Requirements Related to the Mental Health Parity and Addiction Equity Act, 77586-77751 [2024-20612]
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Federal Register / Vol. 89, No. 184 / Monday, September 23, 2024 / Rules and Regulations
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[TD 10006]
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–F]
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: Final rules.
AGENCY:
This document sets forth final
rules amending regulations
implementing the Paul Wellstone and
Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008
(MHPAEA) and adding 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 final
rules amend the existing NQTL standard
to prohibit group health plans and
health insurance issuers offering group
or individual health insurance coverage
from using NQTLs that place greater
restrictions on access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
As part of these changes, these final
rules require plans and issuers to collect
and evaluate relevant data in a manner
reasonably designed to assess the
impact of NQTLs on relevant outcomes
related to access to mental health and
substance use disorder benefits and
medical/surgical benefits and to take
reasonable action, as necessary, to
address material differences in access to
mental health or substance use disorder
benefits as compared to medical/
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SUMMARY:
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surgical benefits. These final rules also
amend existing examples and add new
examples on the application of the rules
for NQTLs to clarify and illustrate the
requirements of MHPAEA.
Additionally, these final rules 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 to
participants, beneficiaries, and
enrollees. Finally, HHS finalizes
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:
Effective date: These regulations are
effective on November 22, 2024.
Applicability date: See the
SUPPLEMENTARY INFORMATION section for
information on the applicability dates.
FOR FURTHER INFORMATION CONTACT:
William Fischer, 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.
SUPPLEMENTARY INFORMATION:
I. Background
America continues to experience a
mental health and substance use
disorder crisis affecting people across
all demographics, with marginalized
communities disproportionately
impacted.1 The COVID–19 pandemic
exacerbated the crisis, but its effects
have continued post-pandemic.2 From
August 19, 2020, to February 1, 2021,
the percentage of adults exhibiting
symptoms of an anxiety or a depressive
disorder rose from 36.4 percent to 41.5
percent.3 In 2022, there were an
1 Kaiser Family Foundation (2022), Five key
findings on mental health and substance use
disorders by race/ethnicity, https://www.kff.org/
mental-health/issue-brief/five-key-findings-onmental-health-and-substance-use-disorders-by-raceethnicity/.
2 American Psychological Association (2023),
Stress in AmericaTM 2023: A nation grappling with
psychological impacts of collective trauma, https://
www.apa.org/news/press/releases/2023/11/
psychological-impacts-collective-trauma.
3 Vahratian, A., Blumberg, S.J., Terlizzi, E.P.,
Schiller, J.S. (2021), Symptoms of Anxiety or
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estimated 15.4 million adults aged 18 or
older in the United States with a serious
mental illness and nearly one in four
adults (59.3 million) living with any
mental illness.4
Additionally, in 2022, nearly 54.6
million people aged 12 or older were
classified as needing treatment for
substance use, but only about 24 percent
of those people received any treatment,
according to the Substance Abuse and
Mental Health Services
Administration’s (SAMHSA) National
Survey on Drug Use and Health
(NSDUH).5 The unmet need for
treatment for substance use disorders
has been even greater among racial
minorities and other marginalized
communities. Between 2019 and 2021,
median monthly overdose deaths among
persons aged 10–19 years increased 109
percent; and deaths involving illicitly
manufactured fentanyl increased 182
percent.6 In 2021, American Indian and
Alaskan Native men aged 15–34 had an
age-adjusted death rate caused by drug
overdoses of 42 per 100,000 people,
compared to 20.5 age-adjusted deaths
per 100,000 people during the same
time period in 2018.7 Non-Hispanic
Black or African American men aged
35–64 had an age-adjusted death rate
caused by drug overdoses of 61.2 per
100,000 people; an increase from 30.6
deaths per 100,000 people during the
same time period in 2018.8
Following the COVID–19 pandemic,
employers highlighted that they have
responded to the impact of the
pandemic on the mental health and
substance use disorder crisis by offering
more comprehensive benefits, including
Depressive Disorder and Use of Mental Health Care
Among Adults During the COVID–19 Pandemic—
United States, Aug. 2020–Feb. 2021, MMWR Morb
Mortal Wkly Rep 2021;70:490–494, https://
www.cdc.gov/mmwr/volumes/70/wr/
mm7013e2.htm.
4 SAMHSA (2023), Key substance use and mental
health indicators in the United States: Results from
the 2022 National Survey on Drug Use and Health
(HHS Publication No. PEP23–07–01–006, NSDUH
Series H–58), https://www.samhsa.gov/data/report/
2022-nsduh-annual-national-report.
5 Ibid.
6 Tanz, L.J., Dinwiddie, A.T., Mattson, C.L.,
O’Donnell, J., Davis, N.L. (2022), Drug Overdose
Deaths Among Persons Aged 10–19 Years—United
States, July 2019–Dec. 2021. MMWR Morb Mortal
Wkly Rep 2022;71:1576–1582, https://
www.cdc.gov/mmwr/volumes/71/wr/
mm7150a2.htm.
7 Han, B., Einstein, E.B., Jones, C.M., Cotto, J.,
Compton, W.M., Volkow, N.D. (2022), Racial and
Ethnic Disparities in Drug Overdose Deaths in the
US During the COVID–19 Pandemic, JAMA Netw
Open, 5(9):e2232314, DOI:10.1001/
jamanetworkopen.2022.32314, https://www.ncbi.
nlm.nih.gov/pmc/articles/PMC9490498/. Ageadjusted death rates are death rates that control for
the effects of differences in population age
distributions.
8 Ibid.
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mental health support. According to a
report published in 2021, ‘‘about three
in four large employers and two in four
small/medium employers report that
they offer at least one type of mental
health support for employees.’’ 9 In a
recent survey, 87 percent of large
employers stated that access to mental
health care was a top priority, and
another survey found that ‘‘the number
of in-network behavioral health
providers has increased by an average of
48 percent in 3 years among commercial
health plans.’’ 10 Group health plans and
health insurance issuers have taken
steps to ensure mental health parity is
reflected in their benefit designs and to
educate participants, beneficiaries, and
enrollees 11 about MHPAEA’s
requirements, by reaching out to
members, expanding telehealth
availability, expanding behavioral
health provider networks, integrating
behavioral health with physical health
care, and working to reduce
stigmatization of seeking treatment.
Despite these efforts, disparities in
coverage between mental health and
substance use disorder benefits and
medical/surgical benefits have grown. In
the preamble to the proposed rules,12
the Departments cited a 2019 Milliman
report 13 that found a growing disparity
9 Coe, E., Cordina, J., Enomoto, K., Mandel, A.,
Stueland, J. (2021), National Surveys Reveal
Disconnect Between Employees and Employers
Around Mental Health Need, McKinsey &
Company, https://www.mckinsey.com/industries/
healthcare/our-insights/national-surveys-revealdisconnect-between-employees-and-employersaround-mental-health-need.
10 America’s Health Insurance Plans (AHIP),
Health Insurance Providers Facilitate Broad Access
to Mental Health Support (Aug. 2022), https://
ahiporg-production.s3.amazonaws.com/documents/
Mental-Health-Survey-July-2022-FINAL.pdf.
11 Consistent with the proposed rules, these final
rules apply directly to group health plans or health
insurance coverage offered by an issuer in
connection with a group health plan, and apply to
individual health insurance coverage by crossreference 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 later in this preamble,
HHS is finalizing an amendment to 45 CFR 147.160
to also include a cross-reference to 45 CFR 146.137
to similarly extend the new 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 to 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.
12 88 FR 51552, 51554 (Aug. 3, 2023).
13 Melek, S., Davenport, S., Gray, T.J. (2019),
Addiction and mental health vs. physical health:
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in the utilization of out-of-network
behavioral health care providers relative
to out-of-network medical/surgical care
providers. A recent study by RTI
International 14 found that out-ofnetwork use was 3.5 times higher for all
behavioral health clinician office visits
than for all out-of-network medical/
surgical clinician office visits; in
addition, the study noted that these
disparities in out-of-network use for
behavioral health office visits compared
to medical/surgical office visits have
remained large and, according to the
study, are not fully attributable to
behavioral health provider shortages.
The study concluded that these results
demonstrate the need for more robust
parity enforcement.
RTI concluded that its analyses of the
most recent, comprehensive private
insurance claims data
reveal material differences in access to
mental health and substance use disorder
benefits as compared to medical/surgical
benefits, as reflected in much greater use of
out-of-network providers. . . . These
disparities indicate that behavioral health
networks are clearly inadequate and signal
potential noncompliance with the NQTL
requirements of MHPAEA.15
These final rules aim to strengthen
consumer protections consistent with
MHPAEA’s fundamental purpose—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 burdens on access to benefits for
those conditions or disorders than they
would face when seeking coverage for
the treatment of a medical condition or
a surgical procedure.16 As highlighted
Widening disparities in network use and provider
reimbursement, Milliman, 6, https://assets.
milliman.com/ektron/Addiction_and_mental_
health_vs_physical_health_Widening_disparities_
in_network_use_and_provider_reimbursement.pdf.
14 Mark, T.L., Parish, W. (2024), Behavioral health
parity—Pervasive disparities in access to innetwork care continue, RTI International, https://
dpjh8al9zd3a4.cloudfront.net/publication/
behavioral-health-parity-pervasive-disparitiesaccess-network-care-continue/fulltext.pdf.
15 Id. at 46.
16 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 (Mar. 4, 2008),
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.’’).
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in the preamble to the proposed rules,17
such barriers are particularly
problematic when the benefits that the
plan or issuer purports to make
available and that individuals
reasonably expect to be covered are not
in fact covered. To the extent these
barriers disproportionately limit access
to mental health or substance use
disorder benefits, such practices
contravene MHPAEA’s statutory
language, which requires that the
financial requirements and treatment
limitations applicable to mental health
or substance use disorder benefits be
‘‘no more restrictive’’ than the
predominant requirements and
limitations applicable to substantially
all medical/surgical benefits.18 The
Departments’ enforcement efforts have
shown that such barriers persist more
than 15 years after MHPAEA’s
enactment.19 These final rules are
critical to addressing barriers to access
to mental health and substance use
disorder benefits.
The problems persist notwithstanding
the Departments’ unprecedented
commitment to advance parity for
mental health and substance use
disorder benefits in recent years, as
reflected through increased enforcement
efforts and the Departments’ work with
interested parties to help them
understand and comply with
MHPAEA’s requirements.20 To promote
compliance, the Departments have
provided extensive guidance and
compliance assistance materials,
especially with respect to NQTLs,21 yet
disparities still persist.
In 1996, Congress enacted the Mental
Health Parity Act of 1996 (MHPA 1996),
which required parity in aggregate
17 88
FR 51552 (Aug. 3, 2023).
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).
19 See, e.g., 2022 MHPAEA Report to Congress
(Jan. 2022), 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; 2023
MHPAEA Comparative Analysis Report to Congress
(July 2023), https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/report-to-congress-2023-mhpaeacomparative-analysis.pdf.
20 More information on the Departments’
enforcement efforts and guidance issued under
MHPAEA is available at https://www.dol.gov/
agencies/ebsa/laws-and-regulations/laws/mentalhealth-and-substance-use-disorder-parity/toolsand-resources and https://www.cms.gov/
marketplace/private-health-insurance/mentalhealth-parity-addiction-equity.
21 As discussed in more detail later in this
preamble, NQTLs are generally non-numerical
limits on the scope or duration of treatment, such
as prior authorization requirements, step therapy,
and standards related to network composition.
18 Internal
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lifetime and annual dollar limits for
mental health benefits and medical/
surgical benefits for group health plans
and health insurance coverage offered in
connection with such plans.22 These
mental health parity provisions were
codified in Code section 9812, ERISA
section 712, and PHS Act section
2705.23 Congress expanded on these
efforts in 2008 with the enactment of
MHPAEA,24 which amended Code
section 9812, ERISA section 712, and
PHS Act section 2705 by adding
requirements for plans and issuers
related to financial requirements and
treatment limitations and made further
amendments to the existing mental
health parity provisions, including
provisions to apply the mental health
parity requirements to substance use
disorder benefits.
The Affordable Care Act (ACA) 25
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 ACA
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 included by these references
are sections 2701 through 2728. The
ACA extended MHPAEA to apply to
individual health insurance coverage
and redesignated MHPAEA in the PHS
Act as section 2726.26 Additionally,
22 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).
23 The Departments published interim final rules
implementing MHPA 1996 at 62 FR 66932 (Dec. 22,
1997).
24 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 (Oct.
3, 2008)).
25 References to the Affordable Care Act or ACA
include the Patient Protection and Affordable Care
Act (Pub. L. 111–148, 123 Stat. 3028) enacted on
March 23, 2010, and the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111–152, 124
Stat. 1029) enacted on March 30, 2010.
26 The requirements of MHPAEA generally apply
to both grandfathered and non-grandfathered health
plans. See section 1251 of the ACA 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 ACA, grandfathered health
plans are exempted only from certain ACA
requirements enacted in Subtitles A and C of Title
I of the ACA. 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
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section 1311(j) of the ACA applies PHS
Act section 2726 to qualified health
plans 27 in the same manner and to the
same extent as it applies to health
insurance issuers and group health
plans. The ACA also included a
requirement for coverage of mental
health and substance use disorder
services, including behavioral health
treatment, as a category of essential
health benefits (EHB).28 HHS’ EHB
regulations 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 to satisfy the
requirement to cover ‘‘mental health
and substance use disorder services,
including behavioral health treatment,’’
as part of EHB.29
The Departments published a request
for information soliciting comments on
issues under MHPAEA 30 and
subsequently issued interim final
regulations to implement the
requirements of MHPAEA.31 After
considering the comments, the
Departments published the 2013 final
regulations.32 As detailed in the
preamble to the proposed rules, in the
years after the 2013 final regulations
were published, the Departments
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, including the 2020 MHPAEA
Self-Compliance Tool,33 which
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.
