognizant of, as a general
matter, in approaching situations that involve ceasing application of a
particular NQTL.
g. NQTL Examples--26 CFR 54.9812-1(c)(4)(viii), 29 CFR
2590.712(c)(4)(viii), and 45 CFR 146.136(c)(4)(viii)
These proposed rules also would amend 26 CFR 54.9812-1(c)(4)(iii),
29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii), redesignated
as part of these proposed rules as 26 CFR 54.9812-1(c)(4)(viii), 29 CFR
2590.712(c)(4)(viii), and 45 CFR 146.136(c)(4)(viii). These proposed
rules would revise some existing examples, remove other existing
examples, and add several new examples to further demonstrate the rules
of 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4), as proposed to be amended in these rules.
In some cases, the Departments propose to revise existing examples
to show how an NQTL would be analyzed under paragraph (c)(4) in
accordance with the proposed amendments. In other cases, the
Departments are proposing to replace existing examples with new fact
patterns that would more clearly demonstrate how these proposed rules
for NQTLs would apply to plans and issuers. In each example in 26 CFR
54.9812-1(c)(4)(viii), 29 CFR 2590.712(c)(4)(viii), and 45 CFR
146.136(c)(4)(viii), a group health plan is subject to the requirements
of MHPAEA and provides coverage for both medical/surgical benefits and
mental health and substance use disorder benefits. Additionally, in
examples that conclude that the plan or issuer violates one provision
of 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4), such examples do not necessarily imply compliance with
all of the other relevant provisions (as these examples do not analyze
compliance with all other provisions). The Departments solicit comments
on these new examples and the proposed amendments to existing examples.
Example 1--More restrictive prior authorization requirement in
operation. First, the Departments propose to amend existing Example 1
to illustrate the effect of a disparity in the routine approval of
benefits for mental health
[[Page 51580]]
conditions and substance use disorders compared to benefits for
medical/surgical conditions in a classification. This proposed amended
example would retain similar facts to the existing example, in which a
plan requires prior authorization from the plan's utilization reviewer
that a treatment is medically necessary for all inpatient, in-network
medical/surgical benefits and for all inpatient, in-network mental
health and substance use disorder benefits. While the plan approves
inpatient, in-network benefits for medical/surgical conditions for
periods of 1, 3, and 7 days, after which a treatment plan must be
submitted by the patient's attending provider and approved by the plan,
the approvals for 7 days are most common under this plan. However, for
mental health and substance use disorder benefits, the plan routinely
approves only 1 day of inpatient, in-network benefits before a
treatment plan must be submitted by the patient's attending provider
and approved by the plan. In this example, the difference in the
duration of approvals is not the result of independent professional
medical or clinical standards or standards related to fraud, waste, and
abuse, but rather reflects the application of a heightened standard to
the provision of the mental health and substance use disorder benefits
in the relevant classification.
The existing conclusion to Example 1 states that the plan violates
the no more restrictive requirement in 26 CFR 54.9812-1(c)(4)(i), 29
CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i) because it is
applying a stricter NQTL in operation to mental health and substance
use disorder benefits than is applied to medical/surgical benefits. The
proposed amended conclusion would provide additional explanation to
illustrate how the prior authorization NQTL would be analyzed under
these proposed rules (and revise the conclusion to indicate that
paragraph (c)(4)(i) of those sections would be redesignated as
paragraph (c)(4)(ii)(A), and new requirements would be added at
paragraph (c)(4)(i)). The proposed conclusion would explain that the
NQTL applies to at least two-thirds of all medical/surgical benefits in
the inpatient, in-network classification, because it applies to all
inpatient medical/surgical benefits in that classification. The most
common or frequent variation of this NQTL, and, therefore, the
predominant NQTL that applies to medical/surgical benefits in the
classification, is the routine approval of inpatient benefits for 7
days before the patient's attending provider must submit a treatment
plan. However, the plan routinely approves inpatient, in-network
benefits for mental health and substance use disorder conditions for
only 1 day before the patient's attending provider must submit a
treatment plan. In doing so, the plan does not impartially apply
independent professional medical or clinical standards or apply
standards related to fraud, waste, and abuse that qualify for the
exceptions in proposed 26 CFR 54.9812-1(c)(4)(i)(E), 29 CFR
2590.712(c)(4)(i)(E), and 45 CFR 146.136(c)(4)(i)(E).
In this proposed amended Example 1, in operation, the prior
authorization NQTL imposed on mental health and substance use disorder
benefits in the inpatient in-network classification is more restrictive
than the predominant prior authorization requirement applicable to
substantially all medical/surgical benefits in the classification,
because the practice of approving 1 day of inpatient, in-network mental
health and substance use disorder benefits limits access to the full
range of treatment options available for benefits for a condition or
disorder under the plan or coverage as compared to the routine 7-day
approval that is given for inpatient, in-network medical/surgical
benefits. As the prior authorization requirement violates the no more
restrictive requirement, the proposed amended example does not address
the other aspects of the NQTL parity analysis under these proposed
rules (the design and application requirements or the relevant data
evaluation requirements), because the plan would violate MHPAEA, even
if it satisfied those requirements.
Example 2--More restrictive peer-to-peer concurrent review
requirements in operation. In new Example 2 in these proposed rules, a
plan follows a written process for the concurrent review of all
medical/surgical benefits and mental health and substance use disorder
benefits within the inpatient, in-network classification. Under the
process, a first-level review is conducted in every instance in which
concurrent review applies, and an authorization request is approved by
the first-level reviewer only if the clinical information submitted by
the facility meets the plan's criteria for a continued stay. If the
first-level reviewer is unable to approve the authorization request
because the clinical information submitted by the facility does not
meet the criteria for a continued stay, it is sent to a second-level
reviewer who will either approve or deny the request. While the written
process only requires review by the second-level reviewer to either
deny or approve the request, in operation, second-level reviewers for
mental health and substance use disorder benefits conduct a peer-to-
peer review with a provider (acting as the authorized representative of
a participant or beneficiary) before coverage of the treatment is
approved. The peer-to-peer review requirement is not the result of
independent professional medical or clinical standards or standards
related to fraud, waste, and abuse. The plan does not impose a peer-to-
peer review, as written or in operation, as part of the second-level
review for medical/surgical benefits.
In this proposed example, the concurrent review requirement
violates the no more restrictive requirement at proposed 26 CFR
54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i). The concurrent review NQTL applies to at least two-
thirds of all medical/surgical benefits within the inpatient, in-
network classification because the plan follows the concurrent review
process for all medical/surgical benefits. The most common or frequent
variation of this NQTL and, therefore, the predominant NQTL that
applies to all medical/surgical benefits in the classification, is that
peer-to-peer review is not imposed as part of second-level review. The
plan does not impartially apply independent professional medical or
clinical standards or apply standards related to fraud, waste, and
abuse that qualify for the exceptions in 26 CFR 54.9812-1(c)(4)(i)(E),
29 CFR 2590.712(c)(4)(i)(E), and 45 CFR 146.136(c)(4)(i)(E) of these
proposed rules. While, as written, the plan's concurrent review
requirements are the same for medical/surgical benefits and mental
health and substance use disorder benefits, in operation, by compelling
an additional action (peer-to-peer review as part of second-level
review) to access only mental health or substance use disorder
benefits, the plan applies the concurrent review NQTL to mental health
or substance use disorder benefits in a manner that is more restrictive
than the predominant concurrent review requirements applied to
substantially all medical/surgical benefits in the inpatient, in-
network classification. Because the plan violates the no more
restrictive requirement, the example does not analyze compliance with
the design and application requirements or the relevant data evaluation
requirements in these proposed rules.
Example 3--More restrictive peer-to-peer review medical necessity
standard in operation; deviation from independent professional medical
and clinical standards. The Departments
[[Page 51581]]
propose to add new Example 3 focusing on the imposition of an
additional NQTL (completion of peer-to-peer review) on benefits for
substance use disorders that is more restrictive than the predominant
NQTL applicable to substantially all medical/surgical benefits in the
classification. In this example, the plan generally requires that all
treatment be medically necessary in the inpatient, out-of-network
classification. For both medical/surgical benefits and mental health
and substance use disorder benefits, the written medical necessity
standards are based on independent professional medical or clinical
standards that do not require peer-to-peer review. In operation, the
plan covers out-of-network benefits for medical/surgical or mental
health inpatient treatment outside of a hospital if the physician
documents medical appropriateness, but for out-of-network substance use
disorder inpatient treatment outside of a hospital, the plan requires a
physician to also complete peer-to-peer review.
In this example, the plan violates proposed 26 CFR 54.9812-
1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i). The
medical necessity NQTL applies to at least two-thirds of all medical/
surgical benefits in the out-of-network, inpatient classification. The
most common or frequent variation of the NQTL and, therefore, the
predominant NQTL that applies to substantially all medical/surgical
benefits, is the requirement that a physician document medical
appropriateness without peer-to-peer review. The plan purports to
satisfy the exception for independent professional medical or clinical
standards in proposed 26 CFR 54.9812-1(c)(4)(i)(E), 29 CFR
2590.712(c)(4)(i)(E), and 45 CFR 146.136(c)(4)(i)(E), but deviates from
those standards in operation by imposing the additional requirements to
complete peer-to-peer review with respect to substance use disorder
inpatient treatment outside of a hospital within the classification. As
written, the plan provisions apply the NQTL to mental health and
substance use disorder benefits in the inpatient, out-of-network
classification in the same manner as for medical/surgical benefits.
However, in operation, the medical necessity NQTL imposed on out-of-
network substance use disorder benefits for treatment outside of a
hospital is more restrictive than the predominant NQTL applied to
substantially all medical/surgical benefits in the classification
because it limits access to the full range of treatment options
available for a condition or disorder under the plan or coverage as
compared to medical/surgical benefits. The NQTL is not the result of
independent professional medical or clinical standards or standards
related to fraud, waste, and abuse that qualify for the exceptions to
the no more restrictive requirement under these proposed rules. Because
the plan violates the no more restrictive requirement, the example does
not analyze compliance with the design and application requirements or
the relevant data evaluation requirements under these proposed rules.
Example 4--Not comparable and more stringent methods for
determining reimbursement rates in operation. New proposed Example 4
would illustrate how plans and issuers must ensure compliance in
operation with the design and application requirements under 26 CFR
54.9812-1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR
146.136(c)(4)(ii) for a plan's reimbursement rate methodology NQTL,
based in part on guidance in FAQs Part 39.\139\ For purposes of this
example, the facts assume that the plan's methods for determining
reimbursement rates for mental health and substance use disorder
benefits satisfy the no more restrictive requirement. In this example,
a plan's base reimbursement rates for outpatient, in-network providers
are determined based on a variety of factors, including the provider's
required training, licensure, and expertise. As written, for mental
health, substance use disorder, and medical/surgical benefits, all
reimbursement rates for physicians and non-physician practitioners for
the same Current Procedural Terminology (CPT) code vary based on a
combination of factors, such as the nature of the service, provider
type, number of providers qualified to provide the service in a given
geographic area, and market need (demand). As a result, reimbursement
rates for mental health, substance use disorder, and medical/surgical
benefits furnished by non-physician providers are generally less than
for physician providers. In operation, the plan reduces the
reimbursement rate for mental health and substance use disorder non-
physician providers from that paid to mental health and substance use
disorder physicians by the same percentage for every CPT code but does
not do the same for non-physician medical/surgical providers.
---------------------------------------------------------------------------
\139\ FAQs Part 39, Q6.
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In this proposed new example, the plan violates the design and
application requirements under these proposed rules. Because the plan
reimburses non-physician providers of mental health and substance use
disorder services by reducing their reimbursement rate from the rate
for physician providers by the same percentage for every CPT code, but
does not apply the same reduction to non-physician providers of
medical/surgical services, in operation, the factors used in applying
the NQTL to mental health and substance use disorder benefits are not
comparable to, and are applied more stringently than, the factors used
in applying the limitation with respect to medical/surgical benefits.
To continue to apply the current reimbursement rate methodology, the
plan would need to ensure that the percentage reduction for mental
health and substance use disorder non-physician providers complies with
the design and application requirements as compared to the percentage
reduction for medical/surgical non-physician providers. Because the
plan violates the design and application requirements of these proposed
rules, the example does not analyze compliance with the relevant data
evaluation requirements (and the facts stipulate compliance with the no
more restrictive requirement).
Example 5--Exception for impartially applied generally recognized
independent professional medical or clinical standards. In new proposed
Example 5, a group health plan develops a medical management
requirement for all inpatient, out-of-network benefits for both
medical/surgical benefits and mental health and substance use disorder
benefits to ensure treatment is medically necessary. The medical
management requirement impartially applies independent professional
medical or clinical standards in a manner that qualifies for the
exception in proposed 26 CFR 54.9812-1(c)(4)(i)(E), 29 CFR
2590.712(c)(4)(i)(E), and 45 CFR 146.136(c)(4)(i)(E). The plan does not
rely on any other factors or evidentiary standards, and the processes,
strategies, evidentiary standards, and other factors used in designing
and applying the medical management requirement to mental health and
substance use disorder benefits are comparable to, and are applied no
more stringently than, the processes, strategies, evidentiary
standards, and other factors used in designing and applying the
requirement with respect to medical/surgical benefits. Within the
inpatient, out-of-network classification, the application of the
medical management requirement results in a higher percentage of
denials for mental health and substance use
[[Page 51582]]
disorder claims than medical/surgical claims because the benefits were
found to be medically necessary for a lower percentage of mental health
and substance use disorder claims based on the impartial application of
the independent professional medical or clinical standards by the NQTL.
The proposed new example would conclude that the plan does not
violate 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4) of these proposed rules. The medical management NQTL
imposed on mental health and substance use disorder benefits does not
violate the no more restrictive requirement or the relevant data
evaluation requirements because the plan impartially applies
independent professional medical or clinical standards for both
medical/surgical benefits and mental health and substance use disorder
benefits in a manner that qualifies for the exception under proposed 26
CFR 54.9812-1(c)(4)(i)(E) and (c)(4)(iv)(D), 29 CFR
2590.712(c)(4)(i)(E) and (c)(4)(iv)(D), and 45 CFR 146.136(c)(4)(i)(E)
and (c)(4)(iv)(D), respectively. Moreover, the independent professional
medical or clinical standards are not considered to be a discriminatory
factor or evidentiary standard and, as written and in operation, the
plan complies with the design and application requirements with respect
to the NQTL, regardless of the fact that the application of the NQTL
resulted in higher percentages of claim denials for mental health and
substance use disorder benefits as compared to medical/surgical
benefits.
Example 6--More restrictive prior authorization requirement;
exception for impartially applied generally recognized independent
professional medical or clinical standards not met. New proposed
Example 6 would incorporate guidance issued in FAQs Part 34,\140\ as
well as these proposed rules. In this example, the provisions of a plan
state that it applies independent professional medical and clinical
standards consistent with generally accepted standards of care for
setting prior authorization requirements for both medical/surgical and
mental health and substance use disorder prescription drugs. The
relevant generally recognized independent professional medical standard
for treatment of opioid use disorder that the plan utilizes (the
American Society of Addiction Medicine national practice guidelines)
does not support prior authorization every 30 days for buprenorphine/
naloxone. However, in operation, the plan requires prior authorization
for buprenorphine/naloxone combination at each refill (every 30 days)
for treatment of opioid use disorder.
---------------------------------------------------------------------------
\140\ See FAQs Part 34, Q8.
---------------------------------------------------------------------------
In Example 6, the plan violates the no more restrictive requirement
under 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) of these proposed rules. The plan does not qualify for
the proposed exception for independent professional medical or clinical
standards, because although the provisions of the plan state that it
applies independent professional medical and clinical standards, the
plan deviates from the relevant standards with respect to prescription
drugs to treat opioid use disorder. The prior authorization NQTL is
applied to at least two-thirds of all medical/surgical benefits in the
prescription drugs classification. The most common or frequent
variation of this NQTL and, therefore, the predominant NQTL that
applies to substantially all medical/surgical benefits in the
classification is following generally recognized independent
professional medical and clinical standards (consistent with generally
accepted standards of care). The prior authorization requirements
imposed on substance use disorder benefits are more restrictive than
the predominant requirement applicable to substantially all medical/
surgical benefits in the classification, because the plan imposes
additional requirements on substance use disorder benefits that limit
access to the full range of treatment options available for a condition
or disorder under the plan or coverage as compared to medical/surgical
benefits in the same classification. Because the plan violates the no
more restrictive requirement under the proposed rules, the example does
not analyze compliance with the design and application requirements or
the relevant data evaluation requirements.
The Departments note that, if the NQTL satisfied the no more
restrictive requirement, in compliance with proposed 26 CFR 54.9812-
1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i), the
clarification in FAQs Part 34 would still be relevant to this example.
In that guidance, the Departments explained that, if the plan had used
a Pharmacy and Therapeutics (P&T) committee to decide how to cover
prescription drugs and to evaluate whether to follow or deviate from
nationally recognized treatment guidelines for setting prior
authorization requirements, this approach may not have violated MHPAEA.
Nonetheless, as explained in the FAQs, use of the P&T committee would
need to be evaluated for compliance with MHPAEA's NQTL requirements
(for example, by evaluating whether the P&T committee is composed of
comparable experts for mental health conditions and substance use
disorders, as compared to the experts for medical/surgical conditions,
and how these experts evaluated nationally recognized treatment
guidelines in setting prior authorization requirements for medications
for mental health conditions, substance use disorders, and medical/
surgical conditions). Although this language on P&T committees has not
been added to the text of this example, this guidance continues to
apply.
Example 7--Impermissible NQTL imposed following a final
determination of noncompliance and direction by Secretary. New proposed
Example 7 would illustrate the application of the provisions of these
proposed rules at 26 CFR 54.9812-1(c)(4)(vii), 29 CFR
2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii). In this example,
following an initial request by the Secretary for a plan's comparative
analysis of an NQTL pursuant to proposed 26 CFR 54.9812-2(d), 29 CFR
2590.712-1(d), and 45 CFR 146.137(d), the plan submits a comparative
analysis for the NQTL. After review of the comparative analysis, the
Secretary makes an initial determination that the comparative analysis
fails to demonstrate that the processes, strategies, evidentiary
standards, or other factors used in designing and applying the NQTL to
mental health or substance use disorder benefits in the relevant
classification are comparable to, and applied no more stringently than,
those used in designing and applying the limitation with respect to
medical/surgical benefits in the classification. Pursuant to proposed
26 CFR 54.9812-2(d)(3), 29 CFR 2590.712-1(d)(3), and 45 CFR
146.137(d)(3), the plan submits a corrective action plan and additional
comparative analyses within 45 calendar days after the initial
determination, and the Secretary then determines that the additional
comparative analyses do not demonstrate compliance with the
requirements of proposed 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4). The plan receives a final determination of
noncompliance from the Secretary, which informs the plan that it is not
in compliance with proposed 26 CFR 54.9812-1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR 146.136(c)(4) and directs the plan not to
impose the NQTL by a certain date, unless and until the plan
[[Page 51583]]
demonstrates compliance to the Secretary or takes appropriate action to
remedy the violation. As of that date, the plan makes no changes to its
plan terms by that date and continues to impose the NQTL.
The proposed example would conclude that the plan violates the
requirements of 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45
CFR 146.136(c)(4) by imposing the NQTL after the Secretary directs the
plan not to impose the NQTL, pursuant to proposed 26 CFR 54.9812-
1(c)(4)(vii), 29 CFR 2590.712(c)(4)(vii), and 45 CFR
146.136(c)(4)(vii).
Example 8--Provider network admission standards not more
restrictive and compliant with requirements for design and application
of NQTLs. The Departments propose to amend Example 7 of the 2013 final
regulations (and redesignate it as Example 8) to better align the
example with the amended requirements for NQTLs set forth in these
proposed rules. In this example, as part of a plan's standards for
provider admission to its network in the outpatient, in-network
classification, any provider seeking to contract with the plan must
have supervised clinical experience. As a result of that standard,
master's level mental health therapists are required to obtain
supervised clinical experience beyond their licensure to participate in
the network, while master's level medical/surgical providers,
psychiatrists and Ph.D.-level psychologists do not require additional
experience beyond their licensure (because their licensure already
requires supervised clinical experience). The plan collects and
evaluates relevant data in a manner reasonably designed to assess the
impact of the NQTL. This includes in-network and out-of-network
utilization rates (including data related to provider claim
submissions), network adequacy metrics (including time and distance
data, and data on providers accepting new patients), and provider
reimbursement rates (including as compared to billed charges). This
data demonstrates that participants and beneficiaries seeking
outpatient care are able to access outpatient, in-network mental health
and substance use disorder providers at the same frequency as
outpatient, in-network medical/surgical providers, that mental health
and substance use disorder providers are active in the network and are
accepting new patients to the same extent as medical/surgical
providers, and that mental health and substance use disorder providers
are within similar time and distances to plan participants and
beneficiaries as are medical/surgical providers. This data also does
not identify material differences in what the plan or issuer pays
psychiatrists or non-physician mental health providers, compared to
physicians or non-physician medical/surgical providers, respectively,
both for the same reimbursement codes and as compared to Medicare
rates. Material differences could suggest that, in operation, NQTLs
related to methodologies for determining reimbursement rates are being
applied in a non-comparable or more restrictive manner for mental
health or substance use disorder services than medical/surgical
services, resulting in a material difference in access.
The conclusion to Example 8 states that the plan does not violate
26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4)
of these proposed rules. The standards for provider admission to the
plan's network are applied to at least two-thirds of all medical/
surgical benefits in the outpatient, in-network classification, as they
apply to all medical/surgical benefits in the classification.
Additionally, the most common or frequent variation of the NQTL (the
predominant NQTL that applies to substantially all medical/surgical
benefits) in the classification is having a certain number of years of
supervised clinical experience. The conclusion notes that the standards
for provider admission to the plan's network that are imposed with
respect to mental health or substance use disorder benefits are no more
restrictive, as written and in operation, than the predominant
standards for provider admission applicable to substantially all
medical/surgical benefits in the classification, because the standards
do not limit access to the full range of treatment options available
for a mental health condition or substance use disorder under the plan
or coverage as compared to medical/surgical benefits. The requirement
that providers have a certain number of years of supervised clinical
experience that the plan relied on to design and apply the NQTL is not
considered to discriminate against mental health or substance use
disorder benefits, even though this results in the requirement that
master's level mental health therapists obtain supervised clinical
experience beyond their licensure, unlike master's level medical/
surgical providers. In addition, as written and in operation, the
processes, strategies, evidentiary standards, or other factors used in
applying the NQTL to mental health or substance use disorder benefits
in the classification are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, or
other factors used in applying the limitation with respect to medical/
surgical benefits in the classification. Finally, the plan collects and
evaluates relevant data in a manner reasonably designed to assess the
impact of the NQTL, which does not show material differences in access
to in-network mental health and substance use disorder benefits as
compared to in-network medical/surgical benefits in the classification.
Example 9--More restrictive requirement for primary caregiver
participation applied to ABA therapy. As discussed earlier in this
preamble, the Departments are proposing amendments clarifying in these
proposed rules that ASD is a mental health condition under generally
recognized independent standards of current medical practice. Thus, ASD
is a mental health condition, and coverage for treatment for ASD is a
mental health benefit as defined in 26 CFR 54.9812-1(a), 29 CFR
2590.712(a), and 45 CFR 146.136(a) of the 2013 final regulations and 26
CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2) of
these proposed rules. In new proposed Examples 9 and 10, the
Departments would illustrate the application of MHPAEA to ASD
treatment, consistent with ASD being classified as a mental health
condition. In proposed new Example 9, a plan generally applies medical
necessity criteria in adjudicating claims for coverage of all
outpatient, in-network medical/surgical and mental health and substance
use disorder benefits, including ABA therapy for the treatment of ASD.
The medical necessity criteria for coverage of ABA therapy requires
evidence that the participant's or beneficiary's primary caregivers
actively participate in ABA therapy, as documented by consistent
attendance in parent, caregiver, or guardian training sessions. In
adding this requirement, the plan deviates from independent
professional medical or clinical standards, and there are no similar
medical necessity criteria requiring evidence of primary caregiver
participation to receive coverage for any medical/surgical benefits.
Proposed Example 9 would violate the no more restrictive
requirement of these proposed rules. The conclusion notes that the plan
applies medical necessity criteria to at least two-thirds of all
outpatient, in-network medical/surgical benefits, as they apply to all
medical/surgical benefits in the classification. The most common or
[[Page 51584]]
frequent variation of this NQTL (the predominant NQTL) that applies to
substantially all medical/surgical benefits in the classification does
not include the requirement to provide evidence that the participant's
or beneficiary's primary caregivers actively participate in the
treatment. The plan does not qualify for the exception in 26 CFR
54.9812-1(c)(4)(i)(E), 29 CFR 2590.712(c)(4)(i)(E), and 45 CFR
146.136(c)(4)(i)(E) of these proposed rules in applying its restriction
on coverage for ABA therapy because the plan deviates from the
independent professional medical or clinical standards by imposing a
different requirement that does not comport with independent
professional medical or clinical standards (consistent with generally
accepted standards of care). The proposed new example would conclude
that the plan's treatment of ABA therapy and the imposition of the
additional requirement to provide evidence that primary caregivers
actively participate in treatment violates proposed 26 CFR 54.9812-
1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i)
because the NQTL imposed on mental health and substance use disorder
benefits in the example is more restrictive than the predominant
medical necessity requirement imposed on substantially all medical/
surgical benefits (which does not include the requirement to provide
evidence that primary caregivers actively participate in treatment).
Because the plan violates the no more restrictive requirement, the
example does not analyze compliance with the design and application
requirements or the relevant data evaluation requirements of these
proposed rules.
Example 10--More restrictive exclusion for experimental or
investigative treatment applied to ABA therapy. Proposed new Example 10
would incorporate guidance issued as part of FAQs Part 39.\141\ In this
example, a plan, as written, generally excludes coverage for all
treatments that are experimental or investigative for medical
conditions and surgical procedures, mental health conditions, and
substance use disorders in the outpatient, in-network classification.
As a result, the plan generally excludes experimental treatment of
medical conditions and surgical procedures, mental health conditions,
and substance use disorders when no professionally recognized treatment
guidelines define clinically appropriate standards of care for the
condition or disorder, and fewer than two randomized controlled trials
are available to support the treatment's use with respect to the given
condition or disorder. The plan provides benefits for the treatment of
ASD, which is a mental health condition, but in operation, the plan
excludes coverage for ABA therapy to treat children with ASD, deeming
it experimental. More than one professionally recognized treatment
guideline defines clinically appropriate standards of care for ASD and
more than two randomized controlled trials are available to support the
use of ABA therapy to treat certain children with ASD.
---------------------------------------------------------------------------
\141\ See FAQs Part 39, Q1.
---------------------------------------------------------------------------
In this proposed new example, the coverage exclusion for
experimental or investigative treatment applies to at least two-thirds
of all medical/surgical benefits, as it applies to all outpatient
medical/surgical benefits in the outpatient, in-network classification.
The most common or frequent variation of this NQTL and, therefore, the
predominant NQTL applicable to substantially all medical/surgical
benefits is the exclusion under the plan for coverage of experimental
treatment of medical conditions and surgical procedures when no
professionally recognized treatment guidelines define clinically
appropriate standards of care for the condition or disorder and fewer
than two randomized controlled trials are available to support the
treatment's use with respect to the given condition or procedure. In
operation, the exclusion for experimental or investigative treatment
imposed on ABA therapy is more restrictive than the predominant
variation of the NQTL for experimental or investigative treatment
imposed on substantially all medical/surgical benefits in the
classification because the exclusion limits access to the full range of
treatment options available for a mental health condition under the
plan as compared to medical/surgical benefits. This is the case,
despite the fact that the requisite number of professionally recognized
treatment guidelines and randomized controlled trials support its use
to treat certain children with ASD. Therefore, the plan's application
of the experimental exclusion to ABA therapy violates the no more
restrictive requirement in 26 CFR 54.9812-1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i), and the example does
not analyze compliance with the design and application requirements or
the relevant data evaluation requirements under these proposed rules.
Example 11--Separate EAP exhaustion treatment limitation applicable
only to mental health benefits. The Departments also propose to amend
Example 6 of the 2013 final regulations and redesignate it as Example
11. In this example, the employer maintains both a major medical plan
and an employee assistance plan (EAP). The EAP provides, among other
benefits, a limited number of mental health or substance use disorder
counseling sessions, which, together with other benefits provided by
the EAP, are not significant benefits in the nature of medical care.
Participants are eligible for mental health and substance use disorder
benefits under the employer's major medical coverage only after
exhausting the counseling sessions provided by the EAP. No similar
exhaustion requirement applies with respect to medical/surgical
benefits provided under the major medical plan.
In this example, limiting eligibility for mental health and
substance use disorder benefits under the major medical plan until EAP
benefits are exhausted is an NQTL subject to MHPAEA and violates these
proposed rules. Because the limitation does not apply to medical/
surgical benefits, it is a separate NQTL applicable only to mental
health and substance use disorder benefits, which violates 26 CFR
54.9812-1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi), and 45 CFR
146.136(c)(4)(vi) of these proposed rules. The Departments also note
that this EAP would generally not qualify as excepted benefits as set
forth in the final excepted benefits rules (published after the 2013
final regulations).\142\ Under those rules, the benefits provided under
an EAP are excepted if the EAP does not provide significant benefits in
the nature of medical care, the benefits under the EAP are not
coordinated with benefits under another group health plan, no employee
premiums or contributions are required as a condition of participation
in the EAP, and there is no cost sharing under the EAP. In this
example, the benefits under the EAP are coordinated with the benefits
of another group health plan, since participants in the major medical
group health plan are required to use and exhaust benefits under the
EAP (making the EAP a gatekeeper) before an individual is eligible for
benefits under the major medical plan.
---------------------------------------------------------------------------
\142\ 26 CFR 54.9831-1(c)(3)(vi)(B)(1), 29 CFR
2590.732(c)(3)(vi)(B)(1), and 45 CFR 146.145(b)(3)(vi)(B)(1); 79 FR
59130 (Oct. 1, 2014).
---------------------------------------------------------------------------
Example 12--Separate residential exclusion treatment limitation
applicable only to mental health benefits. Proposed new Example 12
would demonstrate that MHPAEA
[[Page 51585]]
specifically prohibits separate treatment limitations that are
applicable only with respect to mental health or substance use disorder
benefits. In this example, a plan generally covers inpatient, in-
network and inpatient, out-of-network treatment in any setting,
including skilled nursing facilities and rehabilitation hospitals,
provided other medical necessity standards are satisfied. The plan also
has an exclusion for residential treatment, which the plan defines as
an inpatient benefit, for mental health and substance use disorder
benefits. This exclusion was not generated through any broader NQTL
(such as medical necessity or other clinical guideline). The proposed
new example would conclude that the plan violates 26 CFR 54.9812-
1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi), and 45 CFR 146.136(c)(4)(vi) of
these proposed rules. Because the plan does not apply a comparable
exclusion to inpatient benefits for medical/surgical conditions, the
exclusion of residential treatment is a separate NQTL applicable only
to mental health and substance use disorder benefits in the inpatient,
in-network and inpatient, out-of-network classifications that does not
apply with respect to any medical/surgical benefits in the same benefit
classifications.
Example 13--Standards for provider admission to a network. Finally,
proposed new Example 13 would illustrate how plans and issuers may
comply with these proposed rules with regard to parity, including the
requirement to collect and evaluate data, with respect to standards
related to network composition, including standards for provider and
facility admission to participate in a network or for continued network
participation, methods for determining reimbursement rates,
credentialing standards, and procedures for ensuring the network
includes an adequate number of each category of providers and
facilities to provide covered services under the plan or coverage. As
highlighted above, the proper design, administration, and composition
of networks are essential to participants and beneficiaries having
access to treatment for mental health conditions and substance use
disorders in parity with access to treatment for medical conditions and
surgical procedures, and this proposed example illustrates the steps
that plans and issuers may take to improve such access.
In this proposed new example, a plan applies NQTLs related to
network composition in the outpatient, in-network and inpatient, in-
network classifications. The plan's networks are constructed by
separate service providers for medical/surgical benefits and mental
health and substance use disorder benefits. The facts of the example
stipulate that the plan's NQTLs related to network composition for
mental health and substance use disorder benefits satisfy the no more
restrictive requirement and the design and application requirements in
the outpatient, in-network and inpatient, in-network classifications.
It further stipulates that the plan collects and evaluates all relevant
data in a manner reasonably designed to assess the impact of the NQTLs
related to network composition on access to mental health and substance
use disorder benefits as compared with medical and surgical benefits
and considers the impact as part of the plan's analysis of whether the
NQTLs, in operation, comply with the no more restrictive requirement
and the design and application requirements of these proposed rules.
The plan determined that the data did not reveal any material
differences in access. That data included metrics relating to the time
and distance from plan participants and beneficiaries to network
providers in rural and urban regions; the number of network providers
accepting new patients; the proportions of mental health and substance
use disorder and medical/surgical providers and facilities that provide
services in rural and urban regions who are in the plan's network;
provider reimbursement rates; in-network and out-of-network utilization
rates (including data related to the dollar value and number of
provider claims submissions); and survey data from participants on the
extent to which they forgo or pay out-of-pocket for treatment because
of challenges finding in-network providers. The efforts the plan made
when designing and applying its NQTLs related to network composition,
which ultimately led to its outcomes data not revealing any material
differences in access to benefits for mental health or substance use
disorders as compared with medical/surgical benefits, included making
sure that the plan's service providers are making special efforts to
enroll available providers, including by authorizing greater
compensation or other inducements to the extent necessary, and
expanding telehealth arrangements as appropriate to manage regional
shortages. The plan also notifies participants in clear and prominent
language on its website, employee brochures, and the summary plan
description of a toll-free number available to help participants find
in-network providers. In addition, when plan participants submit bills
for out-of-network items and services, the plan directs their service
providers to reach out to the treating providers and facilities to see
if they will enroll in the network.
The proposed new example would conclude that the plan does not
violate 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), or 45 CFR
146.136(c)(4). The plan's NQTLs related to network composition comply
with the no more restrictive requirement, the design and application
requirements, and the relevant data evaluation requirements and the
data does not reveal any material differences in access to mental
health and substance use disorder benefits as compared to medical/
surgical benefits, as a result of the actions the plan took (as set
forth in the facts) when initially designing its NQTLs related to
network composition
Because the plan takes comparable actions to ensure that its mental
health and substance use disorder provider network is as accessible as
its medical/surgical provider network and exercises careful oversight
over its service providers and the comparative robustness of the
networks with an eye to ensuring that network composition results in
access to in-network benefits for mental health and substance use
disorder services,, plan participants and beneficiaries can access
covered mental health and substance use disorder services and benefits
as readily as medical/surgical benefits. This is reflected in the
plan's carefully designed metrics and assessment of network
composition. The Departments recognize, however, that there are
significant challenges to building networks of mental health and
substance use disorder providers that result in parity. If, despite
taking such comprehensive action in accordance with the requirements of
proposed 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 2590.712(c)(4)(iv)(C),
and 45 CFR 146.136(c)(4)(iv)(C), a plan's or issuer's participants, or
beneficiaries still experience materially greater reliance on out-of-
network, rather than in-network, mental health or substance use
disorder benefits because of provider shortages that the plan or issuer
cannot effectively address through no fault of its own, the Departments
would not treat the plan or issuer as in violation of 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4), provided that
the plan or issuer is otherwise in compliance with the requirements of
these sections.
The Departments solicit comments on these proposed amended and
added examples, including with respect to
[[Page 51586]]
how these proposed examples illustrate the application of the
provisions of these proposed rules related to NQTLs. The Departments
also solicit comments on any additional examples that might be helpful
to interested parties with respect to any specific provision of these
proposed rules applicable to NQTLs or any specific NQTLs that apply to
mental health and substance use disorder benefits.
4. Prohibition on Financial Requirements and Treatment Limitations
Applicable Only to Mental Health or Substance Use Disorder Benefits--26
CFR 54.9812-1(c)(2)(i) and (c)(4)(vi), 29 CFR 2590.712(c)(2)(i) and
(c)(4)(vi), and 45 CFR 146.136(c)(2)(i) and (c)(4)(vi)
The Departments propose to amend the general parity requirement set
forth in 26 CFR 54.9812-1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45
CFR 146.136(c)(2)(i) by adding a sentence to reiterate that a plan or
issuer may not impose any financial requirement or treatment limitation
that is applicable only with respect to mental health or substance use
disorder benefits and not to any medical/surgical benefits in the same
benefit classification. The general parity requirement set forth in
paragraph (c)(2)(i) provides that a plan or issuer that provides both
medical/surgical benefits and mental health or substance use disorder
benefits may not apply any financial requirement or treatment
limitation to mental health or substance use disorder benefits in any
classification that is more restrictive than the predominant financial
requirement or treatment limitation of that type applied to
substantially all medical/surgical benefits in the same classification.
The general parity requirement also states that the application of
paragraph (c)(2) to financial requirements and quantitative treatment
limitations is addressed in paragraph (c)(3) of the regulations; the
application of paragraph (c)(2) to NQTLs is addressed in paragraph
(c)(4) of the regulations.
Code section 9812(a)(3)(A)(i), ERISA section 712(a)(3)(A)(i), and
PHS Act section 2726(a)(3)(A)(i) specifically prohibit separate cost
sharing requirements that are applicable only with respect to mental
health or substance use disorder benefits, and Code section
9812(a)(3)(A)(ii), ERISA section 712(a)(3)(A)(ii), and PHS Act section
2726(a)(3)(A)(ii) specifically prohibit separate treatment limitations
that are applicable only with respect to mental health or substance use
disorder benefits. While the text of the 2013 final regulations does
not explicitly incorporate these statutory prohibitions, financial
requirements and quantitative treatment limitations that are imposed
only with respect to mental health or substance use disorders could not
meet the substantially all or predominant standards in the parity
requirements contained in paragraph (c)(3) of 26 CFR 54.9812-1, 29 CFR
2590.712, and 45 CFR 146.136, as adopted in the 2013 final regulations.
Moreover, an example in the 2013 final regulations demonstrates and
affirms that an NQTL applied only to mental health or substance use
disorder benefits would not be permissible.\143\ These proposed
amendments to the general parity requirement set forth in 26 CFR
54.9812-1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 CFR
146.136(c)(2)(i) would directly incorporate the statutory prohibitions
by expressly stating that plans and issuers are not permitted to impose
any kind of financial requirement or treatment limitation that applies
only to mental health or substance use disorder benefits and not to
medical/surgical benefits in the same classification.
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\143\ See 26 CFR 54.9812-1(c)(4)(iii) Ex. 6, 29 CFR
2590.712(c)(4)(iii) Ex. 6, and 45 CFR 146.136(c)(4)(iii) Ex. 6. The
Departments are proposing to renumber this example, and to add a
clarification on interaction with the Departments' group market
excepted benefit rules, but otherwise propose to leave this example
unamended.
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Because the general parity requirement set forth in 26 CFR 54.9812-
1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 CFR 146.136(c)(2)(i) of
the 2013 final regulations also states that the application of
paragraph (c)(2) to NQTLs is addressed in paragraph (c)(4) of the
regulations, the Departments also propose to add similar language to
these proposed rules for NQTLs at 26 CFR 54.9812-1(c)(4)(vi), 29 CFR
2590.712(c)(4)(vi), and 45 CFR 146.136(c)(4)(vi), which cross-
references the language proposed to be added to paragraph (c)(2)(i).
This proposed language would state that a plan or issuer may not apply
any NQTL that is applicable only with respect to mental health or
substance use disorder benefits and not with respect to any medical/
surgical benefits in the same benefit classification. For this purpose,
an exclusion of benefits for a mental health condition or substance use
disorder in a classification that is merely an expression of another
NQTL, such as medical necessity requirements or experimental or
investigational exclusions, that is applied with respect to medical/
surgical benefits in the same classification would not be considered a
separately applicable treatment limitation. For example, a plan's
exclusion of coverage for ABA therapy is not an expression of a broader
NQTL if it was not generated through a process or strategy, or informed
by an evidentiary standard of, a broader NQTL like medical necessity.
As a result, such an NQTL would be evaluated under 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) to determine
whether such NQTL is permitted.
The Departments solicit comments on this proposal.
5. Other Proposed Amendments
The Departments propose to amend 26 CFR 54.9812-1(c)(2)(ii), 29 CFR
2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii) to specify that if a
plan or issuer provides any benefits for a mental health condition or
substance use disorder in any classification of benefits, benefits for
that mental health condition or substance use disorder must be provided
in every classification in which medical/surgical benefits are
provided. For this purpose, if a plan or issuer provides any benefits
for a mental health condition or substance use disorder in any
classification of benefits, the plan or issuer would not be considered
to provide benefits for the mental health condition or substance use
disorder in every classification in which medical/surgical benefits are
provided unless the plan or issuer provides meaningful benefits for
treatment for that condition or disorder in each classification, as
determined in comparison to the benefits provided for medical/surgical
conditions in such classification. This requirement would ensure that,
when plans and issuers cover benefits for a range of services or
treatments for medical/surgical conditions in a classification, plans
and issuers cannot provide, for example, only one limited benefit for a
mental health condition or substance use disorder in that
classification. The Departments request comments on this proposal,
including whether and how to define ``meaningful benefits'' for
purposes of this provision as well as other potential alternatives. For
example, the Departments request comments on whether it would be more
practical to require plans and issuers to provide ``substantial
coverage'' of mental health and substance use disorder benefits or
benefits for the ``primary or most common or frequent types of
treatment for a covered condition or disorder'' in each classification
in which medical/surgical benefits are provided, and if so, how to
define and make comparisons about
[[Page 51587]]
what constitutes ``substantial coverage'' or the ``primary or most
common or frequent types of treatment'' for medical/surgical and mental
health or substance use disorder benefits.
The preamble of the 2013 final regulations addressed an issue
characterized as ``scope of services'' or ``continuum of care.'' \144\
Scope of services generally refers to the types of treatments and
treatment settings that are covered by a group health plan or health
insurance coverage. The preamble to the 2013 final regulations
explained that plans and issuers must assign mental health and
substance use disorder benefits and medical/surgical benefits to the
six classifications of benefits in a consistent manner, and explained
that this rule also generally applies to benefits for intermediate
levels of care provided under the plan or coverage.\145\ The 2013
regulations further explained that plan or coverage exclusions
affecting the scope of services provided under the plan or coverage,
such as restrictions based on geographic location, facility type, and
provider specialty, among others, must comply with the NQTL parity
standard. The Departments recognize that the proposal to require
meaningful benefits for mental health and substance use disorder
services in a classification is related to scope of services and
request comments on whether additional guidance is needed regarding how
this proposed requirement would interact with the approach related to
scope of services adopted under the 2013 final regulations.
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\144\ 78 FR 68240, 68246-7 (Nov. 13, 2013).
\145\ The preamble to the 2013 final regulations stated, ``For
example, if a plan or issuer classifies care in skilled nursing
facilities or rehabilitation hospitals as inpatient benefits, then
the plan or issuer must likewise treat any covered care in
residential treatment facilities for mental health or substance user
disorders as an inpatient benefit. In addition, if a plan or issuer
treats home health care as an outpatient benefit, then any covered
intensive outpatient mental health or substance use disorder
services and partial hospitalization must be considered outpatient
benefits as well.'' 78 FR 68240, 68247 (Nov. 13, 2013).
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As mentioned above, the proposed amendments to 26 CFR 54.9812-
1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii)
would also state that, if a plan provides any benefits for a mental
health condition or substance use disorder, benefits would be required
to be provided for that condition or disorder in each classification
for which any medical/surgical benefits are provided. This proposed
language would make explicit in the regulations the Departments'
interpretation that the requirement to provide coverage in each
classification in which medical/surgical benefits are provided applies
on a condition or disorder basis, an interpretation that the
Departments have held since the interim final rules.\146\ The
Departments solicit comments on these provisions of these proposed
rules on classifications of benefits, including whether additional
flexibility is needed to account for benefits that are difficult to
place into classifications under the current structure, and whether
additional guardrails or protections should be required.
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\146\ 75 FR 5410, 5413 (Feb. 2, 2010).
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The Departments propose to add two additional examples to 26 CFR
54.9812-1(c)(2)(ii)(C), 29 CFR 2590.712(c)(2)(ii)(C), and 45 CFR
146.136(c)(2)(ii)(C) to illustrate the application of these proposed
amendments to the rules. Proposed Example 5 would involve a plan that
generally covers treatment for ASD, a mental health condition, and
covers outpatient, out-of-network developmental evaluations for ASD but
excludes all other benefits for outpatient treatment for ASD, including
ABA therapy, when provided on an out-of-network basis. Based on
independent standards of current medical practice, ABA therapy is one
of the primary treatments for ASD in children. In this proposed
example, the plan generally covers the full range of outpatient
treatments and treatment settings for medical conditions and surgical
procedures when provided on an out-of-network basis. This proposed
example provides that the plan would violate the proposed rules in 26
CFR 54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR
146.136(c)(2)(ii) because it fails to provide meaningful benefits for
treatment of ASD in the outpatient, out-of-network classification, as
determined in comparison to the benefits provided for medical/surgical
conditions in the classification.
Under proposed Example 6, a plan generally covers diagnosis and
treatment for eating disorders, a mental health condition, but
specifically excludes coverage for nutrition counseling to treat eating
disorders, including in the outpatient, in-network classification.
Nutrition counseling is one of the primary treatments for eating
disorders. The plan generally provides benefits for the primary
treatments for medical conditions and surgical procedures in the
outpatient, in-network classification. In this proposed example, the
exclusion of coverage for nutrition counseling for eating disorders
results in the plan failing to provide meaningful benefits for the
treatment of eating disorders in the outpatient, in-network
classification, as determined in comparison to the benefits provided
for medical/surgical conditions in the classification. Therefore, the
plan violates the proposed rules in 26 CFR 54.9812-1(c)(2)(ii), 29 CFR
2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii). The Departments note
that, if the plan covers medical/surgical benefits for nutritional
counseling, this plan would also violate the proposed rules in 26 CFR
54.9812-1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi), and 45 CFR 146.136
(c)(4)(vi) prohibiting separate NQTLs applicable only to mental health
or substance use disorder benefits.
The 2013 final regulations set forth the only classifications of
benefits that may be used in applying the parity rules for financial
requirements and treatment limitations, and listed specific instances
when a plan or issuer may divide benefits into sub-classifications
beyond the six classifications permitted in paragraph (c)(2)(ii)(A) of
the 2013 final regulations. Specifically, a plan (or health insurance
coverage) may apply different levels of financial requirements to
different tiers of prescription drug benefits based on reasonable
factors determined in accordance with the rules in 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) and without
regard to whether a drug is generally prescribed with respect to
medical/surgical benefits or with respect to mental health or substance
use disorder benefits. Additionally, if a plan or issuer provides
benefits through multiple tiers of in-network providers (such as an in-
network tier of other preferred providers with more generous cost-
sharing than a separate in-network tier of participating providers),
the plan may divide its benefits furnished on an in-network basis into
sub-classifications that reflect network tiers, if the tiering is based
on reasonable factors determined in accordance with the rules in 26 CFR
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) (such
as quality, performance, and market standards) and without regard to
whether a provider provides services with respect to medical/surgical
benefits or mental health or substance use disorder benefits.\147\ A
plan or issuer is also permitted to divide its benefits furnished on an
outpatient basis into two sub-classifications: (1) office visits (such
as physician visits), and (2) all other outpatient items and services
(such as outpatient surgery, facility charges for day treatment
centers,
[[Page 51588]]
laboratory charges, or other medical items).\148\ These proposed rules
at 26 CFR 54.9812-1(c)(2)(ii)(A), 29 CFR 2590.712(c)(2)(ii)(A), and 45
CFR 146.136(c)(2)(ii)(A) would clarify that plans and issuers may use
the permissible sub-classifications under the 2013 final regulations
when applying all of the rules for financial requirements and treatment
limitations, including NQTLs.
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\147\ 26 CFR 54.9812-1(c)(3)(iii)(B), 29 CFR
2590.712(c)(3)(iii)(B), and 45 CFR 146.136(c)(3)(iii)(B).
\148\ 26 CFR 54.9812-1(c)(3)(iii)(C), 29 CFR
2590.712(c)(3)(iii)(C), and 45 CFR 146.136(c)(3)(iii)(C).
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After any of these permissible sub-classifications are established,
a plan or issuer may not impose any financial requirement or
quantitative treatment limitation on mental health or substance use
disorder benefits in any sub-classification that is more restrictive
than the predominant financial requirement or quantitative treatment
limitation that applies to substantially all medical/surgical benefits
in the sub-classification. These proposed rules would clarify at 26 CFR
54.9812-1(c)(3)(iii), 29 CFR 2590.712(c)(3)(iii), and 45 CFR
146.136(c)(3)(iii) that plans and issuers are not permitted to divide
benefits into any sub-classifications other than those specifically
permitted under this paragraph. While this proposed amendment would not
make any substantive changes to the existing rule, the Departments are
proposing to make these regulatory amendments to further reiterate that
plans and issuers are not permitted to sub-divide the classifications
other than as described in paragraph (c)(3)(iii).
The Departments have received questions and requests for guidance
on how to comply with MHPAEA's requirements with respect to telehealth
benefits. Specifically, some of these questions have asked where
telehealth fits into the existing classifications and sub-
classifications of benefits, and whether changes to the Departments'
framework and existing regulations implementing MHPAEA are necessary to
account for telehealth benefits. The Departments are not proposing to
make any changes to the classifications and sub-classifications other
than the proposed amendments described in the prior paragraph. The
Departments expect plans and issuers to treat telehealth benefits the
same way they treat those benefits when provided in person in
determining the classification or sub-classification in which a
particular benefit belongs and in ensuring compliance with the
requirements of MHPAEA, as required under the 2013 final rules. The
Departments request comment on issues related to telehealth later in
this preamble.
Treasury and DOL also propose to amend 26 CFR 54.9812-1(d)(3) and
29 CFR 2590.712(d)(3) by adding cross-references to proposed 26 CFR
54.9812-2 and 29 CFR 2590.712-1. This amendment would clarify the
comparative analyses and any other applicable information required
under the CAA, 2021 are considered to be instruments under which a plan
is established or operated, and therefore, ERISA plans generally must
furnish those documents to plan participants and beneficiaries upon
request within 30 days, as required under section 104 of ERISA and 29
CFR 2520.104b-1. Additionally, the Departments propose to amend 26 CFR
54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR 146.136(d)(3) to
clarify that the comparative analyses and any other applicable
information required under the CAA, 2021 and these proposed rules
qualify as documents, records, and other information relevant to the
claimant's claim for benefits to which plans and issuers must provide
reasonable access, upon request and free of charge. This clarification
is consistent with new proposed 26 CFR 54.9812-2(e)(2), 29 CFR
2590.712-1(e)(2), and 45 CFR 146.137(e)(2), discussed later in this
preamble, which generally would require plans and issuers to make
available the comparative analyses required to be performed and
documented under the CAA, 2021 when requested by participants and
beneficiaries in ERISA plans, including by a provider or other person
acting as a participant's or beneficiary's authorized representative.
These comparative analyses are instruments under which the plan is
established and operated, and participants and beneficiaries should be
able to request this information in order to ensure they are informed
about their health plans or group health insurance coverage.
Additionally, these comparative analyses would be relevant to a
claimant's claim for benefits and should therefore be available to
participants or beneficiaries, and providers or other individuals
acting as a participant's or beneficiary's authorized representative.
Finally, the Departments propose to amend 26 CFR 54.9812-1(e)(4),
29 CFR 2590.712(e)(4), and 45 CFR 146.136(e)(4) to include a reference
to 26 CFR 54.9812-2(g), 29 CFR 2590.712-1(g), and 45 CFR 146.137(g) and
to reflect current HHS regulations at 45 CFR 156.115(a)(3). Existing
regulations at 26 CFR 54.9812-1(e)(4), 29 CFR 2590.712(e)(4), and 45
CFR 146.136(e)(4) state that nothing in paragraphs (f) and (g) of the
2013 final regulations related to MHPAEA's small employer exemption and
increased cost exemption, respectively, changes the requirement under
HHS regulations at 45 CFR 147.150 and 156.115, providing that a health
insurance issuer offering non-grandfathered health insurance coverage
in the individual or small group market providing mental health and
substance use disorder services, including behavioral health treatment
services, must comply with the provisions of 45 CFR 146.136 to satisfy
the requirement to provide essential health benefits (EHBs). HHS has
updated 45 CFR 156.115(a)(3) to state that provision of essential
health benefits means that a health plan provides benefits that
``[w]ith respect to the mental health and substance use disorder
services, including behavioral health treatment services, required
under Sec. 156.110(a)(5), comply with the requirements under section
2726 of the Public Health Service Act and its implementing
regulations.'' \149\ Therefore, to be consistent with the language
contained in 45 CFR 156.115(a)(3), and to ensure that the cross-
reference between the Departments' MHPAEA implementing regulations and
HHS' EHB implementing regulations includes the requirement to comply
with the provisions on comparative analyses, the Departments propose to
amend 26 CFR 54.9812-1(e)(4), 29 CFR 2590.712(e)(4), and 45 CFR
146.136(e)(4) to state that nothing in paragraph (f) or (g) of those
sections, or in proposed 26 CFR 54.9812-2(g), 29 CFR 2590.712-1(g), or
45 CFR 146.136-1(g), would change the requirements of 45 CFR 147.150
and 156.115, providing that a health insurance issuer offering non-
grandfathered health insurance coverage in the individual or small
group market providing mental health and substance use disorder
services, including behavioral health treatment services, as part of
essential health benefits required under 45 CFR 156.110(a)(5) and
156.115(a), must comply with the requirements under section 2726 of the
PHS Act and its implementing regulations to satisfy the requirement to
provide coverage for mental health and substance use disorder services,
[[Page 51589]]
including behavioral health treatment, as part of essential health
benefits.
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\149\ Patient Protection and Affordable Care Act; Updating
Payment Parameters, Section 1332 Waiver Implementing Regulations,
and Improving Health Insurance Markets for 2022 and Beyond, 86 FR
53412 (September 27, 2021), available at https://www.federalregister.gov/documents/2021/09/27/2021-20509/patient-protection-and-affordable-care-act-updating-payment-parameters-section-1332-waiver.
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The Departments solicit comments on these proposals. Additionally,
the Departments request comments on whether there are any other steps
the Departments can take to promote compliance with these proposed
rules or other provisions of MHPAEA, and what other guidance or
technical support from the Departments would be helpful to ensuring
compliance with MHPAEA.
B. New Regulations at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR
146.137
As explained earlier in this preamble, the CAA, 2021 amended
MHPAEA, in part, to expressly require plans and issuers that offer both
medical/surgical benefits and mental health or substance use disorder
benefits and impose NQTLs on mental health or substance use disorder
benefits to perform and document their comparative analyses of the
design and application of NQTLs, and make their comparative analyses
available to the Departments or applicable State authorities upon
request.\150\ On April 2, 2021, the Departments issued FAQs Part 45 to
provide guidance on the amendments to MHPAEA made by the CAA, 2021,
including the NQTL comparative analyses requirements. Since the
issuance of this guidance, interested parties have requested additional
guidance and clarifications on the NQTL comparative analysis
requirements. In addition to the proposed amendments to existing
provisions of the MHPAEA regulations outlined earlier in this preamble,
these proposed rules would, using the definitions indicated in 26 CFR
54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2),
codify in regulations the requirement that a plan or issuer that
imposes any NQTL on mental health or substance use disorder benefits
must perform and document comparative analyses of the design and
application of all NQTLs, consistent with Code section 9812(a)(8)(A),
ERISA section 712(a)(8)(A), and PHS Act section 2726(a)(8)(A). The new
proposed rules also set forth the content requirements for NQTL
comparative analyses, including the proposed requirement that plans and
issuers include and evaluate relevant data as part of their comparative
analyses to ensure compliance with MHPAEA.
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\150\ Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A),
and PHS Act section 2726(a)(8)(A).
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The Departments are proposing these content requirements in
response to requests from interested parties for more details on how
plans and issuers should perform and document comparative analyses and
based on lessons learned by the Departments from conducting NQTL
comparative analysis reviews since the effective date of the
comparative analysis requirement. The proposed additional content
requirements are designed to ensure that the comparative analyses focus
on the statutory standards and promote parity. The proposal includes
specific information and data that plans and issuers would be required
to incorporate in each comparative analysis with respect to an NQTL,
and the factors and evidentiary standards used to design or apply the
NQTL; how plans and issuers would be required to demonstrate in their
analysis that, under the terms of their plan or coverage, as written
and in operation, any processes, strategies, evidentiary standards, or
other factors used in designing and applying the NQTL to mental health
or substance use disorder benefits are comparable to, and are applied
no more stringently than those used with respect to medical/surgical
benefits; and what findings and conclusions would be required to be
addressed. These proposed rules would also set forth details with
respect to when and how plans and issuers would be required to make
those comparative analyses available upon request to the Departments or
the applicable State authority, and propose when and how plans and
issuers would be required to make comparative analyses available upon
request to a participant, beneficiary, or their authorized
representative, including the timeframes and procedures for plans and
issuers to provide additional information to the requesting Department
or an applicable State authority, provide a corrective action
plan,\151\ and notify participants and beneficiaries of a final
determination of noncompliance. For purposes of this proposed
provision, the term ``applicable State authority'' has the same meaning
as under PHS Act section 2791(d)(I) and 45 CFR 144.103, which is, with
respect to a health insurance issuer in a State, the State insurance
commissioner or official or officials designated by the State to
enforce the requirements title of title XXVII of the PHS Act for the
State involved with respect to the issuer.
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\151\ The contents of a corrective action plan will vary from
one case to another, but such corrective action plans will generally
be required to contain certain basic elements including: (1)
identification of the noncompliant NQTL at issue, (2) proposed
approaches to address this noncompliance, including strategies to
provide relief to beneficiaries and participants who were adversely
affected, (3) a timeline for implementation, (4) potential
constraints or sources of delay that could adversely affect timely
implementation, (5) points of contact for corrective action plan
implementation, and (6) any other components deemed necessary by the
Departments. When a plan or issuer submits a corrective action plan
to the Departments, the plan shall be reviewed for completeness and
sufficiency.
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The Departments request comments on all aspects of these proposed
rules contained in 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR
146.137, including what additional clarifications would help plans and
issuers perform and document sufficient comparative analyses and submit
those analyses to the Secretary or applicable State authority upon
request. In addition, the Departments are interested in feedback
related to the challenges plans and issuers face obtaining the
necessary information to perform and document a sufficient comparative
analysis. The requirement to perform and document comparative analyses
under Code section 9812(a)(8), ERISA section 712(a)(8), and PHS Act
section 2726(a)(8) is generally applicable to group health plans and
issuers offering group or individual health insurance coverage. The
Departments are aware that plans and issuers contract with managed
behavioral health organizations (MBHOs), third-party administrators
(TPAs), or other service providers to provide or administer mental
health or substance use disorder benefits.\152\ The preamble to the
2013 final regulations notes that the fact that an employer or issuer
contracts with one or more entities to provide or administer mental
health or substance use disorder benefits or other benefits does not
relieve the employer, issuer, or both of their obligations under
MHPAEA.\153\ Plans and issuers should have clear protocols and
processes in place to ensure that the MBHOs and other TPAs for both
medical/surgical and mental health and substance use disorder benefits
provide sufficient information regarding plan structure and benefits to
each other and the plans and issuers that they serve to ensure that the
mental health and substance use disorder benefits are coordinated with
the medical/surgical benefits for purposes of compliance with
MHPAEA.\154\
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\152\ 78 FR 68239, 68250 (Nov. 13, 2013).
\153\ Ibid.
\154\ 2020 MHPAEA Self-Compliance Tool, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
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The Departments understand that, in practice, plan sponsors often
rely on the issuer of fully-insured plans, TPAs of self-insured plans,
and other service providers to administer their benefits, including
designing and implementing
[[Page 51590]]
the limitations and coverage terms that are subject to MHPAEA
requirements and providing them with comparative analyses (or detailed
information to inform the development of comparative analyses) for the
NQTLs that the issuers, TPAs, and service providers themselves design
and apply to mental health and substance use disorder benefits and
medical/surgical benefits under the terms of the plan or coverage.
While the States and HHS have enforcement authority over issuers
providing health insurance coverage with respect to fully-insured
plans,\155\ the Departments have limited direct enforcement authority
over other service providers (including, for example, an MBHO or the
TPA or TPAs of a self-insured health plan).\156\ However, under ERISA,
such service providers may be fiduciaries with respect to private
employment-based group health plans. To the extent such service
providers are fiduciaries for private employment-based plans, they are
subject to the provisions governing fiduciary conduct and liability,
including the provisions for co-fiduciary liability under ERISA section
405. The Departments are committed to using all available authority to
ensure compliance by plans and issuers with MHPAEA for all entities
that play a role in administering and designing benefits. The
Departments solicit comments on how best to ensure all the entities
involved in the design and administration of a group health plan's
benefits provide the necessary information to plans and issuers to
support their efforts to comply with MHPAEA.
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\155\ As noted earlier in this preamble, HHS enforces applicable
provisions of Title XXVII of the PHS Act, including the provisions
added by MHPAEA, with respect to health insurance issuers offering
group and individual health insurance coverage in States that elect
not to enforce or fail to substantially enforce MHPAEA or another
PHS Act provision.
\156\ The 2022 MHPAEA Report to Congress notes that EBSA has
used the process outlined in section 203 of the CAA, 2021 as a
method to engage with service providers (such as TPAs and MBHOs) to
obtain wider-scope corrections affecting many plans at once,
including pursuing cases against issuers in their capacity as
administrative services-only providers (ASOs) to self-insured plans
covered by ERISA.
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1. Content of Comparative Analyses--26 CFR 54.9812-2(c), 29 CFR
2590.712-1(c), and 45 CFR 146.137(c)
The Departments propose requirements at 26 CFR 54.9812-2(c), 29 CFR
2590.712-1(c), and 45 CFR 146.137(c) governing the content of the
comparative analyses required by Code section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section 2726(a)(8). The proposed content
requirements for comparative analyses as set forth in these proposed
regulations are based on the stepwise process found in the 2020 MHPAEA
Self-Compliance Tool, described earlier in this preamble, and by the
express requirements of the governing statutory provisions.
Consistent with Code section 9812(a)(8), ERISA section 712(a)(8),
and PHS Act section 2726(a)(8) these proposed rules would require that
a comparative analysis include, at a minimum, with respect to each NQTL
imposed under a plan or coverage option on mental health or substance
use disorder benefits, six specific elements:
(1) a description of the NQTL;
(2) the identification and definition of the factors used to design
or apply the NQTL;
(3) a description of how factors are used in the design or
application of the NQTL;
(4) a demonstration of comparability and stringency, as written;
(5) a demonstration of comparability and stringency in operation;
and
(6) findings and conclusions.
Additionally, these proposed rules would require each plan or
issuer to prepare and make available to the Departments or applicable
State authority, upon request, a written list of all NQTLs imposed
under the plan or coverage and a general description of any information
considered or relied upon by the plan or issuer in preparing the
comparative analysis for each NQTL. This requirement is consistent with
FAQs Part 45, which in addition to highlighting four NQTLs that would
be enforcement priorities in the near term,\157\ stated that plans and
issuers should be prepared to make available a list of all other NQTLs
for which they have prepared a comparative analysis and a general
description of any documentation considered or relied upon to prepare
each analysis.\158\ The Departments propose to include a requirement to
make such a list available to the Departments in connection with a
request for a comparative analysis and to clarify that this requirement
applies with respect to comparative analyses prepared for all NQTLs,
not just those for which the Departments or an applicable State
authority have requested a comparative analysis or other information at
any particular time. For plans subject to ERISA, these proposed rules
would also require that the plan or issuer provide this list and
general description to the named fiduciaries required to review the
findings or conclusions of each comparative analysis, as discussed
later in this preamble.
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\157\ See FAQs Part 45, Q8 (listing prior authorization
requirements for in-network and out-of-network inpatient services;
concurrent review for in-network and out-of-network inpatient and
outpatient services; standards for provider admission to participate
in a network, including reimbursement rates; and out-of-network
reimbursement rates (plan methods for determining usual, customary,
and reasonable charges). Additionally, in the 2023 MHPAEA Report to
Congress, EBSA added two areas of priority for the applicable
Reporting Period based on CAA, 2021 implementation experience during
the first reporting period: impermissible exclusions of key
treatments for mental health conditions and substance use disorders
and adequacy standards for mental health and substance use disorder
provider networks.
\158\ FAQs Part 45, Q8.
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For each comparative analysis, the description of the NQTL required
under proposed 26 CFR 54.9812-2(c)(1), 29 CFR 2590.712-1(c)(1), and 45
CFR 146.137(c)(1) would be required to identify the NQTL that is the
subject of the comparative analysis, including the specific terms of
the plan or coverage or other relevant terms regarding the NQTL, the
policies or guidelines (internal or external) in which the NQTL appears
or is described, and the applicable sections of any other relevant
documents, such as provider contracts that describe the NQTL,
consistent with Code section 9812(a)(8)(A)(i), ERISA section
712(a)(8)(A)(i), and PHS Act section 2726(a)(8)(A)(i). This would
include the documents that contain the specific language of the NQTL
that the plan or issuer imposes.
The plan or issuer also would be required to identify all mental
health or substance use disorder benefits and medical/surgical benefits
to which the NQTL applies, including a list of which benefits are
considered to be mental health and substance use disorder benefits and
which benefits are considered to be medical/surgical benefits
(consistent with the proposed definitions of those terms).
Additionally, each plan or issuer would be required to include in its
comparative analysis a description of which benefits are included in
each classification of benefits set forth in 26 CFR 54.9812-
1(c)(2)(ii)(A), 29 CFR 2590.712(c)(2)(ii)(A), and 45 CFR
146.136(c)(2)(ii)(A). Finally, the plan or issuer would be required to
identify the predominant NQTL applicable to substantially all medical/
surgical benefits in each classification, including an explanation of
how the plan or issuer determined which variation is the predominant
NQTL as compared to other variations, as well as how the plan
identified the variations of the NQTL. This requirement is consistent
with the statutory language that requires a
[[Page 51591]]
description of the medical/surgical benefits subject to the NQTL and
would operate in support of the proposed no more restrictive
requirement at 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and
45 CFR 146.136(c)(4)(i), discussed earlier in this preamble.
The second proposed content element of the comparative analysis,
under proposed 26 CFR 54.9812-2(c)(2), 29 CFR 2590.712-1(c)(2), and 45
CFR 146.137(c)(2), would be that a plan or issuer would be required to
identify and define all of the factors considered or relied upon to
design or apply the NQTL. The plan or issuer would be required to
identify all of the factors considered, as well as the evidentiary
standards considered or relied upon to design or apply each factor and
the evidence or sources from which each evidentiary standard was
derived, in determining which mental health or substance use disorder
benefits and which medical/surgical benefits are subject to the NQTL.
The plan or issuer would then be required to define each factor.
The definition of each factor would be required to include a detailed
description of the factor, and a description of each evidentiary
standard (and the source of each evidentiary standard) identified. The
Departments stress that when identifying the evidence or sources from
which an evidentiary standard is derived, the plan or issuer should be
prepared to provide the copies of the actual evidence or source used,
as well as the date and relevant citation for the correct version of
the document used.
The third proposed content element of the comparative analysis,
under 26 CFR 54.9812-2(c)(3), 29 CFR 2590.712-1(c)(3), and 45 CFR
146.137(c)(3) of these proposed rules, would be a description of how
each factor is used in the design or application of the NQTL to mental
health and substance use disorder benefits and medical/surgical
benefits in a classification. This section of the comparative analysis
would be required to include a detailed explanation of how each factor
identified and defined in the comparative analysis is used to determine
which mental health or substance use disorder benefits and which
medical/surgical benefits are subject to the NQTL. The description
would also include an explanation of the evidentiary standards or other
information or sources (if any) considered or relied upon in designing
or applying the factors or relied upon in designing and applying the
NQTL, including in the determination of whether and how mental health
or substance use disorder benefits or medical/surgical benefits are
subject to the NQTL. In instances in which the application of the
factor depends on specific decisions made in the administration of
benefits, the comparative analysis would be required to provide
information on the nature and timing of the decisions, and the
professional designations and qualifications of each decision maker.
For example, for a prior authorization NQTL that uses quality measures
as a factor, the plan or issuer would be required to describe the
nature of the decisions reviewers make to apply the factor (and the
timing of those decisions) and describe the reviewers' professional
designations and qualifications (including, for example, whether they
are psychiatrists or psychologists) when using the factor to apply the
NQTL to mental health benefits.
These proposed rules would further provide that, to the extent that
more than one factor is identified and defined with respect to an NQTL,
the comparative analysis would be required to explain how such factors
relate to each other; the order in which all the factors are applied,
including when they are applied; whether and how any factors are given
more weight than others; and the reasons for the ordering or weighting
of the factors. The analysis would also be required to address any
deviation(s) or variation(s) from a factor, its applicability, or its
definition (including the evidentiary standards used to define the
factor and the information or sources from which each evidentiary
standard was derived), such as how the factor is used differently to
apply the NQTL to mental health and substance use disorder benefits as
compared to medical/surgical benefits, and a description of how the
plan or issuer establishes such deviations or variations. For purposes
of these proposed rules, the terms ``deviations'' or ``variations'' in
this context refer to any differences in how a factor is applied with
respect to an NQTL. For example, if the NQTL that is the subject of a
comparative analysis is the calculation of reimbursement rates for out-
of-network providers, and the factors used to determine how the NQTL
applies to mental health and substance use disorder providers are the
geographic location of the providers and licensing and accreditation of
providers, the comparative analysis would be required to explain in
detail how each factor is used to determine the out-of-network
reimbursement rates for both mental health and substance use disorder
providers and medical/surgical providers, describe how the two factors
relate to each other, and address how the plan or issuer establishes
any deviations or variations from these factors.
Under the fourth and fifth proposed content elements of a
comparative analysis, these proposed rules would require plans and
issuers to demonstrate that, in any classification, under the terms of
the plan (or health insurance coverage), both as written (under the
fourth content element) and in operation (under the fifth content
element), any processes, strategies, evidentiary standards, or other
factors used in designing and applying the NQTL to mental health or
substance use disorder benefits in the classification are comparable
to, and are applied no more stringently than, those used in designing
and applying the NQTL with respect to medical/surgical benefits. These
content elements are consistent with the statutory requirement that
comparative analyses demonstrate ``that the processes, strategies,
evidentiary standards, and other factors used to apply the NQTLs to
mental health or substance use disorder benefits, as written and in
operation, are comparable to, and are applied no more stringently than,
the processes, strategies, evidentiary standards, and other factors
used to apply the NQTLs to medical/surgical benefits in the benefits
classification,'' \159\ as well as the provisions of the 2013 final
regulations and these proposed rules that would require plans and
issuers to analyze parity with respect to NQTLs as written and in
operation (recognizing that a plan or issuer may have written processes
or plan or coverage terms that are compliant as written, but might not
be compliant in practice).\160\
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\159\ Code section 9812(a)(8)(A)(iv), ERISA section
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
\160\ 26 CFR 54.9812(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45
CFR 146.136(c)(4)(i).
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For example, a plan or issuer might use a factor that allows
discretion in applying an NQTL that is not captured in detail in
written plan or coverage terms or procedures (such as whether an
individual may be safely and effectively transitioned to a lower level
of care), which might not be comparable in practice when processing
claims for mental health and substance use disorder benefits as
compared to when processing claims for medical/surgical benefits.
Additionally, a plan or issuer might have written processes that are
comparable for an NQTL applicable to
[[Page 51592]]
mental health and substance use disorder benefits and medical/surgical
benefits, but that are applied in a more stringent manner to mental
health and substance use disorder benefits than to medical/surgical
benefits in operation. Thus, it is essential that the Departments are
able to determine that, as written and in operation, any processes,
strategies, evidentiary standards, or other factors used in designing
and applying the NQTL to mental health or substance use disorder
benefits in the classification are comparable to, and are applied no
more stringently than, those used in designing and applying the NQTL to
medical/surgical benefits.
To demonstrate comparability and stringency as written under the
fourth content element in proposed 26 CFR 54.9812-2(c)(4), 29 CFR
2590.712-1(c)(4), and 45 CFR 146.137(c)(4), plans and issuers would be
required to include in their comparative analysis, with respect to the
NQTL and the factors used in applying the NQTL, documentation of each
factor identified and defined in the comparative analysis that was
applied to determine whether the NQTL applies to mental health or
substance use disorder benefits and medical/surgical benefits in a
classification. This would include, as relevant, quantitative data,
calculations, or other analyses showing whether, in each classification
in which the NQTL applies, mental health or substance use disorder
benefits and medical/surgical benefits met or did not meet any
applicable threshold identified in the relevant evidentiary standard,
and the evaluation of relevant data as required under 26 CFR 54.9812-
1(c)(4)(iv)(A), 29 CFR 2590.712(c)(4)(iv)(A), and 45 CFR
146.136(c)(4)(iv)(A) of these proposed rules, to determine that the
NQTL would or would not apply. In addition, such documentation would
include records maintained by the plan or issuer documenting the
consideration and application of all factors and evidentiary standards,
as well as the results of their application. Such records could include
meeting minutes, or calculations related to quantitative factors, such
as costs.
Plans and issuers would also be required to include in their
comparative analysis, in each classification in which the NQTL applies,
a comparison of how the NQTL, as written, is designed and applied to
mental health or substance use disorder benefits and to medical/
surgical benefits, including the specific provisions of any forms,
checklists, procedure manuals, or other documentation used in designing
and applying the NQTL or that address the application of the NQTL.
Additionally, the plan or issuer would be required to include in its
comparative analysis documentation demonstrating how the factors are
comparably applied, as written, to mental health or substance use
disorder benefits and medical/surgical benefits in each classification,
to determine which benefits are subject to the NQTL. To the extent
there is any deviation(s) or variation(s) in the application of a
factor, the plan or issuer would be required to include in their
comparative analysis an explanation of the reason(s) for any
deviation(s) or variation(s) in the application of a factor used to
apply the NQTL, or the application of the NQTL, to mental health or
substance use disorder benefits as compared to medical/surgical
benefits, and how the plan or issuer establishes such deviation(s) or
variation(s), including in the definition of the factors, the
evidentiary standards used to define the factors, and the sources from
which the evidentiary standards were derived; in the design of the
factors or evidentiary standards; or in the application or design of
the NQTL. As noted earlier in this preamble, the terms ``deviations''
or ``variations'' refer to any differences in how a factor is applied.
In the fifth proposed content element of a comparative analysis, to
demonstrate comparability and stringency in operation, proposed 26 CFR
54.9812-2(c)(5), 29 CFR 2590.712-1(c)(5), and 45 CFR 146.137(c)(5)
would require a plan or issuer to include in its comparative analysis,
with respect to the NQTL and the factors used in designing and applying
the NQTL, a comprehensive explanation of how the plan or issuer ensures
that, in operation, the processes, strategies, evidentiary standards,
or other factors used in designing and applying the NQTL to mental
health or substance use disorder benefits in a classification are
comparable to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, or other factors used in designing
and applying the NQTL with respect to medical/surgical benefits. This
comprehensive explanation would be required to include an explanation
of any methodology and underlying data used to demonstrate the
application of the NQTL in operation, and the sample period, inputs
used in any calculations, definitions of terms used, and any criteria
used to select the mental health or substance use disorder benefits and
medical/surgical benefits to which the NQTL is applicable.
Requiring data to be provided to demonstrate compliance with MHPAEA
is not a new concept. To facilitate the compliance review of NQTLs,
many States have adopted reporting requirements capturing specific data
that reflect how the application of certain NQTLs affect outcomes.\161\
Examples of data required to be included in reporting by States
includes rates of utilization review (including approvals and denials),
rates of appeal for adverse benefit determinations (upheld and
overturned), the numbers or rates of prior or concurrent authorization
requests and denials, percentages of claims for mental health and
substance use disorder benefits and medical/surgical benefits that are
in-network, and provider reimbursement rates.\162\ Additionally, a
number of States have established quantitative standards for assessing
network adequacy, based on maximum travel time or distance, provider-
to-enrollee ratios, and maximum appointment wait times.\163\ HHS
established similar quantitative standards for assessing network
adequacy for QHPs offered through the Federally-facilitated Exchanges
starting with benefit year 2023.\164\ The proposed requirement that
plans and issuers include such data, and their evaluation of such data,
as part of a comparative analysis would support the Departments'
efforts to ensure compliance with MHPAEA, with a focus on access to
mental health and substance use disorder care, by helping to identify
instances of operational noncompliance with the requirements of MHPAEA
and its implementing regulations.
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\161\ See State Parity Implementation Survey, available at
https://www.paritytrack.org/reports/#state-disparities.
\162\ See, e.g., N.Y. Ins. Law 343(b); DC Code Sec. 31-3175.03;
and Tex. Ins. Code Sec. 1355.254 (coverage for mental health
conditions and substance use disorders).
\163\ For examples of these State-imposed quantitative standards
for assessing network adequacy, see https://www.ncsl.org/health/health-insurance-network-adequacy-requirements.
\164\ 87 FR 27208 (May 6, 2022); 2023 Final Letter to Issuers in
the Federally-facilitated Exchanges, available at https://www.cms.gov/sites/default/files/2022-04/Final-2023-Letter-to-Issuers_0.pdf.
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Therefore, as part of a comparative analysis, under these proposed
rules, plans and issuers would be required to include the relevant data
required under proposed 26 CFR 54.9812-1(c)(4)(iv)(A), 29 CFR
2590.712(c)(4)(iv)(A), and 45 146.136(c)(4)(iv)(A) and evaluate the
outcomes that resulted from the application of the NQTL to mental
health or substance disorder benefits and medical/surgical benefits,
including an evaluation of such relevant data in their comparative
analysis, in order to demonstrate whether, in operation, any processes,
strategies, evidentiary
[[Page 51593]]
standards, or other factors used in applying the NQTL to mental health
or substance use disorder benefits in a classification are comparable
to, and are applied no more stringently than those used in applying the
limitation with respect to medical/surgical benefits in the
classification. The collection and evaluation of this data would assist
plans, issuers, participants, beneficiaries, and the Departments (or
applicable State authority) in identifying an NQTL that might not
comply with MHPAEA.
As part of this evaluation, the comparative analysis would be
required to include a detailed explanation of material differences in
outcomes that are not attributable to differences in the comparability
or relative stringency of the NQTL as applied to mental health or
substance use disorder benefits and medical/surgical benefits, as well
as the basis for concluding that material differences in outcomes are
not attributable to differences in the comparability or relative
stringency of the NQTL. The requirement that plans and issuers include
the relevant data, and their evaluation and analysis of such data, in
their comparative analysis is consistent with the CAA, 2021's
amendments to MHPAEA, which require plans and issuers to demonstrate
that, in operation, the processes, strategies, evidentiary standards,
and other factors used in applying the NQTL to mental health or
substance use disorder benefits are comparable to, and are applied no
more stringently than, those used to apply the NQTL to medical/surgical
benefits.\165\ Similarly, to be compliant with this proposed
requirement, plans and issuers must adequately demonstrate that any
material differences in outcomes are not due to the processes,
strategies, evidentiary standards, and other factors being applied more
stringently to mental health or substance use disorder benefits, and
that they are designed and applied comparably.
---------------------------------------------------------------------------
\165\ Code section 9812(a)(8)(A)(iv), ERISA section
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
---------------------------------------------------------------------------
The Departments note that their authority to require data is not
limited to the data required by 26 CFR 54.9812-2(c)(5), 29 CFR
2590.712-1(c)(5), and 45 CFR 146.137(c)(5). The proposed requirement to
evaluate a comparative analysis for operational compliance with
MHPAEA's requirements would permit the Departments to require the plan
or issuer to provide, as part of that process, additional data to
analyze assertions made in the comparative analysis. For example, the
Departments may make such a request in instances in which the
Departments conclude that a plan or issuer has not submitted to the
Departments sufficient information to assess compliance with MHPAEA as
part of its comparative analysis, as described later in this preamble.
Plans and issuers performing and documenting the required comparative
analysis of an NQTL must also provide any and all relevant information
used to design or apply the NQTL, as explained earlier in this
preamble. Finally, the Departments may also require additional
information under their authority to investigate plans and
issuers.\166\
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\166\ See, e.g., ERISA section 504.
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The comparative analysis would be required to include a discussion
of any measures that have been or are being implemented by the plan or
issuer to mitigate any materially disparate outcomes with respect to
mental health or substance use disorder benefits and medical/surgical
benefits, including the actions the plan or issuer is taking under
these proposed rules to address the material differences in access to
mental health or substance use disorder benefits as compared to
medical/surgical benefits, including the actions required by 26 CFR
54.9812-1(c)(4)(iv)(B)(1), 29 CFR 2590.712(c)(4)(iv)(B)(1), and 45 CFR
146.136(c)(4)(iv)(B)(1). As discussed earlier in this preamble and in
previous guidance related to MHPAEA, evaluating quantitative outcomes
helps to identify areas of potential noncompliance. Therefore, these
proposed rules would require that as part of a sufficient comparative
analysis, a plan or issuer must carefully assess any outcomes that
resulted from the application of an NQTL, explain material differences
in those outcomes, and disclose any measures to mitigate those
disparate outcomes.
The sixth proposed content element of a comparative analysis under
proposed 26 CFR 54.9812-2(c)(6), 29 CFR 2590.712-1(c)(6), and 45 CFR
146.137(c)(6) (and consistent with Code section 9812(a)(8)(A)(v), ERISA
section 712(a)(8)(A)(v), and PHS Act section 2726(a)(8)(A)(v)), would
require that a comparative analysis address findings and conclusions as
to the comparability of the processes, strategies, evidentiary
standards, and other factors used in designing and applying the NQTL to
mental health or substance use disorder benefits and medical/surgical
benefits within each classification, and the relative stringency of
their application, both as written and in operation. The comparative
analysis would be required to include any findings or conclusions
indicating that the plan or coverage is not (or might not be) in
compliance with the provisions of these proposed rules for NQTLs,
including any actions the plan or issuer has taken or intends to take
to address any potential areas of concern or noncompliance. The
comparative analysis would be required to include a reasoned and
detailed discussion of those findings and conclusions, as well as
citations to any additional specific information not otherwise included
in the comparative analysis that supports the findings and conclusions.
Additionally, these proposed rules would require that the
comparative analysis include the date of the analysis and the title and
credentials of all relevant persons who participated in the performance
and documentation of the comparative analysis. If the comparative
analysis relies upon an evaluation by a reviewer or consultant
considered by the plan or issuer to be an expert, the comparative
analysis would be required to include an assessment of each expert's
qualifications and the extent to which the plan or issuer ultimately
relied upon each expert's evaluation in performing and documenting the
comparative analysis of the design and application of each NQTL
applicable to both mental health or substance use disorder benefits and
medical/surgical benefits.
Finally, for plans subject to ERISA, the comparative analysis would
be required to include a certification by one or more named fiduciaries
who have reviewed the analysis, stating whether they found the
comparative analysis to be in compliance with the content requirements
of these proposed rules. This requirement, along with the requirement
that the plan provide named fiduciaries with a written list of all
NQTLs and a general description of any existing documentation relied on
by the plan or issuer in preparing the comparative analysis for each
NQTL, would help ensure that plan fiduciaries meet their obligations
under ERISA to review the comparative analyses and properly monitor
their plans for compliance with MHPAEA.
The Departments emphasize that the proposed requirement to include
this information on the factors, evidentiary standards, and sources
used to design or apply the NQTL is crucial to understanding whether
the NQTL complies with MHPAEA's requirements. Plans and issuers must
disclose information as required by MHPAEA to participants and
beneficiaries, as well as the Departments, regardless of whether such
information is ``proprietary'' and/
[[Page 51594]]
or has ``commercial value.'' \167\ Similarly, if finalized, plans and
issuers must include all information required in the comparative
analyses.
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\167\ See FAQs Part XXIX, Q12.
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The Departments solicit comments on all aspects of the proposed
content elements for NQTL comparative analyses, including whether there
are additional considerations, such as the Kennedy Forum's Six-Step
Parity Compliance Guide,\168\ or comparable State processes, that the
Departments should incorporate into these proposed rules. The
Departments also solicit comments on whether any of these proposed
requirements related to the content of comparative analyses are
superfluous, unhelpful, or unreasonably burdensome.
---------------------------------------------------------------------------
\168\ The ``Six-Step'' Parity Compliance Guide for Non-
Quantitative Treatment Limitation (NQTL) Requirements, available at
https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/rules-and-regulations/public-comments/faq-38/00018.pdf.
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2. Requirement To Provide Comparative Analyses and Notices to the
Departments and Other Individuals and Entities--26 CFR 54.9812-2(d) and
(e), 29 CFR 2590.712-1(d) and (e), and 45 CFR 146.137(d) and (e)
As specified in Code section 9812(a)(8), ERISA section 712(a)(8),
and PHS Act section 2726(a)(8) and FAQs Part 45, effective February 10,
2021, plans and issuers must be prepared to make their comparative
analyses available to the Departments or applicable State authorities
upon request. These proposed rules set forth proposed requirements
related to submission of comparative analyses to the Departments or
applicable State authorities once a request has been received by a plan
or issuer. However, as discussed later in this section of the preamble,
the requirement to perform and document comparative analyses of the
design and application of NQTLs is not dependent upon a request by the
Secretary or an applicable State authority, and plans and issuers
should not wait for a request from the Secretary or applicable State
authority to perform and document their comparative analyses.
These proposed rules would require that plans and issuers make a
comparative analysis required under 26 CFR 54.9812-2(b), 29 CFR
2590.712-1(b), and 42 CFR 147.137(b) available and submit it upon
request by the relevant Secretary. Once a comparative analysis is
requested, these proposed rules would require plans and issuers to
provide a comparative analysis within 10 business days of receipt of a
request from the relevant Secretary (or an additional period of time
specified by the relevant Secretary). This proposed deadline is
consistent with the Departments' current enforcement practices for
requesting comparative analyses from plans and issuers and would allow
each Secretary to permit extensions of this deadline as warranted on a
case-by-case basis.
After a plan or issuer responds to an initial request for a
comparative analysis, if the relevant Department (with jurisdiction
over the group health plan (or health insurance coverage offered by an
issuer in connection with such a plan)) concludes a plan or issuer has
not submitted sufficient information for it to review the requested
comparative analyses, Code section 9812(a)(8)(B)(ii), ERISA section
712(a)(8)(B)(ii), and PHS Act section 2726(a)(8)(B)(ii) provide that
the Departments shall specify to the plan or issuer the additional
information the plan or issuer must submit to be responsive to the
request. Under these proposed rules, the plan or issuer would be
required to furnish this additional information to the relevant
Secretary within 10 business days after the relevant Secretary
specifies the additional information to be submitted (or an additional
period of time specified by the relevant Secretary). As noted earlier
in this preamble, a request for additional information by the relevant
Department or an applicable State authority may include a request for
data to analyze the assertions made in the comparative analyses,
consistent with existing authority. This additional information or data
may relate to the relevant data specified by the Departments to be
included in a comparative analysis (discussed earlier in this preamble)
or other data.
In instances that the relevant Department has reviewed a plan's or
issuer's comparative analyses (and any additional information submitted
upon request), and made an initial determination that the plan or
issuer is not in compliance with the requirements related to NQTLs,
Code section 9812(a)(8)(B)(iii)(I)(aa), ERISA section
712(a)(8)(B)(iii)(I)(aa), and PHS Act section 2726(a)(8)(B)(iii)(I)(aa)
require the plan or issuer to respond to the Departments and specify
the actions the plan or issuer will take to bring the plan or coverage
into compliance (a corrective action plan) and provide additional
comparative analyses that demonstrate compliance not later than 45
calendar days after the initial determination of noncompliance.
Consistent with these statutory provisions, these proposed rules would
also require the plan or issuer to respond to the relevant Department
and specify the actions the plan or issuer will take to bring the plan
or coverage into compliance, and provide to the relevant Department
additional comparative analyses meeting the requirements of these
proposed rules that demonstrate compliance with MHPAEA not later than
45 calendar days after the relevant Department's initial determination
that the plan or issuer is not in compliance.
If the relevant Department makes a final determination that the
plan or issuer is not in compliance following the 45-calendar-day
corrective action period, these proposed rules would provide at 26 CFR
54.9812-2(d)(4), 29 CFR 2590.712-1(d)(4), and 45 CFR 146.137(d)(4)
that, within 7 calendar days of the receipt of the final determination
of noncompliance, the plan or issuer must provide a standalone notice
that is not combined with any other notices or disclosures, as required
under applicable Federal or State law, to all participants and
beneficiaries enrolled in the plan or coverage that the plan or issuer
has been determined to not be in compliance with the requirements of
these proposed rules, consistent with Code section
9812(a)(8)(B)(iii)(I)(bb), ERISA section 712(a)(8)(B)(iii)(I)(bb), and
PHS Act section 2726(a)(8)(B)(iii)(I)(bb). The plan or issuer would
also be required to provide a copy of the notice to the Secretary, any
service provider involved in the claims process, and any fiduciary
responsible for deciding benefit claims within the same time frame. The
Departments solicit comments on the proposed timing of this notice,
including whether requiring the notice to be provided within 7 calendar
days of receipt of a final determination of noncompliance would provide
sufficient time for plans and issuers to provide notice, or whether
allowing the notice to be provided within 7 business days would be more
practicable given holidays and weekends that could serve to effectively
shorten the 7-calendar-day timeframe.
The notice to participants and beneficiaries (which would include a
participant's or beneficiary's authorized representative) informing
them that the relevant Department has determined that their plan or
coverage violates MHPAEA gives them critically important information
for the pursuit and protection of their own benefit claims and rights
and provides a powerful incentive for the plan or issuer to take
necessary corrective actions to come into compliance following an
initial determination of noncompliance.
[[Page 51595]]
These proposed rules set forth requirements for the content of this
notice and the manner in which it would be required to be provided.
These proposed rules would require that the notice be written in plain
language and in a manner calculated to be understood by the average
plan participant or beneficiary. This concept is consistent with the
Departments' transparency in coverage regulations,\169\ and the DOL's
style and format requirements for summary plan descriptions under
ERISA.\170\ The notice would be required to include the following
statement prominently displayed on the first page, in no less than 14-
point font:
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\169\ 26 CFR 54.9815-2715A1(a)(2)(xx), 29 CFR 2590.715-
2715A1(a)(2)(xix), 45 CFR 147.210(a)(2)(xx).
\170\ 29 CFR 2520.102-2(a).
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``Attention! The [Department of Labor/Department of Health and
Human Services/Department of the Treasury] has determined that [insert
the name of group health plan or health insurance issuer] is not in
compliance with the Mental Health Parity and Addiction Equity Act.''
The notice would also be required to contain a summary of any
changes the plan or issuer has made as part of its corrective action
plan specified to the Secretary following the initial determination of
noncompliance, including an explanation of any opportunity for a
participant or beneficiary to have a claim for benefits reprocessed.
Additionally, the notice would be required to include a summary of the
Secretary's final determination that the plan or issuer is not in
compliance with MHPAEA, including any provisions or practices
identified to be in violation of MHPAEA, any additional corrective
actions identified by the Secretary in the final determination notice,
and information on how participants and beneficiaries can obtain a copy
of the final determination of noncompliance from the plan or issuer.
This notice would also be required to include any other actions the
plan or issuer is taking to come into compliance with MHPAEA,
information on when the plan or issuer will take (or has taken) such
actions, and a clear and accurate statement explaining whether the
Secretary has indicated that those actions, if completed, will result
in compliance. Finally, these proposed rules would require the notice
include contact information for questions and complaints, with a
statement explaining how participants and beneficiaries can obtain more
information about the notice, including a phone number and an email or
web portal address for the plan or issuer, and contact information for
the relevant Department.
Under these proposed rules, a plan or issuer would be required to
make the notice available in paper form. The plan or issuer may also
make the notice available electronically (such as by email or an
internet posting) if the format is readily accessible, the notice is
provided in paper form free of charge upon request, and, in a case in
which the electronic form is an internet posting, the plan or issuer
timely notifies the participant or beneficiary in paper form (such as a
postcard) or email that the documents are available on the internet,
provides the internet address, and notifies the participant or
beneficiary that the documents are available in paper form upon
request. This approach is similar to standards for when a plan or
issuer is permitted to provide a copy of their plan's or coverage's
summary of benefits and coverage with respect to participants and
beneficiaries who are eligible but not enrolled for coverage.\171\ For
ERISA plans, the plan or issuer would also be required to ensure that
the notice is provided to any service provider involved in the claims
process, and any fiduciary responsible for deciding benefit claims
within 7 calendar days of receipt of the final determination of
noncompliance, so that the service provider or fiduciary can
appropriately take the violation into account in deciding claims in
compliance with the requirements of 29 CFR 2590.712(c)(4) and in
accordance with section 404(a)(1)(D) of ERISA.
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\171\ See 26 CFR 54.9815-2715(a)(4)(ii)(B), 29 CFR 2590.715-
2715(a)(4)(ii)(B), 45 CFR 147.200(a)(4)(ii)(B).
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In addition to making the comparative analyses available upon
request to the relevant Secretary, 26 CFR 54.9812-2(e), 29 CFR
2590.712-1(e), and 45 CFR 146.137(e) of these proposed rules would
require that plans and issuers make available the comparative analyses
required by 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137
when requested by any applicable State authority. While these proposed
rules would codify the statutory requirement to make comparative
analyses available to the applicable State authority upon request,
these proposed rules do not otherwise apply the timeframes and
processes regarding the Secretarial request process to requests made by
applicable State authorities. The Departments seek comment on whether,
in cases in which an applicable State authority makes a request for an
NQTL comparative analysis, the proposed requirements in paragraph (d)
related to submission of comparative analyses to the Secretary,
including the proposed notice requirement in paragraph (d)(4), should
apply to plans and issuers with respect to a request made by the
applicable State authority. In cases of an adverse benefit
determination, non-grandfathered group health plans and health
insurance issuers offering non-grandfathered group or individual health
insurance coverage would be required to make these comparative analyses
available to participants or beneficiaries, and providers or other
individuals acting as their authorized representative, upon request and
in accordance with the requirements under section 2719 of the PHS Act
and its implementing regulations.\172\ Finally, the Departments solicit
comment on other measures to increase transparency and better inform
the general public regarding final agency determinations of
noncompliance of plans or issuers with MHPAEA.
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\172\ 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR
147.136.
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Additionally, under these proposed rules, plans subject to ERISA
would be required to make these comparative analyses available to
participants and beneficiaries upon request, consistent with the
interpretation discussed earlier in this preamble that comparative
analyses and any other applicable information required under the CAA,
2021 and these proposed rules are instruments under which a plan is
established or operated. If a provider or other person is acting as a
participant's or, beneficiary's, authorized representative, plans
subject to ERISA would be required to make this analysis available to
the provider or other authorized representative.
The Departments have received questions about when plans and
issuers are required to perform and document comparative analyses, and
how often they must be updated. The Departments are aware of reports
that some plans (or their TPAs or other service providers) and issuers
have not documented their comparative analyses and instead wait until
the Departments, or an applicable State authority, request comparative
analyses, or indicate that the plan or issuer is otherwise under
investigation. The Departments are also aware of reports that self-
insured plans have been unsuccessful in receiving comparative analyses
(or the information required to perform and document comparative
analyses) from their TPAs or other service providers in response to a
request. The Departments emphasize that the requirement to perform and
[[Page 51596]]
document comparative analyses of the design and application of NQTLs
has been effective under the CAA, 2021 for more than two years (since
February 10, 2021) and is an independent statutory obligation that is
not dependent upon a request by the Secretary or an applicable State
authority. It is an affirmative statutory obligation that applies
irrespective of any such request.
The requirements under Code section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section 2726(a)(8) and these proposed rules to
perform and document comparative analyses of the design and application
of NQTLs are essential components of a plan's or issuer's legal
obligation to ensure compliance with MHPAEA, and failure to satisfy
those requirements puts participants and beneficiaries at risk of their
mental health and substance use disorder benefits not being in parity
with medical/surgical benefits. Therefore, plans and issuers should
work with their service providers to ensure that they have performed
and documented comparative analyses for their NQTLs as required by
MHPAEA, as amended by the CAA, 2021, regardless of the timing of any
request by the Departments, applicable State authorities, or
participants and beneficiaries. Plans and issuers and their service
providers must also ensure that the comparative analyses reflect the
current terms of the plan or coverage, which may require them to update
their comparative analyses, or perform and document new comparative
analyses when there is a change in plan benefit design, administration
or utilization that is not reflected in the current version of the
comparative analyses.
Finally, nothing in these proposed rules, should be construed to
prevent the relevant Secretary from acting within the scope of existing
authorities to address violations of MHPAEA.
C. Applicability--26 CFR 54.9812-1(i), 29 CFR 2590.712(i), and 45 CFR
146.136(i) and 26 CFR 54.9812-2(g), 29 CFR 2590.712-1(g), and 45 CFR
146.137(g)
While the Departments are of the view that the provisions included
in these proposed rules, if finalized, are critical to helping to
ensure access to vital mental health and substance use disorder
benefits, the Departments also recognize that new requirements may take
time for plans and issuers to implement. In order to strike an
appropriate balance, the Departments propose to amend 26 CFR 54.9812-
1(i)(1), 29 CFR 2590.712(i)(1), and 45 CFR 146.136(i)(1) to specify
that except as provided in paragraph (i)(2) of the 2013 final
regulations, these proposed rules, if finalized, would apply on the
first day of the first plan year beginning on or after January 1,
2025.\173\ Until the applicability date, plans and issuers would be
required to continue to comply with 26 CFR 54.9812-1, revised as of
April 1, 2023, 29 CFR 2590.712, revised as of July 1, 2022, and 45 CFR
146.136, revised as of October 1, 2021, as applicable.
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\173\ But see 26 CFR 54.9812-1(e)(4), 29 CFR 2590.712(e)(4), and
45 CFR 146.136(e)(4), which explains how these requirements interact
with the requirement to provide EHBs under 45 CFR 147.150 and
156.115.
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For similar reasons, the Departments also propose that the
requirements in 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137
of these proposed rules would become effective for plan years beginning
on or after January 1, 2025. However, the Departments remind plans and
issuers \174\ that the statutory provisions added to MHPAEA by the CAA,
2021 are self-implementing and took effect on February 10, 2021.
Therefore, the proposed delayed applicability date for these proposed
rules does not alter a plan's or issuer's obligations under the
statute. As such, plans and issuers must continue performing and
documenting comparative analyses of the design and application of NQTLs
in accordance with the statutory requirements and make them available
to the Departments or applicable State authorities before the
applicability date of these proposed rules, if finalized. The
Departments request comments on the proposed applicability date.
---------------------------------------------------------------------------
\174\ Consistent with the statute, under these proposed rules,
the comparative analysis requirements under proposed 26 CFR 54.9812-
2, 29 CFR 2590.712-1, and 45 CFR 146.137 would not apply to a plan
or issuer that qualifies for the small employer exemption under 26
CFR 54.9812-1(f), 29 CFR 2590.712(f), and 45 CFR 146.136(f) or the
increased cost exemption under 26 CFR 54.9812-1(g), 29 CFR
2590.712(g), and 45 CFR 146.136(g).
---------------------------------------------------------------------------
D. Severability--26 CFR 54.9812-1(j), 29 CFR 2590.712(j), and 45 CFR
146.136(j) and 26 CFR 54.9812-2(h), 29 CFR 2590.712-1(h), and 45 CFR
146.137(h)
The Departments propose to include severability clauses in these
proposed rules to capture the Departments' intent that, to the extent a
reviewing court holds that any provision of these proposed rules, if
finalized, is unlawful by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
would be construed so as to continue to be given the maximum effect
permitted by law. The Departments are of the view that this rulemaking,
if finalized as proposed or as a substantially similar version, would
provide comprehensive protections that implement MHPAEA's requirements.
Overall, the aim of these proposed rules is to ensure that individuals
with mental health conditions and substance use disorders benefit from
the full protections afforded to them under MHPAEA, and that separate
elements of this proposal would individually contribute to furthering
that aim. The proposed requirements under 26 CFR 54.9812-1(c)(4)(i) and
(ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45 CFR 146.136(c)(4)(i)
and (ii), for instance, while part of a comprehensive regulatory
scheme, are separate aspects of the parity analysis. Similarly, the
rule requires plans and issuers to collect and evaluate outcomes data
in a manner reasonably designed to assess the impact of the NQTL and
consider the impact as part of the plan's or issuer's analysis of
whether the limitation, in operation, complies with the requirements
under 26 CFR 54.9812-1(c)(4)(i) and (ii), 29 CFR 2590.712(c)(4)(i) and
(ii), and 45 CFR 146.136(c)(4)(i) and (ii). However, the requirements
of paragraphs (c)(4)(i) and (ii) are meant to stand independently of
the requirement to use outcomes data in such a manner and can continue
to apply independently if other provisions of this rule are
invalidated. Finally, while the Departments are of the view that the
unique considerations of the NQTLs related to network composition merit
the special rule at 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR
2590.712(c)(4)(iv)(C), and 45 CFR 146.136(c)(4)(iv)(C), the Departments
believe that the other requirements of this proposed rule could
continue to apply to NQTLs related to network composition, should this
special rule be invalidated or stayed pending further action.
Consequently, following a potential legal challenge, a court's decision
to invalidate one standard does not affect any provision that relates
to a separate standard. As indicated, these applications of
severability to the provisions in these proposed rules is only an
example and is not exhaustive of other potential applications. If a
court were to hold that any provisions were invalid or unenforceable,
these provisions in the proposed rules state that any affected
provisions would be severable from the rest of these proposed rules, if
finalized, and would not affect any other provisions or their
application to persons not similarly situated or to dissimilar
circumstances.
[[Page 51597]]
III. Overview of the Proposed Rules--Department of HHS
A. Sunset of MHPAEA Opt Out for Self-Funded Non-Federal Governmental
Plans
As noted earlier in this preamble, sponsors of self-funded, non-
Federal governmental plans are permitted to opt out of certain
requirements categories of title XXVII of the PHS Act.\175\ Prior to
the enactment of the CAA, 2023, such plans could elect to opt out of
compliance with the requirements under MHPAEA, among three other
requirements categories of title XXVII of the PHS Act.
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\175\ PHS Act section 2722(a)(2); 45 CFR 146.180.
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The CAA, 2023, enacted on December 29, 2022, included a provision
that sunsets the election option with respect to MHPAEA.\176\
Specifically, section 1321 of title I of Division FF of the CAA, 2023
amended PHS Act section 2722(a)(2) by adding language specifying that
no MHPAEA opt-out election may be made on or after the date of the
enactment of the CAA, 2023, and that generally, no MHPAEA opt-out
election expiring on or after the date that is 180 days after the date
of such enactment may be renewed. The CAA, 2023 included an exception
for certain collectively bargained plans with an opt-out election in
effect for MHPAEA that allows for a longer transition to come into
compliance with MHPAEA. Specifically, the CAA, 2023 added language to
PHS Act section 2722(a)(2) indicating that a plan that is subject to
multiple collective bargaining agreements of varying lengths that has a
MHPAEA opt-out election in effect as of the date of enactment of the
CAA, 2023, that expires on or after the date that is 180 days after the
enactment of the CAA, 2023, may extend such election until the date on
which the term of the last such agreement expires.
---------------------------------------------------------------------------
\176\ Division FF, Title I, Subtitle C, Chapter 3, sec. 1321,
Public Law 117-328, 136 Stat. 4459 (Dec. 29, 2022).
---------------------------------------------------------------------------
As a result of the CAA, 2023 amendments to PHS Act section
2722(a)(2), self-funded, non-Federal governmental plan sponsors may
elect to opt out of only the following three PHS Act requirements
categories: standards relating to benefits for newborns and mothers
(PHS Act section 2725), required coverage for reconstructive surgery
following mastectomies (PHS Act section 2727), and coverage for
dependent students on a medically necessary leave of absence (PHS Act
section 2728).
In this rulemaking, HHS proposes to amend 45 CFR 146.180 to align
with the CAA, 2023 amendments to PHS Act section 2722(a)(2).
Specifically, HHS proposes to redesignate paragraphs (a)(3) through (7)
as paragraphs (a)(4) through (8) and add a new paragraph (a)(3)
specifying that a sponsor of a self-funded, non-Federal governmental
plan may not elect to exempt its plan(s) from any of the MHPAEA
requirements on or after December 29, 2022 (the date of enactment of
the CAA, 2023) through the process specified in 45 CFR 146.180. HHS
also proposes to add new paragraph (f)(4)(iii) that would specify that
in the case of a self-funded, non-Federal governmental plan that is
subject to multiple collective bargaining agreements of varying lengths
and that has an election with respect to any of the MHPAEA requirements
in effect as of December 29, 2022, through the process specified in 45
CFR 146.180, that expires on or after June 27, 2023 (the date that is
180 days after the date of enactment of the CAA, 2023), the plan may
extend such election until the date on which the term of the last such
agreement expires. HHS also proposes to make conforming edits to
paragraphs (a)(2), (a)(5)(i) and (ii), and (a)(6)(ii), as proposed to
be redesignated, and paragraph (f)(1). The proposed amendments to 45
CFR 146.180 would apply on the effective date of the final rule. HHS
seeks comments on these proposed amendments to implement the sunset of
the MHPAEA opt-out election and whether additional guidance or
clarifications are necessary.
B. Applicability of MHPAEA to Individual Health Insurance Coverage
The HHS regulation implementing MHPAEA for individual health
insurance coverage is codified at 45 CFR 147.160. The regulation
currently provides that the group market regulation implementing MHPAEA
at 45 CFR 146.136 applies to health insurance coverage offered by a
health insurance issuer in the individual market in the same manner and
to the same extent as such provisions apply to health insurance
coverage offered by a health insurance issuer in connection with a
group health plan in the large group market, for policy years beginning
on or after the applicability date set forth in 45 CFR 146.136(i).
Therefore, through cross-reference, the proposed amendments to 45 CFR
146.136, if finalized, would apply in the same manner to health
insurance issuers offering individual health insurance coverage.
Further, HHS proposes to include a cross reference in 45 CFR 147.160 to
the comparative analysis requirements proposed in 45 CFR 146.137 of
these proposed rules. The cross reference would similarly make clear
that the comparative analysis requirements apply to health insurance
issuers offering individual health insurance coverage in the same
manner that those provisions apply to group health plans and health
insurance issuers offering coverage in connection with such plans.
These provisions would apply to health insurance issuers offering
individual health insurance coverage for policy years beginning on or
after January 1, 2026. In the individual market, non-grandfathered
individual health insurance coverage must be offered on a calendar year
basis. Premium rates must be submitted to the applicable regulator and
finalized prior to January 1 of each calendar year and rates cannot be
modified during the year. The proposed applicability date is intended
to provide time for issuers offering individual health insurance
coverage to account for the effects of these rules following
publication of the final rules and prior to when rates and benefits
must be finalized and approved for the following calendar year.
Finally, for greater clarity and precision and to align with the
statutory terminology, HHS proposes to modify the regulation text to
refer to ``individual health insurance coverage offered by a health
insurance issuer'' as opposed to ``health insurance coverage offered in
the individual market.''
IV. Request for Information on Ways To Improve Mental Health and
Substance Use Disorder Benefits Through Other Consumer Protection Laws
The Departments are committed to using their full statutory
authority to address the nation's mental health and substance use
disorder crises. In supporting the Administration's response to these
epidemics, the Departments are considering ways to improve the coverage
of mental health and substance use disorder benefits through other
consumer protection laws, including the Affordable Care Act. The
Departments request comments from all interested parties with respect
to the following specific areas:
1. Group health plan sponsors depend on administrative service
providers, health insurance issuers, and other TPAs to design and
manage their plans in a manner that complies with MHPAEA among other
Federal consumer protections. However, plan sponsors are generally
responsible for ensuring compliance and could, in certain
circumstances, be liable for
[[Page 51598]]
penalties for any violations.\177\ Are there ways that TPAs could be
further incentivized to facilitate compliance with MHPAEA on behalf of
the plans that they design and administer?
---------------------------------------------------------------------------
\177\ See Code section 4980D.
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2. Section 108 of Title I of Division BB of the CAA, 2021 requires
the Departments to issue a rule implementing the provider
nondiscrimination provisions in PHS Act section 2706(a). In 2014, the
Departments published a request for information on provider
nondiscrimination, followed by FAQs on these requirements.\178\
Following the enactment of the CAA, 2021, the Departments held a
listening session on January 19, 2022 regarding implementation of the
provider nondiscrimination provision, in order to foster an exchange of
information and views and afford interested individuals and
organizations an opportunity to share their perspective on what should
be included in forthcoming proposed rules. As the Departments continue
to work on proposed rules implementing the provider nondiscrimination
provisions, are there ways that the Departments can enhance access to
mental health and substance use disorder benefits through their
implementation of PHS Act section 2706(a)?
---------------------------------------------------------------------------
\178\ 79 FR 14051 (March 12, 2014); FAQs about Affordable Care
Act Implementation (Part XXVII) (May 26, 2015), Q4-5, available at
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvii.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ACA-FAQs-Part-XXVII-MOOP-2706-FINAL.pdf.
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3. Code section 9820(a) and (b), ERISA section 720(a) and (b), and
PHS Act section 2799A-5(a) and (b), as added by section 116 of title I
of Division BB of the CAA, 2021, establish standards related to
provider directories. The Departments intend to undertake notice and
comment rulemaking to implement the provider directory requirements.
Are there ways that the Departments can improve the coverage of and
enhance access to mental health and substance use disorder benefits
through their implementation of these provider directory requirements,
particularly in underserved or rural areas where there may be limited
access to the internet?
4. Telehealth has become a vital means of providing health care,
including mental health and substance use disorder care, especially in
rural areas and in light of the COVID-19 PHE. For the duration of any
plan year beginning before the end of the COVID-19 PHE, the Departments
issued guidance providing relief from the group market reforms under
part 7 of ERISA, title XXVII of the PHS Act, and chapter 100 of the
Code for a group health plan (and health insurance coverage offered in
connection with a group health plan) sponsored by a large employer that
solely provides benefits for telehealth or other remote care services
offered only to employees (or their dependents) who are not eligible
for coverage under any other group health plan offered by that
employer.\179\ However, these arrangements were required to continue to
comply with certain Federal group market reforms, including the
requirements under MHPAEA.\180\ How and to what extent has this
guidance affected mental health and substance use disorder care and
access? Would any further safeguards be needed? How can the Departments
use telehealth or other remote care services to enhance access to
mental health and substance use disorder treatment under the
Departments' existing authority for both routine and crisis care for
behavioral health conditions, including through parity requirements
with respect to financial requirements and treatment limitations?
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\179\ See FAQs Part 43, Q14.
\180\ Id.
---------------------------------------------------------------------------
5. Under the internal claims and appeals and external review rules
implementing the Affordable Care Act, which are generally applicable to
all non-grandfathered group health plans and non-grandfathered group
and individual health insurance coverage, claim denials related to
medical judgment (including for mental health and substance use
disorder benefits) are eligible for external review.\181\ The internal
claims and appeals rules also provide that claimants (or their
authorized representatives) are entitled to, upon request and free of
charge, reasonable access to and copies of all documents, records, and
other information relevant to the claimant's claim for benefits.\182\
This includes documents with information about the processes,
strategies, evidentiary standards, and other factors used to apply an
NQTL with respect to medical/surgical benefits and mental health or
substance use disorder benefits under the plan.\183\ How can the
Departments leverage ERISA's and the Affordable Care Act's existing
claims procedure requirements to help facilitate access to mental
health and substance use disorder benefits? For example, if a plan or
issuer denies a mental health or substance use disorder benefit based
on the plan's or issuer's determination that a lower level of care
would be more appropriate, should the plan or issuer be required to
identify the relevant lower level of care? Should plans and issuers be
required to provide an explanation of how a particular NQTL was applied
to particular benefits, beyond what is currently required by the claims
procedure rules or other related provisions?
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\181\ See 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR
147.136. Grandfathered plans and issuers must also extend external
review to adverse benefit determinations to items and services
within the scope of the requirements for out-of-network emergency
services, nonemergency services performed by nonparticipating
providers with respect to patient visits to certain types of
participating facilities, and air ambulance services furnished by
nonparticipating providers of air ambulance services under the No
Surprises Act, including for denials related to compliance with such
requirements. Such items and services may include mental health and
substance use disorder services. See 26 CFR 54.9815-2719(a)(1)(ii),
29 CFR 2590.715-2719(a)(1)(ii), and 45 CFR 147.136(a)(1)(ii).
\182\ 26 CFR 54.9815-2719(b)(2)(ii)(C), 29 CFR 2590.715-
2719(b)(2)(i) and (b)(2)(ii)(C), 45 CFR 147.136(b)(2)(i) and
(b)(2)(ii)(C), and 29 CFR 2560.503-1(h)(2)(iii).
\183\ 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR
146.136(d)(3).
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6. Currently, the minimum value rules under HHS and Treasury
regulations at 45 CFR 156.145 and 26 CFR 1.36B-6, respectively, specify
that an employer-sponsored plan provides minimum value only if the
percentage of the total allowed costs of benefits provided under the
plan is greater than or equal to 60 percent, and the benefits under the
plan include substantial coverage of inpatient hospital services and
physician services. Should HHS and Treasury consider amending the
minimum value rule so that it would apply separately and independently
to medical/surgical benefits, and to mental health and substance use
disorder benefits? Should HHS and Treasury consider amending the
minimum value rule to require substantial coverage of mental health and
substance use disorder benefits? If so, how should ``substantial
coverage'' be defined in that context?
7. As HHS oversaw the transition to 988 as the new easy-to-remember
3-digit code to access life-saving services through the Suicide &
Crisis Lifeline, (https://www.samhsa.gov/find-help/988), there has been
increased attention to current gaps in access to and provision of a
full continuum of behavioral health crisis services. Final rules under
MHPAEA do not specifically address mobile crisis services. Similarly,
in the establishment of EHBs as part of required benefits for non-
grandfathered individual and small group coverage under the Affordable
[[Page 51599]]
Care Act, there is no specific reference to behavioral health crisis
services as part of the EHB categories. The Departments are interested
in determining if there are questions as to how these services fit
within the existing categories for either MHPAEA, or the EHB
categories. Are there aspects of community-based behavioral health
crisis services that the Departments should address in the context of
MHPAEA? Should the Departments ensure that community-based behavioral
health crisis services are classified in the same way as particular
medical/surgical services, and what are those particular services?
Should crisis call/text/chat center services, mobile crisis and
stabilization services be specifically included as EHBs? Are there ways
the Departments can increase access to crisis services with current
authorities, including in rural or underserved areas in which there are
several challenges to accessing care? How can parity be strengthened
across the behavioral health crisis services landscape, including in
areas with shortages for behavioral health providers? How can the
Departments collaborate with State and local agencies to improve access
to existing and future behavioral health crisis services?
V. Regulatory Impact Analysis
A. Summary--Departments of Health and Human Services and Labor
The Departments have examined the effects of these proposed rules
as required by Executive Order 12866,\184\ Executive Order 13563,\185\
the Paperwork Reduction Act of 1995,\186\ the Regulatory Flexibility
Act,\187\ section 202 of the Unfunded Mandates Reform Act of 1995,\188\
and Executive Order 13132.\189\
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\184\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4,
1993).
\185\ Improving Regulation and Regulatory Review, 76 FR 3821
(Jan. 18, 2011).
\186\ 44 U.S.C. 3506(c)(2)(A) (1995).
\187\ 5 U.S.C. 601 et seq. (1980).
\188\ 2 U.S.C. 1501 et seq. (1995).
\189\ Federalism, 64 FR 153 (Aug. 4, 1999).
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1.1. Executive Orders 12866 and 13563--Departments of Health and Human
Services and Labor
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, select regulatory approaches that maximize net
benefits (including potential economic, environmental, public health
and safety effects; distributive impacts; and equity). Executive Order
13563 emphasizes the importance of quantifying costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility.
Under Executive Order 12866, ``significant'' regulatory actions are
subject to review by the Office of Management and Budget (OMB). As
amended by Executive Order 14094 \190\ entitled ``Modernizing
Regulatory Review'' section 3(f) of the Executive order defines a
``significant regulatory action'' as any regulatory action that is
likely to result in a rule that may:
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\190\ Executive Order 14094, 88 FR 21879 (Apr. 6, 2023).
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(1) have an annual effect on the economy of $200 million or more
(adjusted every 3 years by the Administrator of the Office of
Information and Regulatory Affairs (OIRA) for changes in gross domestic
product); or adversely affect in a material way the economy, a sector
of the economy, productivity, competition, jobs, the environment,
public health or safety, or State, local, Territorial, or Tribal
governments or communities;
(2) create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) materially alter the budgetary impacts of entitlement grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) raise legal or policy issues for which centralized review would
meaningfully further the President's priorities or the principles set
forth in this Executive order, as specifically authorized in a timely
manner by the Administrator of OIRA in each case.
It has been determined that these proposed rules are significant
within the meaning of section 3(f)(1) of the Executive order.
Therefore, the Departments have provided an assessment of the potential
costs, benefits, transfers, and alternatives associated with these
proposed rules, and OMB has reviewed these proposed rules.
1.2. Introduction and Need for Regulations
As explained in section I.A of this preamble, mental health is
crucial to a person's overall wellbeing, and access to quality mental
health and substance use disorder treatment is as essential for health
as access to medical/surgical treatment. Moreover, failure to treat
mental health issues can be costly. For example, depression is
associated with increased risk of cardiovascular disease, diabetes,
stroke, Alzheimer's disease, and osteoporosis, and an untreated
substance use disorder may result in hospital emergency room care for a
drug overdose.\191\ Individuals with mental health conditions or
substance use disorders have faced stigma, discrimination, and other
barriers inside and outside of the health care system, which can
operate as impediments to seeking and obtaining treatment. In 2021,
approximately 40 percent of adults 18 and older with a perceived unmet
need for mental health services reported that they did not receive
services because they could not afford the cost, almost 11 percent
thought it may cause their community to have a negative opinion about
them, almost 8 percent thought it might impact their job, and almost 12
percent were concerned about confidentiality.\192\ Despite deterrents
to seeking treatment, the need for these services has only increased,
as a reported 41 percent of U.S. adults experienced high levels of
psychological distress during the COVID-19 pandemic.\193\
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\191\ Government Accountability Office. ``Behavioral Health:
Research on Health Care Costs of Untreated Conditions is Limited,''
GAO-19-274, February 2019.
\192\ Substance Abuse and Mental Health Services Administration
(SAMHSA), Center for Behavioral Health Statistics and Quality,
National Survey on Drug Use and Health, 2021. Table 6.45B.
\193\ Pasquini, Giancarlo, and Scott Keeter. Pews Research
Center. ``At Least Four-in-Ten US Adults Have Faced High Levels of
Psychological Distress During COVID-19 Pandemic.'' (2022).
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In 2013, the Departments issued final regulations to implement
MHPAEA.\194\ The 2013 final regulations expanded upon MHPA 1996, which
required parity in aggregate lifetime and annual dollar limits between
mental health benefits and medical/surgical benefits. MHPAEA
additionally applies the parity requirements to substance use disorder
benefits and provides that the financial requirements (such as
deductibles, copays, and coinsurance) and treatment limitations (such
as day or visit limits) imposed on mental health or substance use
disorder benefits cannot be more restrictive than the predominant
financial requirements and treatment limitations that apply to
substantially all medical/surgical benefits in a classification. MHPAEA
also prohibits separate treatment limitations that apply only to mental
health and substance use disorder benefits.
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\194\ 78 FR 68240 (Nov. 13, 2013).
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Since 2013, the Departments have provided extensive guidance and
compliance assistance materials to the regulated community, State
regulators, and other interested parties and conducted regular outreach
initiatives to facilitate the implementation and enforcement of MHPAEA.
The Departments also issued reports to
[[Page 51600]]
Congress highlighting this work. In addition, Congress has enacted
several laws that build on MHPAEA, including the Cures Act, the SUPPORT
for Patient and Communities Act (SUPPORT Act),\195\ and most recently,
the CAA, 2021 and 2023.
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\195\ Public Law 115-271, 132 Stat. 3894 (Oct. 24, 2018). The
SUPPORT Act requires that Children's Health Insurance Program (CHIP)
plans must cover mental health and substance use disorder services.
Financial requirements and treatment limitations applicable to such
services shall not differ from those applicable to other medical
services under CHIP.
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Prior to the CAA, 2021, while group health plans and health
insurance issuers were prohibited from imposing NQTLs on mental health
and substance use disorder benefits that did not comply with MHPAEA and
its implementing regulations, there was no statutory requirement that
plans or issuers demonstrate their compliance. Under the CAA, 2021,
group health plans and health insurance issuers are now required to
perform and document comparative analyses of the NQTLs they impose on
mental health and substance use disorder benefits and to provide those
analyses to the Departments or to an applicable State authority, as
applicable, upon request. The CAA, 2021 compels the Departments to
request not fewer than 20 such analyses per year. In addition, the CAA,
2021 imposes steps that the Departments, after reviewing a comparative
analysis, must take following an initial determination that the plan's
or issuer's NQTL comparative analysis does not comply with MHPAEA. The
Departments are also required to report to Congress annually on the
results of their review of the requested NQTL comparative analyses.
As documented in the 2022 MHPAEA Report to Congress,\196\ the
Departments found that none of the NQTL comparative analyses they
reviewed contained sufficient information and documentation from plans
and issuers upon initial receipt. Moreover, despite plans' longstanding
obligations under MHPAEA, it was apparent that many plans and issuers
had not carefully designed and implemented their NQTLs to be compliant
with MHPAEA prior to the enactment of CAA, 2021. Consequently, many of
the comparative analyses appeared to be focused on finding after-the-
fact rationales for decisions and designs involving NQTLs rather than
reflecting proper attention to MHPAEA compliance in the first place.
Similarly, many of the plans and issuers appeared to generate their
analyses for the first time in response to the Departments' requests,
rather than in advance, as required by law and as a critical part of
the design and application of a MHPAEA-compliant NQTL. The 2023 MHPAEA
Report to Congress notes that nearly all the comparative analyses
reviewed by the Departments during the relevant time period contained
insufficient information upon initial receipt and identifies common
deficiencies in the comparative analyses prepared by plans and
issuers.\197\
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\196\ Available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.
\197\ 2023 MHPAEA Report to Congress, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
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The Departments have made an unprecedented commitment to expand
their efforts to ensure parity in access to mental health and substance
use disorder treatment, guarantee that individuals with mental health
conditions and substance use disorders benefit from the full
protections required by law, and intend to provide additional guidance
to interested parties to facilitate compliance with MHPAEA by issuing
these proposed rules.
The proposed amendments to the existing MHPAEA regulations would
clarify existing definitions and add new definitions of key terms,
clarify the way the parity requirements apply to NQTLs, and provide
additional examples of the application of MHPAEA to NQTLs to improve
the understanding and ability of the regulated community to comply with
MHPAEA. The proposed amendments would also clarify that the way a plan
or issuer defines mental health conditions and substance use disorders
for purposes of MHPAEA must be consistent with generally recognized
independent standards of current medical practice and would add more
specificity as to what conditions or disorders plans and issuers must
treat as mental health conditions and substance use disorders.
These proposed rules would also add new regulations that would set
forth more specific content requirements for comparative analyses
required by the CAA, 2021, and outline the process for plans and
issuers to provide their comparative analyses to the Departments or an
applicable State authority upon request. These proposed rules would
also require plans and issuers to collect and evaluate relevant data,
including but not limited to claims denials, as well as any other data
relevant to NQTLs as required by State law or private accreditation
standards. Additionally, for NQTLs related to network composition,
these proposed rules would require additional data, including, but not
limited to, in-network and out-of-network utilization rates (including
data related to provider claim submissions), network adequacy metrics
(including time and distance data, and data on providers accepting new
patients), and provider reimbursement rates (including as compared to
billed charges). Under these proposed rules, plans and issuers must
collect and evaluate these data while conducting their comparative
analyses, regardless of whether the Departments have requested the
analyses. As indicated in section I.A.3.d of this preamble, the type,
form, and manner for these data requirements may be further defined in
guidance, to allow the Departments to provide more detail and adjust
the data requirements as needed to account for enforcement experience
and industry trends. Additionally, in these proposed rules, HHS
proposes regulatory amendments to implement a provision in the CAA,
2023 that sunsets the election option for self-funded, non-Federal
governmental plans to opt out of requirements under MHPAEA.
The Departments have been particularly concerned with barriers to
access for individuals seeking mental health or substance use disorder
treatments. A 2022 Harris Poll sponsored by the National Council for
Mental Wellbeing found that 21 percent of adults with unmet mental
health care needs in the past year and 28 percent of those with unmet
substance use care needs in the past year reported their inability to
get an appointment immediately prevented them from getting needed
care.\198\ While up to 70 percent of all primary care visits include a
behavioral health component,\199\ research suggests that primary care
providers face significant barriers to delivering these services,
including insufficient resources, inadequate related knowledge, and a
lack of time.\200\ In seeking out specialists,
[[Page 51601]]
individuals tend to face less adequate mental health provider networks
than medical/surgical provider networks through their plan or coverage.
According to a 2021 study, which compared the experiences of patients
using out-of-network mental health and out-of-network medical/surgical
providers, patients who were receiving mental health treatment only
from a mental health practitioner rated their plan's mental health
provider network as inadequate more frequently than their plan's
medical/surgical provider network.\201\ The study noted that specialty
mental health practitioners are more likely to opt out of participation
in mental health provider networks due to a growing workforce shortage
of mental health providers, a high demand for mental health services,
and low reimbursements for mental health services compared with other
specialties, which has consequentially resulted in higher out-of-
network utilization rates for mental health care services. In response
to these concerns, the Technical Release that is being issued
concurrently with these proposed rules would set out principles and
seek public comment to inform guidance with respect to required data
submissions for NQTLs related to network composition and a potential
time-limited enforcement safe harbor.
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\198\ National Council for Mental Wellbeing. ``2022 Access to
Care Survey Results,'' May 11, 2022. https://www.thenationalcouncil.org/wp-content/uploads/2022/05/2022-Access-To-Care-Survey-Results.pdf.
\199\ Health Affairs. ``Combating a Crisis by Integrating Mental
Health Services and Primary Care,'' Health Affairs Forefront, July
8, 2022, available at https://www.healthaffairs.org/do/10.1377/forefront.20220706.603540.
\200\ Loeb, Danielle F., Elizabeth A. Bayliss, Ingrid A.
Binswanger, Carey Candrian, and Frank V. Degruy. ``Primary Care
Physician Perceptions on Caring for Complex Patients with Medical
and Mental Illness.'' Journal of General Internal Medicine 27
(2012): 945-952. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3403152/; Poghosyan L, Norful AA, Ghaffari A, George M, Chhabra
S, Olfson M. ``Mental Health Delivery in Primary Care: The
Perspectives of Primary Care Providers.'' Archives of Psychiatric
Nursing 2019 Oct; 33(5):63-67. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7077950/.
\201\ Busch, Susan H., and Kelly Kyanko. ``Assessment of
Perceptions of Mental Health vs Medical Health Plan Networks Among
US Adults with Private Insurance.'' JAMA Network Open 4, no. 10
(2021).
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The Departments have already seen some promising results in
response to their reviews of plans' and issuers' comparative analyses
under the requirements of the CAA, 2021, including the removal of some
exclusions related to treatment for opioid use disorder with methadone
(which must be provided through an opioid treatment program) and ABA
therapy, as well as the removal of unnecessary gatekeepers for
treatment, such as requiring referrals for appointments and pre-
authorization for outpatient services, improving direct access for
mental health and substance use disorder benefits. The Departments
expect that these proposed rules would expand upon these successes as
they would provide plans and issuers with a better understanding of the
requirements of MHPAEA with respect to NQTLs and improve how they
measure, compare, and demonstrate parity, while clarifying appropriate
ways for plans and issuers to modify their policies and procedures to
meet parity requirements. The Departments believe these proposed rules
and any additional guidance would help plans and issuers comply with
these proposed requirements, resulting in improved access to and
coverage of mental health and substance use disorders, as intended by
MHPAEA.
1.3. Baseline
The baseline for this analysis includes the MHPAEA statute, as
amended, implementing regulations, and subsequent guidance. Benefits,
costs, and transfers are measured as changes from the baseline under
these proposed rules. For example, the CAA, 2021 requires that plans
and issuers perform and document NQTL comparative analyses. Starting 45
days after the enactment of the CAA, 2021, plans and issuers are
required to make their comparative analyses available to the
Departments or an applicable State authority upon request. Plans and
issuers are required to make comparative analyses and other applicable
information required by the CAA, 2021 available to participants and
beneficiaries in plans subject to ERISA upon request and to make this
information available to participants, beneficiaries, and enrollees in
all non-grandfathered group health plans and non-grandfathered group or
individual health insurance coverage upon request in connection with an
adverse benefit determination.\202\ This regulatory impact analysis
(RIA) therefore does not include benefits or costs for performing and
making available the comparative analyses, as these are already
required by the provisions of the CAA, 2021 and are in the baseline,
but does take into account the expected impacts of these proposed rules
on the preparation of plans' and issuers' comparative analyses and how
these proposed rules would impact parity and, in turn, access for
participants and beneficiaries needing mental health and substance use
disorder treatments.
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\202\ FAQs Part 45, Q6.
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Similarly, existing guidance that has already generated benefits
and costs is not accounted for here. Rather, only those changes
resulting from these proposed rules are captured in this analysis.
1.4. Summary of Impacts
These proposed rules propose to define certain terms associated
with MHPAEA's requirements for NQTLs and provide that a group health
plan (or health insurance issuer offering coverage in connection with a
group health plan) may not apply any NQTL to mental health or substance
use disorder benefits in any classification that is more restrictive,
as written or in operation, than the predominant NQTL that applies to
substantially all medical/surgical benefits in the same classification.
These proposed rules would require that plans and issuers determine the
portion of plan payments for medical/surgical benefits subject to an
NQTL based on the dollar amount of all plan payments for medical/
surgical benefits in the classification expected to be paid under the
plan or coverage for the plan year (or the portion of the plan year
after a change in benefits that affects the applicability of the NQTL).
Plans and issuers would next be required to determine whether the NQTL
applies to substantially all medical/surgical benefits in the
classification based on the portion of plan payments for medical/
surgical benefits subject to the NQTL to determine whether the NQTL
applies to at least two-thirds of all medical/surgical benefits in that
classification. Plans and issuers would then need to determine which
variation of a given NQTL is predominant (that is, the most common or
frequent variation). Once this is determined, plans and issuers may not
apply any NQTL to mental health or substance use disorder benefits in
any classification that is more restrictive, as written or in
operation, than the predominant NQTL applicable to substantially all
medical/surgical benefits in the same classification. An NQTL is
restrictive if it imposes conditions, terms, or requirements that limit
access to benefits under the terms of the plan or coverage.
These proposed rules also set data requirements and clarify proper
documentation of NQTL comparative analyses, which plans and issuers
have struggled with, as detailed in the Departments' 2022 Report to
Congress \203\ and the 2023 Report to Congress,\204\ released
contemporaneously with these proposed rules. Accordingly, the
Departments are of the view that these proposed rules would increase
plan and issuer compliance with the requirements for imposing NQTLs
under MHPAEA,
[[Page 51602]]
which would in turn expand access to mental health and substance use
disorder benefits and help ensure that limitations on mental health and
substance use disorder benefits are no more restrictive than the
predominant limitations applicable to substantially all medical/
surgical benefits in the same classification. In doing so, access to
in-network medically necessary treatments would increase for a
significant segment of individuals whose health coverage would be
affected by these proposed rules,\205\ which would ultimately result in
better mental health outcomes and lower out-of-pocket costs related to
mental health and substance use disorder benefits for participants,
beneficiaries, and enrollees.