27 A qualified health plan is a health insurance
plan that is certified by a health insurance exchange
that it meets certain minimum standards
established under the ACA and described in
subpart C of 45 CFR part 156. See 45 CFR 155.20.
28 Section 1302 of the ACA requires nongrandfathered health plans in the individual and
small group markets to cover 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.
29 Section 1302(b)(1)(E) of the ACA; 45 CFR
156.115(a)(3).
30 74 FR 19155 (Apr. 28, 2009).
31 75 FR 5410 (Feb. 2, 2010).
32 78 FR 68240 (Nov. 13, 2013).
33 See Self-Compliance Tool for the Mental
Health Parity and Addiction Equity Act (MHPAEA)
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provided a basic framework for plans
and issuers to assess whether their
NQTLs satisfy MHPAEA’s parity
requirements.34
The CAA, 2021 was enacted by
Congress on December 27, 2020,35 and
amended MHPAEA, in part, by
expressly requiring group health plans
and health insurance issuers that
provide both medical/surgical benefits
and mental health or substance use
disorder benefits to perform and
document comparative analyses of the
design and application of NQTLs that
apply to mental health or substance use
disorder benefits. The statute also
requires plans and issuers to make their
analyses available to the Departments or
applicable State authorities, upon
request, effective February 10, 2021.
Additionally, the CAA, 2021 sets forth
a process by which the Departments
must evaluate the requested NQTL
comparative analyses and enforce the
comparative analyses requirements and
requires the Departments to submit
annually to Congress and make publicly
available a report summarizing the
comparative analyses requested for
review by the Departments.36
To help plans and issuers comply
with the amendments to MHPAEA
made by the CAA, 2021, the
Departments issued Frequently Asked
Questions (FAQs) About Mental Health
and Substance Use Disorder Parity
Implementation and the Consolidated
Appropriations Act, 2021 Part 45 (FAQs
Part 45).37 As detailed in the preamble
to the proposed rules, these FAQs
provided initial guidance to plans and
issuers on these amendments to
MHPAEA.38 Additionally, as required
(2020), https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/self-compliance-tool.pdf.
34 88 FR 51552, 51555–56 (Aug. 2, 2023).
35 Section 203 of title II of Division BB of the
CAA, 2021, Public Law 116–260, 134 Stat. 1182
(Dec. 27, 2020).
36 The report must state, in part, whether each
plan or issuer that submitted a comparative analysis
upon request submitted sufficient information to
permit review; whether and why the Departments
determined 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 its
comparative analysis; and, for each plan or issuer
the Departments determined not to be in
compliance, specifications of the actions that the
plan or issuer must take to come into compliance.
See Code section 9812(a)(8)(B)(iv), ERISA section
712(a)(8)(B)(iv), and PHS Act section
2726(a)(8)(B)(iv).
37 FAQs about Mental Health and Substance Use
Disorder Parity Implementation and the
Consolidated Appropriations Act, 2021 Part 45
(Apr. 2, 2021), https://www.dol.gov/sites/dolgov/
files/EBSA/about-ebsa/our-activities/resourcecenter/faqs/aca-part-45.pdf and https://
www.cms.gov/cciio/resources/fact-sheets-and-faqs/
downloads/mhpaea-faqs-part-45.pdf.
38 88 FR 51552, 51562 (Aug. 3, 2023).
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by the CAA, 2021, the Departments
provided reports to Congress on the
NQTL comparative analyses reviews
conducted by the Departments.39 These
reports highlighted that nearly all of the
comparative analyses reviewed by the
Departments during the relevant time
periods contained insufficient
information to support a finding of
compliance upon initial receipt and
reflected common insufficiencies.
Building on the lessons learned from
implementing and enforcing MHPAEA,
as well as the guidance provided in
FAQs Part 45, on August 3, 2023, the
Departments published proposed rules
to amend existing MHPAEA regulations
at 26 CFR 54.9812–1, 29 CFR 2590.712,
and 45 CFR 146.136; 40 to add a
proposed new regulation at 26 CFR
54.9812–2, 29 CFR 2590.712–1, and 45
CFR 146.137 in order to codify
minimum standards for developing
NQTL comparative analyses; and to
codify HHS-only amendments to
implement the sunset provision for selffunded non-Federal governmental plan
elections to opt out of compliance with
MHPAEA. On September 28, 2023, the
Departments extended the comment
period that was set to expire on October
2, 2023, by 15 days to October 17, 2023,
to give interested parties additional time
to review the proposed rules and submit
comments.41
The Departments received 9,503
comments that were submitted during
the comment period 42 in response to
the proposed rules from a wide variety
of interested parties, including private
citizens; consumer and advocacy
organizations; employers, employee
organizations, and other plan sponsors;
Federal, State, and local officials; health
care providers and facilities and health
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39 Ibid.
40 88 FR 51552 (Aug. 3, 2023). On July 25, 2023,
DOL, in collaboration with HHS and the Treasury,
also issued Technical Release 2023–01P. The
Technical Release set out principles and sought
public comment to inform future guidance with
respect to the application of the proposed data
collection and evaluation requirements to NQTLs
related to network composition and a potential
time-limited enforcement safe harbor for plans and
issuers that include data in their comparative
analyses that demonstrate they meet or exceed all
the thresholds identified in future guidance with
respect to NQTLs related to network composition.
The Departments encouraged interested parties to
submit their comments consistent with the
instructions contained in it separate from any
comments they submitted in response to the
proposed rules. The Departments are considering
these comments separately and these final rules do
not respond to those comments. Plans and issuers
would be allowed adequate time to conform to any
future guidance on the type, form, and manner of
collection and evaluation for the relevant data
required under the final rules.
41 88 FR 66728 (Sept. 28, 2023).
42 The comment period for the proposed rules
was extended by 15 days to October 17, 2023.
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systems; health insurance issuers;
service providers, including managed
behavioral health organizations
(MBHOs), third-party administrators
(TPAs), and pharmacy benefit managers
(PBMs); trade and professional
associations; and researchers. Many
commenters provided detailed feedback
on multiple aspects of the proposed
rules and in response to various specific
comment solicitations included in the
preamble to the proposed rules and the
request for information.
In general, many commenters
supported the proposed rules, because
they would formalize and, according to
these commenters, provide greater
clarity on what health plans and issuers
must do to comply with MHPAEA.
Some commenters highlighted that the
existing rules were insufficient and that
the proposed rules were timely and
necessary to strengthen MHPAEA and
ensure fair access to mental health and
substance use disorder care.
Commenters highlighted the importance
of the proposed rules to participants,
beneficiaries, and enrollees, including
children, teens, young adults, and
others living with mental health
conditions and substance use disorders.
Several other commenters, however,
expressed either opposition or concern
regarding the proposed rules. Several
commenters stated that the proposed
rules would increase health plan and
issuer costs and reduce treatment
quality. A few commenters
recommended the Departments
withdraw the proposed rules and
initiate a new rulemaking process after
additional input from interested parties.
After reviewing the comments
received during the comment period,
the Departments are finalizing the
proposed rules, with some changes in
response to comments as described in
more detail later in this preamble, to
ensure that participants, beneficiaries,
and enrollees can access the mental
health and substance use disorder care
they need without facing greater
restrictions than when accessing
medical and surgical care, consistent
with the fundamental purpose of
MHPAEA. These final rules provide
additional clarity to plans and issuers
on how to comply with MHPAEA’s
requirements and, as a result, will
strengthen the protections of MHPAEA.
As highlighted earlier in this preamble,
since the 2013 final regulations, the
Departments repeatedly sought input
from interested parties on MHPAEA’s
requirements; therefore, the
Departments decline to withdraw the
proposed rules or initiate a new
rulemaking process after soliciting
additional input from interested parties.
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As explained throughout this preamble,
the amendments made by these final
rules are faithful to MHPAEA’s parity
requirements and sensitive to the
flexibility plans and issuers have in
designing benefits for group health
plans and health insurance coverage.43
Among other things, these final rules:
• Make clear that MHPAEA requires
that individuals will not face greater
restrictions on access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
• Reinforce that health plans and
issuers cannot use NQTLs, such as prior
authorization and other medical
management techniques, standards
related to network composition, or
methodologies to determine out-ofnetwork reimbursement rates, for
mental health and substance use
disorder benefits, that are more
restrictive than the predominant NQTLs
applied to substantially all medical/
surgical benefits in the same
classification.
• Require plans and issuers to collect
and evaluate data and take reasonable
action, as necessary, to address material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits,
where the relevant data suggest that the
NQTL contributes to material
differences in access.
• Codify the requirement in
MHPAEA, as amended by the CAA,
2021, that health plans and issuers
conduct comparative analyses to
measure the impact of NQTLs. This
includes evaluating standards related to
network composition, out-of-network
reimbursement rates, and medical
management and prior authorization
NQTLs.
• Prohibit plans and issuers from
using discriminatory information,
evidence, sources, or standards that
systematically disfavor or are
specifically designed to disfavor access
to mental health and substance use
disorder benefits when designing
NQTLs.
• Implement the sunset provision for
self-funded non-Federal governmental
plan elections to opt out of compliance
with MHPAEA.
As a result, the Departments
anticipate that these final rules will
result in changes in network
composition and medical management
techniques related to mental health and
substance use disorder care, more robust
mental health and substance use
disorder provider networks, and fewer
43 The Departments note that impacts on plan and
issuer costs are discussed in more detail in the
regulatory impact analysis, later in this preamble.
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and less restrictive prior authorization
requirements for individuals seeking
mental health and substance use
disorder care, as well as provide
additional clarity and information
needed for plans and issuers to meet
their obligations under MHPAEA and
for the Departments and States to
enforce those obligations.
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II. Overview of the Final Rules—
Departments of the Treasury, Labor,
and HHS
The Departments are issuing these
final rules 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 final rules 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 the
steps that plans and issuers must take to
meet their obligations under MHPAEA.
These final rules also add new
regulations at 26 CFR 54.9812–2, 29
CFR 2590.712–1, and 45 CFR 146.137
codifying minimum standards for
developing NQTL comparative analyses
to assess whether an NQTL, as written
and in operation, complies with
MHPAEA’s requirements and setting
forth the content elements of
comparative analyses and the period for
plans and issuers to respond to a request
from the Departments to submit their
comparative analyses. Additionally, in
these final rules, HHS finalizes an
amendment to 45 CFR 147.160 to
specify that the final regulations at 45
CFR 146.137 apply to individual health
insurance coverage offered by a health
insurance issuer in the same manner
and to the same extent that the
regulations apply to health insurance
coverage offered by a health insurance
issuer in connection with a group health
plan in the large group market.44
Consistent with the existing text at 45
CFR 147.160(a), HHS is also extending
the same requirements and framework
outlined in the amendments to 45 CFR
146.136 in these final rules to
individual health insurance coverage in
44 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 will also be
required to comply with the comparative analysis
requirements finalized under 45 CFR 146.137. See
45 CFR 156.115(a)(3).
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the same manner and to the same extent
as the amendments that apply to group
health insurance coverage. Finally, HHS
is finalizing 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).45
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 the preamble to the proposed rules,
the Departments stated that the
fundamental purpose of the MHPAEA
statute, the 2013 final regulations, and
the 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 when
seeking those benefits than when
seeking medical/surgical benefits under
the terms of the plan or coverage. The
Departments also stated that the
fundamental purpose of MHPAEA
should serve as the guiding principle for
plans and issuers as they work to
comply with the requirements of the
law and its implementing regulations.
Accordingly, the Departments proposed
to add a purpose section to the
regulations, specifying this fundamental
purpose, and that MHPAEA and its
implementing regulations should be
interpreted in a manner that is
consistent with this purpose.
Many commenters supported the
addition of the purpose section and the
principles it addressed, including the
goal of increasing access to mental
health and substance use disorder
benefits, to ensure equal treatment for
mental health and substance use
disorder benefits and medical/surgical
benefits. A few commenters expressed
opposition to the proposed purpose
section, arguing that its language goes
beyond the intent of MHPAEA (as
Congress did not direct the Departments
to provide a purpose in regulations,
either initially or in later amendments).
The purpose section is important to
highlight the overall goals of MHPAEA
and to emphasize that the provisions of
the 2013 final regulations, as amended
by these final rules, should be
interpreted in light of these goals.
45 Division FF, title I, subtitle C, chapter 3, section
1321, Public Law 117–328, 136 Stat. 4459 (Dec. 29.
2022).
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Congress provided authority to the
Departments to ‘‘promulgate such
regulations as may be necessary or
appropriate to carry out the provisions
of’’ chapter 100 of the Code, part 7 of
ERISA, and title XXVII of the PHS Act,
including MHPAEA.46 MHPAEA was
enacted to address barriers to access to
mental health and substance use
disorder benefits as compared to
medical/surgical benefits. These final
rules implement MHPAEA’s
requirements and provide clarifying text
to promote compliance with the law.
The Departments are finalizing the
purpose section as proposed, with
minor changes in response to
comments.