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\203\ 2022 MHPAEA Report to Congress, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.
\204\ 2023 MHPAEA Report to Congress, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
\205\ Wen, Hefei, Janet R. Cummings, Jason M. Hockenberry, Laura
M. Gaydos, and Benjamin G. Druss. ``State Parity Laws and Access to
Treatment for Substance Use Disorder in the United States:
Implications for Federal Parity Legislation.'' JAMA Psychiatry 70,
no. 12 (2013): 1355-1362.
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Plans and issuers would incur costs to comply with the requirements
in these proposed rules. However, the Departments have determined that
the benefits of these proposed rules justify the costs. In accordance
with OMB Circular A-4, Table 1 depicts an accounting statement
summarizing the Departments' assessment of the benefits, costs, and
transfers associated with these regulatory actions. The Departments are
unable to quantify all benefits, costs, and transfers of these proposed
rules, but have sought, where possible, to describe these non-
quantified impacts.
The effects in Table 1 reflect non-quantified impacts and estimated
direct monetary costs resulting from the provisions of these proposed
rules.
Table 1--Accounting Statement
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Benefits:
Better understanding of and compliance with MHPAEA by plans and issuers............................
Better health outcomes for those with mental health conditions or substance use disorders, and a
reduction in the negative impacts on families, friends, and coworkers of those with untreated or poorly
managed mental health conditions or substance use disorders based on their improved access to treatment....
Better frameworks for determining whether plans and issuers are making decisions and taking actions
with respect to mental health and substance use disorder benefits in parity with their decisions and
actions regarding medical/surgical benefits................................................................
----------------------------------------------------------------------------------------------------------------
Costs:
Costs to plans and issuers to implement changes associated with the revision of plan provisions....
Increased costs to plans and issuers from expanded coverage and utilization of mental health and
substance use disorder services............................................................................
Costs to plans and issuers from collecting and analyzing data and documenting NQTL comparative
analyses consistent with the requirements of these proposed rules of approximately $291.0 million in the
first year and approximately $117.6 million in subsequent years or between 0.04 percent and 0.01 percent of
health insurance premiums..................................................................................
Costs to plans and issuers for preparing and mailing the comparative analyses to participants,
beneficiaries, and enrollees of approximately $12.1 million annually.......................................
One-time regulatory review costs to plans and issuers of approximately $64.3 million...............
Potential increase in cost-sharing requirements and/or treatment limitations for medical/surgical
care for participants, beneficiaries, and enrollees, if plans and issuers try to achieve parity by imposing
new restrictions on medical/surgical coverage, rather than by reducing restrictions on access to mental
health or substance use disorder benefits..................................................................
Potential costs to self-funded, non-Federal governmental plans that currently opt out of MHPAEA to
come into compliance with requirements under MHPAEA........................................................
Cost savings to self-funded, non-Federal governmental plans of approximately $11,351 in total from
no longer having to send opt-out notices regarding a plan's MHPAEA opt-out election........................
Cost savings for the Federal Government of approximately $2,469 from fewer opt-out notices being
submitted by self-funded, non-Federal governmental plans...................................................
----------------------------------------------------------------------------------------------------------------
Costs Estimate Year dollar Discount rate Period
(percent) covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized............................ $161.29 2023 7 2023-2032
----------------------------------------------------------------------------------------------------------------
($million/Year)................................. 156.71 2023 3 2023-2032
Transfers:
Potential transfers from plans and issuers to participants, beneficiaries, and enrollees resulting
in lower out-of-pocket spending on mental health and substance use disorder services.......................
Potential transfers from participants, beneficiaries, and enrollees to plans and issuers caused by
higher premiums associated with lower cost-sharing requirements, increased utilization of mental health and
substance use disorder services, provider network improvements, and increased provider reimbursement rates.
Potential transfers from primary care providers to mental health providers for the treatment of
mental health and substance use disorders as a result of decisions by participants, beneficiaries, and
enrollees to obtain treatment from a specialist instead of a primary care provider.........................
----------------------------------------------------------------------------------------------------------------
[[Page 51603]]
1.5. Affected Entities
1.5.1. Plans
Employers with 50 or more employees are required to comply with
MHPAEA. Employers with less than 50 employees are required to comply
with MHPAEA as part of the EHB requirements of the Affordable Care Act.
In this analysis, plan size is used as a proxy for employer size to
determine if a plan is affected. The Departments estimate that
1,488,000 fully-insured, non-grandfathered plans with less than 50
participants and approximately 409,800 ERISA-covered group health plans
with 50 or more participants, of which approximately 250,000 are self-
insured group health plans, would be affected by these proposed
rules.\206\ In addition, the Departments estimate that these proposed
rules would affect approximately 90,100 non-Federal governmental health
plans,\207\ of which approximately 14,400 are plans with 50 or more
participants.\208\ The Departments seek comment on these estimates.
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\206\ Employers with less than 50 employees are required to
comply with MHPAEA as part of the EHB requirements of the ACA. The
Departments estimate that there are 2,134,934 ERISA-covered group
health plans with less than 50 participants based on data from the
2021 Medical Expenditure Panel Survey--Insurance Component and the
2019 County Business Patterns from the Census Bureau. The
Departments also estimate that 83 percent of group health plans with
less than 50 participants are fully insured based on data from the
2021 Medical Expenditure Panel Survey Insurance Component (MEPS-IC)
and the 2019 County Business Patterns from the Census Bureau. The
2020 Kaiser Employer Health Benefits Survey reported that in 2020,
16 percent of firms offering health benefits offered at least one
grandfathered health plan (Kaiser Employer Health Benefits Survey
(Source: KFF. 2020 Kaiser Employer Health Benefits Survey. https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf)). Thus, the Departments have calculated the
number of fully insured, non-grandfathered plans with less than 50
participants in the following manner: 2,134,934 small ERISA-covered
group health plans x 83% x (100% minus 16%) = 1,488,476. MHPAEA only
applies to ERISA plans in the group market with 50 or more
participants that offer mental health or substance use disorder
benefits. The Departments have not identified what share of plans
with 50 or more participants offer mental health or substance use
disorder benefits and so has assumed that all of these plans offer
them. Based on the 2021 MEPS-IC and the 2019 County Business
Patterns from the Census Bureau, the Departments estimate 61 percent
of ERISA-covered group health plans with 50 or more participants are
self-insured. Thus, the Departments calculate the number of self-
insured group health plans in the following manner: 409,822 ERISA-
covered group health plans with 50 or more participants x 61% =
249,991.
\207\ Based on the 2017 Census of Governments, there are 90,126
State and local entities. The Departments assume there is one plan
per entity on average. Therefore, the Departments estimate that
there are 90,126 non-Federal governmental health plans.
\208\ MHPAEA applies to non-Federal governmental employers with
50 or more employees that offer mental health or substance use
disorder benefits. The Departments have not identified what share of
non-Federal governmental plans with 50 or more participants offer
mental health or substance use disorder benefits and so have assumed
that all of these plans offer them. Using data from the 2021 Medical
Expenditure Panel Survey Insurance Component (MEPS-IC) and the 2019
County Business Patterns from the Census Bureau, the Departments
estimates that 16 percent of ERISA-covered group health plans have
50 or more participants. The Departments use the percent of ERISA-
covered group plans with 50 or more participants as a proxy for the
percent of non-Federal governmental plans with 50 or more
participants. Therefore, the Departments estimate that there are
14,420 public, non-Federal employer group health plans with 50 or
more participants that offer mental health or substance use disorder
benefits. (90,126 non-Federal governmental health plans x 16 percent
of plans with 50 or more employees = 14,420).
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HHS estimates that 230 self-funded, non-Federal governmental plans
would be affected by the implementation of the CAA, 2023 provision that
sunsets the MHPAEA opt-out election.\209\ HHS is aware of at least four
plans with collective bargaining agreements whose sponsors' MHPAEA opt-
out elections could be in effect beyond 2024. However, other plans
might be similarly situated. HHS does not have precise information
about the number of participants and beneficiaries of the plans that
have elected to opt out of requirements under MHPAEA, as those plans
are not required to report this information to HHS. However, HHS
estimates that there are approximately 253 participants, on average, in
each self-funded, non-Federal governmental plan.\210\ HHS also
estimates that there is one beneficiary for each plan participant on
average. Therefore, approximately 116,500 participants and
beneficiaries would be affected by this proposed provision.\211\ HHS
seeks comments on the estimated number of self-funded, non-Federal
governmental plans and the estimated number of plan participants and
beneficiaries that would be affected by the implementation of the CAA,
2023 provision that sunsets the MHPAEA opt-out election.
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\209\ Based on the HIPAA opt-out elections for self-funded, non-
Federal governmental plans, as of January 6, 2023. Available at
https://www.cms.gov/files/document/hipaaoptouts03182021.pdf.
\210\ According to data from the Medical Expenditure Panel
Survey--Insurance Component (2021) (available at: https://meps.ahrq.gov/mepsweb/https://meps.ahrq.gov/mepsweb/), there are
18,828,246 State and local government employees, and 69.1 percent of
these employees (13,010,318) are enrolled in health coverage through
their jobs. Of these employees, 64.4 percent (8,378,645 employees)
are participants in self-funded plans. Based on data from the 2017
Census of Governments (available at: https://www.census.gov/data/tables/2017/econ/gus/2017-governments.html), there are 90,126 State
and local government entities, and according to the Medical
Expenditure Panel Survey (2021), 36.7 percent, or 33,076, of State
and local government entities self-fund at least one plan.
Therefore, the average number of participants per self-funded, non-
Federal governmental plan is (8,378,645/33,076) 253.3. Since HHS
also estimates that there is 1 beneficiary for each plan participant
on average, the average number of participants and beneficiaries per
self-funded non-Federal governmental plan is (253.3 x 2) 506.6.
\211\ 230 self-funded, non-Federal governmental plans that have
elected to opt out of the requirements under MHPAEA x approximately
506.6 participants and beneficiaries for each self-funded, non-
Federal governmental plan on average = 116,500.
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1.5.2. Participants, Beneficiaries, and Enrollees Receiving Mental
Health and Substance Use Disorder Treatment
There are approximately 55,403,000 participants and 47,990,000
beneficiaries in ERISA-covered group health plans with 50 or more
participants,\212\ approximately 17,841,000 participants and 15,198,000
beneficiaries in non-Federal governmental plans with 50 or more
participants,\213\ an estimated 11,187,000 participants and 10,914,000
beneficiaries in ERISA covered, non-grandfathered, fully insured health
plans with less than 50 participants,\214\ and approximately 11,000,000
individual health insurance coverage
[[Page 51604]]
policyholders (with approximately 15,000,000 total enrollees).\215\
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\212\ Employers with 50 or more employees are required to comply
with MHPAEA. Employers with less than 50 employees are required to
comply with MHPAEA as part of the EHB requirements of the Affordable
Care Act. The Departments have not identified what share of plans
with 50 or more participants offer mental health or substance use
disorder benefits and so has assumed that all of these plans offer
them. The Departments estimate that there are 55,402,568
participants in ERISA-covered group health plans with 50 or more
participants. Estimates are based off Department tabulations of the
March 2021 Current Population Survey (CPS) Auxiliary Data. https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data.
\213\ MHPAEA only applies to non-Federal governmental health
plans with 50 or more participants that offer mental health or
substance use disorder benefits. The Departments have not identified
what share of plans with 50 or more participants offer mental health
or substance use disorder benefits and so has assumed that all of
these plans offer them. The Departments estimate that there are
17,840,590 participants in non-Federal governmental health plans
with 50 or more participants. Estimates are based on Department
tabulations of the March 2021 CPS Auxiliary Data. https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data.
\214\ The Departments estimate that there are 26,311,273
participants and beneficiaries in fully insured, private-sector
health plans with less than 50 participants based off Department
tabulations of the March 2021 CPS Auxiliary Data. https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data. Assuming,
based on Kaiser Family Foundation (KFF) assumptions that 84 percent
of participant and beneficiaries are in non-grandfathered plans
(Source: KFF. 2020 KFF Employer Health Benefits Survey. https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf), this would translate into an estimated
22,101,470 participants and beneficiaries in fully-insured, private-
sector, non-grandfathered plans with less than 50 participants.
\215\ Based on medical loss ratio reports submitted by issuers
for the 2021 reporting year, the number of policyholders in
individual health insurance coverage offered in the individual
market is approximately 11 million, and the number of enrollees was
approximately 15,000,000. https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
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The receipt of behavioral health services has been increasing since
the enactment of MHPAEA. Between 2007 and 2017, private insurance claim
lines for behavioral health diagnoses increased by 320 percent.\216\
Claims data show that between 2013 and 2019, the percentage of the
employment-based coverage population under the age of 65 diagnosed with
major depressive disorder increased from 4.1 percent to 5.3 percent,
and the percentage of the population diagnosed with anxiety increased
from 4.8 percent to 8.1 percent.\217\ In 2020, 41 million Americans
enrolled in employment-based coverage, including 6 million children,
received mental health support, which constituted nearly 25 percent of
employment-based health plan participants and beneficiaries.\218\ A
2021 survey by the Substance Abuse and Mental Health Services
Administration (SAMHSA) indicated that among adults aged 18 or older,
22.8 percent (or 57.8 million people) had any mental illness and 5.5
percent (or 14.1 million people) had serious mental illness in the past
year.\219\
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\216\ Gelburd, Robin. ``The Mental Health Parity Act: 10 Years
Later.'' American Journal of Managed Care (Nov. 22, 2018). https://www.ajmc.com/view/the-mental-health-parity-act-10-years-later.
\217\ Fronstin, Paul and Christopher Roebuck. ``How Do High-
Deductible Health Plans Affect Use of Health Care Services and
Spending Among Enrollees with Mental Health Disorders?'' EBRI Issue.
No. 555, Figure 3. (March 10, 2022) Available at https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_555_mentalhealth-10mar22.pdf?sfvrsn=aec3b2f_2.
\218\ America's Health Insurance Plans. ``How Employer-Provided
Coverage Improves Access to Mental Health Support,'' May 2022.
https://www.ahip.org/documents/202205-CaW_MentalHealth-v03.pdf.
\219\ SAMHSA. ``Key Substance Use and Mental Health Indicators
in the United States: Results from the 2021 National Survey on Drug
Use and Health.'' pp. 39-40. https://www.samhsa.gov/data/sites/default/files/reports/rpt39443/2021NSDUHFFRRev010323.pdf.
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The COVID-19 PHE has exacerbated the need for mental health and
substance use disorder treatment. During the pandemic, many adults
consistently reported anxiety and depressive disorders symptoms, with 4
in 10 adults reporting symptoms in February 2021. Two years later, even
as the pandemic receded from its peak, approximately 3 in 10 adults
were still reporting symptoms of anxiety and depression.\220\ A 2021
study also found that a COVID-19 diagnosis increased the incidence of a
psychiatric diagnosis within the following 14 to 90 days. Specifically,
the study found that approximately 20 percent of adults who received a
COVID-19 diagnosis, including adults with and without a past
psychiatric diagnosis, were later diagnosed with a mental health
disorder.\221\
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\220\ Panchal, Nirmita, Heather Saunders, Robin Rudowitz, and
Cynthia Cox. ``The Implications of COVID-19 for Mental Health and
Substance Use,'' KFF Issue Brief March 20, 2023. https://www.kff.org/coronavirus-covid-19/issue-brief/the-implications-of-covid-19-for-mental-health-and-substance-use/.
\221\ Taquet, Maxime, Sierra Luciano, John R. Geddes, and Paul
J. Harrison. ``Bidirectional Associations Between COVID-19 and
Psychiatric Disorder: Retrospective Cohort Studies Of 62,354 COVID-
19 Cases in the USA.'' The Lancet Psychiatry 8, no. 2 (2021): 130-
140.
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The pandemic may have long-term effects on mental health and
substance use disorders. A 2022 study examined the chronic effects of
the pandemic on the mental health of veterans and found that COVID-19
survivors were associated with a higher risk of developing mental
health disorders, including anxiety, stress, depression, substance use,
and neurocognitive decline, compared to individuals who did not have
COVID-19.\222\ Another 2022 study examined the mental health outcomes
of COVID-19 survivors during the twelve months following their
infection and found that COVID-19 survivors reported a high prevalence
of depression, anxiety, and PTSD at both the six- and twelve-months
follow-up, indicating that the pandemic has long-term adverse mental
health impacts on COVID-19 survivors.\223\ Finally, a 2023 study found
that the pandemic resulted in a long-term increase in the number of
psychiatric inpatient admissions, suggesting that there is a post-
pandemic need to prioritize psychiatric care.\224\
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\222\ Xie, Yan, Evan Xu, and Ziyad Al-Aly. ``Risks of Mental
Health Outcomes in People with Covid-19: Cohort Study.'' The BMJ 376
(2022), available at https://www.bmj.com/content/376/bmj-2021-068993.
\223\ Mazza, Mario Gennaro, Mariagrazia Palladini, Rebecca De
Lorenzo, Beatrice Bravi, Sara Poletti, Roberto Furlan, Fabio Ciceri
et al. ``One-Year Mental Health Outcomes in a Cohort of COVID-19
Survivors.'' Journal of Psychiatric Research 145 (2022): 118-124.
\224\ Warwicker, Sean, Denise Sant, Adrian Richard, Jake
Cutajar, Annalise Bellizzi, Gertrude Micallef, Daniel Refalo,
Liberato Camilleri, and Anton Grech. ``A Retrospective Longitudinal
Analysis of Mental Health Admissions: Measuring the Fallout of the
Pandemic.'' International Journal of Environmental Research and
Public Health 20, no. 2 (2023): 1194.
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1.5.3. Issuers and TPAs
The Departments estimate that these proposed rules would affect 476
health insurance issuers that provide benefits in the group and
individual health insurance markets, with 1,500 issuer/State
combinations.\225\ There are an estimated 205 TPAs that provide
services to health plans.\226\ Finally, the Departments estimate that
these proposed rules would affect at least 40 managed behavioral
healthcare organizations providing mental health and substance use
disorder benefits to group health plans.\227\
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\225\ The Departments' estimate of the number of health
insurance insurers and the number of issuer/State combinations is
based on medical loss ratio reports submitted by issuers for the
2021 reporting year. (Source: Centers for Medicare & Medicaid
Services. ``Medical Loss Ratio Data and System Resources'' (2021).
https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.)
\226\ Non-issuer TPAs based on data derived from the 2016
benefit year reinsurance program contributions.
\227\ The Departments' estimate of the number of insurers is
based on industry trade association membership, including the
National Behavioral Consortium (https://www.nbcgroup.org/member-directory/) and the Association for Behavioral Health and Wellness
(https://abhw.org/about/). Please note that these estimates could
undercount small State-regulated insurers.
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Issuers and TPAs provide key support for plan compliance with laws
and regulations, including MHPAEA. The Departments' understanding,
based on discussions with the regulated community and numerous direct
investigations of plans, specifically the review of comparative
analyses, is that issuers of fully insured health plans provide a menu
of coverage designs from which interested parties select their
coverage. The issuers, as the designers of the products and, commonly,
the claims administrators, make decisions about what NQTLs to use and
how to implement them. Issuers, along with TPAs, are also typically the
owners of claims and other data related to plan administration.
Even for plans that self-insure, it is common practice to have
issuers and TPAs provide expertise in plan design, administer the
claims and networks, and drive compliance (or non-compliance) with
MHPAEA. Self-insured plans rarely build independent provider networks
and instead rely on those built by issuers and TPAs. According to the
2019 KFF Employer Benefits Survey, only 8 percent of large, self-
insured plans with 200 or more employees reported that they directly
contracted with hospitals and health systems, independent of the plan's
TPA, in order to provide health care and services separate from the
provider networks included in the plan network.\228\ The Departments
analyzed
[[Page 51605]]
2020 Form 5500 Schedule C (Service Provider Information) filings of
self-insured health plans and determined that 89 percent of those plans
indicated that they contracted with a TPA.\229\ This statistic provides
the Departments with an estimate for the percent of self-insured plans
that could perform the work for themselves.
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\228\ KFF. ``KFF Employer Health Benefits Survey, 2019.''
(September 25, 2019) Table 14.15. See https://www.kff.org/report-section/ehbs-2019-section-14-employer-practices-and-health-plan-networks/.
\229\ Because many plans are exempt from filing a Form 5500, the
Department only identified 37,934 self-insured health plan filings
for 2020. Of these, only 5,537 plans (or roughly 15 percent)
attached a Schedule C. Of those plans, 4,920 (or roughly 89 percent)
indicated they paid compensation, either directly or indirectly, of
at least $5,000 for either claims processing, contract
administration, or both.
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Issuers and TPAs are therefore the ones mostly likely, and the ones
the Departments have overwhelmingly observed, performing the work to
evaluate NQTLs and provide the comparative analysis and required data.
These proposed rules are expected to continue this trend of issuers and
TPAs performing the required work for plans. While plans could be
charged for these services, this arrangement provides for economies of
scale in compliance as issuers evaluate NQTLs, produce or assist in
producing the comparative analyses for their products and, in
combination with TPAs, provide support for other requirements. Because
TPAs and insurance companies providing administrative services only
(ASO) overwhelmingly design the plans, administer the networks, manage
claims, provide plan services, maintain and hold the data relevant to
the comparative analyses, and drive MHPAEA compliance, they are in the
best position to conduct comparative analyses, and to provide the
analyses in an efficient and cost-effective manner. The Departments
expect, as reflected in their own direct observations of the
comparative analyses process, that TPAs and issuers would perform most
of the work associated with the analyses because they can do so at the
lowest cost and greatest scale. Particularly for self-insured plans,
however, there may be some additional work required by individual plans
to complete the comparative analysis prepared by the issuer to address
unique plan issues. The Departments seek comments on these
observations.
1.6. Benefits
The Departments expect that these proposed rules, if finalized,
would improve the quality of the comparative analyses conducted by
plans and issuers, as required by the CAA, 2021, help plans and issuers
better understand and fulfill their obligations under MHPAEA, and
promote greater transparency regarding discrepancies between mental
health and substance use disorder benefits and medical/surgical
benefits. By specifying more details on how to perform and document
their NQTL comparative analyses, these proposed rules would increase
plan and issuer compliance with the requirements for imposing NQTLs
under MHPAEA, and by doing so, increase access to mental health and
substance use disorder services. Thus, these proposed rules would
generate the following economic and societal benefits for participants,
beneficiaries, and enrollees:
better understanding of and compliance with MHPAEA by
plans and issuers,
greater access to mental health and substance use disorder
services,
better health outcomes among those with mental health
conditions or substance use disorders,
reduced adverse impacts on the families, friends, and
coworkers of people who suffer from untreated or poorly managed mental
health conditions or substance use disorders, and
better frameworks for the Departments, plans, and issuers
to determine whether plans' and issuers' decisions and actions with
respect to mental health and substance use disorder treatments are in
parity with their decisions and actions regarding medical/surgical
treatments.
This analysis provides a mainly qualitative discussion of the
benefits associated with the proposed amendments to the existing MHPAEA
regulations, as the Departments do not have the data necessary to
quantify the likely benefits associated with ensuring that NQTLs for
mental health and substance use disorder benefits are in parity with
medical/surgical benefits. Similarly, this analysis provides a
qualitative discussion of the benefits of these proposed rules and
discusses how the proposed additional guidance would result in better
compliance with the rules related to NQTLs and access to mental health
and substance use disorder benefits. The Departments invite comments
and data related to how it might quantify these benefits as part of
these proposed rules.
1.6.1. Better Understanding of and Compliance With MHPAEA by Plans and
Issuers
By placing renewed focus on the elimination of more restrictive
barriers to access mental health and substance use disorder benefits,
standardizing the definitions associated with parity calculations for
mental health and substance use disorder benefits and medical/surgical
benefits, providing examples of the application of MHPAEA to NQTLs, and
setting forth the content, and data documentation requirements of the
NQTL comparative analyses, these proposed rules would clarify and
strengthen the obligations of plans and issuers, and promote compliance
with MHPAEA. In the course of implementing these proposed rules,
parties would adjust their policies and procedures in order to come
into compliance and better serve participants, beneficiaries, and
enrollees. These proposed rules also help the Departments identify when
they need to intervene.
The Departments have already seen, in response to reviews of
comparative analyses and requests for additional information, revisions
to policies that remove treatment limitations. These proposed rules
would help parties better understand what they need to do to comply
with MHPAEA, reduce uncertainty about compliance status, and help plans
and issuers better identify areas they need to improve.
By improving compliance with MHPAEA, these proposed rules would
have the greatest direct impact on individuals who currently forego
treatments for a mental health condition or substance use disorder
because their health plan imposes barriers to coverage of these
services. The Departments cannot estimate how large this impact would
be, though a 2021 survey by SAMHSA indicated that 19 percent of U.S.
adults with mental illness that did not receive treatment in the past
year at least partially attributed foregoing these services to their
health insurance offering insufficient coverage for mental health
services.\230\
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\230\ SAMHSA. ``Key Substance Use and Mental Health Indicators
in the United States: Results from the 2021 National Survey on Drug
Use and Health.'' Table 6.50B. The question does not distinguish
between sources of insurance, available at https://www.samhsa.gov/data/sites/default/files/reports/rpt39443/2021NSDUHNNR122322/2021NSDUHNNR122322.htm.
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These proposed rules would also directly benefit individuals who
are currently enrolled in a plan with inadequate or narrow networks
with regard to mental health and substance use disorder providers
compared to the networks for medical/surgical benefits, which prevent
participants, beneficiaries, and enrollees from being able to make
appointments with in-network providers and timely accessing needed
care. A 2017 study of Affordable Care Act Marketplace provider networks
[[Page 51606]]
found that mental health networks were significantly narrower on
average than primary care networks, providing less than half the share
of providers practicing within a State-level market.\231\ A 2022 survey
of private and non-Federal public employers found that while 82 percent
of employers believed that there is a sufficient number of primary care
providers in the plan networks, only 44 percent of employers believed
there is a sufficient number of behavioral health providers in the plan
networks.\232\ Moreover, a 2022 study of Medicaid patients in Oregon
found that mental health services remained inaccessible for many
patients due to phantom networks, which are rosters of network
providers that list, as in-network providers, mental health and
substance use disorder professionals and facilities who are not, in
fact, available to participants, beneficiaries, and enrollees for
network treatment.\233\ Phantom networks are also reportedly an issue
for participants and beneficiaries of group health plans.\234\ A
national survey of privately insured individuals that received mental
health care treatment found that more than half of those patients that
used a provider directory encountered inaccuracies which made them more
likely to be treated by an out-of-network provider, and four times as
likely to receive a surprise, out-of-network bill.\235\ In light of
this concern, these proposed rules particularly highlight parity in
network composition as an area that requires clarification in the NQTL
space.
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\231\ Zhu, Jane M., Yuehan Zhang, and Daniel Polsky. ``Networks
in ACA Marketplaces are Narrower for Mental Health Care than for
Primary Care.'' Health Affairs 36, no. 9 (September 2017): 1624-
1631.
\232\ Kaiser Family Foundation. ``KFF Employer Benefits Survey,
2022.'' (October 17, 2022) https://www.kff.org/report-section/ehbs-2022-summary-of-findings.
\233\ Zhu, Jane M., Christina J. Charlesworth, Daniel Polsky,
and K. John McConnell. ``Phantom Networks: Discrepancies Between
Reported and Realized Mental Health Care Access in Oregon
Medicaid.'' Health Affairs 41, no. 7 (2022): 1013-1022.
\234\ See Ellison, Katherine, ``73 Doctors and None Available:
How Ghost Networks Hamper Mental Health Care.'' The Washington Post
(Feb. 19, 2022), available at https://www.washingtonpost.com/health/2022/02/19/mental-health-ghost-network/.
\235\ Busch, Susan H. and Kelly A. Kyanko. ``Incorrect Provider
Directories Associated with Out-of-Network Mental Health Care and
Outpatient Surprise Bills.'' Health Affairs, Vol. 39 No. 6 (June
2020): 975-083.
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1.6.2. Greater Access to Mental Health and Substance Use Disorder
Treatments
By improving plan and issuer understanding of and compliance with
the requirements under MHPAEA, clarifying when and how comparative
analyses of NQTLs should be conducted, and ensuring that the NQTLs are
no more restrictive for mental health and substance use disorder
benefits than for medical/surgical benefits, these proposed rules would
improve compliance and, in turn, expand access to and utilization of
mental health and substance use disorder services.\236\ Utilization-
related evidence is reviewed in section 1.7, below. The implementation
of the CAA, 2023 provision that sunsets the MHPAEA opt-out election
would reduce financial and non-financial barriers to accessing mental
health and substance use disorder treatment for participants and
beneficiaries of plans sponsored by self-funded, non-Federal
governmental entities that currently elect to opt out of requirements
under MHPAEA. This would result in increased access to care and lead,
as discussed in more detail in the next section, to better health
outcomes for plan participants and beneficiaries with a need for mental
health care or substance use disorder services.
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\236\ Wen, Hefei, Janet R. Cummings, Jason M. Hockenberry, Laura
M. Gaydos, and Benjamin G. Druss. ``State Parity Laws and Access to
Treatment for Substance Use Disorder in the United States:
Implications for Federal Parity Legislation.'' JAMA Psychiatry 70,
no. 12 (2013): 1355-1362.
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1.6.3. Better Health Outcomes Among Those With Mental Health Conditions
and Substance Use Disorders
By expanding access to mental health and substance use disorder
services, these proposed rules may also result in better mental health
and substance use disorder outcomes. A 2013 study found that State
parity laws were associated with a five percent decrease in
suicides.\237\ A 2022 study found that severe maternal morbidity (SMM)
among childbearing individuals with commercial insurance decreased by
53 percent between 2008 and 2019. The authors suggested implementation
of MHPAEA may have had a role in the decreasing rates of SMM.\238\ An
improvement in mental health and substance use disorder outcomes can
also improve overall physical health outcomes. A 2017 study found that
better past mental health was associated with more physical activity
and social interactions, which resulted in an improvement in the
present physical health.\239\
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\237\ Lang, Matthew. ``The Impact of Mental Health Insurance
Laws on State Suicide Rates.'' Health Economics 22, no. 1 (2013).
\238\ Admon, Lindsay, Vanessa Dalton, Giselle Kolenic, Anca
Tilea, Stephanie V. Hall, and Kara Zivin. ``MHPAEA/ACA Policy
Implementation and Severe Maternal Morbidity Among Commercially
Insured Individuals, 2008-2019 [A192].'' Obstetrics & Gynecology 139
(2022): 56S.
\239\ Ohrnberger, Julius, Eleonora Fichera, and Matt Sutton.
``The Relationship between Physical and Mental Health: A Mediation
Analysis.'' Social Science & Medicine 195 (2017): 42-49.
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1.6.4. Reduced Adverse Impacts on the Families, Friends, and Coworkers
of People Who Suffer From Untreated or Poorly Managed Mental Health
Conditions and Substance Use Disorders
These proposed rules would help employees and their families meet
their mental health care needs, and thus, may improve the productivity
and resulting earnings of workers dealing with mental health and
substance use disorder issues. Among adults with any mental health
condition in 2021, only 47.2 percent received treatment.\240\ Moreover,
while 15.6 percent of National Survey on Drug Use and Health
respondents 12 and older were classified as needing substance use
disorder treatment in 2021, only 6.3 percent received treatment that
year.\241\ One survey found that more than 85 percent of individuals
that did not receive needed mental health or substance use care
reported negative impacts, including personal relationship issues, job
issues and performing poorly or dropping out of school.\242\
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\240\ SAMHSA. ``Key Substance Use and Mental Health Indicators
in the United States: Results from the 2021 National Survey on Drug
Use and Health.'' Figure 65.
\241\ SAMHSA. ``Key Substance Use and Mental Health Indicators
in the United States: Results from the 2021 National Survey on Drug
Use and Health.'' Figure 54 and 57.
\242\ National Council for Mental Wellbeing. ``2022 Access to
Care Survey Results,'' May 11, 2022. https://www.thenationalcouncil.org/wp-content/uploads/2022/05/2022-Access-To-Care-Survey-Results.pdf.
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The economic impact of untreated mental health and substance use
disorders can be significant. A 2021 study found that the high
prevalence of major depressive disorder among U.S. adults has increased
workplace costs from $114.6 billion in 2010 to $198.6 billion in
2018.\243\ A 2022 study found that, in low and middle-income countries,
mental health interventions significantly improved work-related
outcomes. Relative to a control group, participants receiving a mental
health intervention experienced a 26 percent decrease in their
inability to work and participant absence rates declined by 16 percent.
The authors noted that these economic effects are ``somewhat larger''
for populations with severe mental
[[Page 51607]]
health disorders, compared to populations with mild mental health
disorders.\244\ Finally, a 2015 study examined the impact of State
parity laws on individuals with moderate levels of mental distress and
found that State parity laws were associated with an increase in
overall employment, weekly wages, and the number of hours worked per
week, and attributed these changes to the increased productivity of
these workers.\245\
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\243\ Greenberg, Paul E., Andree-Anne Fournier, Tammy Sisitsky,
Mark Simes, Richard Berman, Sarah H. Koenigsberg, and Ronald C.
Kessler. ``The Economic Burden of Adults with Major Depressive
Disorder in the United States (2010 and 2018).'' Pharmacoeconomics
39, no. 6 (2021): 653-665.
\244\ Lund, Crick, Kate Orkin, Marc Witte, Thandi Davies, John
Walker, Johannes Haushofer, Sarah Murray, Judy Bass, Laura Murray,
and Vikram Patel. ``Treating Mental Health Conditions Improves Labor
Market and Other Economic Outcomes in Low and Middle-Income
Countries.'' University of Oxford, Working Paper (2022).
\245\ Andersen, Martin. ``Heterogeneity and the Effect of Mental
Health Parity Mandates on the Labor Market.'' Journal of Health
Economics 43 (2015).
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These proposed rules would also have significant indirect impacts
on families and social networks of individuals with untreated or poorly
managed mental health conditions and substance use disorders, as well
as society at large. By increasing access to services, these proposed
rules would lead to more people receiving treatment, reducing the
burden on family members and other support systems. This includes
untreated maternal mental health conditions (MMHCs) which can lead to a
reduced ability to work, increased risk of suicide, increased use of
public services such as Medicaid, and worse maternal and child health.
A 2022 study of the cost of MMHC to Texas women and their children
projected costs for the 2019 birth cohort from the time of conception
through five years postpartum to total $2.2 billion.\246\ Untreated
MMHCs include untreated perinatal mood and anxiety disorders (PMADs),
which have been found to account for approximately $48 million in
societal costs in Vermont for the average annual birth cohort from
conception through five years postpartum, including $12.5 million in
productivity loss and $9.4 million in non-obstetric health
expenditures.\247\ The cost in missed productivity due to workers' fair
or poor mental health was estimated as $47.6 billion annually in
2022.\248\ A 2022 study found that households with a family member
diagnosed with a mental health disorder had lower health status scores
compared to households without a mental illness diagnosis, suggesting
evidence of family spillover effects on mental illness.\249\ Finally, a
2020 study estimated that the societal costs of untreated opioid use
disorder was approximately $1.02 trillion, which includes $35 billion
in health care costs and $92 billion in lost productivity.\250\
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\246\ Margiotta, Caroline, Jessica Gao, So O'Neil, Divya Vohra
and Kara Zivin. ``The Economic Impact of Untreated Maternal Mental
Health Conditions in Texas.'' BMC Pregnancy Childbirth 22, 700
(2022). https://doi.org/10.1186/s12884-022-05001-6.
\247\ Platt, Isabel, Emma Pendl-Robinson, Eric Dehus, So O'Neil,
Divya Vohra, Kara Zivin, Michael Kenny and Laura Pentenrieder.
``Estimating the Costs of Untreated Perinatal Mood and Anxiety
Disorders in Vermont.'' Mathematica. May 2023. https://www.mathematica.org/publications/societal-costs-of-perinatal-mood-and-anxiety-disorders-in-vermont.
\248\ Witters, Dan and Sangeeta Agrawal. ``The Economic Cost of
Poor Employee Mental Health'' Gallup Workplace (December 13, 2022).
https://www.gallup.com/workplace/404174/economic-cost-poor-employee-mental-health.aspx?version=print.
\249\ Lee, Donghoon, Yeonil Kim, and Beth Devine. ``Spillover
Effects of Mental Health Disorders on Family Members' Health-related
Quality of Life: Evidence from a US Sample.'' Medical Decision
Making 42, no. 1 (2022): 80-93.
\250\ Florence, Curtis, Feijun Luo, and Ketra Rice. ``The
Economic Burden of Opioid Use Disorder and Fatal Opioid Overdose in
the United States, 2017.'' Drug and Alcohol Dependence 218 (2021):
108350.
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1.7. Costs
These proposed rules aim to promote access to mental health and
substance use disorder services under MHPAEA, while seeking to limit
costs on plans and issuers. The costs incurred in these activities are
discussed below.
A 2019 study which examined the impact of MHPAEA on the utilization
of mental health and substance use disorder services in the private,
large group employer-sponsored insurance market from 2005 to 2015 found
that MHPAEA is positively associated with the utilization of outpatient
mental health and substance use disorder benefits.\251\ A 2020 study of
MHPAEA, using 2007 and 2011-12 data from the National Survey of
Children's Health, found that among children and adolescents with
family income between 150 and 400 percent of the Federal poverty level
in States without prior parity laws, the enactment of MHPAEA resulted
in a 2.8 percentage point increase in mental health care
utilization.\252\ In addition, a 2019 study examined the effectiveness
of the national primary care-mental health integration (PC-MHI)
initiative of the Veterans Health Administration, which aimed to
improve access to mental health services by embedding specialists, care
managers, or both in primary care clinics to collaboratively care for
veterans with psychiatric illness. It found that each percentage-point
increase in the proportion of clinic patients seen by the PC-MHI
providers was associated with an 11 percent increase in the average
total mental health visits per year.\253\ Finally, another 2019 study,
which examined the effectiveness of hybrid psychiatric care, a
combination of in-person and telepsychiatry services, found that hybrid
care increased the total number of outpatient encounters and increased
the timeliness of care in mental health patients, compared to patients
with in-person visits only.\254\
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\251\ Mulvaney-Day, Norah, Brent J. Gibbons, Shums Alikhan, and
Mustafa Karakus. ``Mental Health Parity and Addiction Equity Act and
the Use of Outpatient Behavioral Health services in the United
States, 2005-2016.'' American Journal of Public Health 109, no. S3
(2019): S190-S196.
\252\ Li, Xiaoxue, and Jie Ma. ``Does Mental Health Parity
Encourage Mental Health Utilization Among Children and Adolescents?
Evidence From The 2008 Mental Health Parity and Addiction Equity Act
(MHPAEA).'' The Journal of Behavioral Health Services & Research 47,
no. 1 (2020): 38-53.
\253\ Leung, Lucinda B., Lisa V. Rubenstein, Jean Yoon, Edward
P. Post, Erin Jaske, Kenneth B. Wells, and Ranak B. Trivedi.
``Veterans Health Administration Investments in Primary Care and
Mental Health Integration Improved Care Access.'' Health Affairs 38,
no. 8 (2019): 1281-1288.
\254\ Hughes, M. Courtney, Jack M. Gorman, Yingqian Ren, Sana
Khalid, and Carol Clayton. ``Increasing Access to Rural Mental
Health Care Using Hybrid Care that Includes Telepsychiatry.''
Journal of Rural Mental Health 43, no. 1 (2019): 30.
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1.7.1. Proposed Amendments to the Existing MHPAEA Regulations (26 CFR
54.9812-1, 29 CFR 2590.712, 45 CFR 146.136)
These proposed rules focus plans and issuers on the impact of NQTLs
and associated practices on access to mental health and substance use
disorder benefits. The regulations further stress the importance of
avoiding NQTLs and practices that impose greater limits on access for
participants, beneficiaries, and enrollees for mental health or
substance use disorder benefits.
For example, as discussed in section II.A.2 of the preamble, the
definition of ``substance use disorders'' must include all disorders
covered under the plan or coverage that fall under any of the
diagnostic categories listed in the mental, behavioral, and
neurodevelopmental disorders chapter (or equivalent chapter) of the
most current version of the ICD as a mental or behavioral disorder due
to psychoactive substance use (or equivalent category) or that are
listed in the most current version of the DSM as a Substance-Related
and Addictive Disorder (or equivalent category). Plans and issuers
would also be required to use reasonable methods and analysis to
determine if a limitation complies with the requirements of these
proposed rules. The Departments believe that the proposed amendments
could cause plans and issuers to revise their policies and remove
treatment limitations in response to the Departments'
[[Page 51608]]
clarifications and examples. For instance, a 2016 study examined how
private health plans responded to the 2010 interim final regulations
and found that the majority of plans had eliminated annual limits
related to behavioral health treatments. The percentage of health
insurance products with special annual limits on mental health
treatments decreased from 28 percent in 2009 to 4 percent in 2010, and
a similar decrease was observed for health insurance products with
special annual limits on substance use disorder treatments (from 26
percent in 2009 to 3 percent in 2010).\255\ Therefore, plans and
issuers could incur costs to implement changes associated with coverage
revision of plan provisions, which might result in increased costs from
expanded utilization of mental health and substance use disorder
services. The Departments face uncertainty in quantifying these costs
as they cannot estimate the potential increase in utilization and which
services might see the largest increase in utilization.
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\255\ Horgan, Constance M., Dominic Hodgkin, Maureen T. Stewart,
Amity Quinn, Elizabeth L. Merrick, Sharon Reif, Deborah W. Garnick,
and Timothy B. Creedon. ``Health Plans' Early Response to Federal
Parity Legislation for Mental Health and Addiction Services.''
Psychiatric Services 67, no. 2 (2016): 162-168.
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1.7.2. New Regulations (26 CFR 54.9812-2, 29 CFR 2590.712-1, 45 CFR
146.137; 45 CFR 146.180)
These proposed rules would amend the content and data, and
documentation requirements for comparative analyses required by the
CAA, 2021 and outline the timeframes and processes for plans and
issuers to provide their comparative analyses to the Departments upon
request. These proposed rules would require plans and issuers to
collect and evaluate relevant data with each comparative analysis
requested by the Departments for all NQTLs, including but not limited
to the number and percentage of relevant claims denials and any other
data required by State law or private accreditation standards, and for
NQTLs related to network composition, data including, but not limited
to, in-network and out-of-network utilization rates (including time and
distance data, data on providers, network adequacy metrics (including
time and distance data, and data on providers accepting new patients),
and provider reimbursement rates (including as compared to billed
charges).
Plans and issuers would incur costs associated with collecting,
processing, and analyzing data under the new proposed data
requirements, including data on claims denials, data relevant to NQTLs
as required by State law or private accreditation standards, in-network
and out-of-network utilization rates, network adequacy metrics,
provider reimbursement rates and other relevant data. As discussed in
section 1.5.3 of this RIA, issuers and TPAs provide key support for
plan compliance with MHPAEA and would incur most of the burden given
their large involvement in the plan design and NQTL analyses. The
Departments request comments on whether plans, issuers, and TPAs
already collect and examine this data.
To meet the proposed new content requirements for the comparative
analyses, the Departments, based on internal discussion, expect that on
average, plans would need to analyze 4 NQTLs and issuers would need to
analyze 8 NQTLs. Plans and issuers preparing their own comparative
analyses would incur an incremental burden of 10 hours per NQTL in the
first year, with 2 hours for a general or operations manager to review
the requirements and outline the changes needed for the comparative
analyses and 8 hours for a business operations specialist to prepare
the comparative analyses. In the first year, this would result in a
cost burden of approximately $291.0 million.\256\ The amount of time
spent by plans preparing their own comparative analyses could vary
depending on the level of cooperation by the TPA. Once the comparative
analyses are performed and documented, plans would need to update the
analyses when making changes to the terms of the plan or coverage,
including changes to the way NQTLs are applied to mental health and
substance use disorder benefits. In subsequent years, the Departments
estimate plans would incur an incremental burden of 4 hours annually
per NQTL to update the analyses, with 1 hour for a general or
operations manager and 3 hours for a business operations specialist. In
subsequent years, this would result in a cost burden of approximately
$117.6 million.\257\ The Departments seek comments on these
assumptions.
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\256\ A labor rate of $132.38 is used for a general or
operations manager and a labor rate of $109.96 is used for a
business operations specialist. (Source: Estimates for total
compensation are based on mean hourly wages by occupation from the
2021 Occupational Employment Statistics and estimates of wages and
salaries as a percentage of total compensation by occupation are
from the December 2021 National Compensation Survey's Employee Cost
for Employee Compensation. Estimates for overhead costs for services
are imputed from the 2020 Service Annual Survey. To obtain overhead
cost on an occupational basis, the estimate allocates total industry
overhead cost to unique occupations using a matrix of detailed
occupational employment for each NAICS industry. All values are in
2023 dollars.) The labor rate is applied in the calculation as:
[(27,499 ERISA self-insured group health plans x 4 NQTLs x 2 hours x
$132.38 for a general or operations manager) + (27,499 ERISA self-
insured group health plans x 4 NQTLs x 8 hours x $109.96 for a
business operations specialist) + (1,500 issuers x 8 NQTLs x 2 hours
x $132.38 for a general or operations manager) + (1,500 issuers x 8
NQTLs x 8 hours x $109.96 for a general or operations manager) +
(33,076 self-funded, non-Federal governmental health plans x 4 NQTLs
x 2 hours x $132.38 for a general or operations manager) + (33,076
self-funded, non-Federal governmental health plans x 4 NQTLs x 2
hours x $109.96 for a business operations specialist)] =
$291,031,092.
\257\ A labor rate of $132.38 is used for a general or
operations manager and a labor rate of $109.96 is used for a
business operations specialist. The labor rate is applied in the
calculation as: [(27,499 ERISA self-insured group health plans x 4
NQTLs x 1 hour x $132.38 for a general or operations manager) +
(27,499 ERISA self-insured group health plans xx 4 NQTLs x 3 hours x
$109.96 for a business operations specialist) + (1,500 x 8 NQTLs x 1
hour x $132.38 for a general or operations manager) + (1,500 issuers
x 8 NQTLs x 3 hours x $109.96 for a general or operations manager) +
(33,076 self-funded, non-Federal governmental health plans x 4 NQTLs
x 1 hours x $132.38 for a general or operations manager) + (33,076
self-funded, non-Federal governmental health plans x 4 NQTLs x 3
hours x $109.96 for a business operations specialist)] =
$117,552,718.
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Additionally, plans and issuers must make the comparative analyses
and other applicable information required by the CAA, 2021 available
upon request to participants and beneficiaries in plans subject to
ERISA and to participants, beneficiaries, and enrollees in all non-
grandfathered group health plans and non-grandfathered group or
individual health insurance coverage upon request in connection with an
appeal of an adverse benefit determination. The Departments estimate
that on average each plan or issuer would receive one request annually
and that plans and issuers would annually incur a burden of 5 minutes
for a clerical worker to prepare and send the comparative analyses to
each requesting participant or beneficiary. This would result in an
annual cost burden of approximately $10.5 million.\258\ The Departments
also assume that 58.2 percent of requests would be delivered
electronically, resulting in a de minimis cost.\259\ The
[[Page 51609]]
remaining 41.8 percent of requests would be mailed, at a cost of $1.14
each, which is postage for a 3-ounce letter. The annual cost burden to
mail the comparative analyses to the participants and beneficiaries
requesting them would therefore be approximately $1.6 million.\260\
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\258\ The Departments estimate that there are 476 issuers with
1,500 issuer/State combinations offering individual and group health
coverage nationwide. A labor rate of $63.45 is used for a clerical
worker. The labor rate is applied in the calculation as: (1,898,298
ERISA group health plans + 90,126 non-Federal governmental health
plans + 1,500 issuers/State combinations providing coverage in the
group and individual market) x 5 minutes x $63.45 = $10,521,787.
\259\ According to data from the National Telecommunications and
Information Agency (NTIA), 40.0 percent of individuals aged 25 and
over have access to the internet at work. According to a Greenwald &
Associates survey, 84 percent of plan participants find it
acceptable to make electronic delivery the default option, which is
used as the proxy for the number of participants who will not opt-
out of electronic disclosure that are automatically enrolled (for a
total of 33.6 percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 40.4 percent of individuals aged
25 and over have access to the internet outside of work. According
to a Pew Research Center survey, 61.0 percent of internet users use
online banking, which is used as the proxy for the number of
internet users who will affirmatively consent to receiving
electronic disclosures (for a total of 24.7 percent receiving
electronic disclosure outside of work). Combining the 33.6 percent
who have access to electronic disclosure at work with the 24.7
percent who have access to electronic disclosure outside of work
produces a total of 58.2 percent who will receive to electronic
disclosure overall.
\260\ The Departments assume one request per entity and that
each mailed response will cost $1.89 in materials and postage, on
average. The mailing and postage cost assume $.05 per printed page,
an average document length of 15 pages and $1.14 in postage for a 3-
ounce parcel. Therefore, the cost is estimated as (1,488,476 fully-
insured, non-grandfathered plans with less than 50 participants +
409,822 ERISA-covered group health plans with 50 or more
participants + 1,500 issuers/State Combinations + 90,126 non-Federal
governmental health plans) x 41.8% x ($1.14 + (15 pages x $0.05)) =
$1,572,080.
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In the first year, group health plans and issuers would need time
to familiarize themselves with these proposed rules and amendments. The
Departments assume that on average it would require six and a half
hours for an attorney to review these proposed rules and amendments.
This would result in a one-time cost burden of $64.3 million.\261\
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\261\ A labor rate of $159.34 is used for an attorney (this
figure reflects the median hourly wage of lawyers according to the
DOL Bureau of Labor Statistics Occupational Employment and Wage
Statistics for May 2022, doubled to account for overhead costs and
benefits). The reading time is calculated based on an average 250
words per minute reading rate. The labor rate is applied in the
calculation as: (27,499 self-funded, ERISA group health plans +
33,076 self-funded, non-Federal governmental health plans + 1,500
issuers/State combinations providing coverage in the group and
individual market) x 6.5 hours x $159.34 = $64,291,778.
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According to the 2021 National Health Expenditure Data, the total
contribution of private employers to health insurance premiums is
$554.1 billion. The total contribution of State and local employers to
health insurance premiums is $179.7 billion.\262\ The total health
expenditure on the individual market is $80.9 billion.\263\ In the
first year, the cost to comply with these proposed rules is estimated
to be approximately $367.4 million,\264\ which represents 0.05 percent
of total premiums in these markets. In subsequent years, the cost to
comply with these proposed rules is estimated to be approximately
$129.6 million,\265\ which represents 0.02 percent of total premiums in
these markets. The Departments request comments regarding the costs
associated with these proposed rules and amendments. To be most useful,
comments should distinguish between the cost to comply with existing
parity requirements and the cost to comply with the requirements of
these proposed rules.
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\262\ Centers for Medicare and Medicaid Services. ``National
Health Expenditure Data.'' NHE Tables--Table 24. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalhealthaccountshistorical.
\263\ Centers for Medicare and Medicaid Services. ``National
Health Expenditure Data.'' NHE Tables--Table 21. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalhealthaccountshistorical.
\264\ The cost is estimated as follows: $291.0 million for
preparing the comparative analyses + $64.3 million for reviewing the
proposed rules and amendments + $10.5 million to prepare the
comparative analyses upon request to participants and beneficiaries
+ $1.6 million to distribute the comparative analyses to
participants and beneficiaries = $367.4 million.
\265\ The cost is estimated as follows: $117.6 million for
preparing the comparative analyses + $10.5 million for preparing the
comparative analyses upon request to participants and beneficiaries
+ $1.6 million to distribute the comparative analyses to
participants and beneficiaries = $129.6 million.
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HHS assumes that most of the self-funded, non-Federal governmental
plans that would be affected by the implementation of the CAA, 2023
provision that sunsets the MHPAEA opt-out election currently offer
mental health and substance use disorder benefits, but that many of
these plans might not be complying with MHPAEA. These plans would incur
costs to come into compliance. In particular, some plans might have to
remove limits on or offer more generous mental health and substance use
disorder benefits, which would likely increase utilization of mental
health and substance use disorder services, increasing the number of
claims submitted, and the overall costs incurred by these plans. Plans
that have opted out of requirements under MHPAEA would also need to
conduct NQTL comparative analyses if they are not already doing so. HHS
is unable to estimate the potential costs to these plans because the
extent to which these plans are currently out of compliance is unknown,
and costs associated with coming into compliance would vary from plan
to plan. HHS seeks comments on the potential costs to these plans to
come into compliance with MHPAEA.
HHS estimates that the implementation of the CAA, 2023 provision
that sunsets the MHPAEA opt-out election would generate a total cost
savings of approximately $11,351 for plans (as discussed in section 2.2
of this RIA), as these plans would no longer be required to submit an
opt-out notice to the Federal Government or prepare and disseminate an
opt-out notice to plan participants regarding the plan's opt-out
election, as long as the plans do not elect to permissibly opt-out of
other requirements. This proposed provision would also generate cost
savings of approximately $2,469 for the Federal Government, as
discussed in section 2.2 of this RIA, as HHS would no longer have to
process the opt-out notices submitted by several of these plans.
1.8. Transfers
Improving parity in coverage of mental health and substance use
disorder benefits has the potential to increase premiums, change the
spending patterns of plans and issuers, and change the utilization
patterns of participants, beneficiaries, and enrollees. The Departments
recognize these as transfers among participants, beneficiaries, and
enrollees, plans and issuers, and mental health and substance use
disorder providers and facilities. Specifically, the Departments expect
these proposed rules would result in: (1) transfers from plans and
issuers to participants, beneficiaries, and enrollees caused by lower
out-of-pocket spending; (2) transfers from participants, beneficiaries,
and enrollees to plans and issuers caused by higher premiums; and (3)
transfers between primary care providers and mental health providers
for the treatment of mental health and substance use disorders
resulting from the anticipated shift of participants, beneficiaries,
and enrollees choosing to obtain treatment from a specialist instead of
a primary care provider. The Departments request comment or data on how
large these transfers might be.
1.8.1. Transfers From Plans and Issuers to Participants, Beneficiaries,
and Enrollees Caused by Lower Out-of-Pocket Spending
These proposed rules could result in a transfer from plans and
issuers to participants, beneficiaries, and enrollees through lower
out-of-pocket spending for mental health and substance use disorder
services. For example, a 2013 study examined the impact of the 2001
parity directive in the Federal Employees Health Benefits (FEHB)
Program and found that the annual out-
[[Page 51610]]
of-pocket spending for FEHB enrollees diagnosed with bipolar disorder,
major depression, or adjustment disorder decreased by between $78 and
$86.\266\ Furthermore, a 2018 study compared commercially-insured
children ages 3 to 18 years in 2008 who were continuously enrolled in
plans newly subject to parity under MHPAEA to children continuously
enrolled in plans never subject to MHPAEA. The 2018 study found that
children with mental health conditions who were enrolled in plans
subject to parity had, on average, $140 lower annual out-of-pocket
mental health spending than expected compared to the comparison group.
The study further found that children in or above the 85th percentile
in total mental health spending who were enrolled in plans subject to
MHPAEA had, on average, $234 lower annual out-of-pocket mental health
spending than those in the comparison group.\267\ Finally, a 2019 study
examined the impact of MHPAEA on mental health services spending in a
commercially-insured population diagnosed with mental health disorders
and found that MHPAEA resulted in a decrease in the mean out-of-pocket
spending per mental health outpatient visit.\268\
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\266\ Busch, Alisa B., Frank Yoon, Colleen L. Barry, Vanessa
Azzone, Sharon-Lise T. Normand, Howard H. Goldman, and Haiden A.
Huskamp. ``The Effects of Parity on Mental Health and Substance Use
Disorder Spending and Utilization: Does Diagnosis Matter?'' The
American Journal of Psychiatry 170, no. 2 (2013): 180.
\267\ Kennedy-Hendricks, Alene, Andrew J. Epstein, Elizabeth A.
Stuart, Rebecca L. Haffajee, Emma E. McGinty, Alisa B. Busch, Haiden
A. Huskamp, and Colleen L. Barry. ``Federal Parity and Spending for
Mental Illness.'' Pediatrics 142, no. 2 (2018).
\268\ Haffajee, Rebecca L., Michelle M. Mello, Fang Zhang, Alisa
B. Busch, Alan M. Zaslavsky, and J. Frank Wharam. ``Association Of
Federal Mental Health Parity Legislation with Health Care Use and
Spending Among High Utilizers of Service.'' Medical Care 57, no. 4
(2019): 245.
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1.8.2. Transfers From Participants, Beneficiaries, and Enrollees to
Plans and Issuers Caused by Higher Premiums
These proposed rules might also result in a transfer from
participants, beneficiaries, and enrollees to plans and issuers in the
form of higher premiums. By limiting the ability of plans and issuers
to avoid costs of certain mental health and substance use disorder
treatments, while increasing access to and utilization of these
services, plans and issuers might increase premiums and change cost-
sharing requirements (for example, by raising deductibles) to offset
these costs. Similarly, by incorporating the statutory requirement that
NQTLs be no more restrictive for mental health and substance use
disorder benefits than for medical/surgical benefits, plans and issuers
might reduce the number of NQTLs employed and increase premiums in
order to offset the costs of participants utilizing more mental health
and substance disorder benefits.
Many studies attempt to isolate the changes in health costs
associated with implementing parity. For example, in 2007 the
Congressional Budget Office estimated that MHPAEA would increase
premiums for group health insurance by 0.4 percent on average.\269\
Another study by the Society of Actuaries on mental health parity found
in 2005 that, ``overall health care costs increased minimally and in
some cases were even reduced.'' \270\ The Departments anticipate that
these proposed rules would have a minimal impact on premiums, but there
may be instances in which plans and issuers may impose higher premiums.
The Departments request comments or data on this transfer.
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\269\ Congressional Budget Office. Congressional Budget Office
Cost Estimate: S558. March 20, 2007. https://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/78xx/doc7894/s558.pdf.
\270\ Melek, Steve. ``The Cost of Mental Health Parity.'' Health
Section News. Issue 49. (2005) As presented to the Society of
Actuaries. https://www.soa.org/globalassets/assets/library/newsletters/health-section-news/2005/march/hsn-2005-iss49-melek-b.pdf.
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1.8.3. Transfers Between Primary Care Providers and Mental Health
Providers
Finally, these proposed rules may result in a transfer from primary
care providers to mental health and substance use disorder providers.
More specifically, patients may be more likely to visit a mental health
or substance use disorder specialist compared to a primary care
provider, as these proposed rules clarify the manner in which plans and
issuers must provide parity in coverage for mental health and substance
use disorder benefits and medical/surgical benefits. A 2012 study that
examined the impact of Oregon's 2007 parity law on the choice of
provider found that the law was associated with a slight increase in
the likelihood of patients seeking care with masters-level specialists,
and relatively little change for generalist physicians, psychiatrists,
and psychologists. The findings suggest that these proposed rules may
lead to a slight shift in the use of nonphysician specialists,
including masters-level specialists, and away from generalist
physicians.\271\
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\271\ McConnell, K. John, Samuel HN Gast, and Bentson H.
McFarland. ``The Effect of Comprehensive Behavioral Health Parity on
Choice of Provider.'' Medical Care 50, no. 6 (2012): 527.
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1.8.4. Transfers Associated With the Implementation of the CAA, 2023
Provision That Sunsets the MHPAEA Opt-Out Election for Self-Funded,
Non-Federal Governmental Plans
HHS anticipates that the proposed amendments to implement the CAA,
2023 provision that sunsets the MHPAEA opt-out election for self-
funded, non-Federal governmental plans would have similar effects as
the other provisions examined in this subsection of the RIA. These
proposed amendments might lead to improved coverage of and lower cost-
sharing requirements for mental health and substance use disorder
benefits for participants and beneficiaries of self-funded, non-Federal
governmental plans. This would lead to lower out-of-pocket costs for
plan participants and beneficiaries who receive mental health or
substance use disorder services. This would be viewed as a transfer
from self-funded, non-Federal governmental plans to participants and
beneficiaries.
On the other hand, as noted in section 1.7 of this RIA, if the
proposed amendments cause plans to remove limits on or offer more
generous mental health and substance use disorder benefits, utilization
of mental health and substance use disorder services might increase,
which may result in the number of claims submitted and the overall
costs incurred by plans to also increase. This, in turn, might lead to
higher premiums and/or deductibles for plan participants, which may
seem to be a transfer from plan participants to self-funded, non-
Federal governmental plans, but is instead an indication of who bears
the societal cost presented in section 1.7.
1.9. Uncertainty
It is unclear what percentage of participants, beneficiaries, and
enrollees experience more restrictive NQTLs and more stringent
practices related to the design and implementation of mental health and
substance use disorder benefits, as compared to medical/surgical
benefits. Similarly, it is unclear what percentage of plans and issuers
impose greater limitations on mental health and substance use disorder
benefits than on medical/surgical benefits. This frequency may differ
among small and large plans and issuers. Examining some plans'
comparative analyses shows that they are not in full compliance with
MHPAEA's requirements for NQTL's although the extent across all plans
is not known. As documented in the 2022 MHPAEA Report to Congress, DOL
completed a compliance review of 48
[[Page 51611]]
NQTLs (36 unique NQTLs), corresponding to 30 plans and issuers as of
October 31, 2021. All of these reviews resulted in an initial
determination of noncompliance with MHPAEA.\272\
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\272\ 2022 MHPAEA Report to Congress, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.
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While the Departments expect that these proposed rules would result
in plans and issuers expanding coverage of mental health and substance
use benefits, it is possible that instead of relaxing the use of NQTLs
on mental health and substance use disorder benefits, some plans and
issuers may impose additional NQTLs on medical/surgical benefits. As a
result, some types of medical/surgical benefits may become less
accessible for some participants, beneficiaries, and enrollees, which
could lead to an increase in out-of-pocket costs.
There is also a possibility that some plans and issuers would stop
offering mental health and substance use disorder benefits. In 2010, 2
percent of employers reported discontinuing their coverage of mental
health and substance use disorder treatments.\273\ Nevertheless, as
discussed in section 1.6 of this RIA, the Departments anticipate that
these proposed rules would expand the level of coverage for mental
health and substance use disorder benefits, which would result in
reduced out-of-pocket spending for plan participants, beneficiaries,
and enrollees. The Departments face uncertainty in estimating the
magnitude of savings and welcome any comments and data that can help
estimate the amount of decrease in out-of-pocket spending. The
Departments also invite comments and data related to other issues
identified in this section.
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\273\ Government Accountability Office. ``Mental Health and
Substance Use: Employers' Insurance Coverage Maintained or Enhanced
Since Parity Act, but Effect of Coverage on Enrollees Varied,'' GAO-
12-63, November 2011.
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Further, there may be some possible societal spillover effects
which may occur as a result of these proposed rules. For example,
increasing access to mental health and substance use disorder services
may improve public safety in the long-term. A 2017 study on whether
State parity laws for substance use disorder treatments was associated
with reduced fatal traffic accidents found that passage of State parity
laws was associated with reduced annual total traffic fatality rates by
4.1 to 5.4 percent.\274\ In addition, a 2021 study which examined the
impact of State parity laws on crime between 1994 and 2010 found that
the passage of State parity laws was associated with a reduction of
violent crimes by 5 to 7 percent and that the resulting lower crime
rates were associated with an annual savings of $3 billion.\275\ These
studies may suggest that the benefits of these proposed rules may go
beyond the listed benefits discussed in this RIA.
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\274\ Popovici, Ioana, Johanna Catherine Maclean, and Michael T.
French (2017). ``The Effects of Health Insurance Parity Laws for
Substance Use Disorder Treatment on Traffic Fatalities: Evidence of
Unintended Benefits.'' National Bureau of Economic Research. https://www.nber.org/system/files/working_papers/w23388/revisions/w23388.rev0.pdf?sy=388.
\275\ Sharma, Keshob. ``Do Mental Health Parity Laws Reduce
Crime?'' (2021).
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HHS is unable to precisely forecast how many participants and
beneficiaries would be affected by the proposed amendments to implement
the CAA, 2023 provision that sunsets the MHPAEA opt-out election for
self-funded, non-Federal governmental plans, as plan sponsors that have
elected to opt out of requirements under MHPAEA were not required to
report that information to HHS as part of their HIPAA opt-out filings.
It is possible that some self-funded, non-Federal governmental
plans would stop offering mental health and substance use disorder
benefits in response to the proposed amendments. However, HHS is unable
to estimate the potential number of self-funded, non-Federal
governmental plans that might do so. It is also possible that some
self-funded, non-Federal governmental plans might increase the
financial requirements and treatment limitations that apply to medical/
surgical benefits in response to this proposed provision, to ensure
that these financial requirements and treatment limitations are
comparable to those for mental health and substance use disorder
benefits. HHS anticipates that this is a less likely outcome of these
proposed amendments.
HHS seeks comments on the potential number of self-funded, non-
Federal governmental plans that might stop offering mental health and
substance use disorder benefits, as well as the potential number of
self-funded, non-Federal governmental plans that might increase
financial requirements and treatment limitations for medical/surgical
benefits in response to the proposed amendments. HHS also seeks
comments on the potential number of participants and beneficiaries that
might be affected by these potential plan changes.
1.10. Alternatives
In addition to the regulatory approach outlined in these proposed
rules, the Departments considered alternatives when developing policy
regarding the implementation of MHPAEA. The Departments considered not
expressly incorporating the statutory requirement that NQTLs be no more
restrictive for mental health and substance use disorder benefits than
for medical/surgical benefits. However, as described in section I.E of
this preamble, it is clear that plans and issuers too often fail to
consider the impact of their NQTLs on access to mental health and
substance use disorder benefits, consistent with MHPAEA's fundamental
purpose. While the Departments have seen some promising results in
response to their reviews of plans' and issuers' comparative analyses
under the CAA, 2021's requirements, they have also seen a great deal of
confusion about the application of the current regulation to NQTLs and
about the parity obligation generally. Based on the Departments'
experience with plans' and issuers' attempts to comply with the
existing regulations and guidance and the CAA, 2021, they have
concluded that the existing MHPAEA regulations failed to sufficiently
focus attention on the obligation to ensure that NQTLs, and associated
processes, strategies, factors, and evidentiary standards, avoid
placing disparate burdens on participants', beneficiaries', and
enrollees' access to covered mental health and substance use disorder
treatment. Accordingly, the Departments believe that the proposed
amendments would be beneficial to participants, beneficiaries, and
enrollees, as plans and issuers revise their policies and remove or
amend NQTLs that are inconsistent with MHPAEA.
The Departments also considered not requiring plans and issuers to
use specific data elements in preparing their comparative analyses or
to provide the data to the Departments upon request. However, during
their review of comparative analyses as part of their reporting
requirements to Congress, the Departments found that many plans and
issuers did not initially provide sufficient information to demonstrate
compliance of an NQTL either by design, application, or both. It is
often difficult, to assess compliance in operation without such data.
By requiring the consideration, use, and production of this data, the
regulation should result in improved review of plans' and issuers'
policies and processes, and improved parity
[[Page 51612]]
outcomes for participants, beneficiaries, and enrollees.
1.11. Conclusion
The Departments expect that these proposed rules, if finalized,
would provide plans and issuers with a better understanding of the
requirements of MHPAEA and improve how they measure, analyze, document,
and demonstrate parity with regard to NQTLs. The Departments are of the
view that these proposed rules and corresponding associated Technical
Release, if finalized, would help plans and issuers produce NQTL
comparative analyses that meet the requirements of the CAA, 2021,
resulting in improved access to and coverage of mental health and
substance use disorder treatments, which should ultimately result in
better mental health outcomes.
2. Paperwork Reduction Act
2.1. Paperwork Reduction Act--Departments of Labor and the Treasury
As part of their continuing effort to reduce paperwork and
respondent burden, the Departments conduct a preclearance consultation
program to allow the general public and Federal agencies to comment on
proposed and continuing collections of information in accordance with
the Paperwork Reduction Act of 1995 (PRA).\276\ This helps to ensure
that the public understands the Departments' collection instructions,
respondents can provide the requested data in the desired format,
reporting burden (time and financial resources) is minimized,
collection instruments are clearly understood, and the Departments can
properly assess the impact of collection requirements on respondents.
---------------------------------------------------------------------------
\276\ 44 U.S.C. 3506(c)(2)(A) (1995).
---------------------------------------------------------------------------
Currently, the Departments are soliciting comments concerning the
proposed information collection request (ICR) included in the MHPAEA
Notices. To obtain a copy of the ICR, contact the PRA addressee shown
below or go to https://www.RegInfo.gov.
The Departments have submitted a copy of these proposed rules to
OMB in accordance with 44 U.S.C. 3507(d) for review of its information
collections. The Departments and OMB are particularly interested in
comments that:
Evaluate whether the collection of information is
necessary for the functions of the agency, including whether the
information will have practical utility;
Evaluate the accuracy of the agency's estimate of the
burden of the collection of information, including the validity of the
methodology and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology (for example,
permitting electronically delivered responses).
Commenters may send their views on the Department's PRA analysis in
the same way they send comments in response to these proposed rules
(for example, through the www.regulations.gov website), including as
part of a comment responding to the broader NPRM.
PRA Addressee: Address requests for copies of the ICR to James
Butikofer, Office of Research and Analysis, U.S. Department of Labor,
Employee Benefits Security Administration, 200 Constitution Avenue NW,
Room N-5718, Washington, DC 20210; [email protected] (https://www.reginfo.gov/public/do/PRAMain).
Readers should note that the PRA requires a non-incremental
analysis of information collections, and hence the overall summary of
the paperwork burden estimates in this section includes the entire on-
going burden imposed by information collections required by MHPAEA, the
CAA, and subsequent guidance. The incremental hour and cost burdens of
these proposed rules are discussed in detail below. For a full
discussion of all burden related to this information collection please
see the supporting statement which is part of the ICR available at
https://www.reginfo.gov/public/do/PRAMain.
2.1.1. Amendment to Existing MHPAEA Regulations (29 CFR 2590.712; 26
CFR 54.9812-1)
The proposed amendments to the existing MHPAEA regulations would
add new definitions, amend existing definitions, specify new
requirements related to NQTLs, amend existing examples of NQTLs, and
add new examples of NQTLs, providing clarity to interested parties. The
proposed amendments would also specify that mental health and substance
use disorder definitions must be consistent with generally recognized
independent standards of current medical practice and would add more
specificity as to what conditions or disorders plans and issuers would
be required to treat as mental health and substance use conditions or
disorders.
2.1.2. New Regulation (29 CFR 2590.712-1; 26 CFR 54.9812-2)
These proposed rules set more specific content and data
requirements for the NQTL comparative analyses required by MHPAEA as
amended by the CAA, 2021, clarify when the comparative analyses need to
be performed, and outline the timeframes and process for plans and
issuers to provide their comparative analyses to the Departments or
applicable State authority upon request. These proposed rules would
also require plans and issuers to collect and evaluate relevant data as
part of each comparative analysis, including but not limited to claims
denials, data relevant to NQTLs as required by State law or private
accreditation standards, utilization rates, network adequacy metrics,
and provider reimbursement rates, in fulfillment of the existing
requirement that they evaluate and document their evaluation as part of
the analysis of the application of NQTLs related to network composition
and provider reimbursement.
For the purpose of this analysis, it is assumed that health
insurance issuers would fulfill the data request for fully insured
group health plans. This burden is accounted for under HHS' OMB Control
number 0938-1393 and is discussed later in this document. It is also
assumed that TPAs and other service providers would fulfill the
requirements for the vast majority of self-insured group health plans.
2.1.3. Burden Estimates for Both Existing Requirements and Proposed
Requirements
The Departments estimate that there are approximately 250,000 ERISA
self-insured group health plans with 50 or more participants that are
affected by these proposed rules.\277\ The Departments believe that the
number of self-insured group health plans that actually perform the
analysis themselves and incur the full estimated compliance costs may
be much smaller. The Departments analyzed 2020 Form 5500 Schedule C
(Service Provider
[[Page 51613]]
Information) filings of self-insured health plans and determined that
89 percent of those plans indicated that they contracted with a
TPA.\278\ Self-insured group health plans could fulfill the
requirements with the help of TPAs and other service providers.
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\277\ MHPAEA only applies to ERISA plans in the group market
with 50 or more participants that offer mental health or substance
use disorder (MH/SUD) benefits. The Departments have not identified
what share of plans with 50 or more participants offer MH/SUD
benefits and has therefore assumed that all of these plans offer
them. Based on the 2021 Medical Expenditure Survey, 61 percent of
ERISA-covered group health plans with 50 or more participants are
self-insuring. Thus, the Department calculates the number of ERISA
self-insured group health plans with 50 or more participants based
on the following manner: 409,822 ERISA group health plans with 50 or
more participants x 61% = 249,991.
\278\ Because many plans are exempt from filing a Form 5500, the
Department only identified 37,934 self-insured health plan filings
for 2020. Of these, only 5,537 plans (or roughly 15 percent)
attached a Schedule C. Of those plans, 4,920 (or roughly 89 percent)
indicated they paid compensation, either directly or indirectly, of
at least $5,000 for either claims processing, contract
administration, or both.
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To the extent self-insured plans use plan designs provided by TPAs
or service providers responsible for nearly identical fully insured
plans, those TPAs or service providers could utilize the analysis
already performed for those fully insured plans, while helping these
self-insured plans comply with the requirements. The Departments assume
that most self-insured health plans would utilize service providers to
perform the analysis and that only 11 percent \279\ (27,499) of the
affected self-insured group health plans, primarily the largest, would
need to conduct the analyses themselves for their plan specific
design.\280\ The Departments request comments on the percent of self-
insured group health plans that would rely on analyses that TPAs and
other service providers have already performed for their other plans,
thus reducing estimated burden on plans.
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\279\ Based on the 2020 Form 5500, 89 percent of self-insured
plans filed a Schedule C and indicated using either a Claims
Processor, Contract Administrator, or both.
\280\ The Departments assume only large plans, defined as a plan
with 50 or more participants would self-administer. 249,991 self-
funded ERISA plans with 50 or more participants x 11 percent of
plans that self-administer = 27,499.
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The Departments expect that even these numbers may overestimate the
number of self-insured plans that would perform the analysis
themselves, without assistance from TPAs or service providers. For
example, in DOL's review of comparative analyses, which has focused on
self-funded plans, the reliance on insurance companies, TPAs, and other
service providers for much or all of the work has been nearly
universal. As noted above, this is not surprising because of the
outsized role insurance companies, TPAs and other service providers
tend to play in designing the plans, administering the networks,
managing claims, providing plan services, maintaining and holding the
data relevant to the comparative analyses, and driving MHPAEA
compliance or noncompliance.
Non-grandfathered, fully insured ERISA plans with less than 50
participants that are subject to MHPAEA under the Essential Health
Benefits (EHB) requirements of the Affordable Care Act are likely to
have their issuers prepare their comparative analyses. Issuers can take
advantage of economies of scale by preparing the required documents for
those plans purchasing coverage. HHS has jurisdiction over issuers and
therefore is accounting for this portion of the burden in their
analysis, in addition to the burden related to non-Federal governmental
plans. Accordingly, this analysis considers only the burden associated
with ERISA self-insured group health plans, which are under the
jurisdiction of the DOL and Treasury.
These proposed rules require that group health plans offering group
health insurance coverage must make a comparative analysis available
upon request by DOL. The CAA, 2021 requires DOL to collect no fewer
than 20 comparative analyses per year, but it also provides that DOL
shall request that a group health plan or issuer submit the comparative
analyses for plans that involve potential MHPAEA violations or
complaints regarding noncompliance with MHPAEA that concern NQTLs, and
any other instances in which the DOL determines appropriate. Based on
its prior experience and current funding, DOL expects to request 100
comparative analyses each year.\281\ To provide DOL with their
comparative analyses and associated documentation, DOL estimates, based
on internal discussion, it would take a total of five hours for plans,
with one hour for a general or operations manager and four hours for a
business operations specialist. This would result in a total hour
burden of 500 hours with an equivalent cost burden of $57,222 in each
year.\282\
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\281\ It should be emphasized, however, that DOL currently
relies on supplemental appropriations passed as part of CAA, 2021,
to fund these enforcement efforts. The supplemental appropriations
are currently scheduled to expire at the end of FY 2024 with the
consequence that DOL would lose funds for between a quarter and a
third of its enforcement program and EBSA would have to
commensurately reduce its staff size by approximately 120 full-time
employees (FTEs). As a result, its MHPAEA enforcement efforts would
necessarily decline, and the estimates of associated expenses would
correspondingly decline.
\282\ The burden is calculated as follows: (100 ERISA self-
insured group health plans x 1 hour for a general or operations
manager) + (100 ERISA self-insured group health plans x 4 hours for
a business operations specialist) = 500 hours. A labor rate of
$132.38 is used for a general or operations manager and a labor rate
of $109.96 is used for a business operations specialist. The labor
rate is applied in the calculation as: (100 ERISA self-insured group
health plans x 1 hour for a general or operations manager x $132.38)
+ (100 ERISA self-insured group health plans x 4 hours for a
business operations specialist x $109.96) = $57,222
---------------------------------------------------------------------------
These proposed rules require that a plan or issuer document the
action that has been or is being taken by the plan or issuer to
mitigate any material differences in access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits, as required in the demonstration of comparability and
stringency in operation requirement in Sec. 2590.712-1(c)(5)(iv) of
these proposed rules. To meet the format, content, data, and
documentation requirements for the comparative analysis, DOL expects
that plans preparing their own comparative analyses would on average
annually perform four NQTL analyses across benefit classifications,
based on DOL's experience in reviewing comparative analyses, and
assumes that each NQTL analysis would require 20 hours in the first
year, with 4 hours for a general or operations manager and 16 hours for
a business operations specialist.\283\ In the first year, this results
in a total hour burden of 2,199,921 hours with an equivalent cost
burden of $251,767,736.\284\ Once the comparative analyses are
performed or documented, plans would need to update the analyses when
making changes to the terms of the plan or coverage, including changes
to the way NQTLs are applied to mental health and substance use
disorder benefits. In subsequent years,
[[Page 51614]]
DOL estimates it would take a total of 10 hours annually per NQTL to
update the analyses, with 2 hours for a general or operations manager
and 8 hours for a business operations specialist. In subsequent years,
this results in a total hour burden of 1,099,960 hours with an
equivalent cost burden of $125,883,822.\285\
---------------------------------------------------------------------------
\283\ The estimated hour burden is consistent with the hour
burden estimated in the previous PRA supporting statement for 1210-
0138. In the PRA supporting statement, the Departments estimated
that it would take a total of 20 hours for plans to update each
comparative analysis as required by the CAA, 2021 (https://omb.report/icr/202108-1210-015/doc/114767500). This estimate differs
by accounting for plans needing to evaluate multiple NQTLs.
\284\ The burden is calculated as follows: (27,499 ERISA self-
insured group health plans x 4 NQTLs x 4 hours for a general or
operations manager) + (27,499 ERISA self-insured group health plans
x 4 NQTLs x 16 hours for a business operations specialist) =
2,199,921 hours. A labor rate of $132.38 is used for a general or
operations manager and a labor rate of $109.96 is used for a
business operations specialist. The labor rate is applied in the
calculation as: (27,499 ERISA self-insured group health plans x 4
NQTLs x 4 hours for a general or operations manager x $132.38) +
(27,499 ERISA self-insured group health plans x 4 NQTLs x 16 hours
for a business operations specialist x $109.96) = $251,767,736. DOL
estimates of labor costs by occupation reflect estimates of total
compensation and overhead costs. Estimates for total compensation
are based on mean hourly wages by occupation from the 2021
Occupational Employment Statistics and estimates of wages and
salaries as a percentage of total compensation by occupation from
the December 2021 National Compensation Survey's Employee Cost for
Employee Compensation. Estimates for overhead costs for services are
imputed from the 2020 Service Annual Survey. To obtain overhead cost
on an occupational basis, the estimate allocates total industry
overhead cost to unique occupations using a matrix of detailed
occupational employment for each NAICS industry. All values are in
2023 dollars.
\285\ The burden is calculated as follows: (27,499 ERISA self-
insured group health plans x 4 NQTLs x 2 hours for a general or
operations manager) + (27,499 ERISA self-insured group health plans
x 4 NQTLs x 8 hours for a business operations specialist) =
1,099,960 hours. A labor rate of $132.38 is used for a general or
operations manager and a labor rate of $109.96 is used for a
business operations specialist. The labor rate is applied in the
calculation as: (27,499 ERISA self-insured group health plans x 4
NQTLs x 2 hours for a general or operations manager x $132.38) +
(27,499 ERISA self-insured group health plans x 4 NQTLs x 8 hours
for a business operations specialist x $109.96) = $125,883,822.
---------------------------------------------------------------------------
These proposed rules would also require plans and issuers to make
the comparative analyses and other applicable information required by
the CAA, 2021 available upon request to participants and beneficiaries
in plans subject to ERISA and to participants, beneficiaries, and
enrollees in all non-grandfathered group health plans and non-
grandfathered group or individual health insurance coverage upon
request in connection with an appeal of an adverse benefit
determination. The Departments estimate that each plan would l receive
one request per covered health plan annually and that plans would
annually incur a burden of five minutes for a clerical worker to
prepare and send the comparative analyses to each requesting
participant or beneficiary. This results in an hour burden of 158,192
hours with an equivalent cost of $10,037,282.\286\ DOL also assumes
that 58.2 percent of requests would be delivered electronically,
resulting in a de minimis cost.\287\ The remaining 41.8 percent of
requests would be mailed, the cost of postage for a 3-ounce letter is
$1.14. The annual cost burden to mail the comparative analyses to the
participants and beneficiaries is $1,499,693.\288\
---------------------------------------------------------------------------
\286\ The hour burden is estimated as: (1,488,476 fully-insured,
non-grandfathered plans with less than 50 participants + 409,822
ERISA-covered group health plans with 50 or more participants) x 5
minutes = 158,192 hours. A labor rate of $63.45 is used for a
clerical worker. The labor rate is applied in the calculation as:
(1,488,476 fully-insured, non-grandfathered plans with less than 50
participants + 409,822 ERISA-covered group health plans with 50 or
more participants) x 5 minutes x $63.45 = $10,037,282.
\287\ According to data from the National Telecommunications and
Information Agency (NTIA), 40.0 percent of individuals age 25 and
over have access to the internet at work. According to a Greenwald &
Associates survey, 84 percent of plan participants find it
acceptable to make electronic delivery the default option, which is
used as the proxy for the number of participants who will not opt
out of electronic disclosure that are automatically enrolled (for a
total of 33.6 percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 40.4 percent of individuals age
25 and over have access to the internet outside of work. According
to a Pew Research Center survey, 61.0 percent of internet users use
online banking, which is used as the proxy for the number of
internet users who will affirmatively consent to receiving
electronic disclosures (for a total of 24.7 percent receiving
electronic disclosure outside of work). Combining the 33.6 percent
who receive electronic disclosure at work with the 24.7 percent who
receive electronic disclosure outside of work produces a total of
58.2 percent who will receive electronic disclosure overall.
\288\ The Departments assume one request per entity and that
each mailed response will cost $1.89 in materials and postage, on
average. The mailing and postage cost assume $.05 per printed page,
an average document length of 15 pages and $1.14 in postage for a 3-
ounce parcel. Therefore, the cost burden is calculated as follows:
(1,488,476 fully-insured, non-grandfathered plans with less than 50
participants + 409,822 ERISA-covered group health plans with 50 or
more participants) x 41.8% x ($1.14 + (15 pages x $0.05)) =
$1,499,693.
---------------------------------------------------------------------------
2.1.4. Recordkeeping Requirement
The Departments posit that plans and issuers already maintain
records as part of their regular business practices. Further, ERISA
section 107 includes a general six-year retention requirement. For
these reasons the Departments estimate a minimal additional burden. The
Departments estimate that, on average, any additional recordkeeping
requirements would take clerical personnel five minutes annually. This
results in an hour burden of 158,192 hours with an equivalent cost of
$10,037,282.\289\
---------------------------------------------------------------------------
\289\ The hour burden is estimated as: (1,488,476 fully-insured,
non-grandfathered plans with less than 50 participants + 409,822
ERISA-covered group health plans with 50 or more participants) x 5
minutes = 158,192 hours. A labor rate of $63.45 is used for a
clerical worker. The labor rate is applied in the calculation as:
(1,488,476 fully-insured, non-grandfathered plans with less than 50
participants + 409,822 ERISA-covered group health plans with 50 or
more participants) x 5 minutes x $63.45 = $10,037,282.
---------------------------------------------------------------------------
2.1.5. Overall Summary
In summary, the total burden, including that associated with prior
requirements and by these proposed rules, has a three-year average hour
burden of 1,883,110 hours with an equivalent cost of 205,897,135 and a
cost burden of $2,182,094.
A summary of paperwork burden estimates follows:
Type of Review: Revision.
Agency: Employee Benefits Security Administration, U.S. Department
of Labor; Internal Revenue Service, U.S. Department of the Treasury.
Title: MHPAEA Notices.
OMB Control Number: 1210-0138.
Affected Public: Businesses or other for-profits, Not-for-profit
institutions.
Estimated Number of Respondents: 2,646,306.
Estimated Number of Annual Responses: 2,646,306.
Frequency of Response: Annual.
Estimated Total Annual Burden Hours: 1,883,110 (941,555 for DOL,
941,555 for Treasury).
Estimated Total Annual Burden Cost: $2,182,094 ($1,091,047 for DOL,
$1,091,047 for Treasury).
2.2. Paperwork Reduction Act--Department of HHS
As part of its continuing effort to reduce paperwork and respondent
burden, HHS conducts a preclearance consultation program to allow the
general public and Federal agencies to comment on proposed and
continuing collections of information in accordance with the Paperwork
Reduction Act of 1995 (PRA).\290\ This helps to ensure that the public
understands HHS's collection instructions, respondents can provide the
requested data in the desired format, reporting burden (time and
financial resources) is minimized, collection instruments are clearly
understood, and HHS can properly assess the impact of collection
requirements on respondents.
---------------------------------------------------------------------------
\290\ 44 U.S.C. 3506(c)(2)(A) (1995).
---------------------------------------------------------------------------
Currently, HHS is soliciting comments concerning the proposed
(revised) information collection request (ICR) included in the Non-
Quantitative Treatment Limitation Analyses and Compliance Under MHPAEA
and the proposed (revised) ICR included in the Compliance with
Individual and Group Market Reforms under title XXVII of the Public
Health Service Act. To obtain a copy of either ICR, contact the PRA
addressee shown below or go to https://www.RegInfo.gov.
HHS has submitted a copy of these proposed rules to OMB in
accordance with 44 U.S.C. 3507(d) for review of its information
collections. HHS and OMB are particularly interested in comments that:
Evaluate whether the collection of information is
necessary for the functions of the agency, including whether the
information will have practical utility;
Evaluate the accuracy of the agency's estimate of the
burden of the collection of information, including the validity of the
methodology and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated,
[[Page 51615]]
electronic, mechanical, or other technological collection techniques or
other forms of information technology (e.g., permitting electronically
delivered responses).
Commenters may send their views on HHS PRA analysis in the same way
they send comments in response to the NPRM as a whole (e.g., through
the www.regulations.gov website), including as part of a comment
responding to the broader NPRM.
To obtain copies of the supporting statement and any related forms
for the proposed collections, please visit CMS's website at https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.
2.2.1. Amendments to Existing MHPAEA Regulations (45 CFR 146.136)
The proposed amendments to the existing MHPAEA regulations would
add new definitions, amend existing definitions, clarify the rules for
NQTLs, amend existing examples of NQTLs, and add new examples of NQTLs,
providing clarity to the regulated community. The proposed amendments
would also clarify that mental health and substance use disorder
definitions must be consistent with generally recognized standards of
care and would add more specificity as to what conditions or disorders
plans and issuers would be required to treat as mental health
conditions and substance use disorders.
2.2.2. New Regulations (45 CFR 146.137)
These proposed rules set forth content and data requirements for
the NQTL comparative analyses required by MHPAEA as amended by the CAA,
2021, clarify when the comparative analyses need to be performed, and
outline the timeframes and process for plans and issuers to provide
their comparative analyses to the Departments or an applicable State
authority upon request. These proposed rules would also require plans
and issuers to collect and evaluate relevant data as part of each
comparative analysis, including but not limited to claims denials, data
relevant to NQTLs as required by State law or private accreditation
standards, utilization rates, network adequacy metrics, and provider
reimbursement rates, in fulfillment of the existing requirement that
they evaluate and document their evaluation as part of the analysis of
the application of NQTLs related to network composition and provider
reimbursement. As discussed above, HHS enforces applicable provisions
of Title XXVII of the PHS Act, including the provisions added by
MHPAEA, with respect to health insurance issuers offering group and
individual health insurance coverage in States that elect not to
enforce or fail to substantially enforce MHPAEA or another PHS Act
provision and therefore HHS is accounting for this portion of the
burden in their analysis, in addition to accounting for the burden on
sponsors of non-Federal governmental plans.
2.2.3. Burden Estimates for Both Existing Requirements and Proposed
Requirements
Issuers offering individual or group health insurance coverage
usually have multiple products offered in multiple States. HHS
estimates a total of 476 issuers offering individual and group health
coverage nationwide, with 1,500 issuer/State combinations offering
coverage in multiple States.
These proposed rules require that health insurance issuers offering
group health insurance coverage make their comparative analyses
available upon request by HHS. The CAA, 2021 requires HHS to collect
not fewer than 20 comparative analyses per year, but it also provides
that HHS shall request that a group health plan or issuer submit the
comparative analyses for plans that involve potential MHPAEA violations
or complaints regarding noncompliance with MHPAEA that concern NQTLs,
and any other instances in which HHS determines appropriate. Thus, HHS
expects to request at least 20 comparative analyses each year. HHS
estimates that to provide the comparative analyses and associated
documentation, it would take a total of 5 hours for each plan or
issuer, with 1 hour for a general or operations manager and 4 hours for
a business operations specialist. This would result in a total hour
burden of 100 hours with an equivalent cost burden of $11,444 in each
year.\291\ HHS seeks comment on the average number of NQTLs for plans
offered by non-Federal governmental plans and issuers.
---------------------------------------------------------------------------
\291\ The burden is calculated as follows: (20 plans and issuers
x 1 hour for a general or operations manager) + (20 plans and
issuers x 4 hours for a business operations specialist) = 100 hours.
A labor rate of $132.38 is used for a general or operations manager
and a labor rate of $109.96 is used for a business operations
specialist. The labor rate is applied in the calculation as: (20
plans and issuers x 1 hour for a general or operations manager x
$132.38) + (20 plans and issuers x 4 hours for a business operations
specialist x $109.96) = $11,444.
---------------------------------------------------------------------------
These proposed rules would require that issuers document the action
that has been or is being taken by the issuer to mitigate any material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits, as required by 45
CFR 146.137(c)(5)(iv). To meet the proposed new content and data, and
documentation requirements for the comparative analyses, HHS expects
that each issuer will on average annually perform 8 NQTL comparative
analyses, based on the Departments' experience in reviewing comparative
analyses, and assumes that each NQTL comparative analysis would require
20 hours in the first year, with 4 hours for a general or operations
manager and 16 hours for a business operations specialist. In the first
year, this would result in a total hour burden of 240,000 hours with an
equivalent cost burden of $27,466,560.\292\ Once the comparative
analyses are performed or documented, issuers would need to update the
analyses when making changes to the terms of the plan or coverage,
including changes to the way NQTLs are applied to mental health and
substance use disorder benefits. In subsequent years, HHS estimates it
would take a total of 10 hours annually to update the analyses, with 2
hours for a general or operations manager and 8 hours for a business
operations specialist. In subsequent years, this would result in a
total hour burden of 120,000 hours with an equivalent cost burden of
$13,733,280.\293\
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\292\ The burden is estimated as follows: (1,500 issuers x 8
NQTLs x 4 hours for a general or operations manager) + (1,500
issuers x 8 NQTLs x 16 hours for a business operations specialist) =
240,000 hours. A labor rate of $132.38 is used for general or
operations manager and a labor rate of $109.96 is used for a
business operations specialist. The labor rates are applied in the
calculation as: (1,500 issuers x 8 NQTLs x 4 hours for a general or
operations manager x $132.38) + (1,500 issuers x 8 NQTLs x 16 hours
for a business operations specialist x $109.96) = $27,466,560.
\293\ The burden is estimated as follows: (1,500 issuers x 8
NQTLs x 2 hours for a general or operations manager) + (1,500
issuers x 8 NQTLs x 8 hours for a business operations specialist) =
120,000 hours. A labor rate of $132.38 is used for general or
operations manager and a labor rate of $109.96 is used for a
business operations specialist. The labor rates are applied in the
calculation as: (1,500 issuers x 8 NQTLs x 2 hours for a general or
operations manager x $132.38) + (1,500 issuers x 8 NQTLs x 2 hours
for a business operations specialist x $109.96) = $13,733,280.
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Sponsors of self-funded, non-Federal governmental plans are
responsible for performing and documenting their NQTL comparative
analyses. HHS estimates that there are 33,076 self-funded, non-Federal
governmental health plans.\294\ To meet the proposed
[[Page 51616]]
new, content, data, and documentation requirements for NQTL comparative
analyses, HHS expects that each plan sponsor would on average annually
perform 4 NQTL analyses and assumes that each NQTL comparative analysis
would require a total of 20 hours in the first year, with 4 hours for a
general or operations manager and 16 hours for a business operations
specialist. In the first year, this would result in a total hour burden
of 2,646,080 hours with an equivalent cost burden of $302,827,980.\295\
Once the comparative analyses are performed or documented, plan
sponsors would need to update the analyses when making changes to the
terms of the plan or coverage, including changes to the way NQTLs are
applied to mental health and substance use disorder benefits. In
subsequent years, HHS estimates it would take a total of 10 hours
annually to update the analyses, 2 hours for a general or operations
manager and 8 hours for a business operations specialist. In subsequent
years, this would result in a total hour burden of 1,323,040 hours with
an equivalent cost burden of approximately $151,413,990.\296\
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\294\ Based on the 2017 Census of Governments, there are 90,126
non-Federal governmental health plans. Based on the 2021 Medical
Expenditure Panel Survey, the Department estimates that 36.7 percent
of non-Federal governmental health plans are self-funded. Thus,
90,126 plans x 36.7 percent = 33,076 self-funded, non-Federal
governmental health plans.
\295\ The burden is estimated as follows: (33,076 self-funded
non-Federal governmental plans x 4 NQTLs x 4 hours for a general or
operations manager) + (33,076 self-funded non-Federal governmental
plans x 4 NQTLs x 16 hours for a business operations specialist) =
2,646,080 hours. A labor rate of $132.38 is used for general or
operations manager and a labor rate of $109.96 is used for a
business operations specialist. The labor rates are applied in the
calculation as: (33,076 self-funded non-Federal governmental plans x
4 NQTLs x 4 hours for a general or operations manager x $132.38) +
(33,076 self-funded non-Federal governmental plans x 4 NQTLs x 16
hours for a business operations specialist x $109.96) =
$302,827,980.
\296\ The burden is estimated as follows: (33,076 self-funded
non-Federal governmental plans x 4 NQTLs x 2 hours for a general or
operations manager) + (33,076 self-funded non-Federal governmental
plans x 4 NQTLs x 8 hours for a business operations specialist) =
1,323,040 hours. A labor rate of $132.38 is used for general or
operations manager and a labor rate of $109.96 is used for a
business operations specialist. The labor rates are applied in the
calculation as: (33,076 self-funded non-Federal governmental plans x
4 NQTLs x 2 hours for a general or operations manager x $132.38) +
(33,076 self-funded non-Federal governmental plans x 4 NQTLs x 8
hours for a business operations specialist x $109.96) =
$151,413,990.
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These proposed rules would also require plans and issuers to make
the comparative analyses and other applicable information required by
the CAA, 2021 available upon request to participants and beneficiaries
in plans subject to ERISA and to participants, beneficiaries, and
enrollees in all non-grandfathered group health plans and non-
grandfathered group or individual health insurance coverage upon
request in connection with an appeal of an adverse benefit. HHS
estimates that each non-Federal governmental plan and each issuer would
receive one request annually and that plans and issuers would annually
incur a burden of 5 minutes for a clerical worker to prepare and send
the comparative analyses to each requesting participant, beneficiary,
or enrollee. This would result in a total burden of approximately 7,636
hours annually with an equivalent cost of approximately $484,504.\297\
HHS also assumes that 58.2 percent of requests would be delivered
electronically, resulting in a de minimis cost.\298\ The remaining 41.8
percent of requests would be mailed, and the cost of postage for a 3-
ounce letter is $1.14. The annual cost burden to mail the comparative
analyses to the participants and beneficiaries would therefore be
approximately $72,386.\299\
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\297\ The hour burden is calculated as (90,126 non-Federal
governmental plans + 1,500 issuer/State combinations) x 5 minutes =
7,636 hours. A labor rate of $63.45 is used for a clerical worker.
The labor rate is applied in the calculation as: (90,126 non-Federal
governmental plans + 1,500 issuer/State combinations) x 5 minutes x
$63.45 = $484,504.
\298\ According to data from the National Telecommunications and
Information Agency (NTIA), 40.0 percent of individuals age 25 and
over have access to the internet at work. According to a Greenwald &
Associates survey, 84 percent of plan participants find it
acceptable to make electronic delivery the default option, which is
used as the proxy for the number of participants who will not opt-
out of electronic disclosure that are automatically enrolled (for a
total of 33.6 percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 40.4 percent of individuals age
25 and over have access to the internet outside of work. According
to a Pew Research Center survey, 61.0 percent of internet users use
online banking, which is used as the proxy or the number of internet
users who will affirmatively consent to receiving electronic
disclosures (for a total of 24.7 percent receiving electronic
disclosure outside of work). Combining the 33.6 percent who receive
electronic disclosure at work with the 24.7 percent who receive
electronic disclosure outside of work produces a total of 58.2
percent who will receive electronic disclosure overall.
\299\ The Departments assume one request per entity and that
each mailed response will cost $1.89 in materials and postage, on
average. The mailing and postage cost assume $.05 per printed page,
an average document length of 15 pages and $1.14 in postage for a 3-
ounce parcel. Therefore, the cost burden is calculated as follows:
(1,500 issuers + 90,126 non-Federal governmental health plans) x
41.8% x ($1.14 + (15 pages x $0.05)) = $72,386.
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2.2.4. Recordkeeping Requirement
HHS posits that plans and issuers already maintain records as part
of their regular business practices. HHS therefore estimates a minimal
additional burden associated with these proposed rules. HHS estimates
that each non-Federal governmental plan and issuer would annually incur
a burden of 5 minutes, on average, for clerical personnel to meet the
additional recordkeeping requirements, resulting in a total burden of
approximately 7,636 hours annually with an equivalent cost of
approximately $484,504.\300\
---------------------------------------------------------------------------
\300\ The hour burden is calculated as (90,126 non-Federal
governmental plans + 1,500 issuer/State combinations) x 5 minutes =
7,636 hours. A labor rate of $63.45 is used for a clerical worker.
The labor rate is applied in the calculation as: (90,126 non-Federal
governmental plans + 1,500 issuer/State combinations) x 5 minutes x
$63.45 = $484,504.
---------------------------------------------------------------------------
HHS will revise the information collection approved under OMB
Control Number 0938-1393 to account for this burden.\301\
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\301\ CMS-10773, ``Non-Quantitative Treatment Limitation
Analyses and Compliance Under MHPAEA.''
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2.2.5. ICRs Regarding the Self-Funded, Non-Federal Governmental Plan
Opt-Out Provisions (45 CFR 146.180)
2.2.5.1. Notice to Federal Government of Self-Funded, Non-Federal
Governmental Plan Opt-Out: Plan Burden Reduction--Preparation and
Processing of Opt-Out Election Notice
The proposed amendments to implement the CAA, 2023 provision that
sunsets the MHPAEA opt-out election for sponsors of self-funded, non-
Federal governmental plans would eliminate the need for sponsors to
submit a notice to the Federal Government regarding their plan's opt-
out election (or, for sponsors of multiple plans, their plans' opt-out
elections), as long as the sponsors do not elect to permissibly opt out
of other requirements.\302\ Based on the HIPAA opt-out filings, HHS
estimates that the sponsors of 185 plans would no longer be required to
submit a notice to the Federal Government regarding their plan's opt-
out election (or, for sponsors of multiple plans, notices regarding
their plans' opt-out elections). Previously, HHS estimated that for
each self-funded, non-Federal governmental plan whose sponsor has
elected to opt out of the requirements, a compensation and benefits
manager would need 15 minutes annually to fill out and electronically
submit the model notification form to HHS, with an equivalent cost of
approximately $34.\303\ Therefore, these proposed amendments would
result in a total annual burden reduction (related to the need to
submit
[[Page 51617]]
a notice to the Federal Government) for sponsors of 185 plans of 46
hours (at a wage rate of $137.64 per hour), with an equivalent annual
cost savings of approximately $6,331.\304\
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\302\ Based on the HIPAA opt-out filings, sponsors of 46 self-
funded, non-Federal governmental plans permissibly opt out of other
requirements (standards relating to benefits for mothers and
newborns, required coverage for reconstructive surgery following
mastectomies, and/or coverage of dependent students on medically
necessary leave of absence).
\303\ This includes the time required by the individual signing
the certification to conduct a thorough review of the election
contents.
\304\ The total annual burden reduction is calculated as: 185
plans x 15 minutes = 46 hours. A labor rate of $137.64 is used for a
compensation and benefits manager. The labor rate is applied in the
calculation as: 185 plans x 15 minutes x $137.64 = $6,331.
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These proposed amendments would also generate cost savings for the
Federal Government, as HHS would no longer have to process the opt-out
notices submitted by plan sponsors. The processing of the opt-out
notices is performed by an HHS employee. The average salary of the
employee who completes this task, which includes the locality pay
adjustment for the area of Washington-Baltimore-Arlington, is $53.67
per hour for a GS-13, step 1 employee.\305\ HHS estimates that on
average it takes an HHS employee 15 minutes to process an opt-out
notice submitted by a plan sponsor, with an equivalent cost of
approximately $13. Because sponsors of 185 plans in total would no
longer be required to submit a notice to the Federal Government on
behalf of their plan(s), this proposed provision would therefore result
in a total annual burden reduction for the Federal Government of 46
hours, with equivalent annual cost savings of approximately
$2,469.\306\
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\305\ See Office of Personnel Management 2023 General Schedule
(GS) Locality Pay Tables, available at: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2023/DCB_h.pdf.
\306\ The total annual burden reduction for the Federal
government is calculated as: 185 plans x 15 minutes = 46 hours. A
labor rate of $53.67 is used for an HHS employee. The labor rate is
applied in the calculation as: 185 plans x 15 minutes x $53.67 =
$2,469.
---------------------------------------------------------------------------
2.2.5.2. Notice to Plan Participants of Self-Funded, Non-Federal
Governmental Plan Opt-Out: Plan Burden Reduction--Preparation and
Processing of Opt-Out Election Notice
The proposed amendments to implement the CAA, 2023 provision that
sunsets the MHPAEA opt-out election for sponsors of self-funded non-
Federal governmental plans would also eliminate the need for those
sponsors to prepare and disseminate an opt-out notice to plan
participants regarding their plan sponsors' opt-out election, as long
as the sponsors do not elect to permissibly opt out of other
requirements. Previously, HHS estimated that for each self-funded, non-
Federal governmental plan whose sponsor has elected to opt out of the
requirements, an administrative assistant would need 15 minutes to
develop and update the HHS standardized disclosure statement annually,
with an equivalent cost of approximately $10. Therefore, this proposed
provision would result in a total annual burden reduction (related to
the need to prepare and disseminate opt-out notices to plan
participants) for sponsors of 185 plans of 46 hours (at a wage rate of
$41.74), with an equivalent annual cost savings of approximately
$1,920.\307\ Further, self-funded, non-Federal governmental plan
sponsors would no longer be required to print and mail the opt-out
notice to plan participants and would therefore no longer incur costs
associated with this requirement. As noted earlier in this section
1.5.1, HHS estimates that there are approximately 253 participants in
each self-funded, non-Federal governmental plan, and therefore
approximately 46,863 notices \308\ would no longer have to be printed
and mailed. Because plan sponsors would no longer need to print the 1-
page notice (at an estimated cost of $0.05 per page), plan sponsors
would experience a total cost savings of approximately $2,343.\309\
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\307\ The total annual burden reduction is calculated as: 185
plans x 15 minutes = 46 hours. A labor rate of $41.74 is used for an
administrative assistant. The labor rate is applied in the
calculation as: 185 plans x 15 minutes x $41.74 = $1,920.
\308\ 185 plans x slightly more than 253 participants per plan
on average [ap]46,863 notices in total.
\309\ The total cost savings is calculated as: 46,863 notices x
$0.05 = $2,343.
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The burden related to HIPAA opt-outs is currently approved under
OMB Control Number 0938-0702.\310\ HHS will update the information
collection to account for this burden reduction.
---------------------------------------------------------------------------
\310\ CMS-10430, ``Information Collection Requirements for
Compliance with Individual and Group Market Reforms under Title
XXVII of the Public Health Service Act.''
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2.2.6. Overall Summary
In summary, the total new burden imposed by these proposed rules
regarding NQTL comparative analyses and compliance, has a three-year
average hour burden of approximately 1,939,425 hours with an equivalent
cost of approximately $221,176,812 and a total cost burden of
approximately $72,386. The proposed amendments to implement the CAA,
2023 provision that sunsets the MHPAEA opt-out election for sponsors of
self-funded, non-Federal governmental plans would result in an annual
burden reduction of approximately 92 hours with an equivalent annual
cost savings of approximately $8,251.
A summary of the change in paperwork burden estimates follows:
Type of Review: Revision.
Agency: Centers for Medicare & Medicaid Services, U.S. Department
of Health and Human Services.
Title: Non-Quantitative Treatment Limitation Analyses and
Compliance Under MHPAEA.
OMB Control Number: 0938-1393.
Affected Public: Businesses or other for-profits, Not-for-profit
institutions, State, Local, or Tribal Governments.
Estimated Number of Respondents: 91,626.
Estimated Number of Annual Responses: 91,626.
Frequency of Response: Annual.
Estimated Total Annual Burden Hours: 1,939,425.
Estimated Total Annual Burden Cost: $72,386.
Title: Requirements for Compliance with Individual and Group Market
Reforms under Title XXVII of the Public Health Service Act.
OMB Control Number: 0938-0702.
Affected Public: State, Local, or Tribal Governments.
Estimated Number of Respondents: (185).
Estimated Number of Annual Responses: (185).
Frequency of Response: Annual.
Estimated Total Annual Burden Hours: (92).
Estimated Total Annual Burden Cost: ($2,343).
Note: Numbers in parentheses denote a burden reduction.
3. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \311\ imposes certain
requirements with respect to Federal rules that are subject to the
notice and comment requirements of section 553(b) of the Administrative
Procedure Act \312\ and are likely to have a significant economic
impact on a substantial number of small entities. Unless an agency
determines that a proposal is not likely to have a significant economic
impact on a substantial number of small entities, section 603 of the
RFA requires the agency to present an initial regulatory flexibility
analysis of the proposed rule.
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\311\ 5 U.S.C. 601 et seq. (1980).
\312\ 5 U.S.C. 551 et seq. (1946).
---------------------------------------------------------------------------
The Departments have limited data to determine if these proposed
amendments would have a significant impact on a substantial number of
small entities. The Departments have prepared this initial regulatory
flexibility analysis and request data or other information it would
need to make a determination. The Departments request data or
information on the number of plans and issuers that are not conducting
adequate
[[Page 51618]]
comparative analyses and how the proposed additional guidance would
result in better compliance and access to those benefits.
3.1. Need for and Objectives of the Rule
As documented in the 2022 MHPAEA Report to Congress and the 2023
MHPAEA Report to Congress,\313\ the Departments found that none of the
NQTL comparative analyses they reviewed upon initial receipt contained
sufficient information and documentation.
---------------------------------------------------------------------------
\313\ 2022 MHPAEA Report to Congress, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf; 2023 MHPAEA Report to
Congress, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------
The proposed amendments to the existing MHPAEA regulations would
clarify existing definitions, add new definitions of key terms, require
plans and issuers to determine which NQTLs apply to substantially all
medical/surgical benefit classifications and what variation of a given
NQTL is the predominant (that is, most common or frequent) variation,
ensure that the application of the parity requirements to NQTLs is no
more restrictive for mental health and substance use disorder benefits
than for medical/surgical benefits, and provide additional examples of
the application of MHPAEA to NQTLs to improve the understanding and
ability of the regulated community to comply with MHPAEA. The proposed
amendments would also clarify that mental health and substance use
disorder definitions must be consistent with generally recognized
independent standards of current medical practice and would add more
specificity as to what plans and issuers must treat as mental health
conditions or substance use disorders.
These proposed rules would amend existing guidance, set more
specific content requirements for comparative analyses required by the
CAA, 2021, clarify when a comparative analysis needs to be performed
and for which NQTLs, and outline the process for plans and issuers to
provide their comparative analyses to the Departments upon request.
These proposed rules would also require plans and issuers to collect
and evaluate relevant data with each comparative analysis requested by
the Departments, including but not limited to claims denials, data
relevant to NQTLs as required by State law or private accreditation
standards, utilization rates, network adequacy metrics, and provider
reimbursement rates, in fulfillment of the existing requirement that
they evaluate and document their evaluation as part of the analysis of
the application of NQTLs related to network composition and provider
reimbursement. The data would be further defined in future guidance,
which will allow the Departments to adjust the data requirements as
needed to account for enforcement experience and industry trends. The
Departments also anticipate that future guidance would also set forth
an enforcement safe harbor for NQTLs related to network composition for
plans and issuers that meet certain standards with the data they
submit.
The Departments expect that these proposed rules would result in
plans and issuers having a better understanding of the MHPAEA
requirements with respect to NQTLs. These proposed rules would also
improve the manner in which parity is measured, compared, and
demonstrated by plans and issuers. The Departments believe these
proposed rules and future guidance would improve the compliance of
plans and issuers with these requirements, resulting in greater access
to and utilization of treatment for mental health and substance use
disorders, as intended by MHPAEA.
3.2. Affected Small Entities
For purposes of analysis under the RFA, DOL considers employee
benefit plans with fewer than 100 participants to be small entities.
The basis of this definition is found in section 104(a)(2) of ERISA,
which permits the Secretary of Labor to prescribe simplified annual
reports for plans that cover fewer than 100 participants. Under section
104(a)(3) of ERISA, the Secretary may also provide for exemptions or
simplified annual reporting and disclosure for welfare benefit plans.
Pursuant to the authority of section 104(a)(3), DOL has previously
issued (see 29 CFR 2520.104-20, 2520.104-21, 2520.104-41, 2520.104-46,
and 2520.104b-10) simplified reporting provisions and limited
exemptions from reporting and disclosure requirements for small plans,
including unfunded or insured welfare plans, that cover fewer than 100
participants and satisfy certain requirements. While some large
employers have small plans, small plans are maintained generally by
small employers. Thus, the Departments believe that assessing the
impact of these proposed rules on small plans is an appropriate
substitute for evaluating the effect on small entities. The definition
of small entity considered appropriate for this purpose differs,
however, from a definition of small business based on size standards
promulgated by the Small Business Administration (SBA) pursuant to the
Small Business Act.
As discussed in subsection 1.5.1 of the RIA, these proposed rules
would affect all small ERISA-covered group health plans, including
fully-insured group health plans and self-insured group health plans,
as well as small health insurance issuers and non-Federal governmental
plans. The Departments estimate that these proposed rules would affect
approximately 114,200 fully insured plans with 50 to 100
participants,\314\ and approximately 1,488,000 fully insured, non-
grandfathered plans with less than 50 participants.\315\
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\314\ The Departments estimate that there are 152,254 ERISA-
covered group health plans with 50 to 100 participants based on the
2021 Medical Expenditure Survey--Insurance Component (MEPS-IC) and
the 2019 County Business Patterns from the Census Bureau. The
Departments also estimate that 75 percent of ERISA-covered group
health plans with 50 to 100 participants are fully insured based on
assumptions referencing this same data. Thus, the Departments have
calculated the number of fully insured plans with 50 to 100
participants in the following manner: 152,254 ERISA-covered group
health plans with 50 to 100 participants x 75% = 114,191.
\315\ Employers with less than 50 employees are required to
comply with MHPAEA as part of the Essential Health Benefits
requirements. The Departments estimate that there are 2,134,934
ERISA-covered group health plans with less than 50 participants
based on data from the 2021 MEPS-IC and the 2019 County Business
Patterns from the Census Bureau. The Departments also estimate that
83 percent of group health plans with less than 50 participants are
fully insured based on data from the 2021 MEPS-IC. The 2020 Kaiser
Employer Health Benefits Survey reported that in 2020, 16 percent of
firms offering health benefits offered at least one grandfathered
health plan, therefore, the Departments assume the percent of firms
offering at least one non-grandfathered health plan is 84% (100%
minus 16%). (Source: KFF. 2020 Kaiser Employer Health Benefits
Survey.) https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the Departments have
calculated the number of fully insured, non-grandfathered plans with
less than 50 participants in the following manner: 2,134,934 small
ERISA-covered group health plans x 83% x 84% = 1,488,475.
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The Departments also estimate that approximately 38,000 self-
insured group health plans with 50 to 100 participants would be
affected by these proposed rules.\316\ The Departments estimate that
[[Page 51619]]
approximately 27,000 self-insured group health plans would not utilize
a service provider, and would incur the cost directly,\317\ and the
other self-insured health plans would utilize service providers to
perform the analysis. The largest would need to conduct the analyses
themselves for their plan-specific design. Finally, the Departments
estimate that approximately 14,400 non-Federal governmental health
plans would be affected by these proposed rules, of which the majority
of plans are assumed to be large.\318\
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\316\ MHPAEA only applies to ERISA plans in the group market
with 50 or more participants that offer mental health or substance
use disorder benefits. The Departments have not identified what
share of plans with 50 or more participants offer mental health or
substance use disorder benefits and so have assumed that all of
these plans offer them. The Departments seeks comments on this
assumption. Based on the 2021 MEPS-IC, 25 percent of ERISA-covered
group health plans with 50 to 100 participants are self-insured.
Thus, the Departments calculate the number of self-insured group
health plans with 50 to 100 participants based on the following
manner: 152,254 ERISA-covered group health plans with less than 100
participants x 25% of ERISA-covered group health plans with 50 to
100 participants are self-insured = 38,064.
\317\ Based on the 2020 Form 5500, 89 percent of self-insured
plans filed a Schedule C and indicated using either a Claims
Processor, Contract Administrator, or both.
\318\ Based on the 2017 Census of Government, there are 90,126
State and local entities. The Departments assume that there is one
plan per entity, on average. Therefore, the Departments estimate
that there are 90,126 non-Federal governmental health plans. MHPAEA
applies to non-Federal governmental employers with 50 or more
employees that offer mental health or substance use disorder
benefits. The Departments have not identified what share of plans
with 50 or more participants offer mental health or substance use
disorder benefits and so has have assumed that all of these plans
offer them. The Departments seek comments on this assumption. Based
on the 2021 Medical Expenditure Survey Insurance Component (MEPS-IC)
and the 2019 County Business Patterns from the Census Bureau, 16
percent of ERISA-covered group health plans have 50 or more
participants. The Departments use the percent of ERISA-covered group
plans with more than 50 participants as a proxy for the percent of
non-Federal governmental plans with more than 50 participants.
Therefore, the Departments estimate there are 14,420 public, non-
Federal employer group health plans with 50 or more participants
that offer mental health or substance use disorder benefits (90,126
non-Federal governmental health plans x 16 percent of plans with 50
or more employees).
---------------------------------------------------------------------------
As discussed in subsection 1.5.3 of the RIA, these proposed rules
would also affect health insurance issuers. The Departments estimate
that these proposed rules would affect 476 health insurance issuers
providing mental health and substance use disorder benefits in the
group and individual health insurance markets, with 1,500 issuer/State
combinations offering coverage in multiple States.\319\
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\319\ The Departments' estimate of the number of health
insurance insurers and the number of issuer/State combinations is
based on medical loss ratio reports submitted by issuers for the
2021 reporting year. (Source: Centers for Medicare & Medicaid
Services. ``Medical Loss Ratio Data and System Resources'' (2021).
https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.)
---------------------------------------------------------------------------
Health insurance issuers are generally classified under the North
American Industry Classification System (NAICS) code 524114 (Direct
Health and Medical Insurance Carriers). According to SBA size
standards, entities with average annual receipts of $47 million or less
are considered small entities for this NAICS code.\320\ The Departments
expect that few, if any, insurance companies underwriting health
insurance policies fall below these size thresholds. Based on data from
medical loss ratio (MLR) annual report submissions for the 2021 MLR
reporting year, approximately 87 out of 483 issuers of health insurance
coverage nationwide had total premium revenue of $47 million or
less.\321\ However, it should be noted that over 77 percent of these
small companies belong to larger holding groups, and many, if not all,
of these small companies, are likely to have non-health lines of
business that would result in their revenues exceeding $47 million. To
produce a conservative estimate, for the purposes of this analysis, the
Departments assume 8.6 percent,\322\ or 129 issuer/State combinations
are considered small entities.\323\
---------------------------------------------------------------------------
\320\ Available at: https://www.sba.gov/document/support--table-size-standards, as of March 2023.
\321\ Available at: https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
\322\ Based on data from the NAICS Association for NAICS code
524114, the Departments estimate the percent of businesses within
the industry of Direct Health and Medical Insurer Carriers with less
than $47 million in annual sales. (See NAICS Association. ``Market
Analysis Profile: NAICS Code Annual Sales.'' https://www.naics.com/business-lists/counts-by-naics-code/.)
\323\ 1,500 issuers/State combination x 8.6 percent = 129 small
issuers.
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The proposed amendments to implement the CAA, 2023 provision that
sunsets the MHPAEA opt-out election would affect sponsors of self-
funded, non-Federal governmental plans, some of which might be small
entities. As noted in section 1.10 of this RIA, the extent to which
these plans are out of compliance is unknown, and the costs for them to
come into compliance are expected to vary from plan to plan. HHS seeks
comments on the number of small entities that would be impacted by the
implementation of the sunset provision and the potential effects on
small entities.
3.3. Impact of the Rule
3.3.1. Amendments to Existing MHPAEA Regulation (26 CFR 54.9812-1, 29
CFR 2590.712, 45 CFR 146.136)
The proposed amendments to the existing MHPAEA regulations would
clarify existing definitions, add new definitions, require plans and
issuers to determine which NQTLs apply to substantially all medical/
surgical benefit classifications and what level or variation of a given
NQTL is the most common or frequent, ensure that the application of
NQTLs is generally no more restrictive for mental health and substance
use disorder benefits than for medical/surgical benefits, and provide
additional examples of the application of MHPAEA to NQTLs to improve
the understanding and ability of the regulated community to comply with
MHPAEA. The proposed amendments would also clarify that mental health
benefits and substance use disorder benefits must be defined to be
consistent with generally recognized independent standards of current
medical practice and would add more specificity as to what plans and
issuers must treat as mental health conditions or substance use
disorders. The Departments believe that the proposed amendments might
cause small plans and issuers to revise their policies and remove
treatment limitations. Therefore, small plans and issuers could incur
costs to revise plan provisions which may result in increased costs
from expanded utilization of mental health and substance use disorder
services. The Departments face uncertainty in quantifying these costs
as they cannot estimate the increase in utilization and which
particular services may see the largest increase in utilization.
3.3.2. New Regulations (26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR
146.137 and 146.180)
These proposed rules would amend existing guidance, set more
specific content requirements for comparative analyses required by the
CAA, 2021, clarify when the comparative analysis needs to be performed
and for which NQTLs, and outline the timeframes and process for plans
and issuers to provide their comparative analyses to the Departments
upon request. Participants, beneficiaries, and enrollees may also
request the comparative analyses at any time. These proposed rules
would also require plans and issuers to collect and evaluate relevant
data as part of each comparative analysis, including but not limited to
claims denials, data relevant to NQTLs as required by State law or
private accreditation standards, utilization rates, network adequacy
metrics, and provider reimbursement rates, in fulfillment of the
existing requirement that they evaluate and document their evaluation
as part of the analysis of the application of NQTLs related to network
composition and provider reimbursement. The Departments believe that
plans and issuers would incur costs in collecting, preparing, and
analyzing the data. The Departments request comments on whether plans
and issuers already collect and examine this data. Additionally, in
these proposed rules,
[[Page 51620]]
HHS proposes regulatory amendments to implement the provision in the
CAA, 2023 that sunsets the election option for self-funded, non-Federal
governmental plans to opt out of requirements under MHPAEA.
In the first year, the Departments estimate that self-insured group
health plans and health insurance issuers would incur an incremental
per-entity cost of approximately $5,600 and $5,800, respectively
associated with these proposed rules and amendments. In the subsequent
years, the Departments estimate that self-insured group health plans
and health insurance issuers would both incur an incremental per-entity
cost of approximately $1,900 associated with these proposed rules and
amendments. The Departments note that these per-entity costs are the
average costs, and these costs are expected to vary by plan or issuer
depending on the number of NQTL analyses performed.
3.4. Duplicate, Overlapping, or Relevant Federal Rules
There are no duplicate, overlapping, or relevant Federal rules.
4. Special Analyses--Department of the Treasury
Pursuant to the Memorandum of Agreement, Review of Treasury
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject to the requirements of
section 6 of Executive Order 12866, as amended. Therefore, a regulatory
impact assessment is not required. Pursuant to section 7805(f) of the
Code, these regulations have been submitted to the Chief Counsel for
Advocacy of the Small Business Administration for comment on their
impact on small business.
5. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 requires each
Federal agency to prepare a written statement assessing the effects of
any Federal mandate in a proposed or final agency rule that may result
in an expenditure of $100 million or more (adjusted annually for
inflation with the base year 1995) in any 1 year by State, local, and
Tribal governments, in the aggregate, or by the private sector.\324\ In
2023, that threshold is approximately $177 million. For purposes of the
Unfunded Mandates Reform Act, as well as Executive Order 12875,\325\
this proposal includes Federal mandates that the Departments expect
would result in such expenditures by State, local, or Tribal
governments, or the private sector. UMRA requires that regulations
including such Federal mandates provide a qualitative and quantitative
assessment of the anticipated costs and benefits of the regulations.
For the purposes of these proposed rules, the RIA shall meet this
obligation.
---------------------------------------------------------------------------
\324\ 2 U.S.C. 1501 et seq. (1995).
\325\ Enhancing the Intergovernmental Partnership, 58 FR 58093
(Oct. 28, 1993).
---------------------------------------------------------------------------
6. Federalism Statement
Executive Order 13132 outlines fundamental principles of
federalism, and requires the adherence to specific criteria by Federal
agencies in the process of their formulation and implementation of
policies that have ``substantial direct effects'' on the States, the
relationship between the Federal Government and States, or on the
distribution of power and responsibilities among the various levels of
government.\326\ Federal agencies promulgating regulations that have
federalism implications must consult with State and local officials and
describe the extent of their consultation and the nature of the
concerns of State and local officials in the preamble to these proposed
rules.
---------------------------------------------------------------------------
\326\ Federalism, 64 FR 153 (Aug. 4, 1999).
---------------------------------------------------------------------------
In the Departments' view, these proposed rules could have
federalism implications because they would have direct effects on the
States, on the relationship between the Federal Government and the
States, and on the distribution of power and responsibilities among
various levels of government. These proposed rules could also have
federalism implications because the Departments propose to remove the
reference to State guidelines in the definition of medical/surgical
benefits, mental health benefits, and substance use disorder benefits,
and amend the definition to provide that any condition or procedure
defined by the plan or coverage as being or not being a medical
condition or surgical procedure, mental health condition, or substance
use disorder must be defined to be consistent with generally recognized
independent standards of current medical practice, such as the ICD or
DSM. Finally, these proposed rules could have federalism implications
because the implementation of the CAA, 2023 provision that sunsets the
MHPAEA opt-out election would require State and local government
sponsors of self-funded plans that currently opt out of requirements
under MHPAEA to come into compliance.
In general, through section 514, ERISA supersedes State laws to the
extent that they relate to any covered employee benefit plan, and
preserves State laws that regulate insurance, banking, or securities.
While ERISA prohibits States from regulating a plan as an insurance or
investment company or bank, the preemption provisions of section 731 of
ERISA and section 2724 of the PHS Act (implemented in 29 CFR
2590.731(a) and 45 CFR 146.143(a)) apply so that the MHPAEA
requirements are not to be ``construed to supersede any provision of
State law which establishes, implements, or continues in effect any
standard or requirement solely relating to health insurance issuers in
connection with individual or group health insurance coverage except to
the extent that such standard or requirement prevents the application
of a requirement'' of MHPAEA. The conference report accompanying HIPAA
indicates that this is intended to be the ``narrowest'' preemption of
State laws. (See House Conf. Rep. No. 104-736, at 205, reprinted in
1996 U.S. Code Cong. & Admin. News 2018.)
States may continue to apply State law requirements except to the
extent that such requirements prevent the application of the MHPAEA
requirements that are the subject of this rulemaking. State insurance
laws that are more stringent than the Federal requirements are unlikely
to ``prevent the application of'' MHPAEA and be preempted. Accordingly,
States have significant latitude to impose requirements on health
insurance issuers that are more restrictive than the Federal law.
Throughout the process of developing these proposed rules, to the
extent feasible within the specific preemption provisions of HIPAA as
it applies to MHPAEA, the Departments have attempted to balance the
States' interests in regulating health insurance issuers, and Congress'
intent to provide uniform minimum protections to consumers in every
State. By doing so, it is the Departments' view that they have complied
with the requirements of Executive Order 13132.
The Departments welcome input from affected States regarding this
assessment.
List of Subjects
26 CFR Part 54
Excise taxes, Pensions, Reporting and recordkeeping requirements.
29 CFR Part 2590
Continuation coverage, Disclosure, Employee benefit plans, Group
health plans, Health care, Health insurance,
[[Page 51621]]
Medical child support, Reporting and recordkeeping requirements.
45 CFR Part 146
Health care, Health insurance, Reporting and recordkeeping
requirements.
45 CFR Part 147
Aged, Citizenship and naturalization, Civil rights, Health care,
Health insurance, Individuals with disabilities, Intergovernmental
relations, Reporting and recordkeeping requirements, Sex
discrimination.
Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement, Internal Revenue
Service.
Lisa M. Gomez,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
Xavier Becerra,
Secretary, Department of Health and Human Services.
DEPARTMENT OF THE TREASURY
Internal Revenue Service
Accordingly, the Treasury Department and the IRS propose to amend
26 CFR part 54 as follows:
PART 54--PENSION EXCISE TAXES
0
1. The authority citation for part 54 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *
0
2. Amend Sec. 54.9812-1 by:
0
a. Redesignating paragraph (a) as paragraph (a)(2) and adding
paragraphs (a) heading and (a)(1);
0
b. In newly redesignated paragraph (a)(2):
0
i. Revising the introductory text;
0
ii. Adding the definitions of ``DSM,'' ``Evidentiary standards,''
``Factors,'' and ``ICD'' in alphabetical order;
0
iii. Revising the definitions of ``Medical/surgical benefits'' and
``Mental health benefits'';
0
iv. Adding the definitions of ``Processes'' and ``Strategies'' in
alphabetical order; and
0
v. Revising the definitions of ``Substance use disorder benefits'' and
``Treatment limitations'';
0
c. Revising paragraphs (c)(1)(ii), (c)(2)(i), and (c)(2)(ii)(A)
introductory text;
0
d. In paragraph (c)(2)(ii)(C), designating Examples 1 through 4 as
paragraphs (c)(2)(ii)(C)(1) through (4) and revising newly designated
paragraphs (c)(2)(ii)(C)(1) through (4);
0
e. Adding paragraphs (c)(2)(ii)(C)(5) and (6);
0
f. Revising paragraphs (c)(3)(i)(A), (C), and (D);
0
g. In paragraph (c)(3)(iii), adding introductory text;
0
h. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4),
(d)(3), (e)(4), and (i)(1); and
0
i. Adding paragraph (j).
The revisions and additions read as follows:
Sec. 54.9812-1 Parity in mental health and substance use disorder
benefits.
(a) Purpose and meaning of terms--(1) Purpose. This section and
Sec. 54.9812-2 set forth rules to ensure parity in aggregate lifetime
and annual dollar limits, financial requirements, and quantitative and
nonquantitative treatment limitations between mental health and
substance use disorder benefits and medical/surgical benefits, as
required under Code section 9812. A fundamental purpose of Code section
9812, this section, and Sec. 54.9812-2 is to ensure that participants
and beneficiaries in a group health plan that offers mental health or
substance use disorder benefits are not subject to more restrictive
lifetime or annual dollar limits, financial requirements, or treatment
limitations with respect to those benefits than the predominant dollar
limits, financial requirements, or treatment limitations that are
applied to substantially all medical/surgical benefits covered by the
plan, as further provided in this section and Sec. 54.9812-2.
Accordingly, in complying with the provisions of Code section 9812,
this section, and Sec. 54.9812-2, plans must not design or apply
financial requirements and treatment limitations that impose a greater
burden on access (that is, are more restrictive) to mental health and
substance use disorder benefits under the plan than they impose on
access to generally comparable medical/surgical benefits. The
provisions of Code section 9812, this section, and Sec. 54.9812-2
should be interpreted in a manner that is consistent with the purpose
described in this paragraph (a)(1).
(2) Meaning of terms. For purposes of this section and Sec.
54.9812-2, except where the context clearly indicates otherwise, the
following terms have the meanings indicated:
* * * * *
DSM means the American Psychiatric Association's Diagnostic and
Statistical Manual of Mental Disorders. For the purpose of this
definition, the most current version of the DSM is the version that is
applicable no earlier than on the date that is 1 year before the first
day of the applicable plan year.
Evidentiary standards are any evidence, sources, or standards that
a group health plan considered or relied upon in designing or applying
a factor with respect to a nonquantitative treatment limitation,
including specific benchmarks or thresholds. Evidentiary standards may
be empirical, statistical, or clinical in nature, and include: sources
acquired or originating from an objective third party, such as
recognized medical literature, professional standards and protocols
(which may include comparative effectiveness studies and clinical
trials), published research studies, payment rates for items and
services (such as publicly available databases of the ``usual,
customary and reasonable'' rates paid for items and services), and
clinical treatment guidelines; internal plan data, such as claims or
utilization data or criteria for assuring a sufficient mix and number
of network providers; and benchmarks or thresholds, such as measures of
excessive utilization, cost levels, time or distance standards, or
network participation percentage thresholds.
Factors are all information, including processes and strategies
(but not evidentiary standards), that a group health plan considered or
relied upon to design a nonquantitative treatment limitation, or to
determine whether or how the nonquantitative treatment limitation
applies to benefits under the plan. Examples of factors include, but
are not limited to: provider discretion in determining a diagnosis or
type or length of treatment; clinical efficacy of any proposed
treatment or service; licensing and accreditation of providers; claim
types with a high percentage of fraud; quality measures; treatment
outcomes; severity or chronicity of condition; variability in the cost
of an episode of treatment; high cost growth; variability in cost and
quality; elasticity of demand; and geographic location.
* * * * *
ICD means the World Health Organization's International
Classification of Diseases adopted by the Department of Health and
Human Services through 45 CFR 162.1002. For the purpose of this
definition, the most current version of the ICD is the version that is
applicable no earlier than on the date that is 1 year before the first
day of the applicable plan year.