Several commenters requested that
the reference to ‘‘generally comparable’’
medical/surgical benefits in the
proposed purpose section be revised to
refer to the classification of benefits.
These commenters noted that,
consistent with the 2013 final
regulations, evaluation of a plan’s or
issuer’s MHPAEA compliance is
assessed within the relevant
classification of benefits, and that use of
the term ‘‘comparable,’’ which is used
in the 2013 final regulations and
amendments made to MHPAEA by the
CAA, 2021 with respect to requirements
for NQTLs, is confusing and should be
revised.
The Departments agree with
commenters who noted that use of the
term ‘‘comparable’’ can be confusing
when used in this context, because
compliance with the requirements for
financial requirements, quantitative
treatment limitations, and NQTLs has
historically been determined within one
of the six classifications of benefits.47
Therefore, these final rules remove the
reference to ‘‘generally comparable’’
medical/surgical benefits and instead
specify that 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 or
substance use disorder benefits under
the plan or coverage than they impose
on access to medical/surgical benefits in
the same classification of benefits. The
46 See Code section 9833, ERISA section 734, and
PHS Act section 2792.
47 The six classifications of benefits listed 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) include inpatient, in-network;
inpatient, out-of-network; outpatient, in-network;
outpatient, out-of-network; emergency care, and
prescription drugs. Special rules for multi-tiered
prescription drug benefits, multiple network tiers,
and permissible sub-classifications for office visits,
separate from other outpatient services, are
addressed at 26 CFR 54.9812–1(c)(3)(iii), 29 CFR
2590.712(c)(3)(iii), and 45 CFR 146.136(c)(3)(iii).
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Departments are finalizing the purpose
section without any other substantive
changes, but with a few minor
clarifications to ensure that terms are
used consistently with and accurately
describe other parts of these final rules.
2. Meaning of Terms—26 CFR 54.9812–
1(a)(2), 29 CFR 2590.712(a)(2), and 45
CFR 146.136(a)(2)
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a. Medical/Surgical Benefits, Mental
Health Benefits, and Substance Use
Disorder Benefits
Under the statute and the 2013 final
regulations, the term ‘‘medical/surgical
benefits’’ means benefits for medical or
surgical services as defined under the
terms of the plan or health insurance
coverage but does not include mental
health or substance use disorder
benefits. The 2013 final regulations
further provide that the term must be
defined in accordance with applicable
Federal and State law, and that any
condition defined by the plan or
coverage as being or as not being a
medical/surgical condition must be
defined to be consistent with generally
recognized independent standards of
current medical practice (for example,
the most current version of the
International Classification of Diseases
(ICD) or State guidelines).
The proposed rules generally retained
the first sentence of the 2013 final
regulations’ definition of ‘‘medical/
surgical benefits,’’ 48 but amended the
definition to provide that,
notwithstanding this 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). Further, the proposed rules
stated that, 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 also proposed to remove
the reference to State guidelines in the
definition of the term in the 2013 final
48 Under the 2013 final regulations, the term
‘‘medical/surgical benefits’’ means benefits with
respect to items or services for medical conditions
or surgical procedures, as defined under the terms
of the plan or health insurance coverage and in
accordance with applicable Federal and State law,
but does not include mental health or substance use
disorder benefits. 26 CFR 54.9812–1(a), 29 CFR
2590.712(a), and 45 CFR 146.136(a).
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regulations, both to make the definitions
more consistent with the statute, and to
minimize situations where differences
between generally recognized
independent standards of current
medical practice and State guidelines
create conflicts and improperly limit
protections under MHPAEA.
The Departments also proposed to
make similar changes to the definitions
of ‘‘mental health benefits’’ and
‘‘substance use disorder benefits’’ by
amending the first sentence of each
definition and removing the references
to State guidelines, consistent with the
changes described above for ‘‘medical/
surgical benefits.’’ 49 For purposes of the
requirement that any condition or
disorder defined by the plan or coverage
as being or not being a mental health
condition must be defined to be
consistent with generally recognized
independent standards of current
medical practice, the proposed rules
stated that the plan’s or coverage’s
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 American
Psychiatric Association (APA)
Diagnostic and Statistical Manual of
Mental Disorders (DSM). Similarly, the
proposed rules stated that the plan’s or
coverage’s definition of ‘‘substance use
disorder benefits’’ 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. The proposed rules
solicited comments on whether any
additional clarification is needed on
how State law may interact with the
proposed amended definitions of
‘‘medical/surgical benefits,’’ ‘‘mental
49 Consistent with the statute and the 2013 final
regulations, the Departments note that references to
‘‘mental health and substance use disorder
benefits’’ and ‘‘mental health or substance use
disorder benefits’’ throughout these final rules are
intended to have the same meaning as the terms
‘‘mental health benefits’’ and ‘‘substance use
disorder benefits’’ in combination.
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77591
health benefits’’ and ‘‘substance use
disorder benefits.’’
In general, many commenters
supported modifying these key
definitions in existing MHPAEA
regulations by specifying that, to be
consistent with generally recognized
independent standards of current
medical practice, the terms of the plan
or coverage must accord with
appropriate chapters of the ICD or DSM.
Many commenters generally supported
requiring plans and issuers to follow the
ICD or DSM, reasoning that both are
generally accepted, peer-reviewed,
nonprofit professional standards for
diagnosis and descriptions of medical
conditions, mental health conditions,
and substance use disorders, and that
following these authoritative and
comprehensive diagnostic tools
promotes uniform and standard
application of MHPAEA to mental
health conditions and substance use
disorders. Several commenters noted
that these changes would significantly
improve clarity and would increase
access to care, especially for intellectual
and neurodevelopmental disorders,
including dementia and autism
spectrum disorder (ASD). Another
commenter recommended clarifying
whether plans and issuers are required
to consider both the ICD and the DSM
in categorizing benefits for the purposes
of the proposed rules. One commenter
added that the Departments’ proposal to
align and clarify the definitions of
‘‘mental health benefits’’ and ‘‘substance
use disorder benefits’’ would ensure
parity between the relevant terms and
protect the application of MHPAEA for
conditions and disorders recognized
under independent standards of current
medical practice. Another commenter
expressing support reasoned that the
proposed amendments would clearly
specify how mental health conditions
and substance use disorders must be
defined for MHPAEA compliance
purposes and minimize contradictions
with State guidelines that now limit
MHPAEA protections. The commenter
also remarked that self-insured plans
frequently include language from Statelevel mandated benefit requirements
prevalent in the plan’s geographic area
that may not be MHPAEA-compliant.
Several commenters supported the
removal of any reference to State
guidelines to prevent situations in
which contradictions between Federal
and State guidelines would result in a
loss of protections under MHPAEA. One
commenter wrote that State law
definitions often predate MHPAEA, may
conflict with ICD and DSM standards,
and should not be the operable
standard, while others stated that State
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guidelines should not be given
precedence over Federal regulations to
ensure that MHPAEA’s protections are
not subverted. However, one commenter
urged that the Departments continue
allowing plans and issuers to use State
guidelines to inform the definitions of
‘‘medical/surgical benefits,’’ ‘‘mental
health benefits,’’ and ‘‘substance use
disorder benefits,’’ regardless of whether
State law is consistent with generally
recognized independent standards of
current medical practice. The
commenter noted that independent
standards of medical practice vary and
change over time and are not
established with the same intents and
purposes as State laws. The commenter
also stated that States have been the
traditional regulators of health
insurance issuers when it comes to
interpretive and enforcement matters,
even for coverage issues subject to
Federal law (such as the ACA and
MHPAEA). Another commenter
supported the clarification that, when
the DSM or ICD does not indicate
whether a condition or disorder is a
mental health condition or substance
use disorder, plans and issuers may
define the condition or disorder in
accordance with applicable Federal and
State law.
In the proposed rules, the
Departments noted that, to the extent
applicable 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
ensuring compliance with MHPAEA. To
better understand interested parties’
concerns in implementing this
requirement, the Departments solicited
comments on potential challenges in
applying MHPAEA to all benefits for a
mental health condition or substance
use disorder where a specific item or
service can be furnished 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.
In response to this comment
solicitation, commenters identified
several instances in which an individual
with a mental health or substance use
disorder diagnosis may need a
particular treatment for that condition
or disorder that may also be provided to
treat a medical condition. For example,
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ASD 50 might be treated with speech and
occupational therapy, which is also
used to treat some medical conditions.
Additionally, an eating disorder might
require medical nutrition therapy,
which could also be used to treat a
medical condition (such as for the
treatment of obesity or diabetes).
Moreover, with respect to benefits for
prescription drugs, a commenter noted
that claims for reimbursement generally
do not include diagnosis information.
Some commenters explained that many
specific prescription drugs are
prescribed for mental health conditions
and substance use disorders, as well as
for medical/surgical conditions, and
including diagnosis information would
require a range of different entities and
interested parties to change their current
practice. Commenters also
recommended several methods under
which the rules could allow plans and
issuers to characterize items and
services as medical/surgical benefits,
mental health benefits, or substance use
disorder benefits. One commenter
suggested items and services be
characterized as either mental health
benefits, substance use disorder
benefits, or medical/surgical benefits
based on the condition or disorder being
treated. Similarly, another commenter
suggested that items and services be
characterized as mental health benefits
or substance use disorder benefits when
a claim’s primary diagnosis is a mental
health condition or substance use
disorder, respectively, as that diagnosis
is driving the treatment provided.
Alternatively, several commenters
suggested the rules could be aligned
with existing Centers for Medicare &
Medicaid Services (CMS) guidance on
MHPAEA compliance for Medicaid and
the Children’s Health Insurance
Program (CHIP) so that plans and
issuers could use a ‘‘reasonable
method’’ for defining services
commonly used to treat both medical
conditions and mental health conditions
or substance use disorders, for example,
by using the plan’s or issuer’s annual
claims experience to determine its
spending on the service in question.51
After reviewing comments received
from interested parties, the Departments
are finalizing the definitions of
‘‘medical/surgical benefits,’’ ‘‘mental
health benefits’’ and ‘‘substance use
50 As discussed later in this preamble, the
Departments stated in the proposed rules and
reiterate in these final rules that ASD is a mental
health condition for purposes of MHPAEA.
51 CMS, Frequently Asked Questions: Mental
Health and Substance Use Disorder Parity Final
Rule for Medicaid and CHIP (Oct. 11, 2017), Q4,
https://www.medicaid.gov/federal-policy-guidance/
downloads/faq101117.pdf.
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disorder benefits’’ as proposed. 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, and the
definitions in these final rules include
sufficient safeguards to protect against
defining a benefit in a manner that
could result in limitations on access to
mental health or substance use disorder
benefits that are more restrictive than
those applicable to medical/surgical
benefits. Further, while the Departments
acknowledge the concern that
independent standards of current
medical practice change over time and
may not have been established with the
same intents and purposes as State law
or State guidelines, such standards
better ensure that plans and issuers
define mental health conditions and
substance use disorders in a manner
consistent with the purposes of
MHPAEA. The Departments agree with
one commenter’s concern that some
State laws, in particular, might predate
MHPAEA. As a result, such State laws
might not offer the same safeguards to
access to mental health or substance use
disorder benefits as MHPAEA. The
Departments also note that plans and
issuers are required to ensure that the
definitions used in the plan or coverage
are consistent with the appropriate
chapters of the most current version of
either the ICD or the DSM.
Additionally, while States generally
are the traditional regulators of health
insurance issuers, with respect to
MHPAEA, the Departments are not
persuaded that this necessitates
permitting plans and issuers to use
definitions of ‘‘medical/surgical
benefits,’’ ‘‘mental health benefits’’ and
‘‘substance use disorder benefits’’ that
are solely tied to applicable State law or
guidelines. The definitions of ‘‘medical/
surgical benefits,’’ ‘‘mental health
benefits,’’ and ‘‘substance use disorder
benefits’’ in these final rules preserve
the ability of plans and issuers to use
applicable Federal and State law to
inform their definitions, but only to the
extent that those laws are consistent
with generally recognized independent
standards of current medical practice.52
These final rules do not make any
changes to the proposed definitions to
specifically address how plans and
52 The final rules also permit plans and issuers to
use applicable Federal and State law to inform their
definitions to the extent generally recognized
independent standards of current medical practice
do not address whether a condition or disorder is
a medical condition, surgical procedure, mental
health condition, or substance use disorder.
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issuers should apply MHPAEA where a
specific item or service may be used to
treat both medical conditions or surgical
procedures as well as mental health
conditions or substance use disorders.
These final rules, like the proposed
rules and the 2013 final regulations,
require plans and issuers to continue to
characterize items and services as
medical/surgical benefits, mental health
benefits, or substance use disorder
benefits based on the condition or
disorder being treated. This
interpretation is the most appropriate
reading of the definitions of medical/
surgical benefits, mental health benefits,
and substance use disorder benefits,
consistent with the statute and the
purpose of MHPAEA. The Departments
note that the existing CMS mental
health and substance use disorder parity
guidance for Medicaid and CHIP
identified by several commenters
addresses long-term services and
supports provided through Medicaid
and CHIP, not items and services
covered by group health plans and
health insurance coverage. The
Departments reiterate that, if a plan (or
coverage) defines a condition or
disorder as a mental health condition or
substance use disorder, plans and
issuers subject to these final rules must
treat all benefits for the condition or
disorder as mental health benefits or
substance use disorder benefits,
respectively, for purposes of compliance
with MHPAEA. The Departments
decline to adopt the alternative methods
suggested by commenters that plans and
issuers might use to characterize items
and services as medical/surgical
benefits, mental health benefits, or
substance use disorder benefits, as they
may be insufficient to ensure
consistency with generally recognized
independent standards of current
medical practice and in accordance with
applicable State and Federal law.