Medical/surgical benefits means benefits with respect to items or
services for medical conditions or surgical procedures, as defined
under the terms of the group health plan and in accordance with
applicable Federal and State law, but does not include mental health
benefits or substance use disorder benefits. Notwithstanding the
preceding sentence, any condition or procedure defined by the plan as
being
[[Page 51622]]
or as not being a medical condition or surgical procedure must be
defined consistent with generally recognized independent standards of
current medical practice (for example, the most current version of the
ICD). To the extent generally recognized independent standards of
current medical practice do not address whether a condition or
procedure is a medical condition or surgical procedure, plans may
define the condition or procedure in accordance with applicable Federal
and State law.
Mental health benefits means benefits with respect to items or
services for mental health conditions, as defined under the terms of
the group health plan and in accordance with applicable Federal and
State law, but does not include medical/surgical benefits or substance
use disorder benefits. Notwithstanding the preceding sentence, any
condition defined by the plan as being or as not being a mental health
condition must be defined consistent with generally recognized
independent standards of current medical practice. For the purpose of
this definition, to be consistent with generally recognized independent
standards of current medical practice, the definition must include all
conditions covered under the plan, except for substance use disorders,
that fall under any of the diagnostic categories listed in the mental,
behavioral, and neurodevelopmental disorders chapter (or equivalent
chapter) of the most current version of the ICD or that are listed in
the most current version of the DSM. To the extent generally recognized
independent standards of current medical practice do not address
whether a condition is a mental health condition, plans may define the
condition in accordance with applicable Federal and State law.
Processes are actions, steps, or procedures that a group health
plan uses to apply a nonquantitative treatment limitation, including
actions, steps, or procedures established by the plan as requirements
in order for a participant or beneficiary to access benefits, including
through actions by a participant's or beneficiary's authorized
representative or a provider or facility. Processes include but are not
limited to: procedures to submit information to authorize coverage for
an item or service prior to receiving the benefit or while treatment is
ongoing (including requirements for peer or expert clinical review of
that information); provider referral requirements; and the development
and approval of a treatment plan. Processes also include the specific
procedures used by staff or other representatives of a plan (or the
service provider of a plan) to administer the application of
nonquantitative treatment limitations, such as how a panel of staff
members applies the nonquantitative treatment limitation (including the
qualifications of staff involved, number of staff members allocated,
and time allocated), consultations with panels of experts in applying
the nonquantitative treatment limitation, and reviewer discretion in
adhering to criteria hierarchy when applying a nonquantitative
treatment limitation.
Strategies are practices, methods, or internal metrics that a plan
considers, reviews, or uses to design a nonquantitative treatment
limitation. Examples of strategies include but are not limited to: the
development of the clinical rationale used in approving or denying
benefits; deviation from generally accepted standards of care; the
selection of information deemed reasonably necessary to make a medical
necessity determination; reliance on treatment guidelines or guidelines
provided by third-party organizations; and rationales used in selecting
and adopting certain threshold amounts, professional protocols, and fee
schedules. Strategies also include the creation and composition of the
staff or other representatives of a plan (or the service provider of a
plan) that deliberates, or otherwise makes decisions, on the design of
nonquantitative treatment limitations, including the plan's decisions
related to the qualifications of staff involved, number of staff
members allocated, and time allocated; breadth of sources and evidence
considered; consultations with panels of experts in designing the
nonquantitative treatment limitation; and the composition of the panels
used to design a nonquantitative treatment limitation.
Substance use disorder benefits means benefits with respect to
items or services for substance use disorders, as defined under the
terms of the group health plan and in accordance with applicable
Federal and State law, but does not include medical/surgical benefits
or mental health benefits. Notwithstanding the preceding sentence, any
disorder defined by the plan as being or as not being a substance use
disorder must be defined consistent with generally recognized
independent standards of current medical practice. For the purpose of
this definition, to be consistent with generally recognized independent
standards of current medical practice, the definition must include all
disorders covered under the plan that fall under any of the diagnostic
categories listed as a mental or behavioral disorder due to
psychoactive substance use (or equivalent category) in the mental,
behavioral and neurodevelopmental disorders chapter (or equivalent
chapter) of the most current version of the ICD or that are listed as a
Substance-Related and Addictive Disorder (or equivalent category) in
the most current version of the DSM. To the extent generally recognized
independent standards of current medical practice do not address
whether a disorder is a substance use disorder, plans may define the
disorder in accordance with applicable Federal and State law.
Treatment limitations include limits on benefits based on the
frequency of treatment, number of visits, days of coverage, days in a
waiting period, or other similar limits on the scope or duration of
treatment. Treatment limitations include both quantitative treatment
limitations, which are expressed numerically (such as 50 outpatient
visits per year), and nonquantitative treatment limitations, which
otherwise limit the scope or duration of benefits for treatment under a
plan. (See paragraph (c)(4)(iii) of this section for an illustrative,
non-exhaustive list of nonquantitative treatment limitations.) A
complete exclusion of all benefits for a particular condition or
disorder, however, is not a treatment limitation for purposes of this
definition.
* * * * *
(c) * * *
(1) * * *
(ii) Type of financial requirement or treatment limitation. When
reference is made in this paragraph (c) to a type of financial
requirement or treatment limitation, the reference to type means its
nature. Different types of financial requirements include deductibles,
copayments, coinsurance, and out-of-pocket maximums. Different types of
quantitative treatment limitations include annual, episode, and
lifetime day and visit limits. See paragraph (c)(4)(iii) of this
section for an illustrative, non-exhaustive list of nonquantitative
treatment limitations.
* * * * *
(2) * * *
(i) General rule. A group health plan that provides both medical/
surgical benefits and mental health or substance use disorder benefits
may not apply any financial requirement or treatment limitation to
mental health or substance use disorder benefits in any classification
that is more restrictive than the predominant financial
[[Page 51623]]
requirement or treatment limitation of that type applied to
substantially all medical/surgical benefits in the same classification.
Whether a financial requirement or treatment limitation is a
predominant financial requirement or treatment limitation that applies
to substantially all medical/surgical benefits in a classification is
determined separately for each type of financial requirement or
treatment limitation. A plan may not impose any financial requirement
or treatment limitation that is applicable only with respect to mental
health or substance use disorder benefits and not to any medical/
surgical benefits in the same benefit classification. The application
of the rules of this paragraph (c)(2) to financial requirements and
quantitative treatment limitations is addressed in paragraph (c)(3) of
this section; the application of the rules of this paragraph (c)(2) to
nonquantitative treatment limitations is addressed in paragraph (c)(4)
of this section.
(ii) * * *
(A) In general. If a plan provides any benefits for a mental health
condition or substance use disorder in any classification of benefits
described in this paragraph (c)(2)(ii), benefits for that mental health
condition or substance use disorder must be provided in every
classification in which medical/surgical benefits are provided. For
purposes of this paragraph (c)(2)(ii), a plan providing any benefits
for a mental health condition or substance use disorder in any
classification of benefits does not provide benefits for the mental
health condition or substance use disorder in every classification in
which medical/surgical benefits are provided unless the plan provides
meaningful benefits for treatment for that condition or disorder in
each such classification, as determined in comparison to the benefits
provided for medical/surgical conditions in the classification. In
determining the classification in which a particular benefit belongs, a
plan must apply the same standards to medical/surgical benefits and to
mental health or substance use disorder benefits. To the extent that a
plan provides benefits in a classification and imposes any separate
financial requirement or treatment limitation (or separate level of a
financial requirement or treatment limitation) for benefits in the
classification, the rules of this paragraph (c) apply separately with
respect to that classification for all financial requirements or
treatment limitations (illustrated in examples in paragraph
(c)(2)(ii)(C) of this section). The following classifications of
benefits are the only classifications used in applying the rules of
this paragraph (c), in addition to the permissible sub-classifications
described in paragraph (c)(3)(iii) of this section:
* * * * *
(C) * * *
(1) Example 1--(i) Facts. A group health plan offers inpatient and
outpatient benefits and does not contract with a network of providers.
The plan imposes a $500 deductible on all benefits. For inpatient
medical/surgical benefits, the plan imposes a coinsurance requirement.
For outpatient medical/surgical benefits, the plan imposes copayments.
The plan imposes no other financial requirements or treatment
limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(1) (Example 1),
because the plan has no network of providers, all benefits provided are
out-of-network. Because inpatient, out-of-network medical/surgical
benefits are subject to separate financial requirements from
outpatient, out-of-network medical/surgical benefits, the rules of this
paragraph (c) apply separately with respect to any financial
requirements and treatment limitations, including the deductible, in
each classification.
(2) Example 2--(i) Facts. A plan imposes a $500 deductible on all
benefits. The plan has no network of providers. The plan generally
imposes a 20 percent coinsurance requirement with respect to all
benefits, without distinguishing among inpatient, outpatient, emergency
care, or prescription drug benefits. The plan imposes no other
financial requirements or treatment limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(2) (Example 2),
because the plan does not impose separate financial requirements (or
treatment limitations) based on classification, the rules of this
paragraph (c) apply with respect to the deductible and the coinsurance
across all benefits.
(3) Example 3--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan
exempts emergency care benefits from the 20 percent coinsurance
requirement. The plan imposes no other financial requirements or
treatment limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(3) (Example 3),
because the plan imposes separate financial requirements based on
classifications, the rules of this paragraph (c) apply with respect to
the deductible and the coinsurance separately for benefits in the
emergency care classification and all other benefits.
(4) Example 4--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan also
imposes a preauthorization requirement for all inpatient treatment in
order for benefits to be paid. No such requirement applies to
outpatient treatment.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(4) (Example 4),
because the plan has no network of providers, all benefits provided are
out-of-network. Because the plan imposes a separate treatment
limitation based on classifications, the rules of this paragraph (c)
apply with respect to the deductible and coinsurance separately for
inpatient, out-of-network benefits and all other benefits.
(5) Example 5--(i) Facts. A plan generally covers treatment for
autism spectrum disorder (ASD), a mental health condition, and covers
outpatient, out-of-network developmental evaluations for ASD but
excludes all other benefits for outpatient treatment for ASD, including
applied behavioral analysis (ABA) therapy, when provided on an out-of-
network basis. The plan generally covers the full range of outpatient
treatments and treatment settings for medical conditions and surgical
procedures when provided on an out-of-network basis.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5),
the plan violates the rules of this paragraph (c)(2)(ii). Because the
plan only covers one type of benefit for ASD in the outpatient, out-of-
network classification and excludes all other benefits for ASD in the
classification, but generally covers the full range of medical/surgical
benefits in the classification, it fails to provide meaningful benefits
for treatment of ASD in the classification.
(6) Example 6--(i) Facts. A plan generally covers diagnosis and
treatment for eating disorders, a mental health condition, but
specifically excludes coverage for nutrition counseling to treat eating
disorders, including in the outpatient, in-network classification.
Nutrition counseling is one of the primary treatments for eating
disorders. The plan generally provides benefits for the primary
treatments for medical/surgical conditions in the outpatient, in-
network classification.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6),
the plan violates the rules of this paragraph (c)(2)(ii). The exclusion
of coverage for nutrition counseling for eating disorders results in
the plan failing to provide meaningful benefits for the treatment of
eating disorders in the outpatient, in-network classification, as
determined in comparison to the benefits provided for medical/surgical
conditions in the classification.
[[Page 51624]]
(3) * * *
(i) * * *
(A) Substantially all. For purposes of this paragraph (c)(3), a
type of financial requirement or quantitative treatment limitation is
considered to apply to substantially all medical/surgical benefits in a
classification of benefits if it applies to at least two-thirds of all
medical/surgical benefits in that classification. (For purposes of this
paragraph (c)(3)(i)(A), benefits expressed as subject to a zero level
of a type of financial requirement are treated as benefits not subject
to that type of financial requirement, and benefits expressed as
subject to a quantitative treatment limitation that is unlimited are
treated as benefits not subject to that type of quantitative treatment
limitation.) If a type of financial requirement or quantitative
treatment limitation does not apply to at least two-thirds of all
medical/surgical benefits in a classification, then that type cannot be
applied to mental health or substance use disorder benefits in that
classification.
* * * * *
(C) Portion based on plan payments. For purposes of this paragraph
(c)(3), the determination of the portion of medical/surgical benefits
in a classification of benefits subject to a financial requirement or
quantitative treatment limitation (or subject to any level of a
financial requirement or quantitative treatment limitation) is based on
the dollar amount of all plan payments for medical/surgical benefits in
the classification expected to be paid under the plan for the plan year
(or for the portion of the plan year after a change in plan benefits
that affects the applicability of the financial requirement or
quantitative treatment limitation).
(D) Clarifications for certain threshold requirements. For any
deductible, the dollar amount of plan payments includes all plan
payments with respect to claims that would be subject to the deductible
if it had not been satisfied. For any out-of-pocket maximum, the dollar
amount of plan payments includes all plan payments associated with out-
of-pocket payments that are taken into account towards the out-of-
pocket maximum as well as all plan payments associated with out-of-
pocket payments that would have been made towards the out-of-pocket
maximum if it had not been satisfied. Similar rules apply for any other
thresholds at which the rate of plan payment changes. (See also PHS Act
section 2707 and Affordable Care Act section 1302(c), which establish
annual limitations on out-of-pocket maximums for all non-grandfathered
health plans.)
* * * * *
(iii) Special rules. Unless specifically permitted under this
paragraph (c)(3)(iii), sub-classifications are not permitted when
applying the rules of paragraph (c)(3) of this section.
(A) Multi-tiered prescription drug benefits. If a plan applies
different levels of financial requirements to different tiers of
prescription drug benefits based on reasonable factors determined in
accordance with the rules in paragraph (c)(4) of this section (relating
to requirements for nonquantitative treatment limitations) and without
regard to whether a drug is generally prescribed with respect to
medical/surgical benefits or with respect to mental health or substance
use disorder benefits, the plan satisfies the parity requirements of
this paragraph (c) with respect to prescription drug benefits.
Reasonable factors include cost, efficacy, generic versus brand name,
and mail order versus pharmacy pick-up.
(B) Multiple network tiers. If a plan provides benefits through
multiple tiers of in-network providers (such as an in-network tier of
preferred providers with more generous cost-sharing to participants
than a separate in-network tier of participating providers), the plan
may divide its benefits furnished on an in-network basis into sub-
classifications that reflect network tiers, if the tiering is based on
reasonable factors determined in accordance with the rules in paragraph
(c)(4) of this section (such as quality, performance, and market
standards) and without regard to whether a provider provides services
with respect to medical/surgical benefits or mental health or substance
use disorder benefits. After the sub-classifications are established,
the plan may not impose any financial requirement or treatment
limitation on mental health or substance use disorder benefits in any
sub-classification that is more restrictive than the predominant
financial requirement or treatment limitation that applies to
substantially all medical/surgical benefits in the sub-classification
using the methodology set forth in paragraph (c)(3)(i) of this section.
* * * * *
(iv) Examples. The rules of paragraphs (c)(3)(i) through (iii) of
this section are illustrated by the following examples. In each
example, the group health plan is subject to the requirements of this
section and provides both medical/surgical benefits and mental health
and substance use disorder benefits.
(A) Example 1--(1) Facts. (i) For inpatient, out-of-network
medical/surgical benefits, a group health plan imposes five levels of
coinsurance. Using a reasonable method, the plan projects its payments
for the upcoming year as follows:
Table 1 to Paragraph (c)(3)(iv)(A)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coinsurance rate............................ 0% 10% 15% 20% 30% Total
Projected payments.......................... $200x $100x $450x $100x $150x $1,000x
Percent of total plan costs................. 20 10 45 10 15 ..............
Percent subject to coinsurance level........ N/A 12.5 (100x/800x) 56.25 (450x/800x) 12.5 (100x/800x) 18.75 (150x/800x) ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) The plan projects plan costs of $800x to be subject to
coinsurance ($100x + $450x + $100x + $150x = $800x). Thus, 80 percent
($800x/$1,000x) of the benefits are projected to be subject to
coinsurance, and 56.25 percent of the benefits subject to coinsurance
are projected to be subject to the 15 percent coinsurance level.
(2) Conclusion. In this paragraph (c)(3)(iv)(A) (Example 1), the
two-thirds threshold of the substantially all standard is met for
coinsurance because 80 percent of all inpatient, out-of-network
medical/surgical benefits are subject to coinsurance. Moreover, the 15
percent coinsurance is the predominant level because it is applicable
to more than one-half of inpatient, out-of-network medical/surgical
benefits subject to the coinsurance requirement. The plan may not
impose any level of coinsurance with respect to inpatient, out-of-
network mental health or substance use disorder benefits that is more
restrictive than the 15 percent level of coinsurance.
(B) Example 2--(1) Facts. (i) For outpatient, in-network medical/
surgical
[[Page 51625]]
benefits, a plan imposes five different copayment levels. Using a
reasonable method, the plan projects payments for the upcoming year as
follows:
Table 2 to Paragraph (c)(3)(iv)(B)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copayment amount............................ $0 $10 $15 $20 $50 Total
Projected payments.......................... $200x $200x $200x $300x $100x $1,000x
Percent of total plan costs................. 20 20 20 30 10 ..............
Percent subject to copayments............... N/A 25 (200x/800x) 25 (200x/800x) 37.5 (300x/800x) 12.5 (100x/800x) ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) The plan projects plan costs of $800x to be subject to
copayments ($200x + $200x +$300x + $100x = $800x). Thus, 80 percent
($800x/$1,000x) of the benefits are projected to be subject to a
copayment.
(2) Conclusion. In this paragraph (c)(3)(iv)(B) (Example 2), the
two-thirds threshold of the substantially all standard is met for
copayments because 80 percent of all outpatient, in-network medical/
surgical benefits are subject to a copayment. Moreover, there is no
single level that applies to more than one-half of medical/surgical
benefits in the classification subject to a copayment (for the $10
copayment, 25%; for the $15 copayment, 25%; for the $20 copayment,
37.5%; and for the $50 copayment, 12.5%). The plan can combine any
levels of copayment, including the highest levels, to determine the
predominant level that can be applied to mental health or substance use
disorder benefits. If the plan combines the highest levels of
copayment, the combined projected payments for the two highest
copayment levels, the $50 copayment and the $20 copayment, are not more
than one-half of the outpatient, in-network medical/surgical benefits
subject to a copayment because they are exactly one-half ($300x + $100x
= $400x; $400x/$800x = 50%). The combined projected payments for the
three highest copayment levels--the $50 copayment, the $20 copayment,
and the $15 copayment--are more than one-half of the outpatient, in-
network medical/surgical benefits subject to the copayments ($100x +
$300x + $200x = $600x; $600x/$800x = 75%). Thus, the plan may not
impose any copayment on outpatient, in-network mental health or
substance use disorder benefits that is more restrictive than the least
restrictive copayment in the combination, the $15 copayment.
(C) Example 3--(1) Facts. A plan imposes a $250 deductible on all
medical/surgical benefits for self-only coverage and a $500 deductible
on all medical/surgical benefits for family coverage. The plan has no
network of providers. For all medical/surgical benefits, the plan
imposes a coinsurance requirement. The plan imposes no other financial
requirements or treatment limitations.
(2) Conclusion. In this paragraph (c)(3)(iv)(C) (Example 3),
because the plan has no network of providers, all benefits are provided
out-of-network. Because self-only and family coverage are subject to
different deductibles, whether the deductible applies to substantially
all medical/surgical benefits is determined separately for self-only
medical/surgical benefits and family medical/surgical benefits. Because
the coinsurance is applied without regard to coverage units, the
predominant coinsurance that applies to substantially all medical/
surgical benefits is determined without regard to coverage units.
(D) Example 4--(1) Facts. A plan applies the following financial
requirements for prescription drug benefits. The requirements are
applied without regard to whether a drug is generally prescribed with
respect to medical/surgical benefits or with respect to mental health
or substance use disorder benefits. Moreover, the process for
certifying a particular drug as ``generic'', ``preferred brand name'',
``non-preferred brand name'', or ``specialty'' complies with the rules
of paragraph (c)(4) of this section (relating to requirements for
nonquantitative treatment limitations).
Table 3 to Paragraph (c)(3)(iv)(D)(1)
----------------------------------------------------------------------------------------------------------------
Tier 1 Tier 2 Tier 3 Tier 4
----------------------------------------------------------------------------------------------------------------
Tier description................ Generic drugs..... Preferred brand Non-preferred Specialty drugs.
name drugs. brand name drugs
(which may have
Tier 1 or Tier 2
alternatives).
Percent paid by plan............ 90................ 80................ 60................ 50.
----------------------------------------------------------------------------------------------------------------
(2) Conclusion. In this paragraph (c)(3)(iv)(D) (Example 4), the
financial requirements that apply to prescription drug benefits are
applied without regard to whether a drug is generally prescribed with
respect to medical/surgical benefits or with respect to mental health
or substance use disorder benefits; the process for certifying drugs in
different tiers complies with paragraph (c)(4) of this section; and the
bases for establishing different levels or types of financial
requirements are reasonable. The financial requirements applied to
prescription drug benefits do not violate the parity requirements of
this paragraph (c)(3).
(E) Example 5--(1) Facts. A plan has two-tiers of network of
providers: a preferred provider tier and a participating provider tier.
Providers are placed in either the preferred tier or participating tier
based on reasonable factors determined in accordance with the rules in
paragraph (c)(4) of this section, such as accreditation, quality and
performance measures (including customer feedback), and relative
reimbursement rates. Furthermore, provider tier placement is determined
without regard to whether a provider specializes in the treatment of
mental health conditions or substance use disorders, or medical/
surgical conditions. The plan divides the in-network classifications
into two sub-classifications (in-network/preferred and in-network/
participating). The plan does not impose any financial requirement or
treatment limitation on mental health or substance use disorder
benefits in either of these sub-
[[Page 51626]]
classifications that is more restrictive than the predominant financial
requirement or treatment limitation that applies to substantially all
medical/surgical benefits in each sub-classification.
(2) Conclusion. In this paragraph (c)(3)(iv)(E) (Example 5), the
division of in-network benefits into sub-classifications that reflect
the preferred and participating provider tiers does not violate the
parity requirements of this paragraph (c)(3).
(F) Example 6--(1) Facts. With respect to outpatient, in-network
benefits, a plan imposes a $25 copayment for office visits and a 20
percent coinsurance requirement for outpatient surgery. The plan
divides the outpatient, in-network classification into two sub-
classifications (in-network office visits and all other outpatient, in-
network items and services). The plan does not impose any financial
requirement or quantitative treatment limitation on mental health or
substance use disorder benefits in either of these sub-classifications
that is more restrictive than the predominant financial requirement or
quantitative treatment limitation that applies to substantially all
medical/surgical benefits in each sub-classification.
(2) Conclusion. In this paragraph (c)(3)(iv)(F) (Example 6), the
division of outpatient, in-network benefits into sub-classifications
for office visits and all other outpatient, in-network items and
services does not violate the parity requirements of this paragraph
(c)(3).
(G) Example 7--(1) Facts. Same facts as in paragraph
(c)(3)(iv)(F)(1) of this section (Example 6), but for purposes of
determining parity, the plan divides the outpatient, in-network
classification into outpatient, in-network generalists and outpatient,
in-network specialists.
(2) Conclusion. In this paragraph (c)(3)(iv)(G) (Example 7), the
division of outpatient, in-network benefits into any sub-
classifications other than office visits and all other outpatient items
and services violates the requirements of paragraph (c)(3)(iii)(C) of
this section.
* * * * *
(4) Nonquantitative treatment limitations. Subject to paragraph
(c)(4)(v) of this section, a group health plan may not impose a
nonquantitative treatment limitation with respect to mental health or
substance use disorder benefits in a classification unless the plan's
imposition of the limitation meets the requirements of paragraphs
(c)(4)(i), (ii), and (iv) of this section. If a group health plan fails
to meet any of these requirements with respect to a nonquantitative
treatment limitation, the limitation violates Code section
9812(a)(3)(A)(ii) and may not be imposed by the plan.
(i) Requirement that nonquantitative treatment limitations be no
more restrictive for mental health benefits and substance use disorder
benefits. A group health plan may not apply any nonquantitative
treatment limitation with respect to mental health or substance use
disorder benefits in any classification that is more restrictive, as
written or in operation, than the predominant nonquantitative treatment
limitation applied to substantially all medical/surgical benefits in
the same classification.
(A) Restrictive. For purposes of this paragraph (c)(4)(i), a
nonquantitative treatment limitation is restrictive to the extent it
imposes conditions, terms, or requirements that limit access to
benefits under the terms of the plan. Conditions, terms, or
requirements include, but are not limited to, those that compel an
action by or on behalf of a participant or beneficiary to access
benefits or limit access to the full range of treatment options
available for a condition or disorder under the plan.
(B) Substantially all. For purposes of this paragraph (c)(4)(i), a
nonquantitative treatment limitation is considered to apply to
substantially all medical/surgical benefits in a classification if it
applies to at least two-thirds of all medical/surgical benefits in that
classification, consistent with paragraph (c)(4)(i)(D) of this section.
Whether the nonquantitative treatment limitation applies to at least
two-thirds of all medical/surgical benefits is determined without
regard to whether the nonquantitative treatment limitation was
triggered based on a particular factor or evidentiary standard. If a
nonquantitative treatment limitation does not apply to at least two-
thirds of all medical/surgical benefits in a classification, then that
limitation cannot be applied to mental health or substance use disorder
benefits in that classification.
(C) Predominant. For purposes of this paragraph (c)(4)(i), the term
predominant means the most common or most frequent variation of the
nonquantitative treatment limitation within a classification,
determined in accordance with the method outlined in paragraph
(c)(4)(i)(D) of this section, to the extent the plan imposes multiple
variations of a nonquantitative treatment limitation within the
classification. For example, multiple variations of inpatient
concurrent review include review commencing 1 day, 3 days, or 7 days
after admission, depending on the reason for the stay.
(D) Portion based on plan payments. For purposes of paragraphs
(c)(4)(i)(B) and (C) of this section, the determination of the portion
of medical/surgical benefits in a classification of benefits subject to
a nonquantitative treatment limitation is based on the dollar amount of
all plan payments for medical/surgical benefits in the classification
expected to be paid under the plan for the plan year (or the portion of
the plan year after a change in benefits that affects the applicability
of the nonquantitative treatment limitation). Any reasonable method may
be used to determine the dollar amount expected to be paid under a plan
for medical/surgical benefits.
(E) Exceptions for independent professional medical or clinical
standards and standards to detect or prevent and prove fraud, waste,
and abuse. Notwithstanding paragraphs (c)(4)(i)(A) through (D) of this
section, a plan that applies a nonquantitative treatment limitation
that impartially applies independent professional medical or clinical
standards or applies standards to detect or prevent and prove fraud,
waste, and abuse, as described in paragraph (c)(4)(v)(A) or (B) of this
section, to mental health or substance use disorder benefits in any
classification will not be considered to violate this paragraph
(c)(4)(i) with respect to such nonquantitative treatment limitation.
(ii) Additional requirements related to design and application of
the nonquantitative treatment limitation--(A) In general. Consistent
with paragraph (a)(1) of this section, a plan may not impose a
nonquantitative treatment limitation with respect to mental health or
substance use disorder benefits in any classification unless, under the
terms of the plan as written and in operation, any processes,
strategies, evidentiary standards, or other factors used in designing
and applying the nonquantitative treatment limitation to mental health
or substance use disorder benefits in the classification are comparable
to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, or other factors used in designing
and applying the limitation with respect to medical/surgical benefits
in the classification.
(B) Prohibition on discriminatory factors and evidentiary
standards. For purposes of determining comparability and stringency
under paragraph (c)(4)(ii)(A) of this section, a plan may not rely upon
any factor or evidentiary standard if the information, evidence,
sources, or standards on which the factor or evidentiary standard is
based
[[Page 51627]]
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits. For purposes of this
paragraph (c)(4)(ii)(B):
(1) Impartially applied generally recognized independent
professional medical or clinical standards described in paragraph
(c)(4)(v)(A) of this section are not considered to discriminate against
mental health or substance use disorder benefits.
(2) Standards reasonably designed to detect or prevent and prove
fraud, waste, and abuse described in paragraph (c)(4)(v)(B) of this
section are not considered to discriminate against mental health or
substance use disorder benefits.
(3) Information is considered to discriminate against mental health
or substance use disorder benefits if it is biased or not objective, in
a manner that results in less favorable treatment of mental health or
substance use disorder benefits, based on all the relevant facts and
circumstances including, but not limited to, the source of the
information, the purpose or context of the information, and the content
of the information.
(iii) Illustrative, non-exhaustive list of nonquantitative
treatment limitations. Nonquantitative treatment limitations include--
(A) Medical management standards (such as prior authorization)
limiting or excluding benefits based on medical necessity or medical
appropriateness, or based on whether the treatment is experimental or
investigative;
(B) Formulary design for prescription drugs;
(C) For plans with multiple network tiers (such as preferred
providers and participating providers), network tier design;
(D) Standards related to network composition, including but not
limited to, standards for provider and facility admission to
participate in a network or for continued network participation,
including methods for determining reimbursement rates, credentialing
standards, and procedures for ensuring the network includes an adequate
number of each category of provider and facility to provide services
under the plan;
(E) Plan methods for determining out-of-network rates, such as
allowed amounts; usual, customary, and reasonable charges; or
application of other external benchmarks for out-of-network rates;
(F) Refusal to pay for higher-cost therapies until it can be shown
that a lower-cost therapy is not effective (also known as fail-first
policies or step therapy protocols);
(G) Exclusions based on failure to complete a course of treatment;
and
(H) Restrictions based on geographic location, facility type,
provider specialty, and other criteria that limit the scope or duration
of benefits for services provided under the plan.
(iv) Required use of outcomes data--(A) In general. When designing
and applying a nonquantitative treatment limitation, a plan must
collect and evaluate relevant data in a manner reasonably designed to
assess the impact of the nonquantitative treatment limitation on access
to mental health and substance use disorder benefits and medical/
surgical benefits, and consider the impact as part of the plan's
analysis of whether the limitation, in operation, complies with
paragraphs (c)(4)(i) and (ii) of this section. The Secretary, jointly
with the Secretary of the Department of Labor and the Secretary of
Health and Human Services, may specify in guidance the type, form, and
manner of collection and evaluation for the data required under this
paragraph (c)(4)(iv)(A).
(1) For purposes of this paragraph (c)(4)(iv)(A), relevant data
includes, but is not limited to, the number and percentage of claims
denials and any other data relevant to the nonquantitative treatment
limitation required by State law or private accreditation standards.
(2) In addition to the relevant data set forth in paragraph
(c)(4)(iv)(A)(1) of this section, relevant data for nonquantitative
treatment limitations related to network composition standards
includes, but is not limited to, in-network and out-of-network
utilization rates (including data related to provider claim
submissions), network adequacy metrics (including time and distance
data, and data on providers accepting new patients), and provider
reimbursement rates (including as compared to billed charges).
(B) Material differences. Subject to paragraph (c)(4)(iv)(C) of
this section, to the extent the relevant data evaluated pursuant to
paragraph (c)(4)(iv)(A) of this section show material differences in
access to mental health and substance use disorder benefits as compared
to medical/surgical benefits, the differences will be considered a
strong indicator that the plan violates paragraph (c)(4)(i) or (ii) of
this section. In such instances, the plan:
(1) Must take reasonable action to address the material differences
in access as necessary to ensure compliance, in operation, with
paragraphs (c)(4)(i) and (ii) of this section; and
(2) Must document the action that has been or is being taken by the
plan to mitigate any material differences in access to mental health
and substance use disorder benefits as compared to medical/surgical
benefits, as required by Sec. 54.9812-2(c)(5)(iv).
(C) Special rule for nonquantitative treatment limitations related
to network composition. Notwithstanding paragraph (c)(4)(iv)(B) of this
section, when designing and applying one or more nonquantitative
treatment limitation(s) related to network composition standards, a
plan fails to meet the requirements of paragraphs (c)(4)(i) and (ii) of
this section, in operation, if the relevant data show material
differences in access to in-network mental health and substance use
disorder benefits as compared to in-network medical/surgical benefits
in a classification.
(D) Exception for independent professional medical or clinical
standards. A plan designing and applying a nonquantitative treatment
limitation with respect to mental health or substance use disorder
benefits in any classification that impartially applies independent
professional medical or clinical standards, as described in paragraph
(c)(4)(v)(A) of this section, is not required to comply with the
requirements of this paragraph (c)(4)(iv) with respect to that
classification.
(v) Independent professional medical or clinical standards and
standards to detect or prevent and prove fraud, waste, and abuse. (A)
To qualify for the exceptions in paragraphs (c)(4)(i)(E),
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this section for independent
professional medical or clinical standards, a nonquantitative treatment
limitation must impartially apply generally recognized independent
professional medical or clinical standards (consistent with generally
accepted standards of care) to medical/surgical benefits and mental
health or substance use disorder benefits, and may not deviate from
those standards in any way, such as by imposing additional or different
requirements.
(B) To qualify for the exceptions in paragraphs (c)(4)(i)(E) and
(c)(4)(ii)(B) of this section to detect or prevent and prove fraud,
waste, and abuse, a nonquantitative treatment limitation must be
reasonably designed to detect or prevent and prove fraud, waste, and
abuse, based on indicia of fraud, waste, and abuse that have been
reliably established through objective and unbiased data, and also be
narrowly
[[Page 51628]]
designed to minimize the negative impact on access to appropriate
mental health and substance use disorder benefits.
(vi) Prohibition on separate nonquantitative treatment limitations
applicable only to mental health or substance use disorder benefits.
Consistent with paragraph (c)(2)(i) of this section, a group health
plan may not apply any nonquantitative treatment limitation that is
applicable only with respect to mental health or substance use disorder
benefits and does not apply with respect to any medical/surgical
benefits in the same benefit classification.
(vii) Effect of final determination of noncompliance under Sec.
54.9812-2. If a group health plan receives a final determination from
the Secretary that the plan is not in compliance with the requirements
of Sec. 54.9812-2 with respect to a nonquantitative treatment
limitation, the nonquantitative treatment limitation violates this
paragraph (c)(4) and the Secretary may direct the plan not to impose
the nonquantitative treatment limitation, unless and until the plan
demonstrates to the Secretary compliance with the requirements of this
section or takes appropriate action to remedy the violation.
(viii) Examples. The rules of this paragraph (c)(4) are illustrated
by the following examples. In each example, the group health plan is
subject to the requirements of this section and provides both medical/
surgical benefits and mental health and substance use disorder
benefits. Additionally, in examples that conclude that the plan
violates one provision of this paragraph (c)(4), such examples do not
necessarily imply compliance with other provisions of this paragraph
(c)(4), as these examples do not analyze compliance with all other
provisions of this paragraph (c)(4).
(A) Example 1 (More restrictive prior authorization requirement in
operation)--(1) Facts. A plan requires prior authorization from the
plan's utilization reviewer that a treatment is medically necessary for
all inpatient, in-network medical/surgical benefits and for all
inpatient, in-network mental health and substance use disorder
benefits. While inpatient, in-network benefits for medical/surgical
conditions are approved for periods of 1, 3, and 7 days, after which a
treatment plan must be submitted by the patient's attending provider
and approved by the plan, the approvals for 7 days are most common
under this plan. For inpatient, in-network mental health and substance
use disorder benefits, routine approval is most commonly given only for
one day, after which a treatment plan must be submitted by the
patient's attending provider and approved by the plan. The difference
in the duration of approvals is not the result of independent
professional medical or clinical standards or standards to detect or
prevent and prove fraud, waste, and abuse, but rather reflects the
application of a heightened standard to the provision of the mental
health and substance use disorder benefits in the relevant
classification.
(2) Conclusion. In this paragraph (c)(4)(viii)(A) (Example 1), the
plan violates the rules of paragraph (c)(4)(i) of this section. Under
the terms of the plan, prior authorization applies to at least two-
thirds of all medical/surgical benefits in the relevant classification
(inpatient, in-network), since it applies to all benefits in the
relevant classification. Further, the most common or frequent variation
of the nonquantitative treatment limitation applied to medical/surgical
benefits in the relevant classification (the predominant
nonquantitative treatment limitation) is the routine approval of
inpatient, in-network benefits for 7 days before the patient's
attending provider must submit a treatment plan. However, the plan
routinely approves inpatient, in-network benefits for mental health and
substance use disorder conditions for only 1 day before the patient's
attending provider must submit a treatment plan (and, in doing so, does
not impartially apply independent professional medical or clinical
standards or apply standards to detect or prevent and prove fraud,
waste, and abuse that qualify for the exceptions in paragraph
(c)(4)(i)(E) of this section). In operation, therefore, the prior
authorization requirement imposed on inpatient, in-network mental
health and substance use disorder benefits is more restrictive than the
predominant prior authorization requirement applicable to substantially
all medical/surgical benefits in the inpatient, in-network
classification because the practice of approving only 1 day of
inpatient benefits limits access to the full range of treatment options
available for a condition or disorder under the plan as compared to the
routine 7-day approval that is given for inpatient, in-network medical/
surgical benefits. Because the plan violates the rules of paragraph
(c)(4)(i) of this section, this example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this section.
(B) Example 2 (More restrictive peer-to-peer concurrent review
requirements in operation)--(1) Facts. A plan follows a written process
for the concurrent review of all medical/surgical benefits and mental
health and substance use disorder benefits within the inpatient, in-
network classification. Under the process, a first-level review is
conducted in every instance in which concurrent review applies and an
authorization request is approved by the first-level reviewer only if
the clinical information submitted by the facility meets the plan's
criteria for a continued stay. If the first-level reviewer is unable to
approve the authorization request because the clinical information
submitted by the facility does not meet the plan's criteria for a
continued stay, it is sent to a second-level reviewer who will either
approve or deny the request. While the written process only requires
review by the second-level reviewer to either deny or approve the
request, in operation, second-level reviewers for mental health and
substance use disorder benefits conduct a peer-to-peer review with a
provider (acting as the authorized representative of a participant or
beneficiary) before coverage of the treatment is approved. The peer-to-
peer review requirement is not the result of independent professional
medical or clinical standards or standards to detect or prevent and
prove fraud, waste, and abuse. The plan does not impose a peer-to-peer
review, as written or in operation, as part of the second-level review
for medical/surgical benefits.
(2) Conclusion. In this paragraph (c)(4)(viii)(B) (Example 2), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
concurrent review nonquantitative treatment limitation applies to at
least two-thirds of all medical/surgical benefits within the inpatient,
in-network classification because the plan follows the concurrent
review process for all medical/surgical benefits. The most common or
frequent variation of this nonquantitative treatment limitation (the
predominant nonquantitative treatment limitation) applicable to
substantially all medical/surgical benefits is that peer-to-peer review
is not imposed as part of second-level review. The plan does not
impartially apply independent professional medical or clinical
standards or apply standards to detect or prevent and prove fraud,
waste, and abuse that qualify for the exceptions in paragraph
(c)(4)(i)(E) of this section. As written, the plan's concurrent review
requirements are the same for medical/surgical benefits and mental
health and substance use disorder benefits. However, in operation, by
compelling an additional action (peer-to-peer review as part of second-
level review) to
[[Page 51629]]
access only mental health or substance use disorder benefits, the plan
applies the limitation to mental health and substance use disorder
benefits in a manner that is more restrictive than the predominant
nonquantitative treatment limitation applied to substantially all
medical/surgical benefits in the inpatient, in-network classification.
Because the plan violates the rules of paragraph (c)(4)(i) of this
section, this example does not analyze compliance with paragraph
(c)(4)(ii) or (iv) of this section.
(C) Example 3 (More restrictive peer-to-peer review medical
necessity standard in operation; deviation from independent
professional medical and clinical standards)--(1) Facts. A plan
generally requires that all treatment be medically necessary in the
inpatient, out-of-network classification. For both medical/surgical
benefits and mental health and substance use disorder benefits, the
written medical necessity standards are based on independent
professional medical or clinical standards that do not require peer-to-
peer review. In operation, the plan covers out-of-network benefits for
medical/surgical or mental health inpatient treatment outside of a
hospital if the physician documents medical appropriateness, but for
out-of-network benefits for substance use disorder inpatient treatment
outside of a hospital, the plan requires a physician to also complete
peer-to-peer review.
(2) Conclusion. In this paragraph (c)(4)(viii)(C) (Example 3), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
medical necessity nonquantitative treatment limitation applies to at
least two-thirds of all medical/surgical benefits in the inpatient,
out-of-network classification. The most common or frequent variation of
the nonquantitative treatment limitation (the predominant
nonquantitative treatment limitation) applicable to substantially all
medical/surgical benefits is the requirement that a physician document
medical appropriateness without peer-to-peer review. The plan purports
to impartially apply independent professional medical or clinical
standards that would otherwise qualify for the exception in paragraph
(c)(4)(i)(E) of this section, but deviates from those standards by
imposing the additional requirement to complete peer-to-peer review for
inpatient, out-of-network benefits for substance use disorder outside
of a hospital. Therefore, the exception in paragraph (c)(4)(i)(E) of
this section does not apply. As written, the plan provisions apply the
nonquantitative treatment limitation to mental health and substance use
disorder benefits in the inpatient, out-of-network classification in
the same manner as for medical/surgical benefits. However, in
operation, the nonquantitative treatment limitation imposed with
respect to out-of-network substance use disorder benefits for treatment
outside of a hospital is more restrictive than the predominant
nonquantitative treatment limitation applied to substantially all
medical/surgical benefits in the classification because it limits
access to the full range of treatment options available for a condition
or disorder under the plan or coverage as compared to medical/surgical
benefits in the same classification. Because the plan violates the
rules of paragraph (c)(4)(i) of this section, this example does not
analyze compliance with paragraph (c)(4)(ii) or (iv) of this section.
(D) Example 4 (Not comparable and more stringent methods for
determining reimbursement rates in operation)--(1) Facts. A plan's base
reimbursement rates for outpatient, in-network providers are determined
based on a variety of factors, including the providers' required
training, licensure, and expertise. For purposes of this example, the
plan's nonquantitative treatment limitations for determining
reimbursement rates for mental health and substance use disorder
benefits are not more restrictive than the predominant nonquantitative
treatment limitation applied to substantially all medical/surgical
benefits in the classification under paragraph (c)(4)(i) of this
section. As written, for mental health, substance use disorder, and
medical/surgical benefits, all reimbursement rates for physicians and
non-physician practitioners for the same Current Procedural Terminology
(CPT) code vary based on a combination of factors, such as the nature
of the service, provider type, number of providers qualified to provide
the service in a given geographic area, and market need (demand). As a
result, reimbursement rates for mental health, substance use disorder,
and medical/surgical benefits furnished by non-physician providers are
generally less than for physician providers. In operation, the plan
reduces the reimbursement rate for mental health and substance use
disorder non-physician providers from that paid to mental health and
substance use disorder physicians by the same percentage for every CPT
code but does not apply the same reductions for non-physician medical/
surgical providers.
(2) Conclusion. In this paragraph (c)(4)(viii)(D) (Example 4), the
plan violates the rules of paragraph (c)(4)(ii) of this section.
Because the plan reimburses non-physician providers of mental health
and substance use disorder services by reducing their reimbursement
rate from the rate to physician providers by the same percentage for
every CPT code but does not apply the same reductions to non-physician
providers of medical/surgical services, in operation, the factors used
in applying the nonquantitative treatment limitation to mental health
and substance use disorder benefits are not comparable to, and are
applied more stringently than, the factors used in applying the
limitation with respect to medical/surgical benefits. Because the facts
assume that the plan's methods for determining reimbursement rates
comply with paragraph (c)(4)(i) of this section and the plan violates
the rules of paragraph (c)(4)(ii) of this section, this example does
not analyze compliance with paragraph (c)(4)(iv) of this section.
(E) Example 5 (Exception for impartially applied generally
recognized independent professional medical or clinical standards)--(1)
Facts. A group health plan develops a medical management requirement
for all inpatient, out-of-network benefits for both medical/surgical
benefits and mental health and substance use disorder benefits to
ensure treatment is medically necessary. The medical management
requirement impartially applies independent professional medical or
clinical standards in a manner that qualifies for the exception in
paragraph (c)(4)(i)(E) of this section. The plan does not rely on any
other factors or evidentiary standards and the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the medical management requirement to mental health and substance use
disorder benefits are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, and
other factors used in designing and applying the requirement with
respect to medical/surgical benefits. Within the inpatient, out-of-
network classification, the application of the medical management
requirement results in a higher percentage of denials for mental health
and substance use disorder claims than medical/surgical claims, because
the benefits were found to be medically necessary for a lower
percentage of mental health and substance use disorder claims based on
the impartial application of the independent professional medical or
clinical standards by the nonquantitative treatment limitation.
(2) Conclusion. In this paragraph (c)(4)(viii)(E) (Example 5), the
plan does
[[Page 51630]]
not violate the rules of this paragraph (c)(4). The medical management
nonquantitative treatment limitation imposed on mental health and
substance use disorder benefits does not violate paragraph (c)(4)(i) or
(iv) of this section because it impartially applies independent
professional medical or clinical standards for both medical/surgical
benefits and mental health and substance use disorder benefits in a
manner that qualifies for the exceptions in paragraphs (c)(4)(i)(E) and
(c)(4)(iv)(D) of this section, respectively. Moreover, the
nonquantitative treatment limitation does not violate paragraph
(c)(4)(ii) of this section because the independent professional medical
or clinical standards are not considered to be a discriminatory factor
or evidentiary standard under paragraph (c)(4)(ii)(B) of this section.
Additionally, as written and in operation, the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the nonquantitative treatment limitation to mental health or substance
use disorder benefits in the inpatient, out-of-network classification
are comparable to, and are applied no more stringently than, the
processes, strategies, evidentiary standards, and other factors used in
applying the limitation with respect to medical/surgical benefits in
the classification, regardless of the fact that the application of the
nonquantitative treatment limitation resulted in higher percentages of
claim denials for mental health and substance use disorder benefits as
compared to medical/surgical benefits.
(F) Example 6 (More restrictive prior authorization requirement;
exception for impartially applied generally recognized independent
professional medical or clinical standards not met)--(1) Facts. The
provisions of a plan state that it applies independent professional
medical and clinical standards (consistent with generally accepted
standards of care) for setting prior authorization requirements for
both medical/surgical and mental health and substance use disorder
prescription drugs. The relevant generally recognized independent
professional medical standard for treatment of opioid use disorder that
the plan utilizes--in this case, the American Society of Addiction
Medicine national practice guidelines--does not support prior
authorization every 30 days for buprenorphine/naloxone. However, in
operation, the plan requires prior authorization for buprenorphine/
naloxone combination at each refill (every 30 days) for treatment of
opioid use disorder.
(2) Conclusion. In this paragraph (c)(4)(viii)(F) (Example 6), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
plan does not qualify for the exception in paragraph (c)(4)(i)(E) of
this section, because, although the provisions of the plan state that
it applies independent professional medical and clinical standards, the
plan deviates from the relevant standards with respect to prescription
drugs to treat opioid use disorder. The prior authorization
nonquantitative treatment limitation is applied to at least two-thirds
of all medical/surgical benefits in the prescription drugs
classification. The most common or frequent variation of this
nonquantitative treatment limitation (the predominant nonquantitative
treatment limitation) applicable to substantially all medical/surgical
benefits is following generally recognized independent professional
medical and clinical standards (consistent with generally accepted
standards of care). The prior authorization requirements imposed on
substance use disorder benefits are more restrictive than the
predominant nonquantitative treatment limitation applicable to
substantially all medical/surgical benefits in the classification,
because the plan imposes additional requirements on substance use
disorder benefits that limit access to the full range of treatment
options available for a condition or disorder under the plan as
compared to medical/surgical benefits in the same classification.
Because the plan violates the rules of paragraph (c)(4)(i) of this
section, this example does not analyze compliance with paragraph
(c)(4)(ii) or (iv) of this section.
(G) Example 7 (Impermissible nonquantitative treatment limitation
imposed following a final determination of noncompliance and direction
by the Secretary)--(1) Facts. Following an initial request by the
Secretary for a plan's comparative analysis of a nonquantitative
treatment limitation pursuant to Sec. 54.9812-2(d), the plan submits a
comparative analysis for the nonquantitative treatment limitation.
After review of the comparative analysis, the Secretary makes an
initial determination that the comparative analysis fails to
demonstrate that the processes, strategies, evidentiary standards, and
other factors used in designing and applying the nonquantitative
treatment limitation to mental health or substance use disorder
benefits in the relevant classification are comparable to, and applied
no more stringently than, those used in designing and applying the
limitation to medical/surgical benefits in the classification. Pursuant
to Sec. 54.9812-2(d)(3), the plan submits a corrective action plan and
additional comparative analyses within 45 calendar days after the
initial determination, and the Secretary then determines that the
additional comparative analyses do not demonstrate compliance with the
requirements of this paragraph (c)(4). The plan receives a final
determination of noncompliance from the Secretary, which informs the
plan that it is not in compliance with this paragraph (c)(4) and
directs the plan not to impose the nonquantitative treatment limitation
by a certain date, unless and until the plan demonstrates compliance to
the Secretary or takes appropriate action to remedy the violation. The
plan makes no changes to its plan terms by that date and continues to
impose the nonquantitative treatment limitation.
(2) Conclusion. In this paragraph (c)(4)(viii)(G) (Example 7), the
plan violates the requirements of this paragraph (c)(4) by imposing the
nonquantitative treatment limitation after the Secretary directs the
plan not to impose it, pursuant to paragraph (c)(4)(vii) of this
section.
(H) Example 8 (Provider network admission standards not more
restrictive and compliant with requirements for design and application
of NQTLs)--(1) Facts. As part of a plan's standards for provider
admission to its network, in the outpatient, in-network classification,
any provider seeking to contract with the plan must have a certain
number of years of supervised clinical experience. As a result of that
standard, master's level mental health therapists are required to
obtain supervised clinical experience beyond their licensure, while
master's level medical/surgical providers, psychiatrists, and Ph.D.-
level psychologists do not require additional experience beyond their
licensure because their licensure already requires supervised clinical
experience. The plan collects and evaluates relevant data in a manner
reasonably designed to assess the impact of the nonquantitative
treatment limitation. This includes in-network and out-of-network
utilization rates (including data related to provider claim
submissions), network adequacy metrics (including time and distance
data, and data on providers accepting new patients), and provider
reimbursement rates (including as compared to billed charges). This
data demonstrates that participants and beneficiaries seeking
outpatient care are able to access outpatient, in-network mental health
and substance use disorder providers at the same
[[Page 51631]]
frequency as outpatient, in-network medical/surgical providers, that
mental health and substance use disorder providers are active in the
network and are accepting new patients to the same extent as medical/
surgical providers, and that mental health and substance use disorder
providers are within similar time and distances to plan participants
and beneficiaries as are medical/surgical providers. This data also
does not identify material differences in what the plan pays
psychiatrists or non-physician mental health providers, compared to
physicians or non-physician medical/surgical providers, respectively,
both for the same reimbursement codes and as compared to Medicare
rates.
(2) Conclusion. In this paragraph (c)(4)(viii)(H) (Example 8), the
plan does not violate this paragraph (c)(4). The standards for this
nonquantitative treatment limitation, namely provider admission to the
plan's network, are applied to at least two-thirds of all medical/
surgical benefits in the outpatient, in-network classification, as it
applies to all medical/surgical benefits in the classification. The
most common or frequent variation of this nonquantitative treatment
limitation (the predominant nonquantitative treatment limitation) that
applies to substantially all medical/surgical benefits in the
classification is having a certain number of years of supervised
clinical experience. The standards for provider admission to the plan's
network that are imposed with respect to mental health or substance use
disorder benefits are no more restrictive, as written or in operation,
than the predominant variation of the nonquantitative treatment
limitation applicable to substantially all medical/surgical benefits in
the classification, because the standards do not limit access to the
full range of treatment options available for a condition or disorder
under the plan as compared to medical/surgical benefits in the same
classification. The requirement that providers have a certain number of
years of supervised clinical experience that the plan relied upon to
design and apply the nonquantitative treatment limitation is not
considered to discriminate against mental health or substance use
disorder benefits, even though this results in the requirement that
master's level mental health therapists obtain supervised clinical
experience beyond their licensure, unlike master's level medical/
surgical providers. In addition, as written and in operation, the
processes, strategies, evidentiary standards, or other factors used in
applying the nonquantitative treatment limitation to mental health or
substance use disorder benefits in the classification are comparable
to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, or other factors used in applying
the limitation with respect to medical/surgical benefits in the
classification, because the plan applies the same standard to all
providers in the classification. Finally, the plan collects and
evaluates relevant data in a manner reasonably designed to assess the
impact of the nonquantitative treatment limitation on access to mental
health and substance use disorder benefits, which does not show
material differences in access to in-network mental health and
substance use disorder benefits as compared to in-network medical/
surgical benefits in the classification.
(I) Example 9 (More restrictive requirement for primary caregiver
participation applied to ABA therapy)--(1) Facts. A plan generally
applies medical necessity criteria in adjudicating claims for coverage
of all outpatient, in-network medical/surgical and mental health and
substance use disorder benefits, including ABA therapy for the
treatment of ASD, which is a mental health condition. The plan's
medical necessity criteria for coverage of ABA therapy requires
evidence that the participant's or beneficiary's primary caregivers
actively participate in ABA therapy, as documented by consistent
attendance in parent, caregiver, or guardian training sessions. In
adding this requirement, the plan deviates from independent
professional medical or clinical standards, and there are no similar
medical necessity criteria requiring evidence of primary caregiver
participation in order to receive coverage of any medical/surgical
benefits.
(2) Conclusion. In this paragraph (c)(4)(viii)(I) (Example 9), the
plan violates paragraph (c)(4)(i) of this section. The plan applies
medical necessity criteria to at least two-thirds of all outpatient,
in-network medical/surgical benefits, as they apply to all medical/
surgical benefits in the classification. The most common or frequent
variation of this nonquantitative treatment limitation (the predominant
nonquantitative treatment limitation) that applies to substantially all
medical/surgical benefits in the classification does not include the
requirement to provide evidence that the participant's or beneficiary's
primary caregivers actively participate in the treatment. The plan does
not qualify for the exception in paragraph (c)(4)(i)(E) of this section
in applying its restriction on coverage for ABA therapy because the
plan deviates from the independent professional medical or clinical
standards by imposing a different requirement. As a result, the
nonquantitative treatment limitation imposed on mental health and
substance use disorder benefits is more restrictive than the
predominant medical necessity requirement imposed on substantially all
medical/surgical benefits in the classification (which does not include
the requirement to provide evidence that primary caregivers actively
participate in treatment). Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this example does not analyze
compliance with paragraph (c)(4)(ii) or (iv) of this section.
(J) Example 10 (More restrictive exclusion for experimental or
investigative treatment applied to ABA therapy)--(1) Facts. A plan, as
written, generally excludes coverage for all treatments that are
experimental or investigative for both medical/surgical benefits and
mental health and substance use disorder benefits in the outpatient,
in-network classification. As a result, the plan generally excludes
experimental treatment of medical conditions and surgical procedures,
mental health conditions, and substance use disorders when no
professionally recognized treatment guidelines define clinically
appropriate standards of care for the condition or disorder and fewer
than two randomized controlled trials are available to support the
treatment's use with respect to the given condition or disorder. The
plan provides benefits for the treatment of ASD, which is a mental
health condition, but, in operation, the plan excludes coverage for ABA
therapy to treat children with ASD, deeming it experimental. More than
one professionally recognized treatment guideline defines clinically
appropriate standards of care for ASD and more than two randomized
controlled trials are available to support the use of ABA therapy to
treat certain children with ASD.
(2) Conclusion. In this paragraph (c)(4)(viii)(J) (Example 10), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
coverage exclusion for experimental or investigative treatment applies
to at least two-thirds of all medical/surgical benefits, as it applies
to all medical/surgical benefits in the outpatient, in-network
classification. The most common or frequent variation of this
nonquantitative treatment limitation in the classification (the
predominant nonquantitative treatment limitation)
[[Page 51632]]
applicable to substantially all medical/surgical benefits is the
exclusion under the plan for coverage of experimental treatment of
medical/surgical conditions when no professionally recognized treatment
guidelines define clinically appropriate standards of care for the
condition or disorder and fewer than two randomized controlled trials
are available to support the treatment's use with respect to the given
condition or procedure. In operation, the exclusion for experimental or
investigative treatment imposed on ABA therapy is more restrictive than
the predominant variation of the nonquantitative treatment limitation
for experimental or investigative treatment imposed on substantially
all medical/surgical benefits in the classification because the
exclusion limits access to the full range of treatment options
available for a condition or disorder under the plan as compared to
medical/surgical benefits in the same classification. Because the plan
violates the rules of paragraph (c)(4)(i) of this section, this example
does not analyze compliance with paragraph (c)(4)(ii) or (iv) of this
section.
(K) Example 11 (Separate EAP exhaustion treatment limitation
applicable only to mental health benefits)--(1) Facts. An employer
maintains both a major medical plan and an employee assistance program
(EAP). The EAP provides, among other benefits, a limited number of
mental health or substance use disorder counseling sessions, which,
together with other benefits provided by the EAP, are not significant
benefits in the nature of medical care. Participants are eligible for
mental health or substance use disorder benefits under the major
medical plan only after exhausting the counseling sessions provided by
the EAP. No similar exhaustion requirement applies with respect to
medical/surgical benefits provided under the major medical plan.
(2) Conclusion. In this paragraph (c)(4)(viii)(K) (Example 11),
limiting eligibility for mental health and substance use disorder
benefits under the major medical plan until EAP benefits are exhausted
is a nonquantitative treatment limitation subject to the parity
requirements of this paragraph (c). Because the limitation does not
apply to medical/surgical benefits, it is a separate nonquantitative
treatment limitation applicable only to mental health and substance use
disorder benefits that violates paragraph (c)(4)(vi) of this section.
Additionally, this EAP would not qualify as excepted benefits under
Sec. 54.9831-1(c)(3)(vi)(B)(1) because participants in the major
medical plan are required to use and exhaust benefits under the EAP
(making the EAP a gatekeeper) before an individual is eligible for
benefits under the plan.
(L) Example 12 (Separate residential exclusion treatment limitation
applicable only to mental health benefits)--(1) Facts. A plan generally
covers inpatient, in-network and inpatient out-of-network treatment in
any setting, including skilled nursing facilities and rehabilitation
hospitals, provided other medical necessity standards are satisfied.
The plan also has an exclusion for residential treatment, which the
plan defines as an inpatient benefit, for mental health and substance
use disorder benefits. This exclusion was not generated through any
broader nonquantitative treatment limitation (such as medical necessity
or other clinical guideline).
(2) Conclusion. In this paragraph (c)(4)(viii)(L) (Example 12), the
plan violates the rules of paragraph (c)(4)(vi) of this section.
Because the plan does not apply a comparable exclusion to inpatient
benefits for medical/surgical conditions, the exclusion of residential
treatment is a separate nonquantitative treatment limitation applicable
only to mental health and substance use disorder benefits in the
inpatient, in-network and inpatient, out-of-network classifications
that does not apply with respect to any medical/surgical benefits in
the same benefit classification.
(M) Example 13 (Standards for provider admission to a network)--(1)
Facts. A plan applies nonquantitative treatment limitations related to
network composition in the outpatient in-network and inpatient, in-
network classifications. The plan's networks are constructed by
separate service providers for medical/surgical benefits and mental
health and substance use disorder benefits. For purposes of this
example, these facts assume that these nonquantitative treatment
limitations related to network composition for mental health and
substance use disorder benefits are not more restrictive than the
predominant nonquantitative treatment limitations applied to
substantially all medical/surgical benefits in the classifications
under paragraph (c)(4)(i) of this section. The facts also assume that,
as written and in operation, the processes, strategies, evidentiary
standards, and other factors used in designing and applying the
nonquantitative treatment limitations related to network access to
mental health or substance use disorder benefits in the outpatient in-
network and inpatient in-network classifications are comparable to, and
are applied no more stringently than, the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the nonquantitative treatment limitations with respect to medical/
surgical benefits in the classifications, as required under paragraph
(c)(4)(ii) of this section. The plan collects and evaluates all
relevant data in a manner reasonably designed to assess the impact of
the nonquantitative treatment limitations related to network
composition on access to mental health and substance use disorder
benefits as compared with access to medical/surgical benefits and
considers the impact as part of the plan's analysis of whether the
standards, in operation, comply with paragraphs (c)(4)(i) and (ii) of
this section. The plan determined that the data did not reveal any
material differences in access. That data included metrics relating to
the time and distance from plan participants and beneficiaries to
network providers in rural and urban regions; the number of network
providers accepting new patients; the proportions of mental health and
substance use disorder and medical/surgical providers and facilities
that provide services in rural and urban regions who are in the plan's
network; provider reimbursement rates; in-network and out-of-network
utilization rates (including data related to the dollar value and
number of provider claims submissions); and survey data from
participants on the extent to which they forgo or pay out-of-pocket for
treatment because of challenges finding in-network providers. The
efforts the plan made when designing and applying its nonquantitative
treatment limitations related to network composition, which ultimately
led to its outcomes data not revealing any material differences in
access to benefits for mental health or substance use disorders as
compared with medical/surgical benefits, included making sure that the
plan's service providers are making special efforts to enroll available
providers, including by authorizing greater compensation or other
inducements to the extent necessary, and expanding telehealth
arrangements as appropriate to manage regional shortages. The plan also
notifies participants in clear and prominent language on its website,
employee brochures, and the summary plan description of a toll-free
number available to help participants find in-network providers. In
addition, when plan participants submit bills for out-of-network items
and services, the plan directs their service providers to reach out to
the treating providers and
[[Page 51633]]
facilities to see if they will enroll in the network.
(2) Conclusion. In this paragraph (c)(4)(viii)(M) (Example 13), the
plan does not violate this paragraph (c)(4). As stated in the Facts
section, the plan's nonquantitative treatment limitations related to
network composition comply with the rules of paragraphs (c)(4)(i) and
(ii) of this section. The plan collects and evaluates relevant data, as
required under paragraph (c)(4)(iv)(A) of this section, and the data
does not reveal any material differences in access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits, as a result of the actions the plan took (as set forth in the
facts) when initially designing its nonquantitative treatment
limitations related to network composition. Because the plan takes
comparable actions to ensure that their mental health and substance use
disorder provider network is as accessible as their medical/surgical
provider network and exercises careful oversight over both their
service providers and the comparative robustness of the networks with
an eye to ensuring that network composition results in access to in-
network benefits for mental health and substance use disorder services
that is as generous as for medical/surgical services, plan participants
and beneficiaries can access covered mental health and substance use
disorder services and benefits as readily as medical/surgical benefits.
This is reflected in the plan's carefully designed metrics and
assessment of network composition.
* * * * *
(d) * * *
(3) Provisions of other law. Compliance with the disclosure
requirements in paragraphs (d)(1) and (2) of this section is not
determinative of compliance with any other provision of applicable
Federal or State law. In particular, in addition to those disclosure
requirements, provisions of other applicable law require disclosure of
information relevant to medical/surgical, mental health, and substance
use disorder benefits. For example, ERISA section 104 and 29 CFR
2520.104b-1 provide that, for plans subject to ERISA, instruments under
which the plan is established or operated must generally be furnished
to plan participants within 30 days of request. Instruments under which
the plan is established or operated include documents with information
on medical necessity criteria for both medical/surgical benefits and
mental health and substance use disorder benefits; the processes,
strategies, evidentiary standards, and other factors used to apply a
nonquantitative treatment limitation with respect to medical/surgical
benefits and mental health or substance use disorder benefits under the
plan; and the comparative analyses and other applicable information
required by Sec. 54.9812-2. In addition, 29 CFR 2560.503-1 and Sec.
54.9815-2719T set forth rules regarding claims and appeals, including
the right of claimants (or their authorized representative) upon appeal
of an adverse benefit determination (or a final internal adverse
benefit determination) to be provided upon request and free of charge,
reasonable access to and copies of all documents, records, and other
information relevant to the claimant's claim for benefits. This
includes documents with information on medical necessity criteria for
both medical/surgical benefits and mental health and substance use
disorder benefits, as well as the processes, strategies, evidentiary
standards, and other factors used to apply a nonquantitative treatment
limitation with respect to medical/surgical benefits and mental health
or substance use disorder benefits under the plan and the comparative
analyses and other applicable information required by Sec. 54.9812-2.
(e) * * *
(4) Coordination with EHB requirements. Nothing in paragraph (f) or
(g) of this section or Sec. 54.9812-2(g) changes the requirements of
45 CFR 147.150 and 156.115, providing that a health insurance issuer
offering non-grandfathered health insurance coverage in the individual
or small group market providing mental health and substance use
disorder services, including behavioral health treatment services, as
part of essential health benefits required under 45 CFR 156.110(a)(5)
and 156.115(a), must comply with the requirements under section 2726 of
the Public Health Service Act and its implementing regulations to
satisfy the requirement to provide coverage for mental health and
substance use disorder services, including behavioral health treatment,
as part of essential health benefits.
* * * * *
(i) * * *
(1) In general. Except as provided in paragraph (i)(2) of this
section, this section applies to group health plans on the first day of
the first plan year beginning on or after January 1, 2025. Until the
applicability date in the preceding sentence, plans are required to
continue to comply with 26 CFR 54.9812-1, revised as of April 1, 2023.
* * * * *
(j) Severability. If any provision of this section is held to be
invalid or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
shall be construed so as to continue to give the maximum effect to the
provision permitted by law, unless such holding shall be one of
invalidity or unenforceability, in which event the provision shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
0
3. Add Sec. 54.9812-2 to read as follows:
Sec. 54.9812-2 Nonquantitative treatment limitation comparative
analysis requirements.
(a) Meaning of terms. Unless otherwise stated in this section, the
terms of this section have the meanings indicated in Sec. 54.9812-
1(a)(2).
(b) In general. In the case of a group health plan that provides
both medical/surgical benefits and mental health or substance use
disorder benefits and that imposes any nonquantitative treatment
limitation on mental health or substance use disorder benefits, the
plan must perform and document a comparative analysis of the design and
application of each nonquantitative treatment limitation applicable to
mental health or substance use disorder benefits. Each comparative
analysis must comply with the content requirements of paragraph (c) of
this section and be made available to the Secretary, upon request, in
the manner required by paragraphs (d) and (e) of this section.