Furthermore, while the Departments
acknowledge the particular challenges
with respect to prescription drug
benefits due to the lack of diagnostic
information on claims for
reimbursement, these final rules, similar
to the 2013 final regulations, provide
plans and issuers enough flexibility to
make decisions about how to classify
items and services, including
prescription drugs, as either mental
health benefits, substance use disorder
benefits, or medical/surgical benefits.
To provide guidance to plans and
issuers on how to ensure that they
define benefits consistent with generally
recognized independent standards of
current medical practice, the proposed
rules proposed separate definitions of
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the ICD and DSM. Specifically, the
Departments proposed that 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 APA’s
Diagnostic and Statistical Manual of
Mental Disorders. The proposed
definitions also specified, for purposes
of the definition, which version of the
ICD or DSM is the most current as of a
particular date. This was intended to
provide clarity on when a plan or issuer
would be required to begin to rely on a
new version of the ICD or DSM after it
is released and allow sufficient time
after the adoption of an updated version
of the ICD or DSM for a plan or issuer
to update the terms of its plan or
coverage to be consistent with any
changes made from the previous
version. The proposed definitions stated
that the most current version of the ICD
or DSM, respectively, would be the
version applicable no earlier than the
date that is 1 year before the first day
of the applicable plan year; however,
the proposed rules would permit the use
of an updated version before the plan or
issuer is required to use it. Finally, in
recognition of the fact 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,’’ the proposed
amended definitions referred to
‘‘equivalent categories’’ and ‘‘equivalent
chapters.’’
The Departments received several
comments on the proposed definitions
of the terms ‘‘ICD’’ and ‘‘DSM,’’ with
some commenters suggesting
alternatives to the language identifying
the most current versions of the DSM
and ICD. One commenter suggested
specifying that if a new version of the
DSM or ICD is published in the middle
of a plan year, then plans and issuers
must use the updated version by the
start of the next plan year. One
commenter suggested that the most
current version of an independent
standard should encompass any version
commonly in use among providers, and
any version used in the most recent
claims experience available to plans and
issuers.
The Departments are finalizing the
definition of ‘‘ICD’’ as proposed, with
clarifications with respect to the most
current version of the ICD. Specifically,
under these final rules, the most current
version of the ICD as of November 22,
2024, the effective date of these final
rules, is the International Classification
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of Diseases, 10th Revision, Clinical
Modification adopted for the period
beginning on October 1, 2015, through
HHS regulations at 45 CFR 162.1002 (or
successor regulations).53 Any
subsequent version of the ICD adopted
through 45 CFR 162.1002 (or successor
regulations) after November 22, 2024,
will be considered the most current
version beginning on the first day of the
plan year that is one year after the date
the subsequent version is adopted.
The Departments are also finalizing
the definition of ‘‘DSM’’ as proposed,
with similar clarifications, which note
that the most current version as of
November 22, 2024, the effective date of
these final rules, is the Diagnostic and
Statistical Manual of Mental Disorders,
Fifth Edition, Text Revision published
in March 2022. A subsequent version of
the DSM published after November 22,
2024, will be considered the most
current version beginning on the first
day of the plan year that is one year
after the date the subsequent version is
published (as the DSM is published,
rather than made applicable). Consistent
with this clarification, if a new version
of the DSM is published in the middle
of a plan year, plans and issuers will
have at least one full year before they
are required to use the updated version
with respect to a plan year. For
example, if a new version of the DSM
is published on August 1, 2025, for a
calendar year plan, that version of the
DSM would be the most current version
with respect to the plan year beginning
on January 1, 2027.
It is important to provide specificity
with regard to the relevant versions of
the ICD and DSM instead of allowing
the use of multiple versions, as
suggested by commenters, to ensure that
plans and issuers do not select a version
that restricts access to mental health and
substance use disorder benefits in a
manner that is more restrictive than
access to medical/surgical benefits.
Because the Departments understand
that the ICD and DSM are both broadly
utilized by providers and facilities, as
well as plans and issuers, and were
referenced in the 2013 final regulations,
these final rules continue to rely on
such standards.
Finally, the preamble to the proposed
rules noted that interested parties
requested that the Departments confirm
whether specific conditions are mental
health conditions for purposes of
MHPAEA. Consistent with the 2013
final regulations and section 13007 of
53 These HHS regulations implement section 212
of the Protecting Access to Medicare Act of 2014
by setting compliance dates for the 10th Revision
of the ICD for diagnosis and procedure coding.
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the 21st Century Cures Act (Cures
Act),54 the Departments confirmed in
the proposed rules 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.55
Similarly, the proposed rules made clear
that, for purposes of MHPAEA, ASD is
a mental health condition under
generally recognized independent
standards of current medical practice.56
Therefore, benefits for these disorders
are considered mental health benefits,
and subject to the protections of
MHPAEA and its implementing
regulations, including these final rules.
The Departments also solicited
comments on other specific mental
health conditions or substance use
disorders that may warrant additional
clarification for purposes of analyzing
parity and ensuring compliance with
MHPAEA. The Departments received
only a few comments in response,
including a request to clarify whether
gender dysphoria is a mental health
condition. Because the most current
versions of both the ICD and DSM
include gender dysphoria as a mental
health condition as of the time of the
issuance of these final rules, benefits for
this condition are currently subject to
the protections of MHPAEA and its
implementing regulations, consistent
with the framework described earlier in
this preamble.57
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b. Processes, Strategies, Evidentiary
Standards, and Factors
The proposed rules included
proposed new definitions of terms used
in paragraph (c)(4)(i) of the 2013 final
regulations, which states 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
54 Public Law 114–255, 130 Stat. 1033 (Dec. 13,
2016). 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.
55 See, e.g., DSM Disorders (5th ed.), Section II:
Diagnostic Criteria and Codes, Feeding and Eating
Disorders; ICD–10, Chapter V: Mental and
behavioral disorders, Code F50: Eating disorders.
56 DSM (5th ed.), Section II: Diagnostic Criteria
and Codes, Autism Spectrum Disorder.
57 DSM (5th ed.), Section II: Diagnostic Criteria
and Codes, Gender Dysphoria; ICD–10, Chapter V:
Mental and behavioural disorders, Code F64:
Gender identity disorders.
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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 applying the limitation with
respect to medical/surgical benefits in
the same classification. These terms and
the corresponding standard were
incorporated into MHPAEA’s statutory
language in the amendments made by
the CAA, 2021.58 Because the
Departments heard from interested
parties prior to the issuance of the
proposed rules that it can be difficult to
determine what constitute relevant
processes, strategies, evidentiary
standards, and other factors, the
Departments proposed definitions of
these terms and included an illustration
of the interaction of the definitions of
these terms in the preamble to the
proposed rules. The illustration
described how a plan might rely on
various combinations of processes,
strategies, evidentiary standards, and
other factors in designing and applying
an NQTL, and gave examples of each
term. The Departments also solicited
comments on the proposed definitions,
including any alternate definitions or
additional clarifications that should be
considered.
In general, many commenters
supported the proposed definitions of
these key terms, which they described
as foundational to the development of
sufficient comparative analyses and
necessary to hold plans and issuers
accountable for discriminatory NQTLs.
Several commenters described
widespread misinterpretation by plans
and issuers of the meaning of these key
terms. Other commenters wrote that the
proposed definitions would help clarify
the difference between ‘‘factors’’ and
‘‘evidentiary standards,’’ and draw a
clear distinction between ‘‘strategies’’
and ‘‘processes,’’ which relate,
respectively, to plans’ and issuers’
approaches to the design of an NQTL,
and to their application of an NQTL.
Other commenters stated that the
definitions of these terms should clearly
distinguish between each component of
a plan’s or issuer’s required comparative
analysis and assign each step of the
analysis to a particular component of
the comparative analysis. Additionally,
a commenter requested more specific
examples of processes and evidentiary
standards, and the differences between
factors and evidentiary standards. One
commenter stated that the proposed
definitions are not coherent as applied
to network contracting activities,
development of reimbursement
58 Code section 9812(a)(8)(A), ERISA section
712(a)(8)(A), and PHS Act section 2726(a)(8)(A).
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methodologies, or most other network
composition NQTLs. This commenter
claimed that there is no algorithmic
approach to decision making that can be
documented and requested the
Departments to provide guidance on
how the many activities involved in
constructing provider networks and
provider reimbursements across
different plan types, service settings,
and reimbursement methodologies
should be categorized.
As stated in the preamble to the
proposed rules, the proposed definitions
for the terms ‘‘processes,’’ ‘‘strategies,’’
‘‘evidentiary standards,’’ and ‘‘factors’’
are intended to further clarify how to
properly apply and distinguish between
these terms, and to help facilitate proper
comparisons between the design and
application of NQTLs to medical/
surgical benefits and mental health and
substance use disorder benefits in the
same classification, compliance with the
requirements related to NQTLs, and the
development of sufficient comparative
analyses, as required under the CAA,
2021 and these final rules. The
definitions in these final rules improve
clarity and add specificity to the terms
used in MHPAEA, as amended by the
CAA, 2021, to reduce
misinterpretations, and are consistent
with the requirements in these final
rules that set forth the manner in which
plans and issuers are required to
perform and document comparative
analyses, discussed later in this
preamble. The Departments also provide
additional guidance on how plans and
issuers must comply with the provisions
of these final rules with respect to
NQTLs related to network
composition,59 later in this preamble.
The Departments note that nothing in
these final rules requires an
‘‘algorithmic’’ decision making process;
however, plans and issuers must
perform and document their
comparative analyses as required under
26 CFR 54.9812–2, 29 CFR 2590.712–1,
and 45 CFR 146.137 to show that the
processes, strategies, evidentiary
standards, and other factors used in
designing or applying an NQTL to
mental health and substance use
59 The term ‘‘NQTLs related to network
composition’’ generally refers to the NQTLs listed
in 26 CFR 54.9812–1(c)(4)(ii)(D), 29 CFR
2590.712(c)(4)(ii)(D), and 45 CFR
146.136(c)(4)(ii)(D) of these final rules: 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.
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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 in
designing or applying the NQTL to
medical/surgical benefits in the relevant
classification. Additionally, anything
used by a plan or issuer to design or
apply an NQTL should be considered a
process, strategy, evidentiary standard,
or factor (or information, evidence,
sources, or standards on which a factor
or evidentiary standard is based),
consistent with the Departments’ broad
interpretation of these terms.
Under the proposed rules, the
Departments proposed that evidentiary
standards generally would not be
considered factors, but instead would be
considered or relied upon in designing
or applying a factor. The Departments
noted that, although the framework
established in the 2013 final regulations
treated the terms within the phrase
‘‘processes, strategies, evidentiary
standards, and other factors’’ as having
overlapping meanings (and the term
‘‘other factors’’ was utilized as a catchall), the CAA, 2021 added to MHPAEA
other references to factors and
evidentiary standards that indicate
Congress meant to distinguish between
them.60 The Departments requested
comments on this approach to defining
evidentiary standards separately from
factors, including whether there are any
circumstances under which an
evidentiary standard should also be
considered a factor under the framework
outlined in the proposed rules, but did
not receive any specific comments on
this issue. Therefore, under these final
rules, consistent with the proposed
rules, evidentiary standards are not
considered to be factors.
The proposed rules provided that the
term ‘‘evidentiary standards’’ would
mean any evidence, sources, or
standards that a plan or issuer
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
60 The preamble to the proposed rules noted that,
for example, Code section 9812(a)(8)(A)(iii), ERISA
section 712(a)(8)(A)(iii), and PHS Act section
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. See 88 FR 51552, 51567 (Aug. 3, 2023).
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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. The proposed
definition also provides that evidentiary
standards would 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.
One commenter recommended not
including specific benchmarks or
thresholds and professional standards
and protocols in the definition of the
term ‘‘evidentiary standards.’’ The
commenter noted that many plans and
issuers do not define their evidentiary
standards numerically and that
finalizing the definition as proposed
could require plans and issuers to do so,
thereby compelling plans and issuers
not to use relevant, critical data in the
development of their NQTLs. The
commenter also remarked that including
professional standards and protocols in
the definition would require plans and
issuers to incorporate potentially
unproven medical guidance as a
standard to dictate mental health or
substance use disorder benefits, which
could override common medical
management practices. The commenter
added that, if the reference to
professional standards and protocols is
retained, the Departments should clarify
that the definition of ‘‘evidentiary
standards’’ does not imply that all
professional standards and protocols
must be referenced or that benchmarks
or thresholds are required to be applied
to professional standards and protocols.
The Departments are finalizing the
definition of ‘‘evidentiary standards’’ as
proposed. The definition is consistent
with the use of the term by Congress in
the amendments made to MHPAEA by
the CAA, 2021. The definition of the
term ‘‘evidentiary standards’’ does not
require plans and issuers to define their
evidentiary standards numerically, nor
does it imply that all professional
standards and protocols must be
referenced or that benchmarks or
thresholds are required to be applied to
professional standards and protocols
(for example, where the standards are
qualitative in nature). However, to the
extent these types of evidentiary
standards are used to design or apply an
NQTL, they must be analyzed for
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compliance with MHPAEA. The list of
examples of evidentiary standards
included in the definition is not
intended to be exhaustive, nor are any
of the evidentiary standards listed
required to be considered or relied upon
in designing or applying a factor with
respect to an NQTL.
In the proposed rules, the
Departments proposed that the
definition of the term ‘‘factors’’ be read
broadly, so that factors are all
information, including processes and
strategies (but not evidentiary
standards), that a plan or issuer
considered or relied upon to design an
NQTL or to determine whether or how
the NQTL applies to benefits under the
plan or coverage. The Departments
noted that by defining the term ‘‘factor’’
broadly, the Departments’ intention was
to capture any information used to
design or apply an NQTL (other than
evidentiary standards), regardless of
whether a plan or issuer believes that
information could also be characterized
as a ‘‘process’’ or a ‘‘strategy,’’ as those
terms were proposed to be defined. The
Departments proposed that the term
‘‘factors’’ includes information (but 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.61 The
proposed definition also provided
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.
61 See FAQs About Affordable Care Act
Implementation Part 31, Mental Health Parity
Implementation, and Women’s Health and Cancer
Rights Act Implementation, Q9 (Apr. 20, 2016),
https://www.dol.gov/sites/dolgov/files/EBSA/aboutebsa/our-activities/resource-center/faqs/aca-part31.pdf and https://www.hhs.gov/guidance/
document/affordable-care-act-implementation-faqsset-31, 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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With respect to the ‘‘broad’’ reading of
the term ‘‘factor,’’ a commenter stated
that the proposed definition subsumes
‘‘processes’’ and ‘‘strategies,’’ and
suggested eliminating or clarifying this
distinction with additional guidance.
The commenter also remarked that the
broad definition of ‘‘factor’’ would make
the multiple steps in a comparative
analysis less distinguishable, and the
requirement that plans identify, define,
and describe the use of every factor in
the design or application of an NQTL
unworkably expansive. A few
commenters remarked that the breadth
of the definition of ‘‘factor’’ makes it
unclear how a plan or issuer would
demonstrate that a factor is unbiased or
not discriminatory for the purposes of
the comparative analyses and
recommended narrowing the definition
of ‘‘factor’’ to distinguish it from
evidentiary standards, processes, and
strategies, and instead use the term to
describe the basis for the plan’s or
issuer’s application of an NQTL.
Another commenter recommended not
including information that the plan or
issuer considered but rejected in the
definition of factors, because it is not
illustrative of the ultimate value of the
mental health or substance use disorder
benefit or the plan’s or issuer’s
compliance with MHPAEA’s NQTL
standards. The commenter stated that
the actual design of the benefit and how
it translates to payments, denials, and
reimbursement should substantiate
whether the benefit design complies
with parity requirements, without
examining extraneous information on
considerations early in the benefit’s
development process. A commenter
suggested the Departments include an
example of what the Departments would
consider a complete definition of a
factor and information about how to
specify the weight assigned to factors.
The Departments are finalizing the
definition of the term ‘‘factor’’ as
proposed. The definition and list of
examples of factors in the definition
contained in these final rules are
sufficiently detailed to provide context
to plans and issuers in identifying
factors, including by distinguishing
evidentiary standards from factors and
acknowledging that factors other than
processes and strategies, which are
types of factors, may exist. Under the
2013 final regulations, plans and issuers
were permitted to utilize a wide array of
factors in designing and applying their
NQTLs to mental health and substance
use disorder benefits provided they
were comparable to, and applied no
more stringently than, those utilized to
design and apply NQTLs to medical/
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surgical benefits. Similarly, the CAA,
2021 did not limit what factors plans
and issuers could use to design and
apply their NQTLs, but instead required
that these factors be identified and
analyzed in the comparative analyses.
As noted in the preamble to the
proposed rules, taking into account not
only the factors that the plan or issuer
relied upon, but also those that were
considered but ultimately rejected in the
definition of factors, is consistent with
previous guidance on MHPAEA, namely
because it is a factor that a plan or issuer
uses in designing and applying an
NQTL. The Departments recognize that
the language used in the proposed rules,
which included factors that were
considered and rejected, rather than
those that are relied upon and rejected,
could be interpreted as including a
broader set of information than prior
guidance, which had interpreted
‘‘considered’’ to include ‘‘factors that
were relied upon and were rejected.’’
The Departments did not intend to
broaden the set of information included
as a factor, and agree with the
commenter who questioned the utility
of providing information that was
considered early in the design process
but rejected. However, the Departments
affirm that taking into account
information that the plan or issuer
relied upon and rejected in the
definition of factors is necessary to
analyze compliance with MHPAEA.
In the proposed rules, the
Departments proposed to define
‘‘processes’’ and ‘‘strategies’’ as types of
factors, and to clarify the differences
between the two terms as they relate to
the design and application of an NQTL.
Specifically, the Departments proposed
defining ‘‘processes’’ as relating to the
application of an NQTL, while
‘‘strategies’’ would relate to the design
of an NQTL. After review of the
comments, the Departments continue to
be of the view that the best read of the
statutory text (as well as the 2013 final
regulations) is that processes and
strategies are types of factors, rather
than components of a factor to be
separately evaluated.
The Departments proposed to define
‘‘processes’’ to mean actions, steps, or
procedures that a plan or issuer uses to
apply an NQTL, 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.
Under the proposed rules, processes
include, but are not limited to: prior
authorization procedures, provider
referral requirements, and the
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development and approval of a
treatment plan. The proposed definition
also provided 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.
A commenter expressed appreciation
for the proposed rules’ intent and
requested the Departments to include
more specific examples of ‘‘processes.’’
Another commenter stated that the
proposed definition for ‘‘processes’’ is
too broad and focuses only on the end
result of access to benefits, which the
commenter stated is inconsistent with
the Departments’ previous guidance and
regulations, and recommended
narrowing the definition to focus on the
operational application of any
requirements.
After reviewing comments, the
Departments are finalizing the
definition of the term ‘‘processes,’’ with
minor changes so that the examples of
processes more clearly illustrate the way
the action, step, or procedure is used to
apply an NQTL.62 While the
Departments decline to add examples to
the definition, these modifications will
add clarity to the definition in these
final rules.63 The Departments note that
the final definition of the term does not
focus only on the end result of access to
benefits, but also includes the
operational application of an NQTL, as
evidenced by the framing of the
definition in terms of actions, steps, or
procedures used to apply an NQTL. For
example, prior authorization processes
include the procedures established by a
plan or issuer for a review to determine
how a specific request for prior
authorization should be granted or
denied. Concurrent review processes
include the procedures established by a
plan or issuer for a review to determine
whether a specific request should be
62 The Departments are also finalizing a nonsubstantive modification so that the definition more
closely parallels the definition of ‘‘strategies.’’
63 For example, these final rules clarify that
provider referral requirements are processes if they
are used to determine when and how a participant
or beneficiary may access certain services.
Similarly, the development and approval of a
treatment plan are processes if they are used in a
concurrent review process to determine whether a
specific request should be granted or denied.
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granted or denied, such as when peerto-peer review is required.
The proposed rules proposed to
define ‘‘strategies’’ as practices,
methods, or internal metrics that a plan
or issuer considers, reviews, or uses to
design an NQTL, and included
examples of strategies. The proposed
definition of strategies included the
following examples: 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. The proposed definition of
strategies also specifically included: 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 or issuer’s
decisions related to 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.
One commenter supported the
inclusion in the definition of
‘‘strategies’’ of practices that involve
‘‘deviations from generally accepted
standards of care.’’ Several commenters
also recommended that the Departments
include actions to detect or prevent and
prove fraud, waste, and abuse in the
definitions of either or both ‘‘processes’’
and ‘‘strategies,’’ rather than including
those actions as a stand-alone exception
from the NQTL requirements in the final
rules. Another commenter appreciated
the clear distinction made in the
proposed definitions of processes and
strategies and stated that they would
appreciate if these distinctions tracked
with separate steps in the comparative
analyses.64
The Departments are generally
finalizing the definition of the term
‘‘strategies’’ with some minor changes to
the examples to add specificity. The
definition of the term ‘‘strategies’’ in
these final rules includes examples of
strategies used to design an NQTL, such
as the method of determining whether
and how to deviate from generally
64 The content elements of comparative analyses
are addressed later in this preamble.
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accepted standards of care in concurrent
reviews; rationales used in selecting and
adopting certain threshold amounts to
apply an NQTL; professional standards
and protocols to determine utilization
management standards; and fee
schedules used to determine provider
reimbursement rates, used as part of an
NQTL. The Departments note that, once
a plan or issuer uses a strategy to design
an NQTL, that design also may result in
the establishment or use of processes to
apply the NQTL.
While the Departments acknowledge
comments suggesting that actions to
detect or prevent and prove fraud,
waste, and abuse be defined as either
‘‘processes’’ or ‘‘strategies,’’ and
acknowledge that such actions certainly
could constitute either processes or
strategies (depending on whether the
action is undertaken to design or apply
the NQTL), the Departments decline to
add a specific reference to actions to
detect or prevent and prove fraud,
waste, and abuse to the relevant
definitions, as the proposed exception
for standards to detect or prevent and
prove fraud, waste, and abuse is not
being finalized, as discussed later in this
preamble.65 However, the Departments
are providing additional language to
explain what constitutes a standard to
detect or prevent and prove fraud and
abuse (also referred to as ‘‘fraud and
abuse measures’’) later in this preamble
and how such standards must comply
with MHPAEA under these final rules.
c. Treatment Limitations
The Departments proposed to amend
the definition of ‘‘treatment limitations’’
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’’
(rather than ‘‘permanent’’) exclusion of
all benefits for a particular condition or
disorder is not a treatment limitation for
purposes of the definition. In the
preamble to the proposed rules, the
Departments noted that, while NQTLs
are generally defined as treatment
limitations that are not expressed
65 The proposed rules referred to fraud, waste,
and abuse. However, as explained later in this
preamble, the Departments agree with commenters
that the term ‘‘waste’’ can be construed in a manner
that is overly broad. Thus, in these final rules, when
discussing the exception in the proposed rules for
NQTLs that are narrowly and reasonably designed
to detect or prevent and prove fraud, waste, and
abuse, while minimizing the impact on access to
appropriate mental health and substance use
disorder benefits, this preamble refers to ‘‘fraud,
waste, and abuse measures.’’ When discussing
provisions of this final rule related to carefully
circumscribed measures reasonably and
appropriately designed to detect or prevent and
prove fraud and abuse, this preamble refers to
‘‘fraud and abuse measures.’’
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numerically, the application of an
NQTL in a numerical way does not
modify its nonquantitative character
simply because the NQTL sometimes
involves numerical standards, and such
NQTLs would still be evaluated in
accordance with the rules for NQTLs
under the statute and implementing
regulations.
Several commenters supported the
Departments’ amendment to the
definition of ‘‘treatment limitation’’ to
specify that ‘‘a complete exclusion of all
benefits for a particular condition or
disorder is not a treatment limitation for
purposes of this definition,’’ rather than
retaining the reference in the 2013 final
regulations to a ‘‘permanent’’ exclusion.
These commenters stated that the
proposed definition more clearly
specifies that a plan or issuer can
exclude a particular condition or service
without creating an NQTL, but that in
doing so, the exclusion must be total.
The commenters suggested the
Departments include specific examples
of permissible exclusions and
impermissible exclusionary language.
Other commenters expressed concern
that the proposed definition of
‘‘treatment limitation’’ is too broad and
argued that the proposed definition
would lead to increased uncertainty in
determining which common plan
practices could constitute an NQTL.
One commenter stated that if there is no
comparable medical or surgical
treatment limitation, there is nothing to
compare a treatment limitation on a
mental health or substance use disorder
benefit to, and that therefore such a
limitation on the mental health or
substance use disorder benefit is not
subject to parity requirements. Several
commenters recommended adopting a
consistent and exhaustive definition for
determining whether a medical
management technique is a treatment
limitation.
The Departments are finalizing the
definition of ‘‘treatment limitation’’ as
proposed, with minor modifications to
add an example of an NQTL. As
reflected in the definition, medical
management techniques are NQTLs if
they limit the scope or duration of
treatment. While the definition as
amended is broad, plans and issuers
have great latitude in the types of
limitations that they may impose, and
the Departments understand that plans
and issuers do in fact impose a broad
range of limitations on the scope or
duration of treatment. In enacting
MHPAEA and the amendments to
MHPAEA contained in the CAA, 2021,
Congress did not prohibit the use of
these limitations for mental health and
substance use disorder benefits, but
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required that plans and issuers ensure
that NQTLs satisfy the statutory
requirements that (1) any treatment
limitations imposed on mental health
and substance use disorder benefits are
no more restrictive than the
predominant treatment limitations
imposed on substantially all medical/
surgical benefits; (2) that no treatment
limitations be imposed only with
respect to mental health and substance
use disorder benefits; and (3) that plans
and issuers perform and document
comparative analyses of the design and
application of NQTLs. Because of the
broad range of treatment limitations that
plans and issuers may impose,
combined with the freedom that plans
and issuers have to design their own
unique limitations, the Departments
cannot provide a comprehensive and
exhaustive list of all limitations, as
further explained later in this preamble.