(c) Comparative analysis content requirements. With respect to each
nonquantitative treatment limitation applicable to mental health or
substance use disorder benefits under a group health plan, the
comparative analysis performed by the plan must include, at minimum,
the elements specified in this paragraph (c). In addition to the
comparative analysis for each nonquantitative treatment limitation,
each plan must prepare and make available to the Secretary, upon
request, a written list of all nonquantitative treatment limitations
imposed under the plan and a general description of any information
considered or relied upon by the plan in preparing the comparative
analysis for each nonquantitative treatment limitation.
(1) Description of the nonquantitative treatment limitation. The
comparative analysis must include, with respect to the nonquantitative
treatment limitation
[[Page 51634]]
that is the subject of the comparative analysis:
(i) Identification of the nonquantitative treatment limitation,
including the specific terms of the plan or other relevant terms
regarding the nonquantitative treatment limitation, the policies or
guidelines (internal or external) in which the nonquantitative
treatment limitation appears or is described, and the applicable
sections of any other relevant documents, such as provider contracts,
that describe the nonquantitative treatment limitation;
(ii) Identification of all mental health or substance use disorder
benefits and medical/surgical benefits to which the nonquantitative
treatment limitation applies, including a list of which benefits are
considered mental health or substance use disorder benefits and which
benefits are considered medical/surgical benefits;
(iii) A description of which benefits are included in each
classification set forth in Sec. 54.9812-1(c)(2)(ii)(A); and
(iv) Identification of the predominant nonquantitative treatment
limitation applicable to substantially all medical/surgical benefits in
each classification, including an explanation of how the plan
determined which variation is the predominant nonquantitative treatment
limitation as compared to other variations, as well as how the plan
identified the variations of the nonquantitative treatment limitation.
(2) Identification and definition of the factors used to design or
apply the nonquantitative treatment limitation. The comparative
analysis must include, with respect to every factor considered or
relied upon to design the nonquantitative treatment limitation or apply
the nonquantitative treatment limitation to mental health or substance
use disorder benefits and medical/surgical benefits:
(i) Identification of all of the factors considered, as well as the
evidentiary standards considered or relied upon to design or apply each
factor and the sources from which each evidentiary standard was
derived, in determining which mental health or substance use disorder
benefits and which medical/surgical benefits are subject to the
nonquantitative treatment limitation; and
(ii) A definition of each factor, including:
(A) A detailed description of the factor; and
(B) A description of each evidentiary standard (and the source of
each evidentiary standard) identified under paragraph (c)(2)(i) of this
section.
(3) Description of how factors are used in the design and
application of the nonquantitative treatment limitation. The
comparative analysis must include a description of how each factor
identified and defined pursuant to paragraph (c)(2) of this section is
used in the design or application of the nonquantitative treatment
limitation to mental health and substance use disorder benefits and
medical/surgical benefits in a classification, including:
(i) A detailed explanation of how each factor identified and
defined in paragraph (c)(2) of this section is used to determine which
mental health or substance use disorder benefits and which medical/
surgical benefits are subject to the nonquantitative treatment
limitation;
(ii) An explanation of the evidentiary standards or other
information or sources (if any) considered or relied upon in designing
or applying the factors or relied upon in designing and applying the
nonquantitative treatment limitation, including in the determination of
whether and how mental health or substance use disorder benefits or
medical/surgical benefits are subject to the nonquantitative treatment
limitation;
(iii) If the application of the factor depends on specific
decisions made in the administration of benefits, the nature of the
decisions, the timing of the decisions, and the professional
designation and qualifications of each decision maker;
(iv) If more than one factor is identified and defined in paragraph
(c)(2) of this section, an explanation of:
(A) How all of the factors relate to each other;
(B) The order in which all the factors are applied, including when
they are applied;
(C) Whether and how any factors are given more weight than others;
and
(D) The reasons for the ordering or weighting of the factors; and
(v) Any deviation(s) or variation(s) from a factor, its
applicability, or its definition (including the evidentiary standards
used to define the factor and the information or sources from which
each evidentiary standard was derived), such as how the factor is used
differently to apply the nonquantitative treatment limitation to mental
health or substance use disorder benefits as compared to medical/
surgical benefits, and a description of how the plan establishes such
deviation(s) or variation(s).
(4) Demonstration of comparability and stringency as written. The
comparative analysis must evaluate whether, in any classification,
under the terms of the plan as written, any processes, strategies,
evidentiary standards, or other factors used in designing and applying
the nonquantitative treatment limitation to mental health or substance
use disorder benefits are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, or
other factors used in designing and applying the nonquantitative
treatment limitation with respect to medical/surgical benefits. The
comparative analysis must include, with respect to the nonquantitative
treatment limitation and the factors used in designing and applying the
nonquantitative treatment limitation:
(i) Documentation of each factor identified and defined in
paragraph (c)(2) of this section that was applied to determine whether
the nonquantitative treatment limitation applies to mental health or
substance use disorder benefits and medical/surgical benefits in a
classification, including, as relevant:
(A) Quantitative data, calculations, or other analyses showing
whether, in each classification in which the nonquantitative treatment
limitation applies, mental health or substance use disorder benefits
and medical/surgical benefits met or did not meet any applicable
threshold identified in the relevant evidentiary standard, and the
evaluation of relevant data as required under Sec. 54.9812-
1(c)(4)(iv)(A), to determine that the nonquantitative treatment
limitation would or would not apply; and
(B) Records maintained by the plan documenting the consideration
and application of all factors and evidentiary standards, as well as
the results of their application;
(ii) In each classification in which the nonquantitative treatment
limitation applies to mental health or substance use disorder benefits,
a comparison of how the nonquantitative treatment limitation, as
written, is applied to mental health or substance use disorder benefits
and to medical/surgical benefits, including the specific provisions of
any forms, checklists, procedure manuals, or other documentation used
in designing and applying the nonquantitative treatment limitation or
that address the application of the nonquantitative treatment
limitation;
(iii) Documentation demonstrating how the factors are comparably
applied, as written, to mental health or substance use disorder
benefits and medical/surgical benefits in each classification, to
determine which benefits are subject to the nonquantitative treatment
limitation; and
[[Page 51635]]
(iv) An explanation of the reason(s) for any deviation(s) or
variation(s) in the application of a factor used to apply the
nonquantitative treatment limitation, or the application of the
nonquantitative treatment limitation, to mental health or substance use
disorder benefits as compared to medical/surgical benefits, and how the
plan establishes such deviation(s) or variation(s), including:
(A) In the definition of the factors, the evidentiary standards
used to define the factors, and the sources from which the evidentiary
standards were derived;
(B) In the design of the factors or evidentiary standards; or
(C) In the application or design of the nonquantitative treatment
limitation.
(5) Demonstration of comparability and stringency in operation. The
comparative analysis must evaluate whether, in any classification,
under the terms of the plan in operation, the processes, strategies,
evidentiary standards, or other factors used in designing and applying
the nonquantitative treatment limitation to mental health or substance
use disorder benefits are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, or
other factors used in designing and applying the limitation with
respect to medical/surgical benefits. The comparative analysis must
include, with respect to the nonquantitative treatment limitation and
the factors used in designing and applying the nonquantitative
treatment limitation:
(i) A comprehensive explanation of how the plan ensures that, in
operation, the processes, strategies, evidentiary standards, or other
factors used in designing and applying the nonquantitative treatment
limitation to mental health or substance use disorder benefits in a
classification are comparable to, and are applied no more stringently
than, the processes, strategies, evidentiary standards, or other
factors used in designing and applying the nonquantitative treatment
limitation with respect to medical/surgical benefits, including:
(A) An explanation of any methodology and underlying data used to
demonstrate the application of the nonquantitative treatment
limitation, in operation; and
(B) The sample period, inputs used in any calculations, definitions
of terms used, and any criteria used to select the mental health or
substance use disorder benefits and medical/surgical benefits to which
the nonquantitative treatment limitation is applicable;
(ii) Identification of the relevant data collected and evaluated as
required under Sec. 54.9812-1(c)(4)(iv)(A);
(iii) An evaluation of the outcomes that resulted from the
application of the nonquantitative treatment limitation to mental
health or substance use disorder benefits and medical/surgical
benefits, including the relevant data as required under Sec. 54.9812-
1(c)(4)(iv)(A);
(iv) A detailed explanation of material differences in outcomes
evaluated pursuant to paragraph (c)(5)(iii) of this section that are
not attributable to differences in the comparability or relative
stringency of the nonquantitative treatment limitation as applied to
mental health or substance use disorder benefits and medical/surgical
benefits and the bases for concluding that material differences in
outcomes are not attributable to differences in the comparability or
relative stringency of the nonquantitative treatment limitation; and
(v) A discussion of any measures that have been or are being
implemented by the plan to mitigate any material differences in access
to mental health or substance use disorder benefits as compared to
medical/surgical benefits, including the actions the plan is taking
under Sec. 54.9812-1(c)(4)(iv)(B)(1) to address material differences
to ensure compliance with Sec. 54.9812-1(c)(4)(i) and (ii).
(6) Findings and conclusions. The comparative analysis must address
the findings and conclusions as to the comparability of the processes,
strategies, evidentiary standards, and other factors used in designing
and applying the nonquantitative treatment limitation to mental health
or substance use disorder benefits and medical/surgical benefits within
each classification, and the relative stringency of their application,
both as written and in operation, and include:
(i) Any findings or conclusions indicating that the plan is not (or
might not be) in compliance with the requirements of Sec. 54.9812-
1(c)(4), including any actions the plan has taken or intends to take to
address any potential areas of concern or noncompliance;
(ii) A reasoned and detailed discussion of the findings and
conclusions described in paragraph (c)(6)(i) of this section;
(iii) Citations to any additional specific information not
otherwise included in the comparative analysis that supports the
findings and conclusions described in paragraph (c)(6)(i) of this
section;
(iv) The date of the analysis and the title and credentials of all
relevant persons who participated in the performance and documentation
of the comparative analysis; and
(v) If the comparative analysis relies upon an evaluation by a
reviewer or consultant considered by the plan to be an expert, an
assessment of each expert's qualifications and the extent to which the
plan ultimately relied upon each expert's evaluation in performing and
documenting the comparative analysis of the design and application of
each nonquantitative treatment limitation applicable to both mental
health or substance use disorder benefits and medical/surgical
benefits.
(d) Requirements related to submission of comparative analyses to
the Secretary upon request--(1) Initial request by the Secretary for
comparative analysis. A group health plan must make the comparative
analysis required by paragraph (b) of this section available and submit
it to the Secretary within 10 business days of receipt of a request
from the Secretary (or an additional period of time specified by the
Secretary).
(2) Additional information required after a comparative analysis is
deemed to be insufficient. In instances in which the Secretary
determines that the plan has not submitted sufficient information under
paragraph (d)(1) of this section for the Secretary to review the
comparative analysis required in paragraph (b) of this section, the
Secretary will specify to the plan the additional information the plan
must submit to the Secretary to be responsive to the request under
paragraph (d)(1) of this section. Any such information must be provided
to the Secretary by the plan within 10 business days after the
Secretary specifies the additional information to be submitted (or an
additional period of time specified by the Secretary).
(3) Initial determination of noncompliance, required action, and
corrective action plan. In instances in which the Secretary reviewed
the comparative analysis submitted under paragraph (d)(1) of this
section and any additional information submitted under paragraph (d)(2)
of this section, and made an initial determination that the plan is not
in compliance with the requirements of Sec. 54.9812-1(c)(4) or this
section, the plan must respond to the Secretary and specify the actions
the plan will take to bring the plan into compliance, and provide to
the Secretary additional comparative analyses meeting the requirements
of paragraph (b) of this section that demonstrate compliance with Sec.
54.9812-1(c)(4) and this section, not
[[Page 51636]]
later than 45 calendar days after the Secretary's initial determination
that the plan is not in compliance.
(4) Requirement to notify participants and beneficiaries of final
determination of noncompliance--(i) In general. If the Secretary makes
a final determination of noncompliance, the plan must notify all
participants and beneficiaries enrolled in the plan that the plan has
been determined to not be in compliance with the requirements of Sec.
54.9812-1(c)(4) or this section with respect to such plan. Such notice
must be provided within 7 calendar days of receipt of the final
determination of noncompliance, and the plan must provide a copy of the
notice to the Secretary, and any service provider involved in the
claims process.
(ii) Content of notice. The notice to participants and
beneficiaries required in paragraph (d)(4)(i) of this section shall be
written in a manner calculated to be understood by the average plan
participant and must include, in plain language, the following
information in a standalone notice:
(A) The following statement prominently displayed on the first
page, in no less than 14-point font: ``Attention! Department of the
Treasury has determined that [insert the name of group health plan] is
not in compliance with the Mental Health Parity and Addiction Equity
Act.'';
(B) A summary of changes the plan has made as part of its
corrective action plan specified to the Secretary following the initial
determination of noncompliance, including an explanation of any
opportunity for a participant or beneficiary to have a claim for
benefits reprocessed;
(C) A summary of the Secretary's final determination that the plan
is not in compliance with Sec. 54.9812-1(c)(4) or this section,
including any provisions or practices identified as being in violation
of MHPAEA, additional corrective actions identified by the Secretary in
the final determination notice, and information on how participants and
beneficiaries can obtain from the plan a copy of the final
determination of noncompliance;
(D) Any additional actions the plan is taking to come into
compliance with Sec. 54.9812-1(c)(4) or this section, when the plan
will take such actions, and a clear and accurate statement explaining
whether the Secretary has indicated that those actions, if completed,
will result in compliance; and
(E) Contact information for questions and complaints, and a
statement explaining how participants and beneficiaries can obtain more
information about the notice, including:
(1) The plan's phone number and an email or web portal address; and
(2) The Employee Benefits Security Administration's phone number
and email or web portal address.
(iii) Manner of notice. The plan must make the notice required
under paragraph (d)(4)(i) of this section available in paper form, or
electronically (such as by email or an internet posting) if:
(A) The format is readily accessible;
(B) The notice is provided in paper form free of charge upon
request; and
(C) In a case in which the electronic form is an internet posting,
the plan timely notifies the participant or beneficiary in paper form
(such as a postcard) or email, that the documents are available on the
internet, provides the internet address, includes the statement
required in paragraph (d)(4)(ii)(A) of this section, and notifies the
participant or beneficiary that the documents are available in paper
form upon request.
(e) Requests for a copy of a comparative analysis. In addition to
making a comparative analysis available upon request to the Secretary,
a plan must make available a copy of the comparative analysis required
by paragraph (b) of this section when requested by:
(1) Any applicable State authority; and
(2) A participant or beneficiary (or a provider or other person
acting as a participant's or beneficiary's authorized representative)
who has received an adverse benefit determination related to mental
health or substance use disorder benefits.
(f) Rule of construction. Nothing in this section or Sec. 54.9812-
1 shall be construed to prevent the Secretary from acting within the
scope of existing authorities to address violations of Sec. 54.9812-1
or this section.
(g) Applicability. The provisions of this section apply to group
health plans described in Sec. 54.9812-1(e), to the extent the plan is
not exempt under Sec. 54.9812-1(f) or (g), for plan years beginning on
or after January 1, 2025.
(h) Severability. If any provision of this section is held to be
invalid or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
shall be construed so as to continue to give the maximum effect to the
provision permitted by law, unless such holding shall be one of
invalidity or unenforceability, in which event the provision shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Chapter XXV
For the reasons set forth in the preamble, the Department of Labor
proposes to amend 29 CFR part 2590 as set forth below:
PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS
0
4. The authority citation for part 2590 continues to read as follows:
Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a-n, 1191, 1191a, 1191b, and 1191c; sec.
101(g), Pub. L.104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 105-
200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 110-
343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-148,
124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029;
Division M, Pub. L. 113-235, 128 Stat. 2130; Pub. L. 116-260 134
Stat. 1182; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9,
2012).
0
5. Amend Sec. 2590.712 by:
0
a. Redesignating paragraph (a) as paragraph (a)(2) and adding
paragraphs (a) heading and (a)(1);
0
b. In newly redesignated paragraph (a)(2):
0
i. Revising the introductory text;
0
ii. Adding the definitions of ``DSM,'' ``Evidentiary standards,''
``Factors,'' and ``ICD'' in alphabetical order;
0
iii. Revising the definitions of ``Medical/surgical benefits'' and
``Mental health benefits'';
0
iv. Adding the definitions of ``Processes'' and ``Strategies'' in
alphabetical order; and
0
v. Revising the definitions of ``Substance use disorder benefits'' and
``Treatment limitations'';
0
c. Revising paragraphs (c)(1)(ii), (c)(2)(i), and (c)(2)(ii)(A)
introductory text;
0
d. In paragraph (c)(2)(ii)(C), designating Examples 1 through 4 as
paragraphs (c)(2)(ii)(C)(1) through (4) and revising newly designated
paragraphs (c)(2)(ii)(C)(1) through (4);
0
e. Adding paragraphs (c)(2)(ii)(C)(5) and (6);
0
f. Revising paragraphs (c)(3)(i)(A), (C), and (D);
0
g. In paragraph (c)(3)(iii), adding introductory text;
0
h. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4),
(d)(3), (e)(4), and (i)(1); and
0
i. Adding paragraph (j).
The revisions and additions read as follows:
[[Page 51637]]
Sec. 2590.712 Parity in mental health and substance use disorder
benefits
(a) Purpose and meaning of terms--(1) Purpose. This section and
Sec. 2590.712-1 set forth rules to ensure parity in aggregate lifetime
and annual dollar limits, financial requirements, and quantitative and
nonquantitative treatment limitations between mental health and
substance use disorder benefits and medical/surgical benefits, as
required under ERISA section 712. A fundamental purpose of ERISA
section 712, this section, and Sec. 2590.712-1 is to ensure that
participants and beneficiaries in a group health plan (or health
insurance coverage offered by an issuer in connection with a group
health plan) that offers mental health or substance use disorder
benefits are not subject to more restrictive lifetime or annual dollar
limits, financial requirements, or treatment limitations with respect
to those benefits than the predominant dollar limits, financial
requirements, or treatment limitations that are applied to
substantially all medical/surgical benefits covered by the plan or
coverage, as further provided in this section and Sec. 2590.712-1.
Accordingly, in complying with the provisions of ERISA section 712,
this section, and Sec. 2590.712-1, plans and issuers must not design
or apply financial requirements and treatment limitations that impose a
greater burden on access (that is, are more restrictive) to mental
health and substance use disorder benefits under the plan or coverage
than they impose on access to generally comparable medical/surgical
benefits. The provisions of ERISA section 712, this section, and Sec.
2590.712-1 should be interpreted in a manner that is consistent with
the purpose described in this paragraph (a)(1).
(2) Meaning of terms. For purposes of this section and Sec.
2590.712-1, except where the context clearly indicates otherwise, the
following terms have the meanings indicated:
* * * * *
DSM means the American Psychiatric Association's Diagnostic and
Statistical Manual of Mental Disorders. For the purpose of this
definition, the most current version of the DSM is the version that is
applicable no earlier than on the date that is 1 year before the first
day of the applicable plan year.
Evidentiary standards are any evidence, sources, or standards that
a group health plan (or health insurance issuer offering coverage in
connection with such a plan) considered or relied upon in designing or
applying a factor with respect to a nonquantitative treatment
limitation, including specific benchmarks or thresholds. Evidentiary
standards may be empirical, statistical, or clinical in nature, and
include: sources acquired or originating from an objective third party,
such as recognized medical literature, professional standards and
protocols (which may include comparative effectiveness studies and
clinical trials), published research studies, payment rates for items
and services (such as publicly available databases of the ``usual,
customary and reasonable'' rates paid for items and services), and
clinical treatment guidelines; internal plan or issuer data, such as
claims or utilization data or criteria for assuring a sufficient mix
and number of network providers; and benchmarks or thresholds, such as
measures of excessive utilization, cost levels, time or distance
standards, or network participation percentage thresholds.
Factors are all information, including processes and strategies
(but not evidentiary standards), that a group health plan (or health
insurance issuer offering coverage in connection with such a plan)
considered or relied upon to design a nonquantitative treatment
limitation, or to determine whether or how the nonquantitative
treatment limitation applies to benefits under the plan or coverage.
Examples of factors include, but are not limited to: provider
discretion in determining a diagnosis or type or length of treatment;
clinical efficacy of any proposed treatment or service; licensing and
accreditation of providers; claim types with a high percentage of
fraud; quality measures; treatment outcomes; severity or chronicity of
condition; variability in the cost of an episode of treatment; high
cost growth; variability in cost and quality; elasticity of demand; and
geographic location.
* * * * *
ICD means the World Health Organization's International
Classification of Diseases adopted by the Department of Health and
Human Services through 45 CFR 162.1002. For the purpose of this
definition, the most current version of the ICD is the version that is
applicable no earlier than on the date that is 1 year before the first
day of the applicable plan year.
Medical/surgical benefits means benefits with respect to items or
services for medical conditions or surgical procedures, as defined
under the terms of the group health plan (or health insurance coverage
offered by an issuer in connection with such a plan) and in accordance
with applicable Federal and State law, but does not include mental
health benefits or substance use disorder benefits. Notwithstanding the
preceding sentence, any condition or procedure defined by the plan or
coverage as being or as not being a medical condition or surgical
procedure must be defined consistent with generally recognized
independent standards of current medical practice (for example, the
most current version of the ICD). To the extent generally recognized
independent standards of current medical practice do not address
whether a condition or procedure is a medical condition or surgical
procedure, plans and issuers may define the condition or procedure in
accordance with applicable Federal and State law.
Mental health benefits means benefits with respect to items or
services for mental health conditions, as defined under the terms of
the group health plan (or health insurance coverage offered by an
issuer in connection with such a plan) and in accordance with
applicable Federal and State law, but does not include medical/surgical
benefits or substance use disorder benefits. Notwithstanding the
preceding sentence, any condition defined by the plan or coverage as
being or as not being a mental health condition must be defined
consistent with generally recognized independent standards of current
medical practice. For the purpose of this definition, to be consistent
with generally recognized independent standards of current medical
practice, the definition must include all conditions covered under the
plan or coverage, except for substance use disorders, that fall under
any of the diagnostic categories listed in the mental, behavioral, and
neurodevelopmental disorders chapter (or equivalent chapter) of the
most current version of the ICD or that are listed in the most current
version of the DSM. To the extent generally recognized independent
standards of current medical practice do not address whether a
condition is a mental health condition, plans and issuers may define
the condition in accordance with applicable Federal and State law.
Processes are actions, steps, or procedures that a group health
plan (or health insurance issuer offering coverage in connection with
such a plan) uses to apply a nonquantitative treatment limitation,
including actions, steps, or procedures established by the plan or
issuer as requirements in order for a participant or beneficiary to
access benefits, including through actions by a participant's or
beneficiary's authorized representative or a provider or facility.
Processes include but are not limited to:
[[Page 51638]]
procedures to submit information to authorize coverage for an item or
service prior to receiving the benefit or while treatment is ongoing
(including requirements for peer or expert clinical review of that
information); provider referral requirements; and the development and
approval of a treatment plan. Processes also include the specific
procedures used by staff or other representatives of a plan or issuer
(or the service provider of a plan or issuer) to administer the
application of nonquantitative treatment limitations, such as how a
panel of staff members applies the nonquantitative treatment limitation
(including the qualifications of staff involved, number of staff
members allocated, and time allocated), consultations with panels of
experts in applying the nonquantitative treatment limitation, and
reviewer discretion in adhering to criteria hierarchy when applying a
nonquantitative treatment limitation.
Strategies are practices, methods, or internal metrics that a plan
(or health insurance issuer offering coverage in connection with such a
plan) considers, reviews, or uses to design a nonquantitative treatment
limitation. Examples of strategies include but are not limited to: the
development of the clinical rationale used in approving or denying
benefits; deviation from generally accepted standards of care; the
selection of information deemed reasonably necessary to make a medical
necessity determination; reliance on treatment guidelines or guidelines
provided by third-party organizations; and rationales used in selecting
and adopting certain threshold amounts, professional protocols, and fee
schedules. Strategies also include the creation and composition of the
staff or other representatives of a plan or issuer (or the service
provider of a plan or issuer) that deliberates, or otherwise makes
decisions, on the design of nonquantitative treatment limitations,
including the plan's decisions related to the qualifications of staff
involved, number of staff members allocated, and time allocated;
breadth of sources and evidence considered; consultations with panels
of experts in designing the nonquantitative treatment limitation; and
the composition of the panels used to design a nonquantitative
treatment limitation.
Substance use disorder benefits means benefits with respect to
items or services for substance use disorders, as defined under the
terms of the group health plan (or health insurance coverage offered by
an issuer in connection with such a plan) and in accordance with
applicable Federal and State law, but does not include medical/surgical
benefits or mental health benefits. Notwithstanding the preceding
sentence, any disorder defined by the plan or coverage as being or as
not being a substance use disorder must be defined consistent with
generally recognized independent standards of current medical practice.
For the purpose of this definition, to be consistent with generally
recognized independent standards of current medical practice, the
definition must include all disorders covered under the plan or
coverage that fall under any of the diagnostic categories listed as a
mental or behavioral disorder due to psychoactive substance use (or
equivalent category) in the mental, behavioral and neurodevelopmental
disorders chapter (or equivalent chapter) of the most current version
of the ICD or that are listed as a Substance-Related and Addictive
Disorder (or equivalent category) in the most current version of the
DSM. To the extent generally recognized independent standards of
current medical practice do not address whether a disorder is a
substance use disorder, plans and issuers may define the disorder in
accordance with applicable Federal and State law.
Treatment limitations include limits on benefits based on the
frequency of treatment, number of visits, days of coverage, days in a
waiting period, or other similar limits on the scope or duration of
treatment. Treatment limitations include both quantitative treatment
limitations, which are expressed numerically (such as 50 outpatient
visits per year), and nonquantitative treatment limitations, which
otherwise limit the scope or duration of benefits for treatment under a
plan or coverage. (See paragraph (c)(4)(iii) of this section for an
illustrative, non-exhaustive list of nonquantitative treatment
limitations.) A complete exclusion of all benefits for a particular
condition or disorder, however, is not a treatment limitation for
purposes of this definition.
* * * * *
(c) * * *
(1) * * *
(ii) Type of financial requirement or treatment limitation. When
reference is made in this paragraph (c) to a type of financial
requirement or treatment limitation, the reference to type means its
nature. Different types of financial requirements include deductibles,
copayments, coinsurance, and out-of-pocket maximums. Different types of
quantitative treatment limitations include annual, episode, and
lifetime day and visit limits. See paragraph (c)(4)(iii) of this
section for an illustrative, non-exhaustive list of nonquantitative
treatment limitations.
* * * * *
(2) * * *
(i) General rule. A group health plan (or health insurance coverage
offered by an issuer in connection with a group health plan) that
provides both medical/surgical benefits and mental health or substance
use disorder benefits may not apply any financial requirement or
treatment limitation to mental health or substance use disorder
benefits in any classification that is more restrictive than the
predominant financial requirement or treatment limitation of that type
applied to substantially all medical/surgical benefits in the same
classification. Whether a financial requirement or treatment limitation
is a predominant financial requirement or treatment limitation that
applies to substantially all medical/surgical benefits in a
classification is determined separately for each type of financial
requirement or treatment limitation. A plan or issuer may not impose
any financial requirement or treatment limitation that is applicable
only with respect to mental health or substance use disorder benefits
and not to any medical/surgical benefits in the same benefit
classification. The application of the rules of this paragraph (c)(2)
to financial requirements and quantitative treatment limitations is
addressed in paragraph (c)(3) of this section; the application of the
rules of this paragraph (c)(2) to nonquantitative treatment limitations
is addressed in paragraph (c)(4) of this section.
(ii) * * *
(A) In general. If a plan (or health insurance coverage) provides
any benefits for a mental health condition or substance use disorder in
any classification of benefits described in this paragraph (c)(2)(ii),
benefits for that mental health condition or substance use disorder
must be provided in every classification in which medical/surgical
benefits are provided. For purposes of this paragraph (c)(2)(ii), a
plan (or health insurance coverage) providing any benefits for a mental
health condition or substance use disorder in any classification of
benefits does not provide benefits for the mental health condition or
substance use disorder in every classification in which medical/
surgical benefits are provided unless the plan (or health insurance
coverage) provides meaningful benefits for treatment for that condition
or disorder in each such classification, as determined in comparison to
the
[[Page 51639]]
benefits provided for medical/surgical conditions in the
classification. In determining the classification in which a particular
benefit belongs, a plan (or health insurance issuer) must apply the
same standards to medical/surgical benefits and to mental health or
substance use disorder benefits. To the extent that a plan (or health
insurance coverage) provides benefits in a classification and imposes
any separate financial requirement or treatment limitation (or separate
level of a financial requirement or treatment limitation) for benefits
in the classification, the rules of this paragraph (c) apply separately
with respect to that classification for all financial requirements or
treatment limitations (illustrated in examples in paragraph
(c)(2)(ii)(C) of this section). The following classifications of
benefits are the only classifications used in applying the rules of
this paragraph (c), in addition to the permissible sub-classifications
described in paragraph (c)(3)(iii) of this section:
* * * * *
(C) * * *
(1) Example 1--(i) Facts. A group health plan offers inpatient and
outpatient benefits and does not contract with a network of providers.
The plan imposes a $500 deductible on all benefits. For inpatient
medical/surgical benefits, the plan imposes a coinsurance requirement.
For outpatient medical/surgical benefits, the plan imposes copayments.
The plan imposes no other financial requirements or treatment
limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(1) (Example 1),
because the plan has no network of providers, all benefits provided are
out-of-network. Because inpatient, out-of-network medical/surgical
benefits are subject to separate financial requirements from
outpatient, out-of-network medical/surgical benefits, the rules of this
paragraph (c) apply separately with respect to any financial
requirements and treatment limitations, including the deductible, in
each classification.
(2) Example 2--(i) Facts. A plan imposes a $500 deductible on all
benefits. The plan has no network of providers. The plan generally
imposes a 20 percent coinsurance requirement with respect to all
benefits, without distinguishing among inpatient, outpatient, emergency
care, or prescription drug benefits. The plan imposes no other
financial requirements or treatment limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(2) (Example 2),
because the plan does not impose separate financial requirements (or
treatment limitations) based on classification, the rules of this
paragraph (c) apply with respect to the deductible and the coinsurance
across all benefits.
(3) Example 3--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan
exempts emergency care benefits from the 20 percent coinsurance
requirement. The plan imposes no other financial requirements or
treatment limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(3) (Example 3),
because the plan imposes separate financial requirements based on
classifications, the rules of this paragraph (c) apply with respect to
the deductible and the coinsurance separately for benefits in the
emergency care classification and all other benefits.
(4) Example 4--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan also
imposes a preauthorization requirement for all inpatient treatment in
order for benefits to be paid. No such requirement applies to
outpatient treatment.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(4) (Example 4),
because the plan has no network of providers, all benefits provided are
out-of-network. Because the plan imposes a separate treatment
limitation based on classifications, the rules of this paragraph (c)
apply with respect to the deductible and coinsurance separately for
inpatient, out-of-network benefits and all other benefits.
(5) Example 5--(i) Facts. A plan generally covers treatment for
autism spectrum disorder (ASD), a mental health condition, and covers
outpatient, out-of-network developmental evaluations for ASD but
excludes all other benefits for outpatient treatment for ASD, including
applied behavioral analysis (ABA) therapy, when provided on an out-of-
network basis. The plan generally covers the full range of outpatient
treatments and treatment settings for medical conditions and surgical
procedures when provided on an out-of-network basis.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5),
the plan violates the rules of this paragraph (c)(2)(ii). Because the
plan only covers one type of benefit for ASD in the outpatient, out-of-
network classification and excludes all other benefits for ASD in the
classification, but generally covers the full range of medical/surgical
benefits in the classification, it fails to provide meaningful benefits
for treatment of ASD in the classification.
(6) Example 6--(i) Facts. A plan generally covers diagnosis and
treatment for eating disorders, a mental health condition, but
specifically excludes coverage for nutrition counseling to treat eating
disorders, including in the outpatient, in-network classification.
Nutrition counseling is one of the primary treatments for eating
disorders. The plan generally provides benefits for the primary
treatments for medical/surgical conditions in the outpatient, in-
network classification.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6),
the plan violates the rules of this paragraph (c)(2)(ii). The exclusion
of coverage for nutrition counseling for eating disorders results in
the plan failing to provide meaningful benefits for the treatment of
eating disorders in the outpatient, in-network classification, as
determined in comparison to the benefits provided for medical/surgical
conditions in the classification.
(3) * * *
(i) * * *
(A) Substantially all. For purposes of this paragraph (c)(3), a
type of financial requirement or quantitative treatment limitation is
considered to apply to substantially all medical/surgical benefits in a
classification of benefits if it applies to at least two-thirds of all
medical/surgical benefits in that classification. (For purposes of this
paragraph (c)(3)(i)(A), benefits expressed as subject to a zero level
of a type of financial requirement are treated as benefits not subject
to that type of financial requirement, and benefits expressed as
subject to a quantitative treatment limitation that is unlimited are
treated as benefits not subject to that type of quantitative treatment
limitation.) If a type of financial requirement or quantitative
treatment limitation does not apply to at least two-thirds of all
medical/surgical benefits in a classification, then that type cannot be
applied to mental health or substance use disorder benefits in that
classification.
* * * * *
(C) Portion based on plan payments. For purposes of this paragraph
(c)(3), the determination of the portion of medical/surgical benefits
in a classification of benefits subject to a financial requirement or
quantitative treatment limitation (or subject to any level of a
financial requirement or quantitative treatment limitation) is based on
the dollar amount of all plan payments for medical/surgical benefits in
the classification expected to be paid under the plan for the plan year
(or for the portion of the plan year after a change in plan benefits
that affects the applicability of the financial
[[Page 51640]]
requirement or quantitative treatment limitation).
(D) Clarifications for certain threshold requirements. For any
deductible, the dollar amount of plan payments includes all plan
payments with respect to claims that would be subject to the deductible
if it had not been satisfied. For any out-of-pocket maximum, the dollar
amount of plan payments includes all plan payments associated with out-
of-pocket payments that are taken into account towards the out-of-
pocket maximum as well as all plan payments associated with out-of-
pocket payments that would have been made towards the out-of-pocket
maximum if it had not been satisfied. Similar rules apply for any other
thresholds at which the rate of plan payment changes. (See also PHS Act
section 2707 and Affordable Care Act section 1302(c), which establish
annual limitations on out-of-pocket maximums for all non-grandfathered
health plans.)
* * * * *
(iii) Special rules. Unless specifically permitted under this
paragraph (c)(3)(iii), sub-classifications are not permitted when
applying the rules of paragraph (c)(3) of this section.
(A) Multi-tiered prescription drug benefits. If a plan (or health
insurance coverage) applies different levels of financial requirements
to different tiers of prescription drug benefits based on reasonable
factors determined in accordance with the rules in paragraph (c)(4) of
this section (relating to requirements for nonquantitative treatment
limitations) and without regard to whether a drug is generally
prescribed with respect to medical/surgical benefits or with respect to
mental health or substance use disorder benefits, the plan (or health
insurance coverage) satisfies the parity requirements of this paragraph
(c) with respect to prescription drug benefits. Reasonable factors
include cost, efficacy, generic versus brand name, and mail order
versus pharmacy pick-up.
(B) Multiple network tiers. If a plan (or health insurance
coverage) provides benefits through multiple tiers of in-network
providers (such as an in-network tier of preferred providers with more
generous cost-sharing to participants than a separate in-network tier
of participating providers), the plan may divide its benefits furnished
on an in-network basis into sub-classifications that reflect network
tiers, if the tiering is based on reasonable factors determined in
accordance with the rules in paragraph (c)(4) of this section (such as
quality, performance, and market standards) and without regard to
whether a provider provides services with respect to medical/surgical
benefits or mental health or substance use disorder benefits. After the
sub-classifications are established, the plan or issuer may not impose
any financial requirement or treatment limitation on mental health or
substance use disorder benefits in any sub-classification that is more
restrictive than the predominant financial requirement or treatment
limitation that applies to substantially all medical/surgical benefits
in the sub-classification using the methodology set forth in paragraph
(c)(3)(i) of this section.
* * * * *
(iv) Examples. The rules of paragraphs (c)(3)(i) through (iii) of
this section are illustrated by the following examples. In each
example, the group health plan is subject to the requirements of this
section and provides both medical/surgical benefits and mental health
and substance use disorder benefits.
(A) Example 1--(1) Facts. (i) For inpatient, out-of-network
medical/surgical benefits, a group health plan imposes five levels of
coinsurance. Using a reasonable method, the plan projects its payments
for the upcoming year as follows:
Table 1 to Paragraph (c)(3)(iv)(A)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coinsurance rate............................ 0% 10% 15% 20% 30% Total
Projected payments.......................... $200x $100x $450x $100x $150x $1,000x
Percent of total plan costs................. 20 10 45 10 15 ..............
Percent subject to coinsurance level........ N/A 12.5 (100x/800x) 56.25 (450x/800x) 12.5 (100x/800x) 18.75 (150x/800x) ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) The plan projects plan costs of $800x to be subject to
coinsurance ($100x + $450x + $100x + $150x = $800x). Thus, 80 percent
($800x/$1,000x) of the benefits are projected to be subject to
coinsurance, and 56.25 percent of the benefits subject to coinsurance
are projected to be subject to the 15 percent coinsurance level.
(2) Conclusion. In this paragraph (c)(3)(iv)(A) (Example 1), the
two-thirds threshold of the substantially all standard is met for
coinsurance because 80 percent of all inpatient, out-of-network
medical/surgical benefits are subject to coinsurance. Moreover, the 15
percent coinsurance is the predominant level because it is applicable
to more than one-half of inpatient, out-of-network medical/surgical
benefits subject to the coinsurance requirement. The plan may not
impose any level of coinsurance with respect to inpatient, out-of-
network mental health or substance use disorder benefits that is more
restrictive than the 15 percent level of coinsurance.
(B) Example 2--(1) Facts. (i) For outpatient, in-network medical/
surgical benefits, a plan imposes five different copayment levels.
Using a reasonable method, the plan projects payments for the upcoming
year as follows:
Table 2 to Paragraph (c)(3)(iv)(B)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copayment amount............................ $0 $10 $15 $20 $50 Total
Projected payments.......................... $200x $200x $200x $300x $100x $1,000x
Percent of total plan costs................. 20 20 20 30 10 ..............
Percent subject to copayments............... N/A 25 (200x/800x) 25 (200x/800x) 37.5 (300x/800x) 12.5 (100x/800x) ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) The plan projects plan costs of $800x to be subject to
copayments ($200x + $200x +$300x + $100x = $800x). Thus, 80 percent
($800x/$1,000x) of the benefits are projected to be subject to a
copayment.
(2) Conclusion. In this paragraph (c)(3)(iv)(B) (Example 2), the
two-thirds threshold of the substantially all standard is met for
copayments because 80 percent of all outpatient, in-network medical/
surgical benefits are subject to
[[Page 51641]]
a copayment. Moreover, there is no single level that applies to more
than one-half of medical/surgical benefits in the classification
subject to a copayment (for the $10 copayment, 25%; for the $15
copayment, 25%; for the $20 copayment, 37.5%; and for the $50
copayment, 12.5%). The plan can combine any levels of copayment,
including the highest levels, to determine the predominant level that
can be applied to mental health or substance use disorder benefits. If
the plan combines the highest levels of copayment, the combined
projected payments for the two highest copayment levels, the $50
copayment and the $20 copayment, are not more than one-half of the
outpatient, in-network medical/surgical benefits subject to a copayment
because they are exactly one-half ($300x + $100x = $400x; $400x/$800x =
50%). The combined projected payments for the three highest copayment
levels--the $50 copayment, the $20 copayment, and the $15 copayment--
are more than one-half of the outpatient, in-network medical/surgical
benefits subject to the copayments ($100x + $300x + $200x = $600x;
$600x/$800x = 75%). Thus, the plan may not impose any copayment on
outpatient, in-network mental health or substance use disorder benefits
that is more restrictive than the least restrictive copayment in the
combination, the $15 copayment.
(C) Example 3--(1) Facts. A plan imposes a $250 deductible on all
medical/surgical benefits for self-only coverage and a $500 deductible
on all medical/surgical benefits for family coverage. The plan has no
network of providers. For all medical/surgical benefits, the plan
imposes a coinsurance requirement. The plan imposes no other financial
requirements or treatment limitations.
(2) Conclusion. In this paragraph (c)(3)(iv)(C) (Example 3),
because the plan has no network of providers, all benefits are provided
out-of-network. Because self-only and family coverage are subject to
different deductibles, whether the deductible applies to substantially
all medical/surgical benefits is determined separately for self-only
medical/surgical benefits and family medical/surgical benefits. Because
the coinsurance is applied without regard to coverage units, the
predominant coinsurance that applies to substantially all medical/
surgical benefits is determined without regard to coverage units.
(D) Example 4--(1) Facts. A plan applies the following financial
requirements for prescription drug benefits. The requirements are
applied without regard to whether a drug is generally prescribed with
respect to medical/surgical benefits or with respect to mental health
or substance use disorder benefits. Moreover, the process for
certifying a particular drug as ``generic'', ``preferred brand name'',
``non-preferred brand name'', or ``specialty'' complies with the rules
of paragraph (c)(4) of this section (relating to requirements for
nonquantitative treatment limitations).
Table 3 to Paragraph (c)(3)(iv)(D)(1)
----------------------------------------------------------------------------------------------------------------
Tier 1 Tier 2 Tier 3 Tier 4
----------------------------------------------------------------------------------------------------------------
Tier description................ Generic drugs..... Preferred brand Non-preferred Specialty drugs.
name drugs. brand name drugs
(which may have
Tier 1 or Tier 2
alternatives).
Percent paid by plan............ 90................ 80................ 60................ 50.
----------------------------------------------------------------------------------------------------------------
(2) Conclusion. In this paragraph (c)(3)(iv)(D) (Example 4), the
financial requirements that apply to prescription drug benefits are
applied without regard to whether a drug is generally prescribed with
respect to medical/surgical benefits or with respect to mental health
or substance use disorder benefits; the process for certifying drugs in
different tiers complies with paragraph (c)(4) of this section; and the
bases for establishing different levels or types of financial
requirements are reasonable. The financial requirements applied to
prescription drug benefits do not violate the parity requirements of
this paragraph (c)(3).
(E) Example 5--(1) Facts. A plan has two-tiers of network of
providers: a preferred provider tier and a participating provider tier.
Providers are placed in either the preferred tier or participating tier
based on reasonable factors determined in accordance with the rules in
paragraph (c)(4) of this section, such as accreditation, quality and
performance measures (including customer feedback), and relative
reimbursement rates. Furthermore, provider tier placement is determined
without regard to whether a provider specializes in the treatment of
mental health conditions or substance use disorders, or medical/
surgical conditions. The plan divides the in-network classifications
into two sub-classifications (in-network/preferred and in-network/
participating). The plan does not impose any financial requirement or
treatment limitation on mental health or substance use disorder
benefits in either of these sub-classifications that is more
restrictive than the predominant financial requirement or treatment
limitation that applies to substantially all medical/surgical benefits
in each sub-classification.
(2) Conclusion. In this paragraph (c)(3)(iv)(E) (Example 5), the
division of in-network benefits into sub-classifications that reflect
the preferred and participating provider tiers does not violate the
parity requirements of this paragraph (c)(3).
(F) Example 6--(1) Facts. With respect to outpatient, in-network
benefits, a plan imposes a $25 copayment for office visits and a 20
percent coinsurance requirement for outpatient surgery. The plan
divides the outpatient, in-network classification into two sub-
classifications (in-network office visits and all other outpatient, in-
network items and services).The plan or issuer does not impose any
financial requirement or quantitative treatment limitation on mental
health or substance use disorder benefits in either of these sub-
classifications that is more restrictive than the predominant financial
requirement or quantitative treatment limitation that applies to
substantially all medical/surgical benefits in each sub-classification.
(2) Conclusion. In this paragraph (c)(3)(iv)(F) (Example 6), the
division of outpatient, in-network benefits into sub-classifications
for office visits and all other outpatient, in-network items and
services does not violate the parity requirements of this paragraph
(c)(3).
(G) Example 7--(1) Facts. Same facts as in paragraph
(c)(3)(iv)(F)(1) of this section (Example 6), but for purposes of
determining parity, the plan divides the outpatient, in-network
classification into outpatient, in-network generalists and outpatient,
in-network specialists.
[[Page 51642]]
(2) Conclusion. In this paragraph (c)(3)(iv)(G) (Example 7), the
division of outpatient, in-network benefits into any sub-
classifications other than office visits and all other outpatient items
and services violates the requirements of paragraph (c)(3)(iii)(C) of
this section.
* * * * *
(4) Nonquantitative treatment limitations. Subject to paragraph
(c)(4)(v) of this section, a group health plan (or health insurance
coverage offered by an issuer in connection with a group health plan)
may not impose a nonquantitative treatment limitation with respect to
mental health or substance use disorder benefits in a classification
unless the plan's or coverage's imposition of the limitation meets the
requirements of paragraphs (c)(4)(i), (ii), and (iv) of this section.
If a group health plan (or health insurance coverage offered by an
issuer in connection with a group health plan) fails to meet any of
these requirements with respect to a nonquantitative treatment
limitation, the limitation violates section 712(a)(3)(A)(ii) of ERISA
and may not be imposed by the plan (or health insurance coverage).
(i) Requirement that nonquantitative treatment limitations be no
more restrictive for mental health benefits and substance use disorder
benefits. A group health plan (or health insurance issuer offering
coverage in connection with a group health plan) may not apply any
nonquantitative treatment limitation with respect to mental health or
substance use disorder benefits in any classification that is more
restrictive, as written or in operation, than the predominant
nonquantitative treatment limitation applied to substantially all
medical/surgical benefits in the same classification.
(A) Restrictive. For purposes of this paragraph (c)(4)(i), a
nonquantitative treatment limitation is restrictive to the extent it
imposes conditions, terms, or requirements that limit access to
benefits under the terms of the plan or coverage. Conditions, terms, or
requirements include, but are not limited to, those that compel an
action by or on behalf of a participant or beneficiary to access
benefits or limit access to the full range of treatment options
available for a condition or disorder under the plan or coverage.
(B) Substantially all. For purposes of this paragraph (c)(4)(i), a
nonquantitative treatment limitation is considered to apply to
substantially all medical/surgical benefits in a classification if it
applies to at least two-thirds of all medical/surgical benefits in that
classification, consistent with paragraph (c)(4)(i)(D) of this section.
Whether the nonquantitative treatment limitation applies to at least
two-thirds of all medical/surgical benefits is determined without
regard to whether the nonquantitative treatment limitation was
triggered based on a particular factor or evidentiary standard. If a
nonquantitative treatment limitation does not apply to at least two-
thirds of all medical/surgical benefits in a classification, then that
limitation cannot be applied to mental health or substance use disorder
benefits in that classification.
(C) Predominant. For purposes of this paragraph (c)(4)(i), the term
predominant means the most common or most frequent variation of the
nonquantitative treatment limitation within a classification,
determined in accordance with the method outlined in paragraph
(c)(4)(i)(D) of this section, to the extent the plan or issuer imposes
multiple variations of a nonquantitative treatment limitation within
the classification. For example, multiple variations of inpatient
concurrent review include review commencing 1 day, 3 days, or 7 days
after admission, depending on the reason for the stay.
(D) Portion based on plan payments. For purposes of paragraphs
(c)(4)(i)(B) and (C) of this section, the determination of the portion
of medical/surgical benefits in a classification of benefits subject to
a nonquantitative treatment limitation is based on the dollar amount of
all plan payments for medical/surgical benefits in the classification
expected to be paid under the plan or coverage for the plan year (or
the portion of the plan year after a change in benefits that affects
the applicability of the nonquantitative treatment limitation). Any
reasonable method may be used to determine the dollar amount expected
to be paid under a plan or coverage for medical/surgical benefits.
(E) Exceptions for independent professional medical or clinical
standards and standards to detect or prevent and prove fraud, waste,
and abuse. Notwithstanding paragraphs (c)(4)(i)(A) through (D) of this
section, a plan or issuer that applies a nonquantitative treatment
limitation that impartially applies independent professional medical or
clinical standards or applies standards to detect or prevent and prove
fraud, waste, and abuse, as described in paragraph (c)(4)(v)(A) or (B)
of this section, to mental health or substance use disorder benefits in
any classification will not be considered to violate this paragraph
(c)(4)(i) with respect to such nonquantitative treatment limitation.
(ii) Additional requirements related to design and application of
the nonquantitative treatment limitation--(A) In general. Consistent
with paragraph (a)(1) of this section, a plan or issuer may not impose
a nonquantitative treatment limitation with respect to mental health or
substance use disorder benefits in any classification unless, under the
terms of the plan (or health insurance coverage) as written and in
operation, any processes, strategies, evidentiary standards, or other
factors used in designing and applying the nonquantitative treatment
limitation to mental health or substance use disorder benefits in the
classification are comparable to, and are applied no more stringently
than, the processes, strategies, evidentiary standards, or other
factors used in designing and applying the limitation with respect to
medical/surgical benefits in the classification.
(B) Prohibition on discriminatory factors and evidentiary
standards. For purposes of determining comparability and stringency
under paragraph (c)(4)(ii)(A) of this section, a plan or issuer may not
rely upon any factor or evidentiary standard if the information,
evidence, sources, or standards on which the factor or evidentiary
standard is based discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits. For
purposes of this paragraph (c)(4)(ii)(B):
(1) Impartially applied generally recognized independent
professional medical or clinical standards described in paragraph
(c)(4)(v)(A) of this section are not considered to discriminate against
mental health or substance use disorder benefits.
(2) Standards reasonably designed to detect or prevent and prove
fraud, waste, and abuse described in paragraph (c)(4)(v)(B) of this
section are not considered to discriminate against mental health or
substance use disorder benefits.
(3) Information is considered to discriminate against mental health
or substance use disorder benefits if it is biased or not objective, in
a manner that results in less favorable treatment of mental health or
substance use disorder benefits, based on all the relevant facts and
circumstances including, but not limited to, the source of the
information, the purpose or context of the information, and the content
of the information.
(iii) Illustrative, non-exhaustive list of nonquantitative
treatment limitations. Nonquantitative treatment limitations include--
[[Page 51643]]
(A) Medical management standards (such as prior authorization)
limiting or excluding benefits based on medical necessity or medical
appropriateness, or based on whether the treatment is experimental or
investigative;
(B) Formulary design for prescription drugs;
(C) For plans with multiple network tiers (such as preferred
providers and participating providers), network tier design;
(D) Standards related to network composition, including but not
limited to, standards for provider and facility admission to
participate in a network or for continued network participation,
including methods for determining reimbursement rates, credentialing
standards, and procedures for ensuring the network includes an adequate
number of each category of provider and facility to provide services
under the plan or coverage;
(E) Plan or issuer methods for determining out-of-network rates,
such as allowed amounts; usual, customary, and reasonable charges; or
application of other external benchmarks for out-of-network rates;
(F) Refusal to pay for higher-cost therapies until it can be shown
that a lower-cost therapy is not effective (also known as fail-first
policies or step therapy protocols);
(G) Exclusions based on failure to complete a course of treatment;
and
(H) Restrictions based on geographic location, facility type,
provider specialty, and other criteria that limit the scope or duration
of benefits for services provided under the plan or coverage.
(iv) Required use of outcomes data--(A) In general. When designing
and applying a nonquantitative treatment limitation, a plan or issuer
must collect and evaluate relevant data in a manner reasonably designed
to assess the impact of the nonquantitative treatment limitation on
access to mental health and substance use disorder benefits and
medical/surgical benefits, and consider the impact as part of the
plan's or issuer's analysis of whether the limitation, in operation,
complies with paragraphs (c)(4)(i) and (ii) of this section. The
Secretary, jointly with the Secretary of the Treasury and the Secretary
of Health and Human Services, may specify in guidance the type, form,
and manner of collection and evaluation for the data required under
this paragraph (c)(4)(iv)(A).
(1) For purposes of this paragraph (c)(4)(iv)(A), relevant data
includes, but is not limited to, the number and percentage of claims
denials and any other data relevant to the nonquantitative treatment
limitation required by State law or private accreditation standards.
(2) In addition to the relevant data set forth in paragraph
(c)(4)(iv)(A)(1) of this section, relevant data for nonquantitative
treatment limitations related to network composition standards
includes, but is not limited to, in-network and out-of-network
utilization rates (including data related to provider claim
submissions), network adequacy metrics (including time and distance
data, and data on providers accepting new patients), and provider
reimbursement rates (including as compared to billed charges).
(B) Material differences. Subject to paragraph (c)(4)(iv)(C) of
this section, to the extent the relevant data evaluated pursuant to
paragraph (c)(4)(iv)(A) of this section show material differences in
access to mental health and substance use disorder benefits as compared
to medical/surgical benefits, the differences will be considered a
strong indicator that the plan or issuer violates paragraph (c)(4)(i)
or (ii) of this section. In such instances, the plan or issuer:
(1) Must take reasonable action to address the material differences
in access as necessary to ensure compliance, in operation, with
paragraphs (c)(4)(i) and (ii) of this section; and
(2) Must document the action that has been or is being taken by the
plan or issuer to mitigate any material differences in access to mental
health and substance use disorder benefits as compared to medical/
surgical benefits, as required by Sec. 2590.712-1(c)(5)(iv).
(C) Special rule for nonquantitative treatment limitations related
to network composition. Notwithstanding paragraph (c)(4)(iv)(B) of this
section, when designing and applying one or more nonquantitative
treatment limitation(s) related to network composition standards, a
plan or issuer fails to meet the requirements of paragraphs (c)(4)(i)
and (ii) of this section, in operation, if the relevant data show
material differences in access to in-network mental health and
substance use disorder benefits as compared to in-network medical/
surgical benefits in a classification.
(D) Exception for independent professional medical or clinical
standards. A plan or issuer designing and applying a nonquantitative
treatment limitation with respect to mental health or substance use
disorder benefits in any classification that impartially applies
independent professional medical or clinical standards, as described in
paragraph (c)(4)(v)(A) of this section, is not required to comply with
the requirements of this paragraph (c)(4)(iv) with respect to that
classification.
(v) Independent professional medical or clinical standards and
standards to detect or prevent and prove fraud, waste, and abuse. (A)
To qualify for the exceptions in paragraphs (c)(4)(i)(E),
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this section for independent
professional medical or clinical standards, a nonquantitative treatment
limitation must impartially apply generally recognized independent
professional medical or clinical standards (consistent with generally
accepted standards of care) to medical/surgical benefits and mental
health or substance use disorder benefits, and may not deviate from
those standards in any way, such as by imposing additional or different
requirements.
(B) To qualify for the exceptions in paragraphs (c)(4)(i)(E) and
(c)(4)(ii)(B) of this section to detect or prevent and prove fraud,
waste, and abuse, a nonquantitative treatment limitation must be
reasonably designed to detect or prevent and prove fraud, waste, and
abuse, based on indicia of fraud, waste, and abuse that have been
reliably established through objective and unbiased data, and also be
narrowly designed to minimize the negative impact on access to
appropriate mental health and substance use disorder benefits.
(vi) Prohibition on separate nonquantitative treatment limitations
applicable only to mental health or substance use disorder benefits.
Consistent with paragraph (c)(2)(i) of this section, a group health
plan (or health insurance coverage offered by an issuer in connection
with such a plan) may not apply any nonquantitative treatment
limitation that is applicable only with respect to mental health or
substance use disorder benefits and does not apply with respect to any
medical/surgical benefits in the same benefit classification.
(vii) Effect of final determination of noncompliance under Sec.
2590.712-1. If a group health plan (or health insurance issuer offering
group health insurance coverage in connection with such a plan)
receives a final determination from the Secretary that the plan or
issuer is not in compliance with the requirements of Sec. 2590.712-1
with respect to a nonquantitative treatment limitation, the
nonquantitative treatment limitation violates this paragraph (c)(4) and
the Secretary may direct the plan or issuer not to impose the
nonquantitative treatment limitation, unless and until the plan or
issuer demonstrates to the Secretary
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compliance with the requirements of this section or takes appropriate
action to remedy the violation.
(viii) Examples. The rules of this paragraph (c)(4) are illustrated
by the following examples. In each example, the group health plan is
subject to the requirements of this section and provides both medical/
surgical benefits and mental health and substance use disorder
benefits. Additionally, in examples that conclude that the plan or
issuer violates one provision of this paragraph (c)(4), such examples
do not necessarily imply compliance with other provisions of this
paragraph (c)(4), as these examples do not analyze compliance with all
other provisions of this paragraph (c)(4).
(A) Example 1 (More restrictive prior authorization requirement in
operation)--(1) Facts. A plan requires prior authorization from the
plan's utilization reviewer that a treatment is medically necessary for
all inpatient, in-network medical/surgical benefits and for all
inpatient, in-network mental health and substance use disorder
benefits. While inpatient, in-network benefits for medical/surgical
conditions are approved for periods of 1, 3, and 7 days, after which a
treatment plan must be submitted by the patient's attending provider
and approved by the plan, the approvals for 7 days are most common
under this plan. For inpatient, in-network mental health and substance
use disorder benefits, routine approval is most commonly given only for
one day, after which a treatment plan must be submitted by the
patient's attending provider and approved by the plan. The difference
in the duration of approvals is not the result of independent
professional medical or clinical standards or standards to detect or
prevent and prove fraud, waste, and abuse, but rather reflects the
application of a heightened standard to the provision of the mental
health and substance use disorder benefits in the relevant
classification.
(2) Conclusion. In this paragraph (c)(4)(viii)(A) (Example 1), the
plan violates the rules of paragraph (c)(4)(i) of this section. Under
the terms of the plan, prior authorization applies to at least two-
thirds of all medical/surgical benefits in the relevant classification
(inpatient, in-network), since it applies to all benefits in the
relevant classification. Further, the most common or frequent variation
of the nonquantitative treatment limitation applied to medical/surgical
benefits in the relevant classification (the predominant
nonquantitative treatment limitation) is the routine approval of
inpatient, in-network benefits for 7 days before the patient's
attending provider must submit a treatment plan. However, the plan
routinely approves inpatient, in-network benefits for mental health and
substance use disorder conditions for only 1 day before the patient's
attending provider must submit a treatment plan (and, in doing so, does
not impartially apply independent professional medical or clinical
standards or apply standards to detect or prevent and prove fraud,
waste, and abuse that qualify for the exceptions in paragraph
(c)(4)(i)(E) of this section). In operation, therefore, the prior
authorization requirement imposed on inpatient, in-network mental
health and substance use disorder benefits is more restrictive than the
predominant prior authorization requirement applicable to substantially
all medical/surgical benefits in the inpatient, in-network
classification because the practice of approving only 1 day of
inpatient benefits limits access to the full range of treatment options
available for a condition or disorder under the plan or coverage as
compared to the routine 7-day approval that is given for inpatient, in-
network medical/surgical benefits. Because the plan violates the rules
of paragraph (c)(4)(i) of this section, this example does not analyze
compliance with paragraph (c)(4)(ii) or (iv) of this section.
(B) Example 2 (More restrictive peer-to-peer concurrent review
requirements in operation)--(1) Facts. A plan follows a written process
for the concurrent review of all medical/surgical benefits and mental
health and substance use disorder benefits within the inpatient, in-
network classification. Under the process, a first-level review is
conducted in every instance in which concurrent review applies and an
authorization request is approved by the first-level reviewer only if
the clinical information submitted by the facility meets the plan's
criteria for a continued stay. If the first-level reviewer is unable to
approve the authorization request because the clinical information
submitted by the facility does not meet the plan's criteria for a
continued stay, it is sent to a second-level reviewer who will either
approve or deny the request. While the written process only requires
review by the second-level reviewer to either deny or approve the
request, in operation, second-level reviewers for mental health and
substance use disorder benefits conduct a peer-to-peer review with a
provider (acting as the authorized representative of a participant or
beneficiary) before coverage of the treatment is approved. The peer-to-
peer review requirement is not the result of independent professional
medical or clinical standards or standards to detect or prevent and
prove fraud, waste, and abuse. The plan does not impose a peer-to-peer
review, as written or in operation, as part of the second-level review
for medical/surgical benefits.
(2) Conclusion. In this paragraph (c)(4)(viii)(B) (Example 2), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
concurrent review nonquantitative treatment limitation applies to at
least two-thirds of all medical/surgical benefits within the inpatient,
in-network classification because the plan follows the concurrent
review process for all medical/surgical benefits. The most common or
frequent variation of this nonquantitative treatment limitation (the
predominant nonquantitative treatment limitation) applicable to
substantially all medical/surgical benefits is that peer-to-peer review
is not imposed as part of second-level review. The plan does not
impartially apply independent professional medical or clinical
standards or apply standards to detect or prevent and prove fraud,
waste, and abuse that qualify for the exceptions in paragraph
(c)(4)(i)(E) of this section. As written, the plan's concurrent review
requirements are the same for medical/surgical benefits and mental
health and substance use disorder benefits. However, in operation, by
compelling an additional action (peer-to-peer review as part of second-
level review) to access only mental health or substance use disorder
benefits, the plan applies the limitation to mental health and
substance use disorder benefits in a manner that is more restrictive
than the predominant nonquantitative treatment limitation applied to
substantially all medical/surgical benefits in the inpatient, in-
network classification. Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this example does not analyze
compliance with paragraph (c)(4)(ii) or (iv) of this section.
(C) Example 3 (More restrictive peer-to-peer review medical
necessity standard in operation; deviation from independent
professional medical and clinical standards)--(1) Facts. A plan
generally requires that all treatment be medically necessary in the
inpatient, out-of-network classification. For both medical/surgical
benefits and mental health and substance use disorder benefits, the
written medical necessity standards are based on independent
professional medical or clinical standards that do not require peer-to-
peer review. In operation, the plan covers out-of-network benefits for
[[Page 51645]]
medical/surgical or mental health inpatient treatment outside of a
hospital if the physician documents medical appropriateness, but for
out-of-network benefits for substance use disorder inpatient treatment
outside of a hospital, the plan requires a physician to also complete
peer-to-peer review.
(2) Conclusion. In this paragraph (c)(4)(viii)(C) (Example 3), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
medical necessity nonquantitative treatment limitation applies to at
least two-thirds of all medical/surgical benefits in the inpatient,
out-of-network classification. The most common or frequent variation of
the nonquantitative treatment limitation (the predominant
nonquantitative treatment limitation) applicable to substantially all
medical/surgical benefits is the requirement that a physician document
medical appropriateness without peer-to-peer review. The plan purports
to impartially apply independent professional medical or clinical
standards that would otherwise qualify for the exception in paragraph
(c)(4)(i)(E) of this section, but deviates from those standards by
imposing the additional requirement to complete peer-to-peer review for
inpatient, out-of-network benefits for substance use disorder outside
of a hospital. Therefore, the exception in paragraph (c)(4)(i)(E) of
this section does not apply. As written, the plan provisions apply the
nonquantitative treatment limitation to mental health and substance use
disorder benefits in the inpatient, out-of-network classification in
the same manner as for medical/surgical benefits. However, in
operation, the nonquantitative treatment limitation imposed with
respect to out-of-network substance use disorder benefits for treatment
outside of a hospital is more restrictive than the predominant
nonquantitative treatment limitation applied to substantially all
medical/surgical benefits in the classification because it limits
access to the full range of treatment options available for a condition
or disorder under the plan or coverage as compared to medical/surgical
benefits in the same classification. Because the plan violates the
rules of paragraph (c)(4)(i) of this section, this example does not
analyze compliance with paragraph (c)(4)(ii) or (iv) of this section.
(D) Example 4 (Not comparable and more stringent methods for
determining reimbursement rates in operation)--(1) Facts. A plan's base
reimbursement rates for outpatient, in-network providers are determined
based on a variety of factors, including the providers' required
training, licensure, and expertise. For purposes of this example, the
plan's nonquantitative treatment limitations for determining
reimbursement rates for mental health and substance use disorder
benefits are not more restrictive than the predominant nonquantitative
treatment limitation applied to substantially all medical/surgical
benefits in the classification under paragraph (c)(4)(i) of this
section. As written, for mental health, substance use disorder, and
medical/surgical benefits, all reimbursement rates for physicians and
non-physician practitioners for the same Current Procedural Terminology
(CPT) code vary based on a combination of factors, such as the nature
of the service, provider type, number of providers qualified to provide
the service in a given geographic area, and market need (demand). As a
result, reimbursement rates for mental health, substance use disorder,
and medical/surgical benefits furnished by non-physician providers are
generally less than for physician providers. In operation, the plan
reduces the reimbursement rate for mental health and substance use
disorder non-physician providers from that paid to mental health and
substance use disorder physicians by the same percentage for every CPT
code but does not apply the same reductions for non-physician medical/
surgical providers.
(2) Conclusion. In this paragraph (c)(4)(viii)(D) (Example 4), the
plan violates the rules of paragraph (c)(4)(ii) of this section.
Because the plan reimburses non-physician providers of mental health
and substance use disorder services by reducing their reimbursement
rate from the rate to physician providers by the same percentage for
every CPT code but does not apply the same reductions to non-physician
providers of medical/surgical services, in operation, the factors used
in applying the nonquantitative treatment limitation to mental health
and substance use disorder benefits are not comparable to, and are
applied more stringently than, the factors used in applying the
limitation with respect to medical/surgical benefits. Because the facts
assume that the plan's methods for determining reimbursement rates
comply with paragraph (c)(4)(i) of this section and the plan violates
the rules of paragraph (c)(4)(ii) of this section, this example does
not analyze compliance with paragraph (c)(4)(iv) of this section.