The Departments note that if a plan or
issuer applies a treatment limitation to
mental health and substance use
disorder benefits where medical/
surgical benefits are not subject to a
comparable treatment limitation in the
same classification, the plan or issuer
would violate MHPAEA because it must
not apply separate treatment limitations
only to mental health and substance use
disorder benefits. Further, the
Departments have stated that, if a plan
or issuer provides any benefits for a
mental health condition or substance
use disorder but excludes benefits for
items or services for that condition or
disorder in a classification in which it
provides medical/surgical benefits, such
an exclusion of a benefit for a condition
or disorder that is otherwise covered is
a treatment limitation because it is a
limit on the scope or duration of
treatment offered.66 While the
Departments decline to provide
additional examples of permissible
exclusions and impermissible
exclusionary language in these final
rules, examples of such exclusions and
language have been provided in
guidance and in the Departments’
reports to Congress.
3. Nonquantitative Treatment
Limitations—26 CFR 54.9812–1(c)(4), 29
CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4)
In the proposed rules, the
Departments proposed changes
designed to better ensure that plans and
issuers do not design and implement
NQTLs that impose greater restrictions
on access to mental health and
substance use disorder benefits as
compared to medical/surgical benefits.
66 See
75 FR 5410, 5413 (Feb. 2, 2010).
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The Departments proposed to add
requirements that apply to NQTLs with
respect to mental health and substance
use disorder benefits, to ensure that
plans and issuers do not impose a
greater burden on participants and
beneficiaries accessing those benefits
than the burden imposed on
participants and beneficiaries accessing
medical/surgical benefits, while
preserving the ability of plans and
issuers to impose NQTLs to the extent
they are consistent with generally
recognized independent professional
medical or clinical standards or
legitimate and narrowly designed
standards related to fraud, waste, and
abuse. Subject to those two narrow
exceptions for those types of NQTLs, the
proposed rules provided that plans and
issuers would not be permitted to
impose an NQTL on mental health or
substance use disorder benefits unless
they satisfied all of the following three
requirements: (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 as the no more restrictive
requirement); (2) the plan or issuer
satisfies requirements related to the
design and application of the NQTL
(also referred to as the design and
application requirements); 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 as the relevant data
evaluation requirements).
Specifically, under the no more
restrictive requirement, the proposed
rules specified 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. This
requirement was intended to ensure that
the implementing regulations more
closely mirrored the statutory language
in Code section 9812(a)(3)(A), ERISA
section 712(a)(3)(A), and PHS Act
section 2726(a)(3)(A).
The proposed rules outlined a fourprong test for a plan or issuer to
determine compliance with the no more
restrictive requirement. Specifically,
this provision would have required
plans and issuers to determine: (1) the
portion of plan payments for medical/
surgical benefits subject to an NQTL in
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a classification; (2) whether the NQTL
applies to substantially all medical/
surgical benefits in the classification; (3)
if the NQTL applies to substantially all
medical/surgical benefits in the
classification, the predominant variation
of the NQTL that applies to
substantially all medical/surgical
benefits in the classification; and (4)
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.
The second proposed requirement for
NQTLs, the design and application
requirements, retained the requirements
for NQTLs from the 2013 final
regulations focused on the processes,
strategies, evidentiary standards, and
other factors used to apply an NQTL,
with a proposed modification to better
align the rules with the statute’s focus
on the design of an NQTL in addition
to its application. In addition, the
Departments proposed to 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 was based
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
The third requirement for NQTLs
under the proposed rules, the relevant
data evaluation requirements, proposed
to require plans and issuers to collect
and evaluate relevant outcomes data
and take reasonable action to address
material differences in access between
mental health and substance use
disorder benefits and medical/surgical
benefits as necessary to ensure
compliance, in operation, with
MHPAEA. This requirement also
included a proposed special rule for
NQTLs related to network composition.
The proposed rules stated that, if a
plan or issuer fails to meet any of the
three requirements under the proposed
rules with respect to an NQTL in a
classification, the NQTL would violate
MHPAEA and, as a result, could not be
imposed on mental health or substance
use disorder benefits in the
classification without changes to the
terms of the plan or coverage, or the way
the NQTL is designed or applied, to
ensure compliance with MHPAEA.
The Departments proposed two
limited exceptions to some of the
requirements for NQTLs, consistent
with the Departments’ intention to
avoid interference with a plan’s or
issuer’s attempts to ensure that NQTLs
imposed with respect to benefits for
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treatment of mental health conditions or
substance use disorders are consistent
with generally accepted independent
professional medical or clinical
standards of care (also referred to as
independent professional medical or
clinical standards) or are narrowly and
reasonably designed to detect or prevent
and prove fraud, waste, and abuse,
while minimizing the impact on access
to appropriate mental health and
substance use disorder benefits (also
referred to as fraud, waste, and abuse
measures). The Departments proposed
to exempt NQTLs qualifying for the
exception for independent professional
medical or clinical standards from
compliance with the no more restrictive
requirement, the prohibition on
discriminatory factors and evidentiary
standards, and the relevant data
evaluation requirements. The
Departments proposed to exempt
NQTLs qualifying for the exception for
fraud, waste, and abuse measures from
compliance with the no more restrictive
requirement and the prohibition on
discriminatory factors and evidentiary
standards, but not the relevant data
evaluation requirements.
Finally, the Departments proposed to
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, would also be in
violation of the substantive
requirements that apply to NQTLs
under MHPAEA, as determined by the
Departments. Upon such a
determination, the proposed rules
would permit the Departments to 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.
The Departments requested comments
on all aspects of these proposed
amendments, including the exceptions
to the proposed rules regarding NQTLs.
Many commenters expressed support
for these provisions of the proposed
rules as a whole, as a means of
achieving increased access to mental
health and substance use disorder
benefits by targeting NQTLs that
otherwise impede access. Other
commenters expressed support for the
proposed rules’ enhanced specificity
with respect to the requirements for
imposing NQTLs, with one commenter
also indicating that the proposals would
help State insurance regulators better
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enforce MHPAEA and clarify plans’ and
issuers’ compliance obligations.
However, other commenters
expressed the view that these provisions
of the proposed rules were complex,
ambiguous, confusing, subject to
interpretation, or difficult to
operationalize, which they argued could
lead to substantial uncertainty for plans
and issuers attempting to comply.
Commenters also stated that it may be
impossible for plans or issuers to meet
the proposed mathematical substantially
all and predominant tests as applied to
NQTLs, leading them to eliminate
necessary utilization management tools.
Some commenters also indicated that
these provisions of the proposed rules
could lead to inconsistent application of
NQTLs across plans administered by the
same TPA or issuer, which could result
in administrative complexity and cause
confusion for consumers and providers.
Other commenters highlighted that the
proposed requirements would
significantly increase the cost of
administering plans and health
insurance coverage. One commenter
indicated that some plans might
consider excluding all treatments or
services for a particular mental health
condition or substance use disorder as
a result of the additional burdens
imposed by the substantially all and
predominant tests, if finalized as
proposed. Some commenters also stated
that the additional proposed
requirements for NQTLs do not add
value beyond distinctions already
captured by the design and application
requirements included in the 2013 final
regulations, with some commenters
stating those additional requirements go
beyond MHPAEA’s statutory
requirements. Comments specific to
each of the three requirements and two
exceptions proposed at 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) are
discussed in greater detail later in this
preamble.
The Departments acknowledge the
concerns expressed by commenters and,
in response to comments, the
Departments are finalizing a modified
framework that is still intended to
prevent plans and issuers from
designing and applying NQTLs that
impose greater burdens on access to
mental health and substance use
disorder benefits as compared to
medical/surgical benefits, while limiting
uncertainty, increases in cost,
operational difficulty, and unintended
consequences. These final rules
streamline the proposed rules’ general
requirements to eliminate redundancies
and add clarity for plans and issuers in
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77599
a manner that remains consistent with
the statutory text of MHPAEA, while
also ensuring participants and
beneficiaries will not face greater
restrictions on access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
These final rules do not finalize the
language of the proposed ‘‘no more
restrictive’’ requirement, as discussed in
more detail later in this preamble, and
instead incorporate the statutory
requirements of Code section
9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section
2726(a)(3)(A) as the overall general rule
for NQTLs in 26 CFR 54.9812–1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4). Specifically, these final
rules state that, consistent with the
fundamental purpose of MHPAEA, a
group health plan (or health insurance
coverage offered by an issuer in
connection with a group health plan)
may not impose any NQTL 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 NQTL
that applies to substantially all medical/
surgical benefits in the same
classification. However, as discussed
later in this preamble, the Departments
are declining to finalize the proposed
four-prong test for the no more
restrictive requirement, which was
proposed to determine compliance with
statutory requirements as they apply to
NQTLs.67 Rather, to demonstrate
compliance with the no more restrictive
requirement, which is now the general
rule for NQTLs, a plan or issuer is
required under these final rules to
satisfy (1) the design and application
requirements and (2) the relevant data
evaluation requirements, each of which
the Departments are finalizing with
modifications, as discussed in more
detail later in this preamble.
Additionally, the Departments are not
finalizing the exceptions set forth in the
proposed rules, but have added
language to these final rules to explain
how plans and issuers should analyze
and account for independent
professional medical or clinical
standards and fraud and abuse measures
in designing and applying their NQTLs.
Finally, the Departments are finalizing a
provision providing that, depending on
the relevant facts and circumstances, the
Departments or an applicable State
authority may direct a plan or issuer
that has received a final determination
of noncompliance under the
comparative analysis review process
67 Code section 9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
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established by the CAA, 2021 to not
apply an impermissible NQTL.
a. Requirement That NQTLs Be No More
Restrictive for Mental Health Benefits
and Substance Use Disorder Benefits—
26 CFR 54.9812–1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR
146.136(c)(4)
Through the proposed mathematical
substantially all and predominant tests
for NQTLs as part of the no more
restrictive requirement, the Departments
proposed to require plans and issuers 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 (referred to in this
preamble as the proposed mathematical
substantially all and predominant tests).
As noted in the proposed rules, the
steps in the proposed mathematical
substantially all and predominant tests
would have involved 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; if
the NQTL applies to substantially all
medical/surgical benefits in the
classification, the predominant variation
of the NQTL that applies to
substantially all 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.
Many commenters generally
supported application of the proposed
mathematical substantially all and
predominant tests to NQTLs, with some
indicating that the tests would provide
additional clarity, eliminate
subjectivity, assist regulators, and result
in compliance improvements. Many of
these commenters also stated that the
statute clearly supports the tests, as it
requires treatment limitations to be ‘‘no
more restrictive’’ than the predominant
treatment limitations that apply to
substantially all medical/surgical
benefits. Other commenters generally
opposed the inclusion of the
substantially all and predominant tests
for NQTLs as part of the no more
restrictive requirement. Some of these
commenters stated that the proposed
mathematical substantially all and
predominant tests are a reversal of
policy from the 2013 final regulations
and are inconsistent with congressional
intent, because Congress codified the
design and application requirements
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from the 2013 final regulations in the
CAA, 2021. These commenters
highlighted that the Departments had
stated previously that they understood
NQTLs could not be easily quantified
and that the Departments had not
sufficiently explained their change in
interpretation under the proposed rules.
Some commenters expressed general
concerns that NQTLs are inherently
unquantifiable, arguing that the
proposal would result in unworkable
standards or arbitrary outcomes that
could prohibit plans and issuers from
using evidence-based medical
guidelines or other relevant factors
specific to the item or service under
consideration. Commenters also raised
concerns that imposition of the
proposed mathematical substantially all
and predominant tests on certain types
of NQTLs that are not commonly
utilized for medical/surgical benefits
may lead to some types of legitimate
NQTLs no longer being permitted with
respect to mental health and substance
use disorder benefits. Specifically,
several of these commenters contended
that the proposed mathematical
substantially all and predominant tests,
as proposed, would result in the
elimination of plans’ and issuers’ ability
to impose certain NQTLs with respect to
mental health and substance use
disorder benefits, such as step therapy,
prior authorization, and concurrent
review, which they posited would
negatively impact the quality and cost of
care. Some commenters also cited
potential negative, unintended
consequences of the application of the
proposed mathematical substantially all
and predominant tests, as proposed,
including patient safety concerns;
impacts on health outcomes, quality,
and affordability; and a chilling effect
on access improvements and
innovation. Further, some commenters
expressed concern with the increased
costs associated with complying with
the proposed mathematical substantially
all and predominant tests, with some
stating that this increased burden would
not be offset by any resulting increase in
access to mental health and substance
use disorder benefits for participants
and beneficiaries.
Several commenters expressed
confusion as to how these tests, as
proposed, would be applied in practice
and highlighted the need for more
detail. Specifically, some commenters
stated that these proposed provisions
lack clarity in how the tests apply to
certain types of NQTLs (including those
related to network composition), and
the potential consequences of
enforcement of these requirements.
Many commenters provided specific
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comments and feedback on aspects of
each part of the substantially all and
predominant tests included in the
proposed rules, as discussed later in this
preamble, and highlighted ambiguities
and challenges operationalizing the
proposed quantitative testing
requirements with respect to NQTLs.
Under the first prong of the proposed
mathematical substantially all and
predominant tests, plans and issuers
would have been required to determine
the portion of plan payments for
medical/surgical benefits in the
classification 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). The proposed rules stated
that, for purposes of this determination,
any reasonable method could be used to
determine the dollar amount expected
to be paid under a plan for medical/
surgical benefits.
The Departments received many
comments on the proposed requirement
that the plan or issuer determine the
portion of plan payments for medical/
surgical benefits expected to be subject
to an NQTL in the benefit classification.
Several commenters indicated that the
determination of the dollar amount of
all plan payments for medical/surgical
benefits expected to be paid may be an
inappropriate measure altogether
because NQTLs like medical
management, assessments related to
medical necessity, experimental/
investigational treatment exclusions,
prior authorization requests, and
provider network admission standards
are not generally attached to claims.
Some commenters highlighted that selfinsured plan sponsors may face
challenges in obtaining a complete and
reliable set of plan-level claims data,
and accordingly, would have limited
data to use to assess individual NQTLs,
or would incur additional costs.
After determining the portion of plan
payments for medical/surgical benefits
in the classification expected to be
subject to the NQTL, the Departments
proposed that, under the second prong,
plans and issuers would be required to
determine whether the NQTL applies to
substantially all medical/surgical
benefits in the classification, 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. Under the
proposed rules, an NQTL would be
considered to apply to substantially all
medical/surgical benefits in a
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classification if it applies to at least twothirds of all medical/surgical benefits in
that classification. Under the proposed
rules, 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.68 The proposed
rules further provided that if an NQTL
does not apply to at least two-thirds of
all medical/surgical benefits in a
classification, that NQTL would not be
permitted to be applied to mental health
or substance use disorder benefits in
that classification.
The Departments received many
comments regarding this prong of the
proposed mathematical substantially all
and predominant tests. As mentioned
earlier in this preamble, many
commenters stated that, in practice, a
numerical ‘‘substantially all’’
determination would be difficult to
apply and assess for NQTLs for many
reasons, including because they are
often not quantifiable, and there are
more medical/surgical items and
services (and associated benefits) than
there are mental health and substance
use disorder items and services.
Additionally, commenters highlighted
that plans and issuers already
experience difficulty in obtaining data
from service providers and would have
difficulty in determining which NQTLs
apply to at least two-thirds of medical/
surgical benefits in a classification.
Some commenters predicted that, if the
Departments finalize the substantially
all and predominant tests as proposed,
plans and issuers might increase the
application of NQTLs to medical/
surgical benefits to meet the two-thirds
threshold.
Further, some commenters requested
that the Departments specify and
provide examples showing how to apply
the substantially all test to NQTLs that
are not associated with plan payments,
such as prescription drug formularies
and network composition standards.
One commenter highlighted that it is
difficult to calculate the amount of plan
payments expected to be paid for
prescription drugs subject to an NQTL.
68 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,
under the proposed rules, 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). 88 FR 51552, 51570 (Aug. 3,
2023).
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Another commenter urged the
Departments to clarify the
determination of whether an NQTL
applies regardless of whether the NQTL
was triggered. For example, this
commenter highlighted that insurers
might state that prior authorization
‘‘applies’’ to all benefits in a
classification where a benefit is
considered or evaluated under the
various factors for determining whether
to apply prior authorization, even if the
benefit ultimately is determined to not
be subject to prior authorization based
on the application of factors and
evidentiary standards.
In addition, in the proposed rules, the
Departments solicited comments on
whether plans and issuers maintain
systems capable of determining, under
the proposed mathematical substantially
all and predominant tests, whether an
NQTL applies to substantially all
medical/surgical benefits in a
classification, and the administrative
burden that would be associated with
such determinations. Several
commenters highlighted that it would
be difficult to comply with the
substantially all and predominant tests
as proposed, including because the
requisite data may be housed in
different parts of a plan’s or issuer’s
organization. One commenter
emphasized that current administrative
systems would need to be adapted, and
plans and issuers would need to hire
additional staff or service providers to
be able to perform the analysis that
would be required under the proposed
mathematical substantially all and
predominant tests.
Under the proposed rules, if a plan or
issuer determined that an NQTL applies
to substantially all medical/surgical
benefits in a classification, the third
prong of the test would require a plan
or issuer 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
proposed that the term ‘‘predominant’’
would, for this purpose, mean the most
common or most frequent variation of
an NQTL within a benefit classification.
The Departments received many
comments regarding this part of the
proposed tests. Numerous commenters
stated that this aspect of the
substantially all and predominant tests
is unworkable. Some commenters noted
that, with a lack of guidance on how to
identify all the variations of a particular
NQTL (especially those that are
complex and nuanced), the proposed
rules may not be feasible for plans,
issuers, and regulators to apply in reallife situations. Several commenters
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77601
stated that, while financial requirements
and quantitative treatment limitations
will have only a few different variations,
NQTLs are multifactorial and each
difference could be considered a
different variation, or even a separate
NQTL. For example, some of these
commenters highlighted that prior
authorization or concurrent review may
take varied forms: an admission that
requires advance prior authorization; an
admission that requires notification but
no clinical review; a nonclinical review
based on predetermined standards; a
first-level or nurse clinical review; a
second-level or physician clinical
review; and a peer-to-peer clinical
review. These commenters noted that
some processes may be automated or
manual, some may be handled by
vendors or directly by the plan or issuer,
and some may have multiple utilization
management systems within all of the
aforementioned categories. Another
commenter highlighted that a plan or
regulator could conceivably determine
that ‘‘variations’’ include a wide range
of aspects, such as the credentials of the
reviewer, the type or source of clinical
criteria applied, the timing of the review
(for example, urgent vs. nonurgent), the
modality of authorization submission
(for example, via electronic health
record vs. fax or pdf form), among
others. As a result, these commenters
stated that determining how to identify
the predominant variation of an NQTL
may not be feasible without additional
clarifications. Many commenters
requested that the Departments provide
a definition of the term ‘‘variation’’ and
an explanation of how to determine
whether a variation exists, as well as
additional guidance and examples
illustrating when an NQTL has no
variation and when an NQTL has
multiple variations (beyond variations
based on numerical distinctions). These
commenters also noted that, under the
proposed rules, the predominant
variation may only apply to a small
percentage of medical/surgical services
or items in the applicable benefit
classification.
Lastly, under the fourth prong, the
proposed rules provided that an NQTL
applied to mental health or substance
use disorder benefits cannot be more
restrictive than the predominant
variation of the NQTL applied to
substantially all medical/surgical
benefits in the same classification.
Under the proposed rules, for this
purpose, an NQTL would be considered
restrictive if it imposes conditions,
terms, or requirements that limit access
to benefits under the terms of the plan
or coverage. For this purpose,
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conditions, terms, or requirements
would include, but not be 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.
As discussed later in this preamble, the
Departments also proposed 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 fraud,
waste, and abuse measures, that meet
specific requirements.
Some commenters supported this
approach to the ‘‘more restrictive’’ part
of the test in the proposed rules
because, according to these commenters,
it provided a more concrete and less
subjective standard. Other commenters
emphasized, as discussed earlier in this
preamble, that the proposed
mathematical substantially all and
predominant tests, which provide a
quantitative basis for comparison, are
unworkable for NQTLs and
administratively burdensome. Many of
these commenters requested that, if the
proposed mathematical substantially all
and predominant tests are finalized, the
Departments provide extensive and
detailed implementation guidance to
assist plans and issuers in complying
with what the commenters
characterized as this challenging
framework. Another commenter
suggested that the Departments establish
a safe harbor for plans and issuers from
the substantially all and predominant
tests for any variation in NQTL
outcomes data driven by State law or
regulation.
The Departments appreciate the
detailed comments received on all
aspects of the proposed mathematical
substantially all and predominant tests,
including comments particular to each
aspect of the proposed four-prong test.
The Departments acknowledge that
many commenters expressed concerns
that applying to NQTLs the same
proposed mathematical substantially all
and predominant tests that are
applicable to financial requirements or
quantitative treatment limitations may
be difficult to operationalize and could
be unworkable. The Departments
acknowledge that this framework was
first developed for financial
requirements and quantitative treatment
limitations, where there are relatively
clear and limited numbers of variations,
and that the framework might be
impractical or impossible for NQTLs,
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which differ in how they are designed
and applied to various benefits.
At the same time, the Departments
agree with commenters who stated that
applying the statutory no more
restrictive requirement to NQTLs under
the proposed rules would assist
regulators tasked with enforcing
MHPAEA’s requirements and result in
overall compliance improvements by
formalizing and providing greater clarity
on what plans and issuers must do to
comply with MHPAEA. The
Departments also agree with
commenters who emphasized the
importance of the statutory requirement
that plans and issuers shall ensure that
the treatment limitations they impose
on mental health and substance use
disorder benefits generally are no more
restrictive than those they impose on
medical/surgical benefits. The proposed
rules made clear that the incorporation
of this statutory language into
regulations is key to ensuring that
people seeking mental health and
substance use disorder treatment do not
face a greater burden on access to
benefits for such treatment than on
access to benefits for medical treatment
and surgical procedures, a premise that
is central to MHPAEA.
After reviewing all the comments on
the proposed four prongs of the no more
restrictive requirement, the Departments
have sought to address many of the
workability concerns expressed by
commenters, while honoring statutory
requirements. Specifically, due to
concerns raised by the commenters, the
Departments are declining to finalize
the proposed mathematical substantially
all and predominant tests for NQTLs,
which would have based these
determinations on the dollar amount of
all plan payments for medical/surgical
benefits expected to be paid, similar to
the steps that apply when analyzing
parity with respect to financial
requirements or quantitative treatment
limitations under the 2013 final
regulations. These final rules address
commenters’ operability and feasibility
concerns with respect to the proposed
mathematical substantially all and
predominant tests, while continuing to
set forth a standard for parity
compliance that is grounded in
MHPAEA’s statutory text and is also
sufficiently flexible to account for the
unique and nonquantifiable nature of
NQTLs. As noted later in this preamble,
these final rules retain the focus on the
design and application of NQTLs,
including with respect to relevant
outcomes measures, to ensure that
NQTLs are no more restrictive in the
context of mental health and substance
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use disorder benefits than in the context
of medical/surgical benefits.
Therefore, these final rules do not
finalize the provisions proposed under
26 CFR 54.9812–1(c)(4)(i)(A) through
(E), 29 CFR 2590.712(c)(4)(i)(A) through
(E), and 45 CFR 146.136(c)(4)(i)(A)
through (E). Instead, consistent with
MHPAEA’s express statutory
requirement,69 the Departments are
finalizing under 26 CFR 54.9812–1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4) the general rule that,
consistent with the fundamental
purpose of MHPAEA, a group health
plan (or health insurance coverage
offered by an issuer in connection with
a group health plan) may not impose
any NQTL 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 NQTL that
applies to substantially all medical/
surgical benefits in the same
classification. Through this
requirement, the Departments reiterate
the importance of promoting the goals of
the statute and ensuring that individuals
have access to the mental health and
substance use disorder benefits under
their plan or coverage in a way that is
not more restrictive than their access to
the medical/surgical benefits under
their health coverage. For this purpose,
consistent with the fundamental
purpose of MHPAEA, an NQTL is more
restrictive than the predominant NQTL
that applies to substantially all medical/
surgical benefits in the same
classification if the plan or issuer fails
to satisfy the design and application
requirements at 26 CFR 54.9812–
1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and
45 CFR 146.136(c)(4)(i) or the relevant
data evaluation requirements at 26 CFR
54.9812–1(c)(4)(iii), 29 CFR
2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii). Accordingly, plans
and issuers must ensure that the
processes, strategies, evidentiary
standards, and other factors used to
design and apply an NQTL to mental
health or substance use disorder
benefits are comparable to, and applied
no more stringently than, the processes,
strategies, evidentiary standards, and
other factors used to design and apply
the NQTL for medical/surgical benefits,
including by ensuring that the
information, evidence, sources, or
standards on which factors and
evidentiary standards are based are not
biased and are objective. Additionally,
plans and issuers must comply with the
relevant data evaluation requirements,
69 Code section 9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
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including by collecting and evaluating
relevant data, determining whether the
data suggest an NQTL contributes to
material differences in relevant
outcomes related to access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits, and if material
differences in relevant outcomes related
to access exist, taking reasonable action,
as necessary, to address the material
differences to ensure compliance, in
operation, with 26 CFR 54.9812–1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4). Absent compliance with
both the design and application
requirements and the relevant data
evaluation requirements with respect to
an NQTL, which are addressed in more
detail later in this preamble, a plan or
issuer fails to comply with Code section
9812(a)(3)(A)(ii), ERISA section
712(a)(3)(A)(ii), and PHS Act section
2726(a)(3)(A)(ii), as applicable, and may
not impose the NQTL with respect to
mental health or substance use disorder
benefits. These requirements, taken
together, require a plan to consider and
evaluate an NQTL’s design, application,
and resulting outcomes to ensure that an
NQTL is not more restrictive, as written
or in operation, than the predominant
NQTL that applies to substantially all
medical/surgical benefits in the same
classification.
These final rules also include a few
technical changes to this language,
including relocation of the reference to
26 CFR 54.9812–1(a)(1), 29 CFR
2590.712(a)(1), and 45 CFR
146.136(a)(1) from the beginning of the
general rule of the design and
application requirements to the
beginning of the regulatory
requirements for NQTLs at 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4), to make clear
that plans and issuers should consider
the fundamental purpose of MHPAEA
in complying with all parts of the
requirements for NQTLs. Additionally,
the Departments are incorporating the
phrase ‘‘may not impose’’ from the
beginning of the proposed regulatory
requirements for NQTLs, to make clear
that this standard applies both to the
design and application of NQTLs. The
Departments are also replacing the word
‘‘applied’’ with ‘‘applies’’ in the clause
describing ‘‘the predominant NQTL that
applies to substantially all medical/
surgical benefits in the same
classification.’’ This adjustment from
past to present tense is intended to
clarify that plans and issuers should
evaluate compliance with MHPAEA
with respect to NQTLs that are currently
imposed under the plan or coverage,
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rather than just those that might have
been imposed at some point in the past.
b. Requirements Related to Design and
Application of the NQTL—26 CFR
54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i)
The Departments proposed to
redesignate the 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) in the 2013 final
regulations as paragraph (c)(4)(ii)(A) and
amend it to align with the Departments’
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 (as
compared to only applying, as under the
2013 final regulations) the NQTL to
mental health and substance use
disorder benefits are comparable to, and
are applied no more stringently than
those used in designing and applying
the limitation with respect to medical/
surgical benefits in the classification. To
codify this interpretation, and for
consistency with the statutory language
added by the CAA, 2021, the
Departments proposed to revise the
regulatory text to make this requirement
with respect to designing the NQTL
explicit.