(E) Example 5 (Exception for impartially applied generally
recognized independent professional medical or clinical standards)--(1)
Facts. A group health plan develops a medical management requirement
for all inpatient, out-of-network benefits for both medical/surgical
benefits and mental health and substance use disorder benefits to
ensure treatment is medically necessary. The medical management
requirement impartially applies independent professional medical or
clinical standards in a manner that qualifies for the exception in
paragraph (c)(4)(i)(E) of this section. The plan does not rely on any
other factors or evidentiary standards and the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the medical management requirement to mental health and substance use
disorder benefits are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, and
other factors used in designing and applying the requirement with
respect to medical/surgical benefits. Within the inpatient, out-of-
network classification, the application of the medical management
requirement results in a higher percentage of denials for mental health
and substance use disorder claims than medical/surgical claims, because
the benefits were found to be medically necessary for a lower
percentage of mental health and substance use disorder claims based on
the impartial application of the independent professional medical or
clinical standards by the nonquantitative treatment limitation.
(2) Conclusion. In this paragraph (c)(4)(viii)(E) (Example 5), the
plan does not violate the rules of this paragraph (c)(4). The medical
management nonquantitative treatment limitation imposed on mental
health and substance use disorder benefits does not violate paragraph
(c)(4)(i) or (iv) of this section because it impartially applies
independent professional medical or clinical standards for both
medical/surgical benefits and mental health and substance use disorder
benefits in a manner that qualifies for the exceptions in paragraphs
(c)(4)(i)(E) and (c)(4)(iv)(D) of this section, respectively. Moreover,
the nonquantitative treatment limitation does not violate paragraph
(c)(4)(ii) of this section because the independent professional medical
or clinical standards are not considered to be a discriminatory factor
or evidentiary standard under paragraph (c)(4)(ii)(B) of this section.
Additionally, as written and in operation, the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the nonquantitative treatment limitation to mental health or substance
use disorder benefits in the inpatient, out-of-network classification
are
[[Page 51646]]
comparable to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, and other factors used in applying
the limitation with respect to medical/surgical benefits in the
classification, regardless of the fact that the application of the
nonquantitative treatment limitation resulted in higher percentages of
claim denials for mental health and substance use disorder benefits as
compared to medical/surgical benefits.
(F) Example 6 (More restrictive prior authorization requirement;
exception for impartially applied generally recognized independent
professional medical or clinical standards not met)--(1) Facts. The
provisions of a plan state that it applies independent professional
medical and clinical standards (consistent with generally accepted
standards of care) for setting prior authorization requirements for
both medical/surgical and mental health and substance use disorder
prescription drugs. The relevant generally recognized independent
professional medical standard for treatment of opioid use disorder that
the plan utilizes--in this case, the American Society of Addiction
Medicine national practice guidelines--does not support prior
authorization every 30 days for buprenorphine/naloxone. However, in
operation, the plan requires prior authorization for buprenorphine/
naloxone combination at each refill (every 30 days) for treatment of
opioid use disorder.
(2) Conclusion. In this paragraph (c)(4)(viii)(F) (Example 6), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
plan does not qualify for the exception in paragraph (c)(4)(i)(E) of
this section, because, although the provisions of the plan state that
it applies independent professional medical and clinical standards, the
plan deviates from the relevant standards with respect to prescription
drugs to treat opioid use disorder. The prior authorization
nonquantitative treatment limitation is applied to at least two-thirds
of all medical/surgical benefits in the prescription drugs
classification. The most common or frequent variation of this
nonquantitative treatment limitation (the predominant nonquantitative
treatment limitation) applicable to substantially all medical/surgical
benefits is following generally recognized independent professional
medical and clinical standards (consistent with generally accepted
standards of care). The prior authorization requirements imposed on
substance use disorder benefits are more restrictive than the
predominant nonquantitative treatment limitation applicable to
substantially all medical/surgical benefits in the classification,
because the plan imposes additional requirements on substance use
disorder benefits that limit access to the full range of treatment
options available for a condition or disorder under the plan or
coverage as compared to medical/surgical benefits in the same
classification. Because the plan violates the rules of paragraph
(c)(4)(i) of this section, this example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this section.
(G) Example 7 (Impermissible nonquantitative treatment limitation
imposed following a final determination of noncompliance and direction
by the Secretary)--(1) Facts. Following an initial request by the
Secretary for a plan's comparative analysis of a nonquantitative
treatment limitation pursuant to Sec. 2590.712-1(d), the plan submits
a comparative analysis for the nonquantitative treatment limitation.
After review of the comparative analysis, the Secretary makes an
initial determination that the comparative analysis fails to
demonstrate that the processes, strategies, evidentiary standards, and
other factors used in designing and applying the nonquantitative
treatment limitation to mental health or substance use disorder
benefits in the relevant classification are comparable to, and applied
no more stringently than, those used in designing and applying the
limitation to medical/surgical benefits in the classification. Pursuant
to Sec. 2590.712-1(d)(3), the plan submits a corrective action plan
and additional comparative analyses within 45 calendar days after the
initial determination, and the Secretary then determines that the
additional comparative analyses do not demonstrate compliance with the
requirements of this paragraph (c)(4). The plan receives a final
determination of noncompliance from the Secretary, which informs the
plan that it is not in compliance with this paragraph (c)(4) and
directs the plan not to impose the nonquantitative treatment limitation
by a certain date, unless and until the plan demonstrates compliance to
the Secretary or takes appropriate action to remedy the violation. The
plan makes no changes to its plan terms by that date and continues to
impose the nonquantitative treatment limitation.
(2) Conclusion. In this paragraph (c)(4)(viii)(G) (Example 7), the
plan violates the requirements of this paragraph (c)(4) by imposing the
nonquantitative treatment limitation after the Secretary directs the
plan not to impose it, pursuant to paragraph (c)(4)(vii) of this
section.
(H) Example 8 (Provider network admission standards not more
restrictive and compliant with requirements for design and application
of NQTLs)--(1) Facts. As part of a plan's standards for provider
admission to its network, in the outpatient, in-network classification,
any provider seeking to contract with the plan must have a certain
number of years of supervised clinical experience. As a result of that
standard, master's level mental health therapists are required to
obtain supervised clinical experience beyond their licensure, while
master's level medical/surgical providers, psychiatrists, and Ph.D.-
level psychologists do not require additional experience beyond their
licensure because their licensure already requires supervised clinical
experience. The plan collects and evaluates relevant data in a manner
reasonably designed to assess the impact of the nonquantitative
treatment limitation. This includes in-network and out-of-network
utilization rates (including data related to provider claim
submissions), network adequacy metrics (including time and distance
data, and data on providers accepting new patients), and provider
reimbursement rates (including as compared to billed charges). This
data demonstrates that participants and beneficiaries seeking
outpatient care are able to access outpatient, in-network mental health
and substance use disorder providers at the same frequency as
outpatient, in-network medical/surgical providers, that mental health
and substance use disorder providers are active in the network and are
accepting new patients to the same extent as medical/surgical
providers, and that mental health and substance use disorder providers
are within similar time and distances to plan participants and
beneficiaries as are medical/surgical providers. This data also does
not identify material differences in what the plan or issuer pays
psychiatrists or non-physician mental health providers, compared to
physicians or non-physician medical/surgical providers, respectively,
both for the same reimbursement codes and as compared to Medicare
rates.
(2) Conclusion. In this paragraph (c)(4)(viii)(H) (Example 8), the
plan does not violate this paragraph (c)(4). The standards for this
nonquantitative treatment limitation, namely provider admission to the
plan's network, are applied to at least two-thirds of all medical/
surgical benefits in the outpatient, in-network classification, as it
applies to all medical/surgical benefits in the classification. The
most
[[Page 51647]]
common or frequent variation of this nonquantitative treatment
limitation (the predominant nonquantitative treatment limitation) that
applies to substantially all medical/surgical benefits in the
classification is having a certain number of years of supervised
clinical experience. The standards for provider admission to the plan's
network that are imposed with respect to mental health or substance use
disorder benefits are no more restrictive, as written or in operation,
than the predominant variation of the nonquantitative treatment
limitation applicable to substantially all medical/surgical benefits in
the classification, because the standards do not limit access to the
full range of treatment options available for a condition or disorder
under the plan or coverage as compared to medical/surgical benefits in
the same classification. The requirement that providers have a certain
number of years of supervised clinical experience that the plan relied
upon to design and apply the nonquantitative treatment limitation is
not considered to discriminate against mental health or substance use
disorder benefits, even though this results in the requirement that
master's level mental health therapists obtain supervised clinical
experience beyond their licensure, unlike master's level medical/
surgical providers. In addition, as written and in operation, the
processes, strategies, evidentiary standards, or other factors used in
applying the nonquantitative treatment limitation to mental health or
substance use disorder benefits in the classification are comparable
to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, or other factors used in applying
the limitation with respect to medical/surgical benefits in the
classification, because the plan applies the same standard to all
providers in the classification. Finally, the plan or issuer collects
and evaluates relevant data in a manner reasonably designed to assess
the impact of the nonquantitative treatment limitation on access to
mental health and substance use disorder benefits, which does not show
material differences in access to in-network mental health and
substance use disorder benefits as compared to in-network medical/
surgical benefits in the classification.
(I) Example 9 (More restrictive requirement for primary caregiver
participation applied to ABA therapy)--(1) Facts. A plan generally
applies medical necessity criteria in adjudicating claims for coverage
of all outpatient, in-network medical/surgical and mental health and
substance use disorder benefits, including ABA therapy for the
treatment of ASD, which is a mental health condition. The plan's
medical necessity criteria for coverage of ABA therapy requires
evidence that the participant's or beneficiary's primary caregivers
actively participate in ABA therapy, as documented by consistent
attendance in parent, caregiver, or guardian training sessions. In
adding this requirement, the plan deviates from independent
professional medical or clinical standards, and there are no similar
medical necessity criteria requiring evidence of primary caregiver
participation in order to receive coverage of any medical/surgical
benefits.
(2) Conclusion. In this paragraph (c)(4)(viii)(I) (Example 9), the
plan violates paragraph (c)(4)(i) of this section. The plan applies
medical necessity criteria to at least two-thirds of all outpatient,
in-network medical/surgical benefits, as they apply to all medical/
surgical benefits in the classification. The most common or frequent
variation of this nonquantitative treatment limitation (the predominant
nonquantitative treatment limitation) that applies to substantially all
medical/surgical benefits in the classification does not include the
requirement to provide evidence that the participant's or beneficiary's
primary caregivers actively participate in the treatment. The plan does
not qualify for the exception in paragraph (c)(4)(i)(E) of this section
in applying its restriction on coverage for ABA therapy because the
plan deviates from the independent professional medical or clinical
standards by imposing a different requirement. As a result, the
nonquantitative treatment limitation imposed on mental health and
substance use disorder benefits is more restrictive than the
predominant medical necessity requirement imposed on substantially all
medical/surgical benefits in the classification (which does not include
the requirement to provide evidence that primary caregivers actively
participate in treatment). Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this example does not analyze
compliance with paragraph (c)(4)(ii) or (iv) of this section.
(J) Example 10 (More restrictive exclusion for experimental or
investigative treatment applied to ABA therapy)--(1) Facts. A plan, as
written, generally excludes coverage for all treatments that are
experimental or investigative for both medical/surgical benefits and
mental health and substance use disorder benefits in the outpatient,
in-network classification. As a result, the plan generally excludes
experimental treatment of medical conditions and surgical procedures,
mental health conditions, and substance use disorders when no
professionally recognized treatment guidelines define clinically
appropriate standards of care for the condition or disorder and fewer
than two randomized controlled trials are available to support the
treatment's use with respect to the given condition or disorder. The
plan provides benefits for the treatment of ASD, which is a mental
health condition, but, in operation, the plan excludes coverage for ABA
therapy to treat children with ASD, deeming it experimental. More than
one professionally recognized treatment guideline defines clinically
appropriate standards of care for ASD and more than two randomized
controlled trials are available to support the use of ABA therapy to
treat certain children with ASD.
(2) Conclusion. In this paragraph (c)(4)(viii)(J) (Example 10), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
coverage exclusion for experimental or investigative treatment applies
to at least two-thirds of all medical/surgical benefits, as it applies
to all medical/surgical benefits in the outpatient, in-network
classification. The most common or frequent variation of this
nonquantitative treatment limitation in the classification (the
predominant nonquantitative treatment limitation) applicable to
substantially all medical/surgical benefits is the exclusion under the
plan for coverage of experimental treatment of medical/surgical
conditions when no professionally recognized treatment guidelines
define clinically appropriate standards of care for the condition or
disorder and fewer than two randomized controlled trials are available
to support the treatment's use with respect to the given condition or
procedure. In operation, the exclusion for experimental or
investigative treatment imposed on ABA therapy is more restrictive than
the predominant variation of the nonquantitative treatment limitation
for experimental or investigative treatment imposed on substantially
all medical/surgical benefits in the classification because the
exclusion limits access to the full range of treatment options
available for a condition or disorder under the plan or coverage as
compared to medical/surgical benefits in the same classification.
Because the plan violates the rules of paragraph (c)(4)(i) of this
section, this example does not analyze
[[Page 51648]]
compliance with paragraph (c)(4)(ii) or (iv) of this section.
(K) Example 11 (Separate EAP exhaustion treatment limitation
applicable only to mental health benefits)--(1) Facts. An employer
maintains both a major medical plan and an employee assistance program
(EAP). The EAP provides, among other benefits, a limited number of
mental health or substance use disorder counseling sessions, which,
together with other benefits provided by the EAP, are not significant
benefits in the nature of medical care. Participants are eligible for
mental health or substance use disorder benefits under the major
medical plan only after exhausting the counseling sessions provided by
the EAP. No similar exhaustion requirement applies with respect to
medical/surgical benefits provided under the major medical plan.
(2) Conclusion. In this paragraph (c)(4)(viii)(K) (Example 11),
limiting eligibility for mental health and substance use disorder
benefits under the major medical plan until EAP benefits are exhausted
is a nonquantitative treatment limitation subject to the parity
requirements of this paragraph (c). Because the limitation does not
apply to medical/surgical benefits, it is a separate nonquantitative
treatment limitation applicable only to mental health and substance use
disorder benefits that violates paragraph (c)(4)(vi) of this section.
Additionally, this EAP would not qualify as excepted benefits under
Sec. 2590.732(c)(3)(vi)(B)(1) because participants in the major
medical plan are required to use and exhaust benefits under the EAP
(making the EAP a gatekeeper) before an individual is eligible for
benefits under the plan.
(L) Example 12 (Separate residential exclusion treatment limitation
applicable only to mental health benefits)--(1) Facts. A plan generally
covers inpatient, in-network and inpatient out-of-network treatment in
any setting, including skilled nursing facilities and rehabilitation
hospitals, provided other medical necessity standards are satisfied.
The plan also has an exclusion for residential treatment, which the
plan defines as an inpatient benefit, for mental health and substance
use disorder benefits. This exclusion was not generated through any
broader nonquantitative treatment limitation (such as medical necessity
or other clinical guideline).
(2) Conclusion. In this paragraph (c)(4)(viii)(L) (Example 12), the
plan violates the rules of paragraph (c)(4)(vi) of this section.
Because the plan does not apply a comparable exclusion to inpatient
benefits for medical/surgical conditions, the exclusion of residential
treatment is a separate nonquantitative treatment limitation applicable
only to mental health and substance use disorder benefits in the
inpatient, in-network and inpatient, out-of-network classifications
that does not apply with respect to any medical/surgical benefits in
the same benefit classification.
(M) Example 13 (Standards for provider admission to a network)--(1)
Facts. A plan applies nonquantitative treatment limitations related to
network composition in the outpatient in-network and inpatient, in-
network classifications. The plan's networks are constructed by
separate service providers for medical/surgical benefits and mental
health and substance use disorder benefits. For purposes of this
example, these facts assume that these nonquantitative treatment
limitations related to network composition for mental health and
substance use disorder benefits are not more restrictive than the
predominant nonquantitative treatment limitations applied to
substantially all medical/surgical benefits in the classifications
under paragraph (c)(4)(i) of this section. The facts also assume that,
as written and in operation, the processes, strategies, evidentiary
standards, and other factors used in designing and applying the
nonquantitative treatment limitations related to network access to
mental health or substance use disorder benefits in the outpatient in-
network and inpatient in-network classifications are comparable to, and
are applied no more stringently than, the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the nonquantitative treatment limitations with respect to medical/
surgical benefits in the classifications, as required under paragraph
(c)(4)(ii) of this section. The plan collects and evaluates all
relevant data in a manner reasonably designed to assess the impact of
the nonquantitative treatment limitations related to network
composition on access to mental health and substance use disorder
benefits as compared with access to medical/surgical benefits and
considers the impact as part of the plan's or issuer's analysis of
whether the standards, in operation, comply with paragraphs (c)(4)(i)
and (ii) of this section. The plan determined that the data did not
reveal any material differences in access. That data included metrics
relating to the time and distance from plan participants and
beneficiaries to network providers in rural and urban regions; the
number of network providers accepting new patients; the proportions of
mental health and substance use disorder and medical/surgical providers
and facilities that provide services in rural and urban regions who are
in the plan's network; provider reimbursement rates; in-network and
out-of-network utilization rates (including data related to the dollar
value and number of provider claims submissions); and survey data from
participants on the extent to which they forgo or pay out-of-pocket for
treatment because of challenges finding in-network providers. The
efforts the plan made when designing and applying its nonquantitative
treatment limitations related to network composition, which ultimately
led to its outcomes data not revealing any material differences in
access to benefits for mental health or substance use disorders as
compared with medical/surgical benefits, included making sure that the
plan's service providers are making special efforts to enroll available
providers, including by authorizing greater compensation or other
inducements to the extent necessary, and expanding telehealth
arrangements as appropriate to manage regional shortages. The plan also
notifies participants in clear and prominent language on its website,
employee brochures, and the summary plan description of a toll-free
number available to help participants find in-network providers. In
addition, when plan participants submit bills for out-of-network items
and services, the plan directs their service providers to reach out to
the treating providers and facilities to see if they will enroll in the
network.
(2) Conclusion. In this paragraph (c)(4)(viii)(M) (Example 13), the
plan does not violate this paragraph (c)(4). As stated in the Facts
section, the plan's nonquantitative treatment limitations related to
network composition comply with the rules of paragraphs (c)(4)(i) and
(ii) of this section. The plan collects and evaluates relevant data, as
required under paragraph (c)(4)(iv)(A) of this section, and the data
does not reveal any material differences in access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits, as a result of the actions the plan took (as set forth in the
facts) when initially designing its nonquantitative treatment
limitations related to network composition. Because the plan takes
comparable actions to ensure that their mental health and substance use
disorder provider network is as accessible as their medical/surgical
provider network and
[[Page 51649]]
exercises careful oversight over both their service providers and the
comparative robustness of the networks with an eye to ensuring that
network composition results in access to in-network benefits for mental
health and substance use disorder services that is as generous as for
medical/surgical services, plan participants and beneficiaries can
access covered mental health and substance use disorder services and
benefits as readily as medical/surgical benefits. This is reflected in
the plan's carefully designed metrics and assessment of network
composition.
* * * * *
(d) * * *
(3) Provisions of other law. Compliance with the disclosure
requirements in paragraphs (d)(1) and (2) of this section is not
determinative of compliance with any other provision of applicable
Federal or State law. In particular, in addition to those disclosure
requirements, provisions of other applicable law require disclosure of
information relevant to medical/surgical, mental health, and substance
use disorder benefits. For example, ERISA section 104 and Sec.
2520.104b-1 of this chapter provide that, for plans subject to ERISA,
instruments under which the plan is established or operated must
generally be furnished to plan participants within 30 days of request.
Instruments under which the plan is established or operated include
documents with information on medical necessity criteria for both
medical/surgical benefits and mental health and substance use disorder
benefits; the processes, strategies, evidentiary standards, and other
factors used to apply a nonquantitative treatment limitation with
respect to medical/surgical benefits and mental health or substance use
disorder benefits under the plan; and the comparative analyses and
other applicable information required by Sec. 2590.712-1. In addition,
Sec. 2560.503-1 of this chapter and Sec. 2590.715-2719 set forth
rules regarding claims and appeals, including the right of claimants
(or their authorized representative) upon appeal of an adverse benefit
determination (or a final internal adverse benefit determination) to be
provided upon request and free of charge, reasonable access to and
copies of all documents, records, and other information relevant to the
claimant's claim for benefits. This includes documents with information
on medical necessity criteria for both medical/surgical benefits and
mental health and substance use disorder benefits, as well as the
processes, strategies, evidentiary standards, and other factors used to
apply a nonquantitative treatment limitation with respect to medical/
surgical benefits and mental health or substance use disorder benefits
under the plan and the comparative analyses and other applicable
information required by Sec. 2590.712-1.
(e)
* * * * *
(4) Coordination with EHB requirements. Nothing in paragraph (f) or
(g) of this section or Sec. 2590.712-1(g) changes the requirements of
45 CFR 147.150 and 156.115, providing that a health insurance issuer
offering non-grandfathered health insurance coverage in the individual
or small group market providing mental health and substance use
disorder services, including behavioral health treatment services, as
part of essential health benefits required under 45 CFR 156.110(a)(5)
and 156.115(a), must comply with the requirements under section 2726 of
the Public Health Service Act and its implementing regulations to
satisfy the requirement to provide coverage for mental health and
substance use disorder services, including behavioral health treatment,
as part of essential health benefits.
* * * * *
(i) * * *
(1) In general. Except as provided in paragraph (i)(2) of this
section, this section applies to group health plans and health
insurance issuers offering group health insurance coverage on the first
day of the first plan year beginning on or after January 1, 2025. Until
the applicability date in the preceding sentence, plans and issuers are
required to continue to comply with 29 CFR 2590.712, revised as of July
1, 2022.
* * * * *
(j) Severability. If any provision of this section is held to be
invalid or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
shall be construed so as to continue to give the maximum effect to the
provision permitted by law, unless such holding shall be one of
invalidity or unenforceability, in which event the provision shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
0
6. Add Sec. 2590.712-1 to read as follows:
Sec. 2590.712-1 Nonquantitative treatment limitation comparative
analysis requirements.
(a) Meaning of terms. Unless otherwise stated in this section, the
terms of this section have the meanings indicated in Sec.
2590.712(a)(2).
(b) In general. In the case of a group health plan (or health
insurance issuer offering group health insurance coverage in connection
with a group health plan) that provides both medical/surgical benefits
and mental health or substance use disorder benefits and that imposes
any nonquantitative treatment limitation on mental health or substance
use disorder benefits, the plan or issuer must perform and document a
comparative analysis of the design and application of each
nonquantitative treatment limitation applicable to mental health or
substance use disorder benefits. Each comparative analysis must comply
with the content requirements of paragraph (c) of this section and be
made available to the Secretary, upon request, in the manner required
by paragraphs (d) and (e) of this section.
(c) Comparative analysis content requirements. With respect to each
nonquantitative treatment limitation applicable to mental health or
substance use disorder benefits under a group health plan (or health
insurance coverage offered in connection with a group health plan), the
comparative analysis performed by the plan or issuer must include, at
minimum, the elements specified in this paragraph (c). In addition to
the comparative analysis for each nonquantitative treatment limitation,
each plan or issuer must prepare and make available to the Secretary,
upon request, a written list of all nonquantitative treatment
limitations imposed under the plan or coverage and a general
description of any information considered or relied upon by the plan or
issuer in preparing the comparative analysis for each nonquantitative
treatment limitation. This list and general description must be
provided to the named fiduciaries of the plan who are required to
review the findings or conclusions of each comparative analysis, as
required under paragraph (c)(6)(vi) of this section.
(1) Description of the nonquantitative treatment limitation. The
comparative analysis must include, with respect to the nonquantitative
treatment limitation that is the subject of the comparative analysis:
(i) Identification of the nonquantitative treatment limitation,
including the specific terms of the plan or coverage or other relevant
terms regarding the nonquantitative treatment
[[Page 51650]]
limitation, the policies or guidelines (internal or external) in which
the nonquantitative treatment limitation appears or is described, and
the applicable sections of any other relevant documents, such as
provider contracts, that describe the nonquantitative treatment
limitation;
(ii) Identification of all mental health or substance use disorder
benefits and medical/surgical benefits to which the nonquantitative
treatment limitation applies, including a list of which benefits are
considered mental health or substance use disorder benefits and which
benefits are considered medical/surgical benefits;
(iii) A description of which benefits are included in each
classification set forth in Sec. 2590.712(c)(2)(ii)(A); and
(iv) Identification of the predominant nonquantitative treatment
limitation applicable to substantially all medical/surgical benefits in
each classification, including an explanation of how the plan or issuer
determined which variation is the predominant nonquantitative treatment
limitation as compared to other variations, as well as how the plan
identified the variations of the nonquantitative treatment limitation.
(2) Identification and definition of the factors used to design or
apply the nonquantitative treatment limitation. The comparative
analysis must include, with respect to every factor considered or
relied upon to design the nonquantitative treatment limitation or apply
the nonquantitative treatment limitation to mental health or substance
use disorder benefits and medical/surgical benefits:
(i) Identification of all of the factors considered, as well as the
evidentiary standards considered or relied upon to design or apply each
factor and the sources from which each evidentiary standard was
derived, in determining which mental health or substance use disorder
benefits and which medical/surgical benefits are subject to the
nonquantitative treatment limitation; and
(ii) A definition of each factor, including:
(A) A detailed description of the factor; and
(B) A description of each evidentiary standard (and the source of
each evidentiary standard) identified under paragraph (c)(2)(i) of this
section.
(3) Description of how factors are used in the design and
application of the nonquantitative treatment limitation. The
comparative analysis must include a description of how each factor
identified and defined pursuant to paragraph (c)(2) of this section is
used in the design or application of the nonquantitative treatment
limitation to mental health and substance use disorder benefits and
medical/surgical benefits in a classification, including:
(i) A detailed explanation of how each factor identified and
defined in paragraph (c)(2) of this section is used to determine which
mental health or substance use disorder benefits and which medical/
surgical benefits are subject to the nonquantitative treatment
limitation;
(ii) An explanation of the evidentiary standards or other
information or sources (if any) considered or relied upon in designing
or applying the factors or relied upon in designing and applying the
nonquantitative treatment limitation, including in the determination of
whether and how mental health or substance use disorder benefits or
medical/surgical benefits are subject to the nonquantitative treatment
limitation;
(iii) If the application of the factor depends on specific
decisions made in the administration of benefits, the nature of the
decisions, the timing of the decisions, and the professional
designation and qualifications of each decision maker;
(iv) If more than one factor is identified and defined in paragraph
(c)(2) of this section, an explanation of:
(A) How all of the factors relate to each other;
(B) The order in which all the factors are applied, including when
they are applied;
(C) Whether and how any factors are given more weight than others;
and
(D) The reasons for the ordering or weighting of the factors; and
(v) Any deviation(s) or variation(s) from a factor, its
applicability, or its definition (including the evidentiary standards
used to define the factor and the information or sources from which
each evidentiary standard was derived), such as how the factor is used
differently to apply the nonquantitative treatment limitation to mental
health or substance use disorder benefits as compared to medical/
surgical benefits, and a description of how the plan or issuer
establishes such deviation(s) or variation(s).
(4) Demonstration of comparability and stringency as written. The
comparative analysis must evaluate whether, in any classification,
under the terms of the plan (or health insurance coverage) as written,
any processes, strategies, evidentiary standards, or other factors used
in designing and applying the nonquantitative treatment limitation to
mental health or substance use disorder benefits are comparable to, and
are applied no more stringently than, the processes, strategies,
evidentiary standards, or other factors used in designing and applying
the nonquantitative treatment limitation with respect to medical/
surgical benefits. The comparative analysis must include, with respect
to the nonquantitative treatment limitation and the factors used in
designing and applying the nonquantitative treatment limitation:
(i) Documentation of each factor identified and defined in
paragraph (c)(2) of this section that was applied to determine whether
the nonquantitative treatment limitation applies to mental health or
substance use disorder benefits and medical/surgical benefits in a
classification, including, as relevant:
(A) Quantitative data, calculations, or other analyses showing
whether, in each classification in which the nonquantitative treatment
limitation applies, mental health or substance use disorder benefits
and medical/surgical benefits met or did not meet any applicable
threshold identified in the relevant evidentiary standard, and the
evaluation of relevant data as required under Sec.
2590.712(c)(4)(iv)(A), to determine that the nonquantitative treatment
limitation would or would not apply; and
(B) Records maintained by the plan or issuer documenting the
consideration and application of all factors and evidentiary standards,
as well as the results of their application;
(ii) In each classification in which the nonquantitative treatment
limitation applies to mental health or substance use disorder benefits,
a comparison of how the nonquantitative treatment limitation, as
written, is applied to mental health or substance use disorder benefits
and to medical/surgical benefits, including the specific provisions of
any forms, checklists, procedure manuals, or other documentation used
in designing and applying the nonquantitative treatment limitation or
that address the application of the nonquantitative treatment
limitation;
(iii) Documentation demonstrating how the factors are comparably
applied, as written, to mental health or substance use disorder
benefits and medical/surgical benefits in each classification, to
determine which benefits are subject to the nonquantitative treatment
limitation; and
(iv) An explanation of the reason(s) for any deviation(s) or
variation(s) in the application of a factor used to apply the
nonquantitative treatment limitation, or the application of the
nonquantitative treatment limitation, to mental health or
[[Page 51651]]
substance use disorder benefits as compared to medical/surgical
benefits, and how the plan or issuer establishes such deviation(s) or
variation(s), including:
(A) In the definition of the factors, the evidentiary standards
used to define the factors, and the sources from which the evidentiary
standards were derived;
(B) In the design of the factors or evidentiary standards; or
(C) In the application or design of the nonquantitative treatment
limitation.
(5) Demonstration of comparability and stringency in operation. The
comparative analysis must evaluate whether, in any classification,
under the terms of the plan (or health insurance coverage) in
operation, the processes, strategies, evidentiary standards, or other
factors used in designing and applying the nonquantitative treatment
limitation to mental health or substance use disorder benefits are
comparable to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, or other factors used in designing
and applying the limitation with respect to medical/surgical benefits.
The comparative analysis must include, with respect to the
nonquantitative treatment limitation and the factors used in designing
and applying the nonquantitative treatment limitation:
(i) A comprehensive explanation of how the plan or issuer ensures
that, in operation, the processes, strategies, evidentiary standards,
or other factors used in designing and applying the nonquantitative
treatment limitation to mental health or substance use disorder
benefits in a classification are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, or
other factors used in designing and applying the nonquantitative
treatment limitation with respect to medical/surgical benefits,
including:
(A) An explanation of any methodology and underlying data used to
demonstrate the application of the nonquantitative treatment
limitation, in operation; and
(B) The sample period, inputs used in any calculations, definitions
of terms used, and any criteria used to select the mental health or
substance use disorder benefits and medical/surgical benefits to which
the nonquantitative treatment limitation is applicable;
(ii) Identification of the relevant data collected and evaluated as
required under Sec. 2590.712(c)(4)(iv)(A);
(iii) An evaluation of the outcomes that resulted from the
application of the nonquantitative treatment limitation to mental
health or substance use disorder benefits and medical/surgical
benefits, including the relevant data as required under Sec.
2590.712(c)(4)(iv)(A);
(iv) A detailed explanation of material differences in outcomes
evaluated pursuant to paragraph (c)(5)(iii) of this section that are
not attributable to differences in the comparability or relative
stringency of the nonquantitative treatment limitation as applied to
mental health or substance use disorder benefits and medical/surgical
benefits and the bases for concluding that material differences in
outcomes are not attributable to differences in the comparability or
relative stringency of the nonquantitative treatment limitation; and
(v) A discussion of any measures that have been or are being
implemented by the plan or issuer to mitigate any material differences
in access to mental health or substance use disorder benefits as
compared to medical/surgical benefits, including the actions the plan
or issuer is taking under Sec. 2590.712(c)(4)(iv)(B)(1) to address
material differences to ensure compliance with Sec. 2590.712(c)(4)(i)
and (ii).
(6) Findings and conclusions. The comparative analysis must address
the findings and conclusions as to the comparability of the processes,
strategies, evidentiary standards, and other factors used in designing
and applying the nonquantitative treatment limitation to mental health
or substance use disorder benefits and medical/surgical benefits within
each classification, and the relative stringency of their application,
both as written and in operation, and include:
(i) Any findings or conclusions indicating that the plan or
coverage is not (or might not be) in compliance with the requirements
of Sec. 2590.712(c)(4), including any actions the plan or issuer has
taken or intends to take to address any potential areas of concern or
noncompliance;
(ii) A reasoned and detailed discussion of the findings and
conclusions described in paragraph (c)(6)(i) of this section;
(iii) Citations to any additional specific information not
otherwise included in the comparative analysis that supports the
findings and conclusions described in paragraph (c)(6)(i) of this
section;
(iv) The date of the analysis and the title and credentials of all
relevant persons who participated in the performance and documentation
of the comparative analysis;
(v) If the comparative analysis relies upon an evaluation by a
reviewer or consultant considered by the plan or issuer to be an
expert, an assessment of each expert's qualifications and the extent to
which the plan or issuer ultimately relied upon each expert's
evaluation in performing and documenting the comparative analysis of
the design and application of each nonquantitative treatment limitation
applicable to both mental health or substance use disorder benefits and
medical/surgical benefits; and
(vi) A certification by one or more named fiduciaries who have
reviewed the comparative analysis stating whether they found the
comparative analysis to be in compliance with the content requirements
of paragraph (c) of this section.
(d) Requirements related to submission of comparative analyses to
the Secretary upon request--(1) Initial request by the Secretary for
comparative analysis. A group health plan or health insurance issuer
offering group health insurance coverage must make the comparative
analysis required by paragraph (b) of this section available and submit
it to the Secretary within 10 business days of receipt of a request
from the Secretary (or an additional period of time specified by the
Secretary).
(2) Additional information required after a comparative analysis is
deemed to be insufficient. In instances in which the Secretary
determines that the plan or issuer has not submitted sufficient
information under paragraph (d)(1) of this section for the Secretary to
review the comparative analysis required in paragraph (b) of this
section, the Secretary will specify to the plan or issuer the
additional information the plan or issuer must submit to the Secretary
to be responsive to the request under paragraph (d)(1) of this section.
Any such information must be provided to the Secretary by the plan or
issuer within 10 business days after the Secretary specifies the
additional information to be submitted (or an additional period of time
specified by the Secretary).
(3) Initial determination of noncompliance, required action, and
corrective action plan. In instances in which the Secretary reviewed
the comparative analysis submitted under paragraph (d)(1) of this
section and any additional information submitted under paragraph (d)(2)
of this section, and made an initial determination that the plan or
issuer is not in compliance with the requirements of Sec.
2590.712(c)(4) or this section, the plan or issuer must respond to the
Secretary and specify the actions the plan or issuer will take to bring
the plan or coverage into
[[Page 51652]]
compliance, and provide to the Secretary additional comparative
analyses meeting the requirements of paragraph (b) of this section that
demonstrate compliance with Sec. 2590.712(c)(4) and this section, not
later than 45 calendar days after the Secretary's initial determination
that the plan or issuer is not in compliance.
(4) Requirement to notify participants and beneficiaries of final
determination of noncompliance--(i) In general. If the Secretary makes
a final determination of noncompliance, the plan or issuer must notify
all participants and beneficiaries enrolled in the plan or coverage
that the plan or issuer has been determined to not be in compliance
with the requirements of Sec. 2590.712(c)(4) or this section with
respect to such plan or coverage. Such notice must be provided within 7
calendar days of receipt of the final determination of noncompliance,
and the plan or issuer must provide a copy of the notice to the
Secretary, and any service provider involved in the claims process, and
any fiduciary responsible for deciding benefit claims within the same
time frame.
(ii) Content of notice. The notice to participants and
beneficiaries required in paragraph (d)(4)(i) of this section shall be
written in a manner calculated to be understood by the average plan
participant and must include, in plain language, the following
information in a standalone notice:
(A) The following statement prominently displayed on the first
page, in no less than 14-point font: ``Attention! The Department of
Labor has determined that [insert the name of group health plan or
health insurance issuer] is not in compliance with the Mental Health
Parity and Addiction Equity Act.'';
(B) A summary of changes the plan or issuer has made as part of its
corrective action plan specified to the Secretary following the initial
determination of noncompliance, including an explanation of any
opportunity for a participant or beneficiary to have a claim for
benefits reprocessed;
(C) A summary of the Secretary's final determination that the plan
or issuer is not in compliance with Sec. 2590.712(c)(4) or this
section, including any provisions or practices identified as being in
violation of MHPAEA, additional corrective actions identified by the
Secretary in the final determination notice, and information on how
participants and beneficiaries can obtain from the plan or issuer a
copy of the final determination of noncompliance;
(D) Any additional actions the plan or issuer is taking to come
into compliance with Sec. 2590.712(c)(4) or this section, when the
plan or issuer will take such actions, and a clear and accurate
statement explaining whether the Secretary has indicated that those
actions, if completed, will result in compliance; and
(E) Contact information for questions and complaints, and a
statement explaining how participants and beneficiaries can obtain more
information about the notice, including:
(1) The plan's or issuer's phone number and an email or web portal
address; and
(2) The Employee Benefits Security Administration's phone number
and email or web portal address.
(iii) Manner of notice. The plan or issuer must make the notice
required under paragraph (d)(4)(i) of this section available in paper
form, or electronically (such as by email or an internet posting) if:
(A) The format is readily accessible;
(B) The notice is provided in paper form free of charge upon
request; and
(C) In a case in which the electronic form is an internet posting,
the plan or issuer timely notifies the participant or beneficiary in
paper form (such as a postcard) or email, that the documents are
available on the internet, provides the internet address, includes the
statement required in paragraph (d)(4)(ii)(A) of this section, and
notifies the participant or beneficiary that the documents are
available in paper form upon request.
(e) Requests for a copy of a comparative analysis. In addition to
making a comparative analysis available upon request to the Secretary,
a plan or issuer must make available a copy of the comparative analysis
required by paragraph (b) of this section when requested by:
(1) Any applicable State authority;
(2) A participant or beneficiary (or a provider or other person
acting as a participant's or beneficiary's authorized representative)
who has received an adverse benefit determination related to mental
health or substance use disorder benefits; and
(3) Participants and beneficiaries, who may request the comparative
analysis at any time under ERISA section 104.
(f) Rule of construction. Nothing in this section or Sec. 2590.712
shall be construed to prevent the Secretary from acting within the
scope of existing authorities to address violations of Sec. 2590.712
or this section.
(g) Applicability. The provisions of this section apply to group
health plans and health insurance issuers offering group health
insurance coverage described in Sec. 2590.712(e), to the extent the
plan or issuer is not exempt under Sec. 2590.712(f) or (g), for plan
years beginning on or after January 1, 2025.
(h) Severability. If any provision of this section is held to be
invalid or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
shall be construed so as to continue to give the maximum effect to the
provision permitted by law, unless such holding shall be one of
invalidity or unenforceability, in which event the provision shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
For the reasons set forth in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR parts 146 and 147 as set
forth below:
PART 146--REQUIREMENTS FOR THE GROUP HEALTH INSURANCE MARKET
0
7. The authority citation for part 146 continues to read as follows:
Authority: 42 U.S.C. 300gg-1 through 300gg-5, 300gg-11 through
300gg-23, 300gg-91, and 300gg-92.
0
8. Amend Sec. 146.136 is amended by:
0
a. Redesignating paragraph (a) as paragraph (a)(2) and adding
paragraphs (a) heading and (a)(1);
0
b. In newly redesignated paragraph (a)(2):
0
i. Revising the introductory text;
0
ii. Adding the definitions of ``DSM,'' ``Evidentiary standards,''
``Factors,'' and ``ICD'' in alphabetical order;
0
iii. Revising the definitions of ``Medical/surgical benefits'' and
``Mental health benefits'';
0
iv. Adding the definitions of ``Processes'' and ``Strategies'' in
alphabetical order; and
0
v. Revising the definitions of ``Substance use disorder benefits'' and
``Treatment limitations'';
0
c. Revising paragraphs (c)(1)(ii), (c)(2)(i), and (c)(2)(ii)(A)
introductory text;
0
d. In paragraph (c)(2)(ii)(C), designating Examples 1 through 4 as
paragraphs (c)(2)(ii)(C)(1) through (4) and revising newly designated
paragraphs (c)(2)(ii)(C)(1) through (4);
0
e. Adding paragraphs (c)(2)(ii)(C)(5) and (6);
0
f. Revising paragraphs (c)(3)(i)(A), (C), and (D);
0
g. In paragraph (c)(3)(iii), adding introductory text;
[[Page 51653]]
0
h. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4),
(d)(3), (e)(4), and (i)(1); and
0
I, Adding paragraph (j).
The revisions and additions read as follows:
Sec. 146.136 Parity in mental health and substance use disorder
benefits.
(a) Purpose and meaning of terms--(1) Purpose. This section and
Sec. 146.137 set forth rules to ensure parity in aggregate lifetime
and annual dollar limits, financial requirements, and quantitative and
nonquantitative treatment limitations between mental health and
substance use disorder benefits and medical/surgical benefits, as
required under PHS Act section 2726. A fundamental purpose of PHS Act
section 2726, this section, and Sec. 146.137 is to ensure that
participants and beneficiaries in a group health plan (or health
insurance coverage offered by an issuer in connection with a group
health plan) that offers mental health or substance use disorder
benefits are not subject to more restrictive lifetime or annual dollar
limits, financial requirements, or treatment limitations with respect
to those benefits than the predominant dollar limits, financial
requirements, or treatment limitations that are applied to
substantially all medical/surgical benefits covered by the plan or
coverage, as further provided in this section and Sec. 146.137.
Accordingly, in complying with the provisions of PHS Act section 2726,
this section, and Sec. 146.137, plans and issuers must not design or
apply financial requirements and treatment limitations that impose a
greater burden on access (that is, are more restrictive) to mental
health and substance use disorder benefits under the plan or coverage
than they impose on access to generally comparable medical/surgical
benefits. The provisions of PHS section 2726, this section, and Sec.
146.137 should be interpreted in a manner that is consistent with the
purpose described in this paragraph (a)(1).
(2) Meaning of terms. For purposes of this section and Sec.
146.137, except where the context clearly indicates otherwise, the
following terms have the meanings indicated:
* * * * *
DSM means the American Psychiatric Association's Diagnostic and
Statistical Manual of Mental Disorders. For the purpose of this
definition, the most current version of the DSM is the version that is
applicable no earlier than on the date that is 1 year before the first
day of the applicable plan year.
Evidentiary standards are any evidence, sources, or standards that
a group health plan (or health insurance issuer offering coverage in
connection with such a plan) considered or relied upon in designing or
applying a factor with respect to a nonquantitative treatment
limitation, including specific benchmarks or thresholds. Evidentiary
standards may be empirical, statistical, or clinical in nature, and
include: sources acquired or originating from an objective third party,
such as recognized medical literature, professional standards and
protocols (which may include comparative effectiveness studies and
clinical trials), published research studies, payment rates for items
and services (such as publicly available databases of the ``usual,
customary and reasonable'' rates paid for items and services), and
clinical treatment guidelines; internal plan or issuer data, such as
claims or utilization data or criteria for assuring a sufficient mix
and number of network providers; and benchmarks or thresholds, such as
measures of excessive utilization, cost levels, time or distance
standards, or network participation percentage thresholds.
Factors are all information, including processes and strategies
(but not evidentiary standards), that a group health plan (or health
insurance issuer offering coverage in connection with such a plan)
considered or relied upon to design a nonquantitative treatment
limitation, or to determine whether or how the nonquantitative
treatment limitation applies to benefits under the plan or coverage.
Examples of factors include, but are not limited to: provider
discretion in determining a diagnosis or type or length of treatment;
clinical efficacy of any proposed treatment or service; licensing and
accreditation of providers; claim types with a high percentage of
fraud; quality measures; treatment outcomes; severity or chronicity of
condition; variability in the cost of an episode of treatment; high
cost growth; variability in cost and quality; elasticity of demand; and
geographic location.
* * * * *
ICD means the World Health Organization's International
Classification of Diseases adopted by the Department of Health and
Human Services through Sec. 162.1002 of this subtitle. For the purpose
of this definition, the most current version of the ICD is the version
that is applicable no earlier than on the date that is 1 year before
the first day of the applicable plan year.
Medical/surgical benefits means benefits with respect to items or
services for medical conditions or surgical procedures, as defined
under the terms of the group health plan (or health insurance coverage
offered by an issuer in connection with such a plan) and in accordance
with applicable Federal and State law, but does not include mental
health benefits or substance use disorder benefits. Notwithstanding the
preceding sentence, any condition or procedure defined by the plan or
coverage as being or as not being a medical condition or surgical
procedure must be defined consistent with generally recognized
independent standards of current medical practice (for example, the
most current version of the ICD). To the extent generally recognized
independent standards of current medical practice do not address
whether a condition or procedure is a medical condition or surgical
procedure, plans and issuers may define the condition or procedure in
accordance with applicable Federal and State law.
Mental health benefits means benefits with respect to items or
services for mental health conditions, as defined under the terms of
the group health plan (or health insurance coverage offered by an
issuer in connection with such a plan) and in accordance with
applicable Federal and State law, but does not include medical/surgical
benefits or substance use disorder benefits. Notwithstanding the
preceding sentence, any condition defined by the plan or coverage as
being or as not being a mental health condition must be defined
consistent with generally recognized independent standards of current
medical practice. For the purpose of this definition, to be consistent
with generally recognized independent standards of current medical
practice, the definition must include all conditions covered under the
plan or coverage, except for substance use disorders, that fall under
any of the diagnostic categories listed in the mental, behavioral, and
neurodevelopmental disorders chapter (or equivalent chapter) of the
most current version of the ICD or that are listed in the most current
version of the DSM. To the extent generally recognized independent
standards of current medical practice do not address whether a
condition is a mental health condition, plans and issuers may define
the condition in accordance with applicable Federal and State law.
Processes are actions, steps, or procedures that a group health
plan (or health insurance issuer offering coverage in connection with
such a plan) uses to apply a nonquantitative treatment limitation,
including actions, steps, or procedures established by the
[[Page 51654]]
plan or issuer as requirements in order for a participant or
beneficiary to access benefits, including through actions by a
participant's or beneficiary's authorized representative or a provider
or facility. Processes include but are not limited to: procedures to
submit information to authorize coverage for an item or service prior
to receiving the benefit or while treatment is ongoing (including
requirements for peer or expert clinical review of that information);
provider referral requirements; and the development and approval of a
treatment plan. Processes also include the specific procedures used by
staff or other representatives of a plan or issuer (or the service
provider of a plan or issuer) to administer the application of
nonquantitative treatment limitations, such as how a panel of staff
members applies the nonquantitative treatment limitation (including the
qualifications of staff involved, number of staff members allocated,
and time allocated), consultations with panels of experts in applying
the nonquantitative treatment limitation, and reviewer discretion in
adhering to criteria hierarchy when applying a nonquantitative
treatment limitation.
Strategies are practices, methods, or internal metrics that a plan
(or health insurance issuer offering coverage in connection with such a
plan) considers, reviews, or uses to design a nonquantitative treatment
limitation. Examples of strategies include but are not limited to: the
development of the clinical rationale used in approving or denying
benefits; deviation from generally accepted standards of care; the
selection of information deemed reasonably necessary to make a medical
necessity determination; reliance on treatment guidelines or guidelines
provided by third-party organizations; and rationales used in selecting
and adopting certain threshold amounts, professional protocols, and fee
schedules. Strategies also include the creation and composition of the
staff or other representatives of a plan or issuer (or the service
provider of a plan or issuer) that deliberates, or otherwise makes
decisions, on the design of nonquantitative treatment limitations,
including the plan's decisions related to the qualifications of staff
involved, number of staff members allocated, and time allocated;
breadth of sources and evidence considered; consultations with panels
of experts in designing the nonquantitative treatment limitation; and
the composition of the panels used to design a nonquantitative
treatment limitation.
Substance use disorder benefits means benefits with respect to
items or services for substance use disorders, as defined under the
terms of the group health plan (or health insurance coverage offered by
an issuer in connection with such a plan) and in accordance with
applicable Federal and State law, but does not include medical/surgical
benefits or mental health benefits. Notwithstanding the preceding
sentence, any disorder defined by the plan or coverage as being or as
not being a substance use disorder must be defined consistent with
generally recognized independent standards of current medical practice.
For the purpose of this definition, to be consistent with generally
recognized independent standards of current medical practice, the
definition must include all disorders covered under the plan or
coverage that fall under any of the diagnostic categories listed as a
mental or behavioral disorder due to psychoactive substance use (or
equivalent category) in the mental, behavioral and neurodevelopmental
disorders chapter (or equivalent chapter) of the most current version
of the ICD or that are listed as a Substance-Related and Addictive
Disorder (or equivalent category) in the most current version of the
DSM. To the extent generally recognized independent standards of
current medical practice do not address whether a disorder is a
substance use disorder, plans and issuers may define the disorder in
accordance with applicable Federal and State law.
Treatment limitations include limits on benefits based on the
frequency of treatment, number of visits, days of coverage, days in a
waiting period, or other similar limits on the scope or duration of
treatment. Treatment limitations include both quantitative treatment
limitations, which are expressed numerically (such as 50 outpatient
visits per year), and nonquantitative treatment limitations, which
otherwise limit the scope or duration of benefits for treatment under a
plan or coverage. (See paragraph (c)(4)(iii) of this section for an
illustrative, non-exhaustive list of nonquantitative treatment
limitations.) A complete exclusion of all benefits for a particular
condition or disorder, however, is not a treatment limitation for
purposes of this definition.
* * * * *
(c) * * *
(1) * * *
(ii) Type of financial requirement or treatment limitation. When
reference is made in this paragraph (c) to a type of financial
requirement or treatment limitation, the reference to type means its
nature. Different types of financial requirements include deductibles,
copayments, coinsurance, and out-of-pocket maximums. Different types of
quantitative treatment limitations include annual, episode, and
lifetime day and visit limits. See paragraph (c)(4)(iii) of this
section for an illustrative, non-exhaustive list of nonquantitative
treatment limitations.
* * * * *
(2) * * *
(i) General rule. A group health plan (or health insurance coverage
offered by an issuer in connection with a group health plan) that
provides both medical/surgical benefits and mental health or substance
use disorder benefits may not apply any financial requirement or
treatment limitation to mental health or substance use disorder
benefits in any classification that is more restrictive than the
predominant financial requirement or treatment limitation of that type
applied to substantially all medical/surgical benefits in the same
classification. Whether a financial requirement or treatment limitation
is a predominant financial requirement or treatment limitation that
applies to substantially all medical/surgical benefits in a
classification is determined separately for each type of financial
requirement or treatment limitation. A plan or issuer may not impose
any financial requirement or treatment limitation that is applicable
only with respect to mental health or substance use disorder benefits
and not to any medical/surgical benefits in the same benefit
classification. The application of the rules of this paragraph (c)(2)
to financial requirements and quantitative treatment limitations is
addressed in paragraph (c)(3) of this section; the application of the
rules of this paragraph (c)(2) to nonquantitative treatment limitations
is addressed in paragraph (c)(4) of this section.
(ii) * * *
(A) In general. If a plan (or health insurance coverage) provides
any benefits for a mental health condition or substance use disorder in
any classification of benefits described in this paragraph (c)(2)(ii),
benefits for that mental health condition or substance use disorder
must be provided in every classification in which medical/surgical
benefits are provided. For purposes of this paragraph (c)(2)(ii), a
plan (or health insurance coverage) providing any benefits for a mental
health condition or substance use disorder in any classification of
benefits does not provide benefits for the mental health condition or
substance use disorder in every classification in which medical/
[[Page 51655]]
surgical benefits are provided unless the plan (or health insurance
coverage) provides meaningful benefits for treatment for that condition
or disorder in each such classification, as determined in comparison to
the benefits provided for medical/surgical conditions in the
classification. In determining the classification in which a particular
benefit belongs, a plan (or health insurance issuer) must apply the
same standards to medical/surgical benefits and to mental health or
substance use disorder benefits. To the extent that a plan (or health
insurance coverage) provides benefits in a classification and imposes
any separate financial requirement or treatment limitation (or separate
level of a financial requirement or treatment limitation) for benefits
in the classification, the rules of this paragraph (c) apply separately
with respect to that classification for all financial requirements or
treatment limitations (illustrated in examples in paragraph
(c)(2)(ii)(C) of this section). The following classifications of
benefits are the only classifications used in applying the rules of
this paragraph (c), in addition to the permissible sub-classifications
described in paragraph (c)(3)(iii) of this section:
* * * * *
(C) * * *
(1) Example 1--(i) Facts. A group health plan offers inpatient and
outpatient benefits and does not contract with a network of providers.
The plan imposes a $500 deductible on all benefits. For inpatient
medical/surgical benefits, the plan imposes a coinsurance requirement.
For outpatient medical/surgical benefits, the plan imposes copayments.
The plan imposes no other financial requirements or treatment
limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(1) (Example 1),
because the plan has no network of providers, all benefits provided are
out-of-network. Because inpatient, out-of-network medical/surgical
benefits are subject to separate financial requirements from
outpatient, out-of-network medical/surgical benefits, the rules of this
paragraph (c) apply separately with respect to any financial
requirements and treatment limitations, including the deductible, in
each classification.
(2) Example 2--(i) Facts. A plan imposes a $500 deductible on all
benefits. The plan has no network of providers. The plan generally
imposes a 20 percent coinsurance requirement with respect to all
benefits, without distinguishing among inpatient, outpatient, emergency
care, or prescription drug benefits. The plan imposes no other
financial requirements or treatment limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(2) (Example 2),
because the plan does not impose separate financial requirements (or
treatment limitations) based on classification, the rules of this
paragraph (c) apply with respect to the deductible and the coinsurance
across all benefits.
(3) Example 3--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan
exempts emergency care benefits from the 20 percent coinsurance
requirement. The plan imposes no other financial requirements or
treatment limitations.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(3) (Example 3),
because the plan imposes separate financial requirements based on
classifications, the rules of this paragraph (c) apply with respect to
the deductible and the coinsurance separately for benefits in the
emergency care classification and all other benefits.
(4) Example 4--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan also
imposes a preauthorization requirement for all inpatient treatment in
order for benefits to be paid. No such requirement applies to
outpatient treatment.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(4) (Example 4),
because the plan has no network of providers, all benefits provided are
out-of-network. Because the plan imposes a separate treatment
limitation based on classifications, the rules of this paragraph (c)
apply with respect to the deductible and coinsurance separately for
inpatient, out-of-network benefits and all other benefits.
(5) Example 5--(i) Facts. A plan generally covers treatment for
autism spectrum disorder (ASD), a mental health condition, and covers
outpatient, out-of-network developmental evaluations for ASD but
excludes all other benefits for outpatient treatment for ASD, including
applied behavioral analysis (ABA) therapy, when provided on an out-of-
network basis. The plan generally covers the full range of outpatient
treatments and treatment settings for medical conditions and surgical
procedures when provided on an out-of-network basis.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5),
the plan violates the rules of this paragraph (c)(2)(ii). Because the
plan only covers one type of benefit for ASD in the outpatient, out-of-
network classification and excludes all other benefits for ASD in the
classification, but generally covers the full range of medical/surgical
benefits in the classification, it fails to provide meaningful benefits
for treatment of ASD in the classification.
(6) Example 6--(i) Facts. A plan generally covers diagnosis and
treatment for eating disorders, a mental health condition, but
specifically excludes coverage for nutrition counseling to treat eating
disorders, including in the outpatient, in-network classification.
Nutrition counseling is one of the primary treatments for eating
disorders. The plan generally provides benefits for the primary
treatments for medical/surgical conditions in the outpatient, in-
network classification.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6),
the plan violates the rules of this paragraph (c)(2)(ii). The exclusion
of coverage for nutrition counseling for eating disorders results in
the plan failing to provide meaningful benefits for the treatment of
eating disorders in the outpatient, in-network classification, as
determined in comparison to the benefits provided for medical/surgical
conditions in the classification.
(3) * * *
(i) * * *
(A) Substantially all. For purposes of this paragraph (c)(3), a
type of financial requirement or quantitative treatment limitation is
considered to apply to substantially all medical/surgical benefits in a
classification of benefits if it applies to at least two-thirds of all
medical/surgical benefits in that classification. (For purposes of this
paragraph (c)(3)(i)(A), benefits expressed as subject to a zero level
of a type of financial requirement are treated as benefits not subject
to that type of financial requirement, and benefits expressed as
subject to a quantitative treatment limitation that is unlimited are
treated as benefits not subject to that type of quantitative treatment
limitation.) If a type of financial requirement or quantitative
treatment limitation does not apply to at least two-thirds of all
medical/surgical benefits in a classification, then that type cannot be
applied to mental health or substance use disorder benefits in that
classification.
* * * * *
(C) Portion based on plan payments. For purposes of this paragraph
(c)(3), the determination of the portion of medical/surgical benefits
in a classification of benefits subject to a financial requirement or
quantitative treatment limitation (or subject to any level of a
financial requirement or quantitative treatment limitation) is based on
the dollar amount of all plan
[[Page 51656]]
payments for medical/surgical benefits in the classification expected
to be paid under the plan for the plan year (or for the portion of the
plan year after a change in plan benefits that affects the
applicability of the financial requirement or quantitative treatment
limitation).
(D) Clarifications for certain threshold requirements. For any
deductible, the dollar amount of plan payments includes all plan
payments with respect to claims that would be subject to the deductible
if it had not been satisfied. For any out-of-pocket maximum, the dollar
amount of plan payments includes all plan payments associated with out-
of-pocket payments that are taken into account towards the out-of-
pocket maximum as well as all plan payments associated with out-of-
pocket payments that would have been made towards the out-of-pocket
maximum if it had not been satisfied. Similar rules apply for any other
thresholds at which the rate of plan payment changes. (See also PHS Act
section 2707 and Affordable Care Act section 1302(c), which establish
annual limitations on out-of-pocket maximums for all non-grandfathered
health plans.)
* * * * *
(iii) Special rules. Unless specifically permitted under this
paragraph (c)(3)(iii), sub-classifications are not permitted when
applying the rules of paragraph (c)(3) of this section.
(A) Multi-tiered prescription drug benefits. If a plan (or health
insurance coverage) applies different levels of financial requirements
to different tiers of prescription drug benefits based on reasonable
factors determined in accordance with the rules in paragraph (c)(4) of
this section (relating to requirements for nonquantitative treatment
limitations) and without regard to whether a drug is generally
prescribed with respect to medical/surgical benefits or with respect to
mental health or substance use disorder benefits, the plan (or health
insurance coverage) satisfies the parity requirements of this paragraph
(c) with respect to prescription drug benefits. Reasonable factors
include cost, efficacy, generic versus brand name, and mail order
versus pharmacy pick-up.
(B) Multiple network tiers. If a plan (or health insurance
coverage) provides benefits through multiple tiers of in-network
providers (such as an in-network tier of preferred providers with more
generous cost-sharing to participants than a separate in-network tier
of participating providers), the plan may divide its benefits furnished
on an in-network basis into sub-classifications that reflect network
tiers, if the tiering is based on reasonable factors determined in
accordance with the rules in paragraph (c)(4) of this section (such as
quality, performance, and market standards) and without regard to
whether a provider provides services with respect to medical/surgical
benefits or mental health or substance use disorder benefits. After the
sub-classifications are established, the plan or issuer may not impose
any financial requirement or treatment limitation on mental health or
substance use disorder benefits in any sub-classification that is more
restrictive than the predominant financial requirement or treatment
limitation that applies to substantially all medical/surgical benefits
in the sub-classification using the methodology set forth in paragraph
(c)(3)(i) of this section.
* * * * *
(iv) Examples. The rules of paragraphs (c)(3)(i) through (iii) of
this section are illustrated by the following examples. In each
example, the group health plan is subject to the requirements of this
section and provides both medical/surgical benefits and mental health
and substance use disorder benefits.
(A) Example 1--(1) Facts. (i) For inpatient, out-of-network
medical/surgical benefits, a group health plan imposes five levels of
coinsurance. Using a reasonable method, the plan projects its payments
for the upcoming year as follows:
Table 1 to Paragraph (c)(3)(iv)(A)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coinsurance rate............................ 0% 10% 15% 20% 30% Total
Projected payments.......................... $200x $100x $450x $100x $150x $1,000x
Percent of total plan costs................. 20 10 45 10 15 ..............
Percent subject to coinsurance level........ N/A 12.5 (100x/800x) 56.25 (450x/800x) 12.5 (100x/800x) 18.75 (150x/800x) ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) The plan projects plan costs of $800x to be subject to
coinsurance ($100x + $450x + $100x + $150x = $800x). Thus, 80 percent
($800x/$1,000x) of the benefits are projected to be subject to
coinsurance, and 56.25 percent of the benefits subject to coinsurance
are projected to be subject to the 15 percent coinsurance level.
(2) Conclusion. In this paragraph (c)(3)(iv)(A) (Example 1), the
two-thirds threshold of the substantially all standard is met for
coinsurance because 80 percent of all inpatient, out-of-network
medical/surgical benefits are subject to coinsurance. Moreover, the 15
percent coinsurance is the predominant level because it is applicable
to more than one-half of inpatient, out-of-network medical/surgical
benefits subject to the coinsurance requirement. The plan may not
impose any level of coinsurance with respect to inpatient, out-of-
network mental health or substance use disorder benefits that is more
restrictive than the 15 percent level of coinsurance.
(B) Example 2--(1) Facts. (i) For outpatient, in-network medical/
surgical benefits, a plan imposes five different copayment levels.
Using a reasonable method, the plan projects payments for the upcoming
year as follows:
Table 2 to Paragraph (c)(3)(iv)(B)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copayment amount............................ $0 $10 $15 $20 $50 Total
Projected payments.......................... $200x $200x $200x $300x $100x $1,000x
Percent of total plan costs................. 20 20 20 30 10 ..............
Percent subject to copayments............... N/A 25 (200x/800x) 25 (200x/800x) 37.5 (300x/800x) 12.5 (100x/800x) ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 51657]]
(ii) The plan projects plan costs of $800x to be subject to
copayments ($200x + $200x + $300x + $100x = $800x). Thus, 80 percent
($800x/$1,000x) of the benefits are projected to be subject to a
copayment.
(2) Conclusion. In this paragraph (c)(3)(iv)(B) (Example 2), the
two-thirds threshold of the substantially all standard is met for
copayments because 80 percent of all outpatient, in-network medical/
surgical benefits are subject to a copayment. Moreover, there is no
single level that applies to more than one-half of medical/surgical
benefits in the classification subject to a copayment (for the $10
copayment, 25%; for the $15 copayment, 25%; for the $20 copayment,
37.5%; and for the $50 copayment, 12.5%). The plan can combine any
levels of copayment, including the highest levels, to determine the
predominant level that can be applied to mental health or substance use
disorder benefits. If the plan combines the highest levels of
copayment, the combined projected payments for the two highest
copayment levels, the $50 copayment and the $20 copayment, are not more
than one-half of the outpatient, in-network medical/surgical benefits
subject to a copayment because they are exactly one-half ($300x + $100x
= $400x; $400x/$800x = 50%). The combined projected payments for the
three highest copayment levels--the $50 copayment, the $20 copayment,
and the $15 copayment--are more than one-half of the outpatient, in-
network medical/surgical benefits subject to the copayments ($100x +
$300x + $200x = $600x; $600x/$800x = 75%). Thus, the plan may not
impose any copayment on outpatient, in-network mental health or
substance use disorder benefits that is more restrictive than the least
restrictive copayment in the combination, the $15 copayment.
(C) Example 3--(1) Facts. A plan imposes a $250 deductible on all
medical/surgical benefits for self-only coverage and a $500 deductible
on all medical/surgical benefits for family coverage. The plan has no
network of providers. For all medical/surgical benefits, the plan
imposes a coinsurance requirement. The plan imposes no other financial
requirements or treatment limitations.
(2) Conclusion. In this paragraph (c)(3)(iv)(C) (Example 3),
because the plan has no network of providers, all benefits are provided
out-of-network. Because self-only and family coverage are subject to
different deductibles, whether the deductible applies to substantially
all medical/surgical benefits is determined separately for self-only
medical/surgical benefits and family medical/surgical benefits. Because
the coinsurance is applied without regard to coverage units, the
predominant coinsurance that applies to substantially all medical/
surgical benefits is determined without regard to coverage units.
(D) Example 4--(1) Facts. A plan applies the following financial
requirements for prescription drug benefits. The requirements are
applied without regard to whether a drug is generally prescribed with
respect to medical/surgical benefits or with respect to mental health
or substance use disorder benefits. Moreover, the process for
certifying a particular drug as ``generic'', ``preferred brand name'',
``non-preferred brand name'', or ``specialty'' complies with the rules
of paragraph (c)(4) of this section (relating to requirements for
nonquantitative treatment limitations).
Table 3 to Paragraph (c)(3)(iv)(D)(1)
----------------------------------------------------------------------------------------------------------------
Tier 1 Tier 2 Tier 3 Tier 4
----------------------------------------------------------------------------------------------------------------
Tier description................ Generic drugs..... Preferred brand Non-preferred Specialty drugs.
name drugs. brand name drugs
(which may have
Tier 1 or Tier 2
alternatives).
Percent paid by plan............ 90%............... 80%............... 60%............... 50%.
----------------------------------------------------------------------------------------------------------------
(2) Conclusion. In this paragraph (c)(3)(iv)(D) (Example 4), the
financial requirements that apply to prescription drug benefits are
applied without regard to whether a drug is generally prescribed with
respect to medical/surgical benefits or with respect to mental health
or substance use disorder benefits; the process for certifying drugs in
different tiers complies with paragraph (c)(4) of this section; and the
bases for establishing different levels or types of financial
requirements are reasonable. The financial requirements applied to
prescription drug benefits do not violate the parity requirements of
this paragraph (c)(3).
(E) Example 5--(1) Facts. A plan has two-tiers of network of
providers: a preferred provider tier and a participating provider tier.
Providers are placed in either the preferred tier or participating tier
based on reasonable factors determined in accordance with the rules in
paragraph (c)(4) of this section, such as accreditation, quality and
performance measures (including customer feedback), and relative
reimbursement rates. Furthermore, provider tier placement is determined
without regard to whether a provider specializes in the treatment of
mental health conditions or substance use disorders, or medical/
surgical conditions. The plan divides the in-network classifications
into two sub-classifications (in-network/preferred and in-network/
participating). The plan does not impose any financial requirement or
treatment limitation on mental health or substance use disorder
benefits in either of these sub-classifications that is more
restrictive than the predominant financial requirement or treatment
limitation that applies to substantially all medical/surgical benefits
in each sub-classification.
(2) Conclusion. In this paragraph (c)(3)(iv)(E) (Example 5), the
division of in-network benefits into sub-classifications that reflect
the preferred and participating provider tiers does not violate the
parity requirements of this paragraph (c)(3).
(F) Example 6--(1) Facts. With respect to outpatient, in-network
benefits, a plan imposes a $25 copayment for office visits and a 20
percent coinsurance requirement for outpatient surgery. The plan
divides the outpatient, in-network classification into two sub-
classifications (in-network office visits and all other outpatient, in-
network items and services). The plan or issuer does not impose any
financial requirement or quantitative treatment limitation on mental
health or substance use disorder benefits in either of these sub-
classifications that is more restrictive than the predominant financial
requirement or quantitative treatment limitation that applies to
substantially all medical/surgical benefits in each sub-classification.
(2) Conclusion. In this paragraph (c)(3)(iv)(F) (Example 6), the
division of outpatient, in-network benefits into sub-
[[Page 51658]]
classifications for office visits and all other outpatient, in-network
items and services does not violate the parity requirements of this
paragraph (c)(3).
(G) Example 7--(1) Facts. Same facts as in paragraph
(c)(3)(iv)(F)(1) of this section (Example 6), but for purposes of
determining parity, the plan divides the outpatient, in-network
classification into outpatient, in-network generalists and outpatient,
in-network specialists.
(2) Conclusion. In this paragraph (c)(3)(iv)(G) (Example 7), the
division of outpatient, in-network benefits into any sub-
classifications other than office visits and all other outpatient items
and services violates the requirements of paragraph (c)(3)(iii)(C) of
this section.
* * * * *
(4) Nonquantitative treatment limitations. Subject to paragraph
(c)(4)(v) of this section, a group health plan (or health insurance
coverage offered by an issuer in connection with a group health plan)
may not impose a nonquantitative treatment limitation with respect to
mental health or substance use disorder benefits in a classification
unless the plan's or coverage's imposition of the limitation meets the
requirements of paragraphs (c)(4)(i), (ii), and (iv) of this section.
If a group health plan (or health insurance coverage offered by an
issuer in connection with a group health plan) fails to meet any of
these requirements with respect to a nonquantitative treatment
limitation, the limitation violates section 2726(a)(3)(A)(ii) of the
PHS Act and may not be imposed by the plan (or health insurance
coverage).
(i) Requirement that nonquantitative treatment limitations be no
more restrictive for mental health benefits and substance use disorder
benefits. A group health plan (or health insurance issuer offering
coverage in connection with a group health plan) may not apply any
nonquantitative treatment limitation with respect to mental health or
substance use disorder benefits in any classification that is more
restrictive, as written or in operation, than the predominant
nonquantitative treatment limitation applied to substantially all
medical/surgical benefits in the same classification.
(A) Restrictive. For purposes of this paragraph (c)(4)(i), a
nonquantitative treatment limitation is restrictive to the extent it
imposes conditions, terms, or requirements that limit access to
benefits under the terms of the plan or coverage. Conditions, terms, or
requirements include, but are not limited to, those that compel an
action by or on behalf of a participant or beneficiary to access
benefits or limit access to the full range of treatment options
available for a condition or disorder under the plan or coverage.
(B) Substantially all. For purposes of this paragraph (c)(4)(i), a
nonquantitative treatment limitation is considered to apply to
substantially all medical/surgical benefits in a classification if it
applies to at least two-thirds of all medical/surgical benefits in that
classification, consistent with paragraph (c)(4)(i)(D) of this section.
Whether the nonquantitative treatment limitation applies to at least
two-thirds of all medical/surgical benefits is determined without
regard to whether the nonquantitative treatment limitation was
triggered based on a particular factor or evidentiary standard. If a
nonquantitative treatment limitation does not apply to at least two-
thirds of all medical/surgical benefits in a classification, then that
limitation cannot be applied to mental health or substance use disorder
benefits in that classification.
(C) Predominant. For purposes of this paragraph (c)(4)(i), the term
predominant means the most common or most frequent variation of the
nonquantitative treatment limitation within a classification,
determined in accordance with the method outlined in paragraph
(c)(4)(i)(D) of this section, to the extent the plan or issuer imposes
multiple variations of a nonquantitative treatment limitation within
the classification. For example, multiple variations of inpatient
concurrent review include review commencing 1 day, 3 days, or 7 days
after admission, depending on the reason for the stay.
(D) Portion based on plan payments. For purposes of paragraphs
(c)(4)(i)(B) and (C) of this section, the determination of the portion
of medical/surgical benefits in a classification of benefits subject to
a nonquantitative treatment limitation is based on the dollar amount of
all plan payments for medical/surgical benefits in the classification
expected to be paid under the plan or coverage for the plan year (or
the portion of the plan year after a change in benefits that affects
the applicability of the nonquantitative treatment limitation). Any
reasonable method may be used to determine the dollar amount expected
to be paid under a plan or coverage for medical/surgical benefits.
(E) Exceptions for independent professional medical or clinical
standards and standards to detect or prevent and prove fraud, waste,
and abuse. Notwithstanding paragraphs (c)(4)(i)(A) through (D) of this
section, a plan or issuer that applies a nonquantitative treatment
limitation that impartially applies independent professional medical or
clinical standards or applies standards to detect or prevent and prove
fraud, waste, and abuse, as described in paragraph (c)(4)(v)(A) or (B)
of this section, to mental health or substance use disorder benefits in
any classification will not be considered to violate this paragraph
(c)(4)(i) with respect to such nonquantitative treatment limitation.
(ii) Additional requirements related to design and application of
the nonquantitative treatment limitation--(A) In general. Consistent
with paragraph (a)(1) of this section, a plan or issuer may not impose
a nonquantitative treatment limitation with respect to mental health or
substance use disorder benefits in any classification unless, under the
terms of the plan (or health insurance coverage) as written and in
operation, any processes, strategies, evidentiary standards, or other
factors used in designing and applying the nonquantitative treatment
limitation to mental health or substance use disorder benefits in the
classification are comparable to, and are applied no more stringently
than, the processes, strategies, evidentiary standards, or other
factors used in designing and applying the limitation with respect to
medical/surgical benefits in the classification.
(B) Prohibition on discriminatory factors and evidentiary
standards. For purposes of determining comparability and stringency
under paragraph (c)(4)(ii)(A) of this section, a plan or issuer may not
rely upon any factor or evidentiary standard if the information,
evidence, sources, or standards on which the factor or evidentiary
standard is based discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits. For
purposes of this paragraph (c)(4)(ii)(B):
(1) Impartially applied generally recognized independent
professional medical or clinical standards described in paragraph
(c)(4)(v)(A) of this section are not considered to discriminate against
mental health or substance use disorder benefits.
(2) Standards reasonably designed to detect or prevent and prove
fraud, waste, and abuse described in paragraph (c)(4)(v)(B) of this
section are not considered to discriminate against mental health or
substance use disorder benefits.
(3) Information is considered to discriminate against mental health
or substance use disorder benefits if it is biased or not objective, in
a manner that results in less favorable treatment of
[[Page 51659]]
mental health or substance use disorder benefits, based on all the
relevant facts and circumstances including, but not limited to, the
source of the information, the purpose or context of the information,
and the content of the information.
(iii) Illustrative, non-exhaustive list of nonquantitative
treatment limitations. Nonquantitative treatment limitations include--
(A) Medical management standards (such as prior authorization)
limiting or excluding benefits based on medical necessity or medical
appropriateness, or based on whether the treatment is experimental or
investigative;
(B) Formulary design for prescription drugs;
(C) For plans with multiple network tiers (such as preferred
providers and participating providers), network tier design;
(D) Standards related to network composition, including but not
limited to, standards for provider and facility admission to
participate in a network or for continued network participation,
including methods for determining reimbursement rates, credentialing
standards, and procedures for ensuring the network includes an adequate
number of each category of provider and facility to provide services
under the plan or coverage;
(E) Plan or issuer methods for determining out-of-network rates,
such as allowed amounts; usual, customary, and reasonable charges; or
application of other external benchmarks for out-of-network rates;
(F) Refusal to pay for higher-cost therapies until it can be shown
that a lower-cost therapy is not effective (also known as fail-first
policies or step therapy protocols);
(G) Exclusions based on failure to complete a course of treatment;
and
(H) Restrictions based on geographic location, facility type,
provider specialty, and other criteria that limit the scope or duration
of benefits for services provided under the plan or coverage.
(iv) Required use of outcomes data--(A) In general. When designing
and applying a nonquantitative treatment limitation, a plan or issuer
must collect and evaluate relevant data in a manner reasonably designed
to assess the impact of the nonquantitative treatment limitation on
access to mental health and substance use disorder benefits and
medical/surgical benefits, and consider the impact as part of the
plan's or issuer's analysis of whether the limitation, in operation,
complies with paragraphs (c)(4)(i) and (ii) of this section. The
Secretary, jointly with the Secretary of the Treasury and the Secretary
of Labor, may specify in guidance the type, form, and manner of
collection and evaluation for the data required under this paragraph
(c)(4)(iv)(A).
(1) For purposes of this paragraph (c)(4)(iv)(A), relevant data
includes, but is not limited to, the number and percentage of claims
denials and any other data relevant to the nonquantitative treatment
limitation required by State law or private accreditation standards.
(2) In addition to the relevant data set forth in paragraph
(c)(4)(iv)(A)(1) of this section, relevant data for nonquantitative
treatment limitations related to network composition standards
includes, but is not limited to, in-network and out-of-network
utilization rates (including data related to provider claim
submissions), network adequacy metrics (including time and distance
data, and data on providers accepting new patients), and provider
reimbursement rates (including as compared to billed charges).
(B) Material differences. Subject to paragraph (c)(4)(iv)(C) of
this section, to the extent the relevant data evaluated pursuant to
paragraph (c)(4)(iv)(A) of this section show material differences in
access to mental health and substance use disorder benefits as compared
to medical/surgical benefits, the differences will be considered a
strong indicator that the plan or issuer violates paragraph (c)(4)(i)
or (ii) of this section. In such instances, the plan or issuer:
(1) Must take reasonable action to address the material differences
in access as necessary to ensure compliance, in operation, with
paragraphs (c)(4)(i) and (ii) of this section; and
(2) Must document the action that has been or is being taken by the
plan or issuer to mitigate any material differences in access to mental
health and substance use disorder benefits as compared to medical/
surgical benefits, as required by Sec. 146.137(c)(5)(iv).
(C) Special rule for nonquantitative treatment limitations related
to network composition. Notwithstanding paragraph (c)(4)(iv)(B) of this
section, when designing and applying one or more nonquantitative
treatment limitation(s) related to network composition standards, a
plan or issuer fails to meet the requirements of paragraphs (c)(4)(i)
and (ii) of this section, in operation, if the relevant data show
material differences in access to in-network mental health and
substance use disorder benefits as compared to in-network medical/
surgical benefits in a classification.
(D) Exception for independent professional medical or clinical
standards. A plan or issuer designing and applying a nonquantitative
treatment limitation with respect to mental health or substance use
disorder benefits in any classification that impartially applies
independent professional medical or clinical standards, as described in
paragraph (c)(4)(v)(A) of this section, is not required to comply with
the requirements of this paragraph (c)(4)(iv) with respect to that
classification.
(v) Independent professional medical or clinical standards and
standards to detect or prevent and prove fraud, waste, and abuse. (A)
To qualify for the exceptions in paragraphs (c)(4)(i)(E),
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this section for independent
professional medical or clinical standards, a nonquantitative treatment
limitation must impartially apply generally recognized independent
professional medical or clinical standards (consistent with generally
accepted standards of care) to medical/surgical benefits and mental
health or substance use disorder benefits, and may not deviate from
those standards in any way, such as by imposing additional or different
requirements.
(B) To qualify for the exceptions in paragraphs (c)(4)(i)(E) and
(c)(4)(ii)(B) of this section to detect or prevent and prove fraud,
waste, and abuse, a nonquantitative treatment limitation must be
reasonably designed to detect or prevent and prove fraud, waste, and
abuse, based on indicia of fraud, waste, and abuse that have been
reliably established through objective and unbiased data, and also be
narrowly designed to minimize the negative impact on access to
appropriate mental health and substance use disorder benefits.
(vi) Prohibition on separate nonquantitative treatment limitations
applicable only to mental health or substance use disorder benefits.
Consistent with paragraph (c)(2)(i) of this section, a group health
plan (or health insurance coverage offered by an issuer in connection
with such a plan) may not apply any nonquantitative treatment
limitation that is applicable only with respect to mental health or
substance use disorder benefits and does not apply with respect to any
medical/surgical benefits in the same benefit classification.
(vii) Effect of final determination of noncompliance under Sec.
146.137. If a group health plan (or health insurance issuer offering
group health insurance coverage in connection with such a plan)
receives a final determination
[[Page 51660]]
from the Secretary that the plan or issuer is not in compliance with
the requirements of Sec. 146.137 with respect to a nonquantitative
treatment limitation, the nonquantitative treatment limitation violates
this paragraph (c)(4) and the Secretary may direct the plan or issuer
not to impose the nonquantitative treatment limitation, unless and
until the plan or issuer demonstrates to the Secretary compliance with
the requirements of this section or takes appropriate action to remedy
the violation.
(viii) Examples. The rules of this paragraph (c)(4) are illustrated
by the following examples. In each example, the group health plan is
subject to the requirements of this section and provides both medical/
surgical benefits and mental health and substance use disorder
benefits. Additionally, in examples that conclude that the plan or
issuer violates one provision of this paragraph (c)(4), such examples
do not necessarily imply compliance with other provisions of this
paragraph (c)(4), as these examples do not analyze compliance with all
other provisions of this paragraph (c)(4).
(A) Example 1 (More restrictive prior authorization requirement in
operation)--(1) Facts. A plan requires prior authorization from the
plan's utilization reviewer that a treatment is medically necessary for
all inpatient, in-network medical/surgical benefits and for all
inpatient, in-network mental health and substance use disorder
benefits. While inpatient, in-network benefits for medical/surgical
conditions are approved for periods of 1, 3, and 7 days, after which a
treatment plan must be submitted by the patient's attending provider
and approved by the plan, the approvals for 7 days are most common
under this plan. For inpatient, in-network mental health and substance
use disorder benefits, routine approval is most commonly given only for
one day, after which a treatment plan must be submitted by the
patient's attending provider and approved by the plan. The difference
in the duration of approvals is not the result of independent
professional medical or clinical standards or standards to detect or
prevent and prove fraud, waste, and abuse, but rather reflects the
application of a heightened standard to the provision of the mental
health and substance use disorder benefits in the relevant
classification.
(2) Conclusion. In this paragraph (c)(4)(viii)(A) (Example 1), the
plan violates the rules of paragraph (c)(4)(i) of this section. Under
the terms of the plan, prior authorization applies to at least two-
thirds of all medical/surgical benefits in the relevant classification
(inpatient, in-network), since it applies to all benefits in the
relevant classification. Further, the most common or frequent variation
of the nonquantitative treatment limitation applied to medical/surgical
benefits in the relevant classification (the predominant
nonquantitative treatment limitation) is the routine approval of
inpatient, in-network benefits for 7 days before the patient's
attending provider must submit a treatment plan. However, the plan
routinely approves inpatient, in-network benefits for mental health and
substance use disorder conditions for only 1 day before the patient's
attending provider must submit a treatment plan (and, in doing so, does
not impartially apply independent professional medical or clinical
standards or apply standards to detect or prevent and prove fraud,
waste, and abuse that qualify for the exceptions in paragraph
(c)(4)(i)(E) of this section). In operation, therefore, the prior
authorization requirement imposed on inpatient, in-network mental
health and substance use disorder benefits is more restrictive than the
predominant prior authorization requirement applicable to substantially
all medical/surgical benefits in the inpatient, in-network
classification because the practice of approving only 1 day of
inpatient benefits limits access to the full range of treatment options
available for a condition or disorder under the plan or coverage as
compared to the routine 7-day approval that is given for inpatient, in-
network medical/surgical benefits. Because the plan violates the rules
of paragraph (c)(4)(i) of this section, this example does not analyze
compliance with paragraph (c)(4)(ii) or (iv) of this section.
(B) Example 2 (More restrictive peer-to-peer concurrent review
requirements in operation)--(1) Facts. A plan follows a written process
for the concurrent review of all medical/surgical benefits and mental
health and substance use disorder benefits within the inpatient, in-
network classification. Under the process, a first-level review is
conducted in every instance in which concurrent review applies and an
authorization request is approved by the first-level reviewer only if
the clinical information submitted by the facility meets the plan's
criteria for a continued stay. If the first-level reviewer is unable to
approve the authorization request because the clinical information
submitted by the facility does not meet the plan's criteria for a
continued stay, it is sent to a second-level reviewer who will either
approve or deny the request. While the written process only requires
review by the second-level reviewer to either deny or approve the
request, in operation, second-level reviewers for mental health and
substance use disorder benefits conduct a peer-to-peer review with a
provider (acting as the authorized representative of a participant or
beneficiary) before coverage of the treatment is approved. The peer-to-
peer review requirement is not the result of independent professional
medical or clinical standards or standards to detect or prevent and
prove fraud, waste, and abuse. The plan does not impose a peer-to-peer
review, as written or in operation, as part of the second-level review
for medical/surgical benefits.
(2) Conclusion. In this paragraph (c)(4)(viii)(B) (Example 2), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
concurrent review nonquantitative treatment limitation applies to at
least two-thirds of all medical/surgical benefits within the inpatient,
in-network classification because the plan follows the concurrent
review process for all medical/surgical benefits. The most common or
frequent variation of this nonquantitative treatment limitation (the
predominant nonquantitative treatment limitation) applicable to
substantially all medical/surgical benefits is that peer-to-peer review
is not imposed as part of second-level review. The plan does not
impartially apply independent professional medical or clinical
standards or apply standards to detect or prevent and prove fraud,
waste, and abuse that qualify for the exceptions in paragraph
(c)(4)(i)(E) of this section. As written, the plan's concurrent review
requirements are the same for medical/surgical benefits and mental
health and substance use disorder benefits. However, in operation, by
compelling an additional action (peer-to-peer review as part of second-
level review) to access only mental health or substance use disorder
benefits, the plan applies the limitation to mental health and
substance use disorder benefits in a manner that is more restrictive
than the predominant nonquantitative treatment limitation applied to
substantially all medical/surgical benefits in the inpatient, in-
network classification. Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this example does not analyze
compliance with paragraph (c)(4)(ii) or (iv) of this section.
(C) Example 3 (More restrictive peer-to-peer review medical
necessity standard in operation; deviation from independent
professional medical and clinical standards)--(1) Facts. A plan
[[Page 51661]]
generally requires that all treatment be medically necessary in the
inpatient, out-of-network classification. For both medical/surgical
benefits and mental health and substance use disorder benefits, the
written medical necessity standards are based on independent
professional medical or clinical standards that do not require peer-to-
peer review. In operation, the plan covers out-of-network benefits for
medical/surgical or mental health inpatient treatment outside of a
hospital if the physician documents medical appropriateness, but for
out-of-network benefits for substance use disorder inpatient treatment
outside of a hospital, the plan requires a physician to also complete
peer-to-peer review.
(2) Conclusion. In this paragraph (c)(4)(viii)(C) (Example 3), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
medical necessity nonquantitative treatment limitation applies to at
least two-thirds of all medical/surgical benefits in the inpatient,
out-of-network classification. The most common or frequent variation of
the nonquantitative treatment limitation (the predominant
nonquantitative treatment limitation) applicable to substantially all
medical/surgical benefits is the requirement that a physician document
medical appropriateness without peer-to-peer review. The plan purports
to impartially apply independent professional medical or clinical
standards that would otherwise qualify for the exception in paragraph
(c)(4)(i)(E) of this section, but deviates from those standards by
imposing the additional requirement to complete peer-to-peer review for
inpatient, out-of-network benefits for substance use disorder outside
of a hospital. Therefore, the exception in paragraph (c)(4)(i)(E) of
this section does not apply. As written, the plan provisions apply the
nonquantitative treatment limitation to mental health and substance use
disorder benefits in the inpatient, out-of-network classification in
the same manner as for medical/surgical benefits. However, in
operation, the nonquantitative treatment limitation imposed with
respect to out-of-network substance use disorder benefits for treatment
outside of a hospital is more restrictive than the predominant
nonquantitative treatment limitation applied to substantially all
medical/surgical benefits in the classification because it limits
access to the full range of treatment options available for a condition
or disorder under the plan or coverage as compared to medical/surgical
benefits in the same classification. Because the plan violates the
rules of paragraph (c)(4)(i) of this section, this example does not
analyze compliance with paragraph (c)(4)(ii) or (iv) of this section.
(D) Example 4 (Not comparable and more stringent methods for
determining reimbursement rates in operation)--(1) Facts. A plan's base
reimbursement rates for outpatient, in-network providers are determined
based on a variety of factors, including the providers' required
training, licensure, and expertise. For purposes of this example, the
plan's nonquantitative treatment limitations for determining
reimbursement rates for mental health and substance use disorder
benefits are not more restrictive than the predominant nonquantitative
treatment limitation applied to substantially all medical/surgical
benefits in the classification under paragraph (c)(4)(i) of this
section. As written, for mental health, substance use disorder, and
medical/surgical benefits, all reimbursement rates for physicians and
non-physician practitioners for the same Current Procedural Terminology
(CPT) code vary based on a combination of factors, such as the nature
of the service, provider type, number of providers qualified to provide
the service in a given geographic area, and market need (demand). As a
result, reimbursement rates for mental health, substance use disorder,
and medical/surgical benefits furnished by non-physician providers are
generally less than for physician providers. In operation, the plan
reduces the reimbursement rate for mental health and substance use
disorder non-physician providers from that paid to mental health and
substance use disorder physicians by the same percentage for every CPT
code but does not apply the same reductions for non-physician medical/
surgical providers.
(2) Conclusion. In this paragraph (c)(4)(viii)(D) (Example 4), the
plan violates the rules of paragraph (c)(4)(ii) of this section.
Because the plan reimburses non-physician providers of mental health
and substance use disorder services by reducing their reimbursement
rate from the rate to physician providers by the same percentage for
every CPT code but does not apply the same reductions to non-physician
providers of medical/surgical services, in operation, the factors used
in applying the nonquantitative treatment limitation to mental health
and substance use disorder benefits are not comparable to, and are
applied more stringently than, the factors used in applying the
limitation with respect to medical/surgical benefits. Because the facts
assume that the plan's methods for determining reimbursement rates
comply with paragraph (c)(4)(i) of this section and the plan violates
the rules of paragraph (c)(4)(ii) of this section, this example does
not analyze compliance with paragraph (c)(4)(iv) of this section.
(E) Example 5 (Exception for impartially applied generally
recognized independent professional medical or clinical standards)--(1)
Facts. A group health plan develops a medical management requirement
for all inpatient, out-of-network benefits for both medical/surgical
benefits and mental health and substance use disorder benefits to
ensure treatment is medically necessary. The medical management
requirement impartially applies independent professional medical or
clinical standards in a manner that qualifies for the exception in
paragraph (c)(4)(i)(E) of this section. The plan does not rely on any
other factors or evidentiary standards and the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the medical management requirement to mental health and substance use
disorder benefits are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, and
other factors used in designing and applying the requirement with
respect to medical/surgical benefits. Within the inpatient, out-of-
network classification, the application of the medical management
requirement results in a higher percentage of denials for mental health
and substance use disorder claims than medical/surgical claims, because
the benefits were found to be medically necessary for a lower
percentage of mental health and substance use disorder claims based on
the impartial application of the independent professional medical or
clinical standards by the nonquantitative treatment limitation.
(2) Conclusion. In this paragraph (c)(4)(viii)(E) (Example 5), the
plan does not violate the rules of this paragraph (c)(4). The medical
management nonquantitative treatment limitation imposed on mental
health and substance use disorder benefits does not violate paragraph
(c)(4)(i) or (iv) of this section because it impartially applies
independent professional medical or clinical standards for both
medical/surgical benefits and mental health and substance use disorder
benefits in a manner that qualifies for the exceptions in paragraphs
(c)(4)(i)(E) and (c)(4)(iv)(D) of this section, respectively. Moreover,
the nonquantitative treatment limitation does not violate paragraph
(c)(4)(ii) of this section because the independent professional medical
or
[[Page 51662]]
clinical standards are not considered to be a discriminatory factor or
evidentiary standard under paragraph (c)(4)(ii)(B) of this section.
Additionally, as written and in operation, the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the nonquantitative treatment limitation to mental health or substance
use disorder benefits in the inpatient, out-of-network classification
are comparable to, and are applied no more stringently than, the
processes, strategies, evidentiary standards, and other factors used in
applying the limitation with respect to medical/surgical benefits in
the classification, regardless of the fact that the application of the
nonquantitative treatment limitation resulted in higher percentages of
claim denials for mental health and substance use disorder benefits as
compared to medical/surgical benefits.
(F) Example 6 (More restrictive prior authorization requirement;
exception for impartially applied generally recognized independent
professional medical or clinical standards not met)--(1) Facts. The
provisions of a plan state that it applies independent professional
medical and clinical standards (consistent with generally accepted
standards of care) for setting prior authorization requirements for
both medical/surgical and mental health and substance use disorder
prescription drugs. The relevant generally recognized independent
professional medical standard for treatment of opioid use disorder that
the plan utilizes--in this case, the American Society of Addiction
Medicine national practice guidelines--does not support prior
authorization every 30 days for buprenorphine/naloxone. However, in
operation, the plan requires prior authorization for buprenorphine/
naloxone combination at each refill (every 30 days) for treatment of
opioid use disorder.
(2) Conclusion. In this paragraph (c)(4)(viii)(F) (Example 6), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
plan does not qualify for the exception in paragraph (c)(4)(i)(E) of
this section, because, although the provisions of the plan state that
it applies independent professional medical and clinical standards, the
plan deviates from the relevant standards with respect to prescription
drugs to treat opioid use disorder. The prior authorization
nonquantitative treatment limitation is applied to at least two-thirds
of all medical/surgical benefits in the prescription drugs
classification. The most common or frequent variation of this
nonquantitative treatment limitation (the predominant nonquantitative
treatment limitation) applicable to substantially all medical/surgical
benefits is following generally recognized independent professional
medical and clinical standards (consistent with generally accepted
standards of care). The prior authorization requirements imposed on
substance use disorder benefits are more restrictive than the
predominant nonquantitative treatment limitation applicable to
substantially all medical/surgical benefits in the classification,
because the plan imposes additional requirements on substance use
disorder benefits that limit access to the full range of treatment
options available for a condition or disorder under the plan or
coverage as compared to medical/surgical benefits in the same
classification. Because the plan violates the rules of paragraph
(c)(4)(i) of this section, this example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this section.
(G) Example 7 (Impermissible nonquantitative treatment limitation
imposed following a final determination of noncompliance and direction
by the Secretary)--(1) Facts. Following an initial request by the
Secretary for a plan's comparative analysis of a nonquantitative
treatment limitation pursuant to Sec. 146.137(d), the plan submits a
comparative analysis for the nonquantitative treatment limitation.
After review of the comparative analysis, the Secretary makes an
initial determination that the comparative analysis fails to
demonstrate that the processes, strategies, evidentiary standards, and
other factors used in designing and applying the nonquantitative
treatment limitation to mental health or substance use disorder
benefits in the relevant classification are comparable to, and applied
no more stringently than, those used in designing and applying the
limitation to medical/surgical benefits in the classification. Pursuant
to Sec. 146.137(d)(3), the plan submits a corrective action plan and
additional comparative analyses within 45 calendar days after the
initial determination, and the Secretary then determines that the
additional comparative analyses do not demonstrate compliance with the
requirements of this paragraph (c)(4). The plan receives a final
determination of noncompliance from the Secretary, which informs the
plan that it is not in compliance with this paragraph (c)(4) and
directs the plan not to impose the nonquantitative treatment limitation
by a certain date, unless and until the plan demonstrates compliance to
the Secretary or takes appropriate action to remedy the violation. The
plan makes no changes to its plan terms by that date and continues to
impose the nonquantitative treatment limitation.
(2) Conclusion. In this paragraph (c)(4)(viii)(G) (Example 7), the
plan violates the requirements of this paragraph (c)(4) by imposing the
nonquantitative treatment limitation after the Secretary directs the
plan not to impose it, pursuant to paragraph (c)(4)(vii) of this
section.
(H) Example 8 (Provider network admission standards not more
restrictive and compliant with requirements for design and application
of NQTLs)--(1) Facts. As part of a plan's standards for provider
admission to its network, in the outpatient, in-network classification,
any provider seeking to contract with the plan must have a certain
number of years of supervised clinical experience. As a result of that
standard, master's level mental health therapists are required to
obtain supervised clinical experience beyond their licensure, while
master's level medical/surgical providers, psychiatrists, and Ph.D.-
level psychologists do not require additional experience beyond their
licensure because their licensure already requires supervised clinical
experience. The plan collects and evaluates relevant data in a manner
reasonably designed to assess the impact of the nonquantitative
treatment limitation. This includes in-network and out-of-network
utilization rates (including data related to provider claim
submissions), network adequacy metrics (including time and distance
data, and data on providers accepting new patients), and provider
reimbursement rates (including as compared to billed charges). This
data demonstrates that participants and beneficiaries seeking
outpatient care are able to access outpatient, in-network mental health
and substance use disorder providers at the same frequency as
outpatient, in-network medical/surgical providers, that mental health
and substance use disorder providers are active in the network and are
accepting new patients to the same extent as medical/surgical
providers, and that mental health and substance use disorder providers
are within similar time and distances to plan participants and
beneficiaries as are medical/surgical providers. This data also does
not identify material differences in what the plan or issuer pays
psychiatrists or non-physician mental health providers, compared to
physicians or non-physician medical/surgical providers, respectively,
both for the same reimbursement codes and as compared to Medicare
rates.
[[Page 51663]]
(2) Conclusion. In this paragraph (c)(4)(viii)(H) (Example 8), the
plan does not violate this paragraph (c)(4). The standards for this
nonquantitative treatment limitation, namely provider admission to the
plan's network, are applied to at least two-thirds of all medical/
surgical benefits in the outpatient, in-network classification, as it
applies to all medical/surgical benefits in the classification. The
most common or frequent variation of this nonquantitative treatment
limitation (the predominant nonquantitative treatment limitation) that
applies to substantially all medical/surgical benefits in the
classification is having a certain number of years of supervised
clinical experience. The standards for provider admission to the plan's
network that are imposed with respect to mental health or substance use
disorder benefits are no more restrictive, as written or in operation,
than the predominant variation of the nonquantitative treatment
limitation applicable to substantially all medical/surgical benefits in
the classification, because the standards do not limit access to the
full range of treatment options available for a condition or disorder
under the plan or coverage as compared to medical/surgical benefits in
the same classification. The requirement that providers have a certain
number of years of supervised clinical experience that the plan relied
upon to design and apply the nonquantitative treatment limitation is
not considered to discriminate against mental health or substance use
disorder benefits, even though this results in the requirement that
master's level mental health therapists obtain supervised clinical
experience beyond their licensure, unlike master's level medical/
surgical providers. In addition, as written and in operation, the
processes, strategies, evidentiary standards, or other factors used in
applying the nonquantitative treatment limitation to mental health or
substance use disorder benefits in the classification are comparable
to, and are applied no more stringently than, the processes,
strategies, evidentiary standards, or other factors used in applying
the limitation with respect to medical/surgical benefits in the
classification, because the plan applies the same standard to all
providers in the classification. Finally, the plan or issuer collects
and evaluates relevant data in a manner reasonably designed to assess
the impact of the nonquantitative treatment limitation on access to
mental health and substance use disorder benefits, which does not show
material differences in access to in-network mental health and
substance use disorder benefits as compared to in-network medical/
surgical benefits in the classification.
(I) Example 9 (More restrictive requirement for primary caregiver
participation applied to ABA therapy)--(1) Facts. A plan generally
applies medical necessity criteria in adjudicating claims for coverage
of all outpatient, in-network medical/surgical and mental health and
substance use disorder benefits, including ABA therapy for the
treatment of ASD, which is a mental health condition. The plan's
medical necessity criteria for coverage of ABA therapy requires
evidence that the participant's or beneficiary's primary caregivers
actively participate in ABA therapy, as documented by consistent
attendance in parent, caregiver, or guardian training sessions. In
adding this requirement, the plan deviates from independent
professional medical or clinical standards, and there are no similar
medical necessity criteria requiring evidence of primary caregiver
participation in order to receive coverage of any medical/surgical
benefits.
(2) Conclusion. In this paragraph (c)(4)(viii)(I) (Example 9), the
plan violates paragraph (c)(4)(i) of this section. The plan applies
medical necessity criteria to at least two-thirds of all outpatient,
in-network medical/surgical benefits, as they apply to all medical/
surgical benefits in the classification. The most common or frequent
variation of this nonquantitative treatment limitation (the predominant
nonquantitative treatment limitation) that applies to substantially all
medical/surgical benefits in the classification does not include the
requirement to provide evidence that the participant's or beneficiary's
primary caregivers actively participate in the treatment. The plan does
not qualify for the exception in paragraph (c)(4)(i)(E) of this section
in applying its restriction on coverage for ABA therapy because the
plan deviates from the independent professional medical or clinical
standards by imposing a different requirement. As a result, the
nonquantitative treatment limitation imposed on mental health and
substance use disorder benefits is more restrictive than the
predominant medical necessity requirement imposed on substantially all
medical/surgical benefits in the classification (which does not include
the requirement to provide evidence that primary caregivers actively
participate in treatment). Because the plan violates the rules of
paragraph (c)(4)(i) of this section, this example does not analyze
compliance with paragraph (c)(4)(ii) or (iv) of this section.
(J) Example 10 (More restrictive exclusion for experimental or
investigative treatment applied to ABA therapy)--(1) Facts. A plan, as
written, generally excludes coverage for all treatments that are
experimental or investigative for both medical/surgical benefits and
mental health and substance use disorder benefits in the outpatient,
in-network classification. As a result, the plan generally excludes
experimental treatment of medical conditions and surgical procedures,
mental health conditions, and substance use disorders when no
professionally recognized treatment guidelines define clinically
appropriate standards of care for the condition or disorder and fewer
than two randomized controlled trials are available to support the
treatment's use with respect to the given condition or disorder. The
plan provides benefits for the treatment of ASD, which is a mental
health condition, but, in operation, the plan excludes coverage for ABA
therapy to treat children with ASD, deeming it experimental. More than
one professionally recognized treatment guideline defines clinically
appropriate standards of care for ASD and more than two randomized
controlled trials are available to support the use of ABA therapy to
treat certain children with ASD.
(2) Conclusion. In this paragraph (c)(4)(viii)(J) (Example 10), the
plan violates the rules of paragraph (c)(4)(i) of this section. The
coverage exclusion for experimental or investigative treatment applies
to at least two-thirds of all medical/surgical benefits, as it applies
to all medical/surgical benefits in the outpatient, in-network
classification. The most common or frequent variation of this
nonquantitative treatment limitation in the classification (the
predominant nonquantitative treatment limitation) applicable to
substantially all medical/surgical benefits is the exclusion under the
plan for coverage of experimental treatment of medical/surgical
conditions when no professionally recognized treatment guidelines
define clinically appropriate standards of care for the condition or
disorder and fewer than two randomized controlled trials are available
to support the treatment's use with respect to the given condition or
procedure. In operation, the exclusion for experimental or
investigative treatment imposed on ABA therapy is more restrictive than
the predominant variation of the nonquantitative treatment limitation
for experimental or investigative treatment imposed on
[[Page 51664]]
substantially all medical/surgical benefits in the classification
because the exclusion limits access to the full range of treatment
options available for a condition or disorder under the plan or
coverage as compared to medical/surgical benefits in the same
classification. Because the plan violates the rules of paragraph
(c)(4)(i) of this section, this example does not analyze compliance
with paragraph (c)(4)(ii) or (iv) of this section.
(K) Example 11 (Separate EAP exhaustion treatment limitation
applicable only to mental health benefits)--(1) Facts. An employer
maintains both a major medical plan and an employee assistance program
(EAP). The EAP provides, among other benefits, a limited number of
mental health or substance use disorder counseling sessions, which,
together with other benefits provided by the EAP, are not significant
benefits in the nature of medical care. Participants are eligible for
mental health or substance use disorder benefits under the major
medical plan only after exhausting the counseling sessions provided by
the EAP. No similar exhaustion requirement applies with respect to
medical/surgical benefits provided under the major medical plan.
(2) Conclusion. In this paragraph (c)(4)(viii)(K) (Example 11),
limiting eligibility for mental health and substance use disorder
benefits under the major medical plan until EAP benefits are exhausted
is a nonquantitative treatment limitation subject to the parity
requirements of this paragraph (c). Because the limitation does not
apply to medical/surgical benefits, it is a separate nonquantitative
treatment limitation applicable only to mental health and substance use
disorder benefits that violates paragraph (c)(4)(vi) of this section.
Additionally, this EAP would not qualify as excepted benefits under
Sec. 146.145(b)(3)(vi)(B)(1) because participants in the major medical
plan are required to use and exhaust benefits under the EAP (making the
EAP a gatekeeper) before an individual is eligible for benefits under
the plan.
(L) Example 12 (Separate residential exclusion treatment limitation
applicable only to mental health benefits)--(1) Facts. A plan generally
covers inpatient, in-network and inpatient out-of-network treatment in
any setting, including skilled nursing facilities and rehabilitation
hospitals, provided other medical necessity standards are satisfied.
The plan also has an exclusion for residential treatment, which the
plan defines as an inpatient benefit, for mental health and substance
use disorder benefits. This exclusion was not generated through any
broader nonquantitative treatment limitation (such as medical necessity
or other clinical guideline).
(2) Conclusion. In this paragraph (c)(4)(viii)(L) (Example 12), the
plan violates the rules of paragraph (c)(4)(vi) of this section.
Because the plan does not apply a comparable exclusion to inpatient
benefits for medical/surgical conditions, the exclusion of residential
treatment is a separate nonquantitative treatment limitation applicable
only to mental health and substance use disorder benefits in the
inpatient, in-network and inpatient, out-of-network classifications
that does not apply with respect to any medical/surgical benefits in
the same benefit classification.
(M) Example 13 (Standards for provider admission to a network)--(1)
Facts. A plan applies nonquantitative treatment limitations related to
network composition in the outpatient in-network and inpatient, in-
network classifications. The plan's networks are constructed by
separate service providers for medical/surgical benefits and mental
health and substance use disorder benefits. For purposes of this
example, these facts assume that these nonquantitative treatment
limitations related to network composition for mental health and
substance use disorder benefits are not more restrictive than the
predominant nonquantitative treatment limitations applied to
substantially all medical/surgical benefits in the classifications
under paragraph (c)(4)(i) of this section. The facts also assume that,
as written and in operation, the processes, strategies, evidentiary
standards, and other factors used in designing and applying the
nonquantitative treatment limitations related to network access to
mental health or substance use disorder benefits in the outpatient in-
network and inpatient in-network classifications are comparable to, and
are applied no more stringently than, the processes, strategies,
evidentiary standards, and other factors used in designing and applying
the nonquantitative treatment limitations with respect to medical/
surgical benefits in the classifications, as required under paragraph
(c)(4)(ii) of this section. The plan collects and evaluates all
relevant data in a manner reasonably designed to assess the impact of
the nonquantitative treatment limitations related to network
composition on access to mental health and substance use disorder
benefits as compared with access to medical/surgical benefits and
considers the impact as part of the plan's or issuer's analysis of
whether the standards, in operation, comply with paragraphs (c)(4)(i)
and (ii) of this section. The plan determined that the data did not
reveal any material differences in access. That data included metrics
relating to the time and distance from plan participants and
beneficiaries to network providers in rural and urban regions; the
number of network providers accepting new patients; the proportions of
mental health and substance use disorder and medical/surgical providers
and facilities that provide services in rural and urban regions who are
in the plan's network; provider reimbursement rates; in-network and
out-of-network utilization rates (including data related to the dollar
value and number of provider claims submissions); and survey data from
participants on the extent to which they forgo or pay out-of-pocket for
treatment because of challenges finding in-network providers. The
efforts the plan made when designing and applying its nonquantitative
treatment limitations related to network composition, which ultimately
led to its outcomes data not revealing any material differences in
access to benefits for mental health or substance use disorders as
compared with medical/surgical benefits, included making sure that the
plan's service providers are making special efforts to enroll available
providers, including by authorizing greater compensation or other
inducements to the extent necessary, and expanding telehealth
arrangements as appropriate to manage regional shortages. The plan also
notifies participants in clear and prominent language on its website,
employee brochures, and the summary plan description of a toll-free
number available to help participants find in-network providers. In
addition, when plan participants submit bills for out-of-network items
and services, the plan directs their service providers to reach out to
the treating providers and facilities to see if they will enroll in the
network.
(2) Conclusion. In this paragraph (c)(4)(viii)(M) (Example 13), the
plan does not violate this paragraph (c)(4). As stated in the Facts
section, the plan's nonquantitative treatment limitations related to
network composition comply with the rules of paragraphs (c)(4)(i) and
(ii) of this section. The plan collects and evaluates relevant data, as
required under paragraph (c)(4)(iv)(A) of this section, and the data
does not reveal any material differences in access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits, as a result of the
[[Page 51665]]
actions the plan took (as set forth in the facts) when initially
designing its nonquantitative treatment limitations related to network
composition. Because the plan takes comparable actions to ensure that
their mental health and substance use disorder provider network is as
accessible as their medical/surgical provider network and exercises
careful oversight over both their service providers and the comparative
robustness of the networks with an eye to ensuring that network
composition results in access to in-network benefits for mental health
and substance use disorder services that is as generous as for medical/
surgical services, plan participants and beneficiaries can access
covered mental health and substance use disorder services and benefits
as readily as medical/surgical benefits. This is reflected in the
plan's carefully designed metrics and assessment of network
composition.
* * * * *
(d) * * *
(3) Provisions of other law. Compliance with the disclosure
requirements in paragraphs (d)(1) and (2) of this section is not
determinative of compliance with any other provision of applicable
Federal or State law. In particular, in addition to those disclosure
requirements, provisions of other applicable law require disclosure of
information relevant to medical/surgical, mental health, and substance
use disorder benefits. For example, Sec. 147.136 of this subchapter
sets forth rules regarding claims and appeals, including the right of
claimants (or their authorized representative) upon appeal of an
adverse benefit determination (or a final internal adverse benefit
determination) to be provided upon request and free of charge,
reasonable access to and copies of all documents, records, and other
information relevant to the claimant's claim for benefits. This
includes documents with information on medical necessity criteria for
both medical/surgical benefits and mental health and substance use
disorder benefits, as well as the processes, strategies, evidentiary
standards, and other factors used to apply a nonquantitative treatment
limitation with respect to medical/surgical benefits and mental health
or substance use disorder benefits under the plan and the comparative
analyses and other applicable information required by Sec. 146.137.
(e) * * *
(4) Coordination with EHB requirements. Nothing in paragraph (f) or
(g) of this section or Sec. 146.137(g) changes the requirements of
Sec. Sec. 147.150 and 156.115 of this subchapter, providing that a
health insurance issuer offering non-grandfathered health insurance
coverage in the individual or small group market providing mental
health and substance use disorder services, including behavioral health
treatment services, as part of essential health benefits required under
Sec. Sec. 156.110(a)(5) and 156.115(a) of this subchapter, must comply
with the requirements under section 2726 of the PHS Act and its
implementing regulations in this subchapter to satisfy the requirement
to provide coverage for mental health and substance use disorder
services, including behavioral health treatment, as part of essential
health benefits.
* * * * *
(i) * * *
(1) In general. Except as provided in paragraph (i)(2) of this
section, this section applies to group health plans and health
insurance issuers offering group health insurance coverage on the first
day of the first plan year beginning on or after January 1, 2025. Until
the applicability date in the preceding sentence, plans and issuers are
required to continue to comply with 45 CFR 146.136, revised as of
October 1, 2021.
* * * * *
(j) Severability. If any provision of this section is held to be
invalid or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
shall be construed so as to continue to give the maximum effect to the
provision permitted by law, unless such holding shall be one of
invalidity or unenforceability, in which event the provision shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
0
9. Add Sec. 146.137 to read as follows:
Sec. 146.137 Nonquantitative treatment limitation comparative
analysis requirements.
(a) Meaning of terms. Unless otherwise stated in this section, the
terms of this section have the meanings indicated in Sec.
146.136(a)(2).
(b) In general. In the case of a group health plan (or health
insurance issuer offering group health insurance coverage in connection
with a group health plan) that provides both medical/surgical benefits
and mental health or substance use disorder benefits and that imposes
any nonquantitative treatment limitation on mental health or substance
use disorder benefits, the plan or issuer must perform and document a
comparative analysis of the design and application of each
nonquantitative treatment limitation applicable to mental health or
substance use disorder benefits. Each comparative analysis must comply
with the content requirements of paragraph (c) of this section and be
made available to the Secretary, upon request, in the manner required
by paragraphs (d) and (e) of this section.
(c) Comparative analysis content requirements. With respect to each
nonquantitative treatment limitation applicable to mental health or
substance use disorder benefits under a group health plan (or health
insurance coverage offered in connection with a group health plan), the
comparative analysis performed by the plan or issuer must include, at
minimum, the elements specified in this paragraph (c). In addition to
the comparative analysis for each nonquantitative treatment limitation,
each plan or issuer must prepare and make available to the Secretary,
upon request, a written list of all nonquantitative treatment
limitations imposed under the plan or coverage and a general
description of any information considered or relied upon by the plan or
issuer in preparing the comparative analysis for each nonquantitative
treatment limitation.
(1) Description of the nonquantitative treatment limitation. The
comparative analysis must include, with respect to the nonquantitative
treatment limitation that is the subject of the comparative analysis:
(i) Identification of the nonquantitative treatment limitation,
including the specific terms of the plan or coverage or other relevant
terms regarding the nonquantitative treatment limitation, the policies
or guidelines (internal or external) in which the nonquantitative
treatment limitation appears or is described, and the applicable
sections of any other relevant documents, such as provider contracts,
that describe the nonquantitative treatment limitation;
(ii) Identification of all mental health or substance use disorder
benefits and medical/surgical benefits to which the nonquantitative
treatment limitation applies, including a list of which benefits are
considered mental health or substance use disorder benefits and which
benefits are considered medical/surgical benefits;
(iii) A description of which benefits are included in each
classification set forth in Sec. 146.136(c)(2)(ii)(A); and
(iv) Identification of the predominant nonquantitative treatment
limitation applicable to substantially all medical/surgical benefits in
each classification,
[[Page 51666]]
including an explanation of how the plan or issuer determined which
variation is the predominant nonquantitative treatment limitation as
compared to other variations, as well as how the plan identified the
variations of the nonquantitative treatment limitation.
(2) Identification and definition of the factors used to design or
apply the nonquantitative treatment limitation. The comparative
analysis must include, with respect to every factor considered or
relied upon to design the nonquantitative treatment limitation or apply
the nonquantitative treatment limitation to mental health or substance
use disorder benefits and medical/surgical benefits:
(i) Identification of all of the factors considered, as well as the
evidentiary standards considered or relied upon to design or apply each
factor and the sources from which each evidentiary standard was
derived, in determining which mental health or substance use disorder
benefits and which medical/surgical benefits are subject to the
nonquantitative treatment limitation; and
(ii) A definition of each factor, including:
(A) A detailed description of the factor; and
(B) A description of each evidentiary standard (and the source of
each evidentiary standard) identified under paragraph (c)(2)(i) of this
section.
(3) Description of how factors are used in the design and
application of the nonquantitative treatment limitation. The
comparative analysis must include a description of how each factor
identified and defined pursuant to paragraph (c)(2) of this section is
used in the design or application of the nonquantitative treatment
limitation to mental health and substance use disorder benefits and
medical/surgical benefits in a classification, including:
(i) A detailed explanation of how each factor identified and
defined in paragraph (c)(2) of this section is used to determine which
mental health or substance use disorder benefits and which medical/
surgical benefits are subject to the nonquantitative treatment
limitation;
(ii) An explanation of the evidentiary standards or other
information or sources (if any) considered or relied upon in designing
or applying the factors or relied upon in designing and applying the
nonquantitative treatment limitation, including in the determination of
whether and how mental health or substance use disorder benefits or
medical/surgical benefits are subject to the nonquantitative treatment
limitation;
(iii) If the application of the factor depends on specific
decisions made in the administration of benefits, the nature of the
decisions, the timing of the decisions, and the professional
designation and qualifications of each decision maker;
(iv) If more than one factor is identified and defined in paragraph
(c)(2) of this section, an explanation of:
(A) How all of the factors relate to each other;
(B) The order in which all the factors are applied, including when
they are applied;
(C) Whether and how any factors are given more weight than others;
and
(D) The reasons for the ordering or weighting of the factors; and
(v) Any deviation(s) or variation(s) from a factor, its
applicability, or its definition (including the evidentiary standards
used to define the factor and the information or sources from which
each evidentiary standard was derived), such as how the factor is used
differently to apply the nonquantitative treatment limitation to mental
health or substance use disorder benefits as compared to medical/
surgical benefits, and a description of how the plan or issuer
establishes such deviation(s) or variation(s).
(4) Demonstration of comparability and stringency as written. The
comparative analysis must evaluate whether, in any classification,
under the terms of the plan (or health insurance coverage) as written,
any processes, strategies, evidentiary standards, or other factors used
in designing and applying the nonquantitative treatment limitation to
mental health or substance use disorder benefits are comparable to, and
are applied no more stringently than, the processes, strategies,
evidentiary standards, or other factors used in designing and applying
the nonquantitative treatment limitation with respect to medical/
surgical benefits. The comparative analysis must include, with respect
to the nonquantitative treatment limitation and the factors used in
designing and applying the nonquantitative treatment limitation:
(i) Documentation of each factor identified and defined in
paragraph (c)(2) of this section that was applied to determine whether
the nonquantitative treatment limitation applies to mental health or
substance use disorder benefits and medical/surgical benefits in a
classification, including, as relevant:
(A) Quantitative data, calculations, or other analyses showing
whether, in each classification in which the nonquantitative treatment
limitation applies, mental health or substance use disorder benefits
and medical/surgical benefits met or did not meet any applicable
threshold identified in the relevant evidentiary standard, and the
evaluation of relevant data as required under Sec.
146.136(c)(4)(iv)(A), to determine that the nonquantitative treatment
limitation would or would not apply; and
(B) Records maintained by the plan or issuer documenting the
consideration and application of all factors and evidentiary standards,
as well as the results of their application;
(ii) In each classification in which the nonquantitative treatment
limitation applies to mental health or substance use disorder benefits,
a comparison of how the nonquantitative treatment limitation, as
written, is applied to mental health or substance use disorder benefits
and to medical/surgical benefits, including the specific provisions of
any forms, checklists, procedure manuals, or other documentation used
in designing and applying the nonquantitative treatment limitation or
that address the application of the nonquantitative treatment
limitation;
(iii) Documentation demonstrating how the factors are comparably
applied, as written, to mental health or substance use disorder
benefits and medical/surgical benefits in each classification, to
determine which benefits are subject to the nonquantitative treatment
limitation; and
(iv) An explanation of the reason(s) for any deviation(s) or
variation(s) in the application of a factor used to apply the
nonquantitative treatment limitation, or the application of the
nonquantitative treatment limitation, to mental health or substance use
disorder benefits as compared to medical/surgical benefits, and how the
plan or issuer establishes such deviation(s) or variation(s),
including:
(A) In the definition of the factors, the evidentiary standards
used to define the factors, and the sources from which the evidentiary
standards were derived;
(B) In the design of the factors or evidentiary standards; or
(C) In the application or design of the nonquantitative treatment
limitation.
(5) Demonstration of comparability and stringency in operation. The
comparative analysis must evaluate whether, in any classification,
under the terms of the plan (or health insurance coverage) in
operation, the processes, strategies, evidentiary standards, or other
factors used in designing and applying the nonquantitative treatment
limitation to mental health or substance
[[Page 51667]]
use disorder benefits are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, or
other factors used in designing and applying the limitation with
respect to medical/surgical benefits. The comparative analysis must
include, with respect to the nonquantitative treatment limitation and
the factors used in designing and applying the nonquantitative
treatment limitation:
(i) A comprehensive explanation of how the plan or issuer ensures
that, in operation, the processes, strategies, evidentiary standards,
or other factors used in designing and applying the nonquantitative
treatment limitation to mental health or substance use disorder
benefits in a classification are comparable to, and are applied no more
stringently than, the processes, strategies, evidentiary standards, or
other factors used in designing and applying the nonquantitative
treatment limitation with respect to medical/surgical benefits,
including:
(A) An explanation of any methodology and underlying data used to
demonstrate the application of the nonquantitative treatment
limitation, in operation; and
(B) The sample period, inputs used in any calculations, definitions
of terms used, and any criteria used to select the mental health or
substance use disorder benefits and medical/surgical benefits to which
the nonquantitative treatment limitation is applicable;
(ii) Identification of the relevant data collected and evaluated as
required under Sec. 146.136(c)(4)(iv)(A);
(iii) An evaluation of the outcomes that resulted from the
application of the nonquantitative treatment limitation to mental
health or substance use disorder benefits and medical/surgical
benefits, including the relevant data as required under Sec.
146.136(c)(4)(iv)(A);
(iv) A detailed explanation of material differences in outcomes
evaluated pursuant to paragraph (c)(5)(iii) of this section that are
not attributable to differences in the comparability or relative
stringency of the nonquantitative treatment limitation as applied to
mental health or substance use disorder benefits and medical/surgical
benefits and the bases for concluding that material differences in
outcomes are not attributable to differences in the comparability or
relative stringency of the nonquantitative treatment limitation; and
(v) A discussion of any measures that have been or are being
implemented by the plan or issuer to mitigate any material differences
in access to mental health or substance use disorder benefits as
compared to medical/surgical benefits, including the actions the plan
or issuer is taking under Sec. 146.136(c)(4)(iv)(B)(1) to address
material differences to ensure compliance with Sec. 146.136(c)(4)(i)
and (ii).
(6) Findings and conclusions. The comparative analysis must address
the findings and conclusions as to the comparability of the processes,
strategies, evidentiary standards, and other factors used in designing
and applying the nonquantitative treatment limitation to mental health
or substance use disorder benefits and medical/surgical benefits within
each classification, and the relative stringency of their application,
both as written and in operation, and include:
(i) Any findings or conclusions indicating that the plan or
coverage is not (or might not be) in compliance with the requirements
of Sec. 146.136(c)(4), including any actions the plan or issuer has
taken or intends to take to address any potential areas of concern or
noncompliance;
(ii) A reasoned and detailed discussion of the findings and
conclusions described in paragraph (c)(6)(i) of this section;
(iii) Citations to any additional specific information not
otherwise included in the comparative analysis that supports the
findings and conclusions described in paragraph (c)(6)(i) of this
section;
(iv) The date of the analysis and the title and credentials of all
relevant persons who participated in the performance and documentation
of the comparative analysis; and
(v) If the comparative analysis relies upon an evaluation by a
reviewer or consultant considered by the plan or issuer to be an
expert, an assessment of each expert's qualifications and the extent to
which the plan or issuer ultimately relied upon each expert's
evaluation in performing and documenting the comparative analysis of
the design and application of each nonquantitative treatment limitation
applicable to both mental health or substance use disorder benefits and
medical/surgical benefits.
(d) Requirements related to submission of comparative analyses to
the Secretary upon request--(1) Initial request by the Secretary for
comparative analysis. A group health plan or health insurance issuer
offering group health insurance coverage must make the comparative
analysis required by paragraph (b) of this section available and submit
it to the Secretary within 10 business days of receipt of a request
from the Secretary (or an additional period of time specified by the
Secretary).
(2) Additional information required after a comparative analysis is
deemed to be insufficient. In instances in which the Secretary
determines that the plan or issuer has not submitted sufficient
information under paragraph (d)(1) of this section for the Secretary to
review the comparative analysis required in paragraph (b) of this
section, the Secretary will specify to the plan or issuer the
additional information the plan or issuer must submit to the Secretary
to be responsive to the request under paragraph (d)(1) of this section.
Any such information must be provided to the Secretary by the plan or
issuer within 10 business days after the Secretary specifies the
additional information to be submitted (or an additional period of time
specified by the Secretary).
(3) Initial determination of noncompliance, required action, and
corrective action plan. In instances in which the Secretary reviewed
the comparative analysis submitted under paragraph (d)(1) of this
section and any additional information submitted under paragraph (d)(2)
of this section, and made an initial determination that the plan or
issuer is not in compliance with the requirements of Sec.
146.136(c)(4) or this section, the plan or issuer must respond to the
Secretary and specify the actions the plan or issuer will take to bring
the plan or coverage into compliance, and provide to the Secretary
additional comparative analyses meeting the requirements of paragraph
(b) of this section that demonstrate compliance with Sec.
146.136(c)(4) and this section, not later than 45 calendar days after
the Secretary's initial determination that the plan or issuer is not in
compliance.
(4) Requirement to notify participants and beneficiaries of final
determination of noncompliance--(i) In general. If the Secretary makes
a final determination of noncompliance, the plan or issuer must notify
all participants and beneficiaries enrolled in the plan or coverage
that the plan or issuer has been determined to not be in compliance
with the requirements of Sec. 146.136(c)(4) or this section with
respect to such plan or coverage. Such notice must be provided within 7
calendar days of receipt of the final determination of noncompliance,
and the plan or issuer must provide a copy of the notice to the
Secretary, and any service provider involved in the claims process.
(ii) Content of notice. The notice to participants and
beneficiaries required in paragraph (d)(4)(i) of this section
[[Page 51668]]
shall be written in a manner calculated to be understood by the average
plan participant and must include, in plain language, the following
information in a standalone notice:
(A) The following statement prominently displayed on the first
page, in no less than 14-point font: ``Attention! The Department of
Health and Human Services has determined that [insert the name of group
health plan or health insurance issuer] is not in compliance with the
Mental Health Parity and Addiction Equity Act.'';
(B) A summary of changes the plan or issuer has made as part of its
corrective action plan specified to the Secretary following the initial
determination of noncompliance, including an explanation of any
opportunity for a participant or beneficiary to have a claim for
benefits reprocessed;
(C) A summary of the Secretary's final determination that the plan
or issuer is not in compliance with Sec. 146.136(c)(4) or this
section, including any provisions or practices identified as being in
violation of MHPAEA, additional corrective actions identified by the
Secretary in the final determination notice, and information on how
participants and beneficiaries can obtain from the plan or issuer a
copy of the final determination of noncompliance;
(D) Any additional actions the plan or issuer is taking to come
into compliance with Sec. 146.136(c)(4) or this section, when the plan
or issuer will take such actions, and a clear and accurate statement
explaining whether the Secretary has indicated that those actions, if
completed, will result in compliance; and
(E) Contact information for questions and complaints, and a
statement explaining how participants and beneficiaries can obtain more
information about the notice, including:
(1) The plan's or issuer's phone number and an email or web portal
address; and
(2) The Center for Medicare and Medicaid Services' phone number and
email or web portal address.
(iii) Manner of notice. The plan or issuer must make the notice
required under paragraph (d)(4)(i) of this section available in paper
form, or electronically (such as by email or an internet posting) if:
(A) The format is readily accessible;
(B) The notice is provided in paper form free of charge upon
request; and
(C) In a case in which the electronic form is an internet posting,
the plan or issuer timely notifies the participant or beneficiary in
paper form (such as a postcard) or email, that the documents are
available on the internet, provides the internet address, includes the
statement required in paragraph (d)(4)(ii)(A) of this section, and
notifies the participant or beneficiary that the documents are
available in paper form upon request.
(e) Requests for a copy of a comparative analysis. In addition to
making a comparative analysis available upon request to the Secretary,
a plan or issuer must make available a copy of the comparative analysis
required by paragraph (b) of this section when requested by:
(1) Any applicable State authority; and
(2) A participant or beneficiary (or a provider or other person
acting as a participant's or beneficiary's authorized representative)
who has received an adverse benefit determination related to mental
health or substance use disorder benefits.
(f) Rule of construction. Nothing in this section or Sec. 146.136
shall be construed to prevent the Secretary from acting within the
scope of existing authorities to address violations of Sec. 146.136 or
this section.
(g) Applicability. The provisions of this section apply to group
health plans and health insurance issuers offering group health
insurance coverage described in Sec. 146.136(e), to the extent the
plan or issuer is not exempt under Sec. 146.136(f) or (g), for plan
years beginning on or after January 1, 2025.
(h) Severability. If any provision of this section is held to be
invalid or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, the provision
shall be construed so as to continue to give the maximum effect to the
provision permitted by law, unless such holding shall be one of
invalidity or unenforceability, in which event the provision shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
0
9. Amend Sec. 146.180 by:
0
a. Revising paragraph (a)(2);
0
b. Redesignating paragraphs (a)(3) through (7) as paragraphs (a)(4)
through (8);
0
c. Adding new paragraph (a)(3);
0
d. Revising newly redesignated paragraphs (a)(5) and (a)(7)(i) and
paragraph (f)(1); and
0
e. Adding paragraph (f)(4)(iii).
The revisions and additions read as follows:
Sec. 146.180 Treatment of non-Federal governmental plans.
(a) * * *
(2) General rule. For plans years beginning on or after September
23, 2010, a sponsor of a non-Federal governmental plan may elect to
exempt its plan, to the extent the plan is not provided through health
insurance coverage (that is self-funded), from one or more of the
requirements described in paragraphs (a)(1)(iv) through (vii) of this
section, except as provided in paragraphs (a)(3) and (f)(1) of this
section with respect to the requirements described in paragraph
(a)(1)(v) of this section.
(3) Sunset of election option related to parity in mental health
and substance use disorder benefits. A sponsor of a non-Federal
governmental plan may not newly elect to exempt its plan(s) from the
requirements described in paragraph (a)(1)(v) of this section on or
after December 29, 2022.
* * * * *
(5) Examples--(i) Example 1. A non-Federal governmental employer
has elected to exempt its self-funded group health plan from all of the
requirements described in paragraph (a)(1) of this section. The plan
year commences September 1 of each year. The plan is not subject to the
provisions of paragraph (a)(2) of this section until the plan year that
commences on September 1, 2011. Accordingly, for that plan year and any
subsequent plan years, the plan sponsor may elect to exempt its plan
only from the requirements described in paragraphs (a)(1)(iv) through
(vii) of this section, subject to paragraphs (a)(3) and (f)(1) of this
section with respect to the requirements described in paragraph
(a)(1)(v) of this section.
(ii) Example 2. A non-Federal governmental employer has elected to
exempt its collectively bargained self-funded plan from all of the
requirements described in paragraph (a)(1) of this section. The
collective bargaining agreement applies to 5 plan years, October 1,
2009 through September 30, 2014. For the plan year that begins on
October 1, 2014, the plan sponsor is no longer permitted to elect to
exempt its plan from the requirements described in paragraphs (a)(1)(i)
through (iii) of this section. Accordingly, for that plan year and any
subsequent plan years, the plan sponsor may elect to exempt its plan
only from the requirements described in paragraphs (a)(1)(iv) through
(vii) of this section, subject to paragraphs (a)(3) and (f)(1) of this
section with respect to the requirements described in paragraph
(a)(1)(v) of this section.
* * * * *
(7) * * *
(i) Subject to paragraph (a)(7)(ii) of this section, the purchase
of stop-loss or excess risk coverage by a self-funded
[[Page 51669]]
non-Federal governmental plan does not prevent an election under this
section.
* * * * *
(f) * * *
(1) Election renewal. A plan sponsor may renew an election under
this section through subsequent elections. Notwithstanding the previous
sentence and except as provided in paragraph (f)(4)(iii) of this
section, an election with respect to the requirements described in
paragraph (a)(1)(v) of this section expiring on or after June 27, 2023,
may not be renewed. The timeliness standards described in paragraph (c)
of this section apply to election renewals under paragraph (f) of this
section.
* * * * *
(4) * * *
(iii) In the case of a plan that is subject to multiple collective
bargaining agreements of varying lengths and that has an election with
respect to the requirements described in paragraph (a)(1)(v) of this
section in effect as of December 29, 2022, that expires on or after
June 27, 2023, the plan may extend such election until the date on
which the term of the last such agreement expires.
* * * * *
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
INDIVIDUAL HEALTH INSURANCE MARKETS
0
10. The authority citation for part 147 continues to read as follows:
Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, 300gg-
92, and 300gg-111 through 300gg-139, as amended, and section 3203,
Pub. L. 116-136, 134 Stat. 281.
0
11. Revise Sec. 147.160 to read as follows:
Sec. 147.160 Parity in mental health and substance use disorder
benefits.
(a) In general. The provisions of Sec. Sec. 146.136 and 146.137 of
this subchapter apply to individual health insurance coverage offered
by a health insurance issuer in the same manner and to the same extent
as such provisions apply to health insurance coverage offered by a
health insurance issuer in connection with a group health plan in the
large group market.
(b) Applicability date. The provisions of this section apply for
policy years beginning on or after January 1, 2026. Until the
applicability date in the preceding sentence, issuers are required to
continue to comply with 45 CFR 147.160, revised as of October 1, 2021.
This section applies to non-grandfathered and grandfathered health
plans as defined in Sec. 147.140.
[FR Doc. 2023-15945 Filed 7-31-23; 8:45 am]
BILLING CODE 4510-29-P