Some commenters generally
supported the proposed design and
application requirements as part of an
overall framework for evaluating
compliance with MHPAEA’s
requirements with respect to NQTLs.
Some commenters indicated that they
have encountered barriers in identifying
whether plans and issuers comply with
MHPAEA’s requirements, and this
proposal would help them identify
whether the plan or issuer is compliant
with respect to the design and
application of NQTLs. Other
commenters generally opposed the
proposed changes to the design and
application requirements. One
commenter also stated that the design
and application requirements would not
improve benefit quality and would also
constitute an impermissible retroactive
application of the regulation in the case
of regulated entities that were not
required to comply with MHPAEA
when they designed their benefit plans.
With respect to commenters’ concern
that the design and application
requirements would not improve benefit
quality, the Departments anticipate that
greater clarity with respect to these
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77603
requirements, including the definitions
of the terms ‘‘processes,’’ ‘‘strategies,’’
‘‘evidentiary standards,’’ and ‘‘factors’’
under these final rules, as discussed
earlier in this preamble, will help plans
and issuers assess their compliance and
remedy any parity violations, which
will result in improved benefit quality
overall. The Departments also disagree
with the concern expressed by
commenters that the design and
application requirements impermissibly
apply to plans and issuers that were not
required to comply with MHPAEA
when they designed their benefit plans.
As stated earlier in this preamble, this
provision codifies the Departments’
longstanding interpretation of the
design and application requirements
and the CAA, 2021 amendments to the
MHPAEA statute. The CAA, 2021
amendments apply generally to 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.
Congress did not exempt plans or
issuers whose plans or benefit designs
predated these requirements, and the
Departments similarly did not take such
an approach in implementing the 2010
interim final regulations or the 2013
final regulations. In fact, as described in
more detail later in this preamble,
Congress included a provision in the
CAA, 2023 that sunsets the option for
self-funded non-Federal governmental
plans to elect to opt out of compliance
with respect to MHPAEA, so that plans
that previously were exempt from the
requirements as a result of an opt-out
election will no longer be able to make
such an election.
The Departments are finalizing as
proposed the general rule with respect
to the design and application
requirements for NQTLs, with a few
minor amendments. Accordingly, this
provision clarifies that to satisfy these
requirements, a plan or issuer must
consider, as part of its assessment of an
NQTL’s compliance with the no more
restrictive requirement, whether 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 limitation with respect
to medical/surgical benefits in the
classification. By requiring processes,
strategies, evidentiary standards, or
other factors used to be comparable to
and applied no more stringently than,
the design and application requirements
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of these final rules give meaning to the
statutory terms ‘‘substantially all’’ and
‘‘predominant.’’ By making explicit in
these final rules the Departments’
interpretation of the design and
application requirements, and codifying
the requirements of the CAA, 2021, this
provision will help plans and issuers
better understand their MHPAEA
compliance obligations with respect to
NQTLs, by emphasizing that, as written
and in operation, the design of an NQTL
is equally relevant as how it is applied.
The design and application
requirements of these final rules will
also ensure that plans and issuers do not
place greater burdens on access to
mental health and substance use
disorder benefits as compared to
medical/surgical benefits.
The Departments note that a plan or
issuer must comply with the relevant
requirements under these final rules
with respect to NQTLs applicable to
mental health or substance use disorder
benefits once the final rules become
applicable to the plan or coverage,
including with respect to any NQTLs
that were developed and imposed when
a plan or issuer was not subject to
MHPAEA and that continue to be
imposed after the applicability date.
However, these final rules are not
applicable to an NQTL imposed with
respect to mental health or substance
use disorder benefits for any such prior
period of time (including a period when
MHPAEA was not applicable).
In these final rules, the Departments
are codifying the design and application
requirements at 26 CFR 54.9812–
1(c)(4)(i)(A), 29 CFR
2590.712(c)(4)(i)(A), and 45 CFR
146.136(c)(4)(i)(A), rather than as
proposed at 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) because, as
discussed earlier in this preamble, these
final rules structure the design and
application requirements as part of the
statutory no more restrictive
requirement, rather than as a unique
prong of the three requirements for
NQTLs included in the proposed rules.
In addition, the Departments are making
a technical correction by amending the
regulatory text to refer to health
insurance coverage, rather than an
issuer, to generally use consistent
terminology throughout the regulations.
Finally, as noted earlier in this
preamble, these final rules move the
reference to 26 CFR 54.9812–1(a)(1), 29
CFR 2590.712(a)(1), and 45 CFR
146.136(a)(1) from the beginning of the
general rule of the design and
application requirements to the
beginning of the regulatory
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requirements for NQTLs at 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4).
Prohibition on Discriminatory Factors
and Evidentiary Standards
The proposed rules would add a new
provision that, for purposes of
determining comparability and
stringency under the design and
application requirements of proposed 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), plans and issuers
would be prohibited from relying upon
any factor or evidentiary standard if the
information, evidence, sources, or
standards on which the factor or
evidentiary standard is based
discriminate against mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
The proposed rules stated that
information would be 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 would include, but
not be limited to, the source of the
information, the purpose or context of
the information, and the content of the
information. Therefore, under the
proposed rules, plans and issuers would
not be permitted to rely on information
that reflects bias, as those factors or
evidentiary standards would be
discriminatory.
For this purpose, the Departments
stated in the proposed rules that
information resulting 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. 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 the 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. The Departments also
proposed that impartially applied
independent professional medical or
clinical standards and fraud, waste, and
abuse measures that meet specific
requirements would qualify for an
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exception and would not be considered
to discriminate against mental health or
substance use disorder benefits.
Additionally, in the preamble to the
proposed rules the Departments noted
that the proposed prohibition on
discriminatory factors and evidentiary
standards 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. The
Departments provided an example
illustrating that 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 result in less
favorable treatment of mental health and
substance use disorder benefits.
Consequently, under the framework in
the proposed rules, 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. The proposed rules stated, 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 would
violate the prohibition on
discriminatory factors and evidentiary
standards 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).
Many commenters expressed general
support for this provision of the
proposed rules. For example, one
commenter noted that the prohibition
on discriminatory factors and
evidentiary standards would more
effectively protect against the
inappropriate application of NQTLs
that, although appearing to be compliant
with MHPAEA as written, have a
disproportionately negative effect on
access to mental health and substance
use disorder benefits. Some commenters
also indicated that the proposed
provision is consistent with the text and
purpose of MHPAEA, as well as the
ACA, and favored a broad interpretation
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of the requirement to address particular
examples of discrimination by plans
and issuers, to which some of them
expressly cited. Other commenters
expressed opposition to the proposed
prohibition on discriminatory factors
and evidentiary standards. Some of
these commenters stated that the
proposal would be administratively
burdensome, and it would be difficult
for plans and issuers to operationalize
due to ambiguity and inherent
subjectivity. Some commenters opposed
to the proposed prohibition stated that
it is duplicative of the proposed relevant
data evaluation requirements. These
commenters thought the prohibition on
discriminatory factors and evidentiary
standards should be eliminated as
superfluous, because the required
evaluation of outcomes data under the
proposed rules is intended to ensure
that factors are applied no more
stringently to mental health and
substance use disorder benefits than
medical/surgical benefits and do not
result in a material difference in access.
Some commenters expressed concern
that the proposed requirement that
information must not be biased and
must be objective (which is based on
facts and circumstances) is too
subjective, can only be determined
retroactively (yet must be applied
prospectively), and is too difficult to
apply for plans or issuers to be certain
of compliance. One commenter
requested clarification on the
documentation and evidence required to
demonstrate the absence of bias.
Another commenter expressed concern
that plans may not have the ability to
prove that information is unbiased and
objective.
One commenter stated that it is
unclear whether the Departments intend
to focus on the factors and evidentiary
standards themselves or on the effects of
using those factors and standards. Some
commenters assumed that whether a
factor or evidentiary standard is
discriminatory would be based on an
evaluation of outcomes, and that
therefore any disparity in outcomes data
could be viewed as use of a
discriminatory factor or evidentiary
standard. These commenters requested
examples of outcomes that would
demonstrate compliance. In addition,
many commenters requested examples
of discriminatory factors and
evidentiary standards and of
nondiscriminatory information and data
sources. Several commenters requested
the Departments to make clear that
plans and issuers may not establish
compliance by relying on a fee schedule
used by Medicare, although another
commenter requested that plans and
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issuers be able to access a safe harbor if
they paid above-Medicare rates.
After considering commenters’
feedback, the Departments are finalizing
the prohibition on discriminatory
factors and evidentiary standards with
modifications. As the Departments
stated in the preamble to the proposed
rules this provision will help address
the concern that various factors and
evidentiary standards that plans and
issuers have relied on to design NQTLs
with respect to mental health or
substance use disorder benefits might
themselves discriminate against mental
health and substance use disorder
benefits by treating them in a less
favorable manner. At the same time, the
Departments acknowledge commenters’
concerns about potential ambiguities in
the proposed prohibition on
discriminatory factors and evidentiary
standards, questions about whether this
provision is duplicative of other parts of
the proposed rules, and confusion about
how to operationalize the prohibition.
In response to these concerns, and to
assist plans and issuers in complying
with the prohibition on discriminatory
factors and evidentiary standards in
these final rules, the Departments have
modified the prohibition by providing
additional clarity regarding what it
means for information, evidence,
sources, or standards to be ‘‘biased or
not objective.’’ The final rules both
clarify the prohibition in a manner to
ensure that it can be applied
prospectively and revise it to expressly
provide that potentially biased or not
objective information, evidence,
sources, or standards can be corrected,
cured, or supplemented, and then relied
upon by a plan or issuer to inform a
factor or evidentiary standard that is not
discriminatory. The Departments also
provide additional examples of
discriminatory factors and evidentiary
standards later in this preamble.
First, with respect to the general
prohibition on discriminatory factors
and evidentiary standards, these final
rules at 26 CFR 54.9812–1(c)(4)(i)(B), 29
CFR 2590.712(c)(4)(i)(B), and 45 CFR
146.136(c)(4)(i)(B) 70 provide that, for
purposes of determining comparability
and stringency under 26 CFR 54.9812–
70 As noted earlier in this preamble, the
Departments are codifying the design and
application requirements (including the prohibition
on discriminatory factors and evidentiary
standards) at 26 CFR 54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i), rather
than as proposed at 26 CFR 54.9812–1(c)(4)(ii), 29
CFR 2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii),
because these final rules structure the design and
application requirements as part of the no more
restrictive requirement, rather than as a unique
prong of the 3-part test proposed in the proposed
rules.
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1(c)(4)(i)(A), 29 CFR
2590.712(c)(4)(i)(A), and 45 CFR
146.136(c)(4)(i)(A), a plan (or health
insurance coverage) may not rely upon
discriminatory factors and evidentiary
standards to design an NQTL to be
imposed on mental health or substance
use disorder benefits. The Departments
intend that the focus of this prohibition
be specifically on the design of NQTLs,
to further distinguish the prohibition on
discriminatory factors and evidentiary
standards from the relevant data
evaluation requirements. These final
rules provide the necessary clarity for
plans and issuers to determine whether
information, evidence, sources, or
standards are biased or not objective,
and if so, cannot be used as the basis for
a factor or evidentiary standard used to
design an NQTL applicable to mental
health or substance use disorder
benefits.
Specifically, these final rules state
that a factor or evidentiary standard is
discriminatory if the information,
evidence, sources, or standards on
which the factor or evidentiary standard
are based are biased or not objective in
a manner that discriminates against
mental health or substance use disorder
benefits as compared to medical/
surgical benefits. This language is
similar to that included under 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) but adds the phrase
‘‘is biased or not objective in a manner
that,’’ preceding the word
‘‘discriminates.’’ This phrase, in
conjunction with the other changes to
the prohibition on discriminatory
factors and evidentiary standards
discussed later in this preamble, was
modified in response to comments and
is intended to help clarify that a plan or
issuer is expected to assess whether the
information, evidence, sources, or
standards on which each factor or
evidentiary standard are based are
biased or not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
This analysis is distinct from the final
rules’ requirement to compare the
comparability and stringency of factors
and evidentiary standards used to
design and apply an NQTL.
Second, the Departments are
finalizing a modified version of the
provision originally proposed under 26
CFR 54.9812–1(c)(4)(ii)(B)(3), 29 CFR
2590.712(c)(4)(ii)(B)(3), and 45 CFR
146.136(c)(4)(ii)(B)(3) as 26 CFR
54.9812–1(c)(4)(i)(B)(1), 29 CFR
2590.712(c)(4)(i)(B)(1), and 45 CFR
146.136(c)(4)(i)(B)(1) of these final rules.
This provision of the proposed rules
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provided that 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. As mentioned
earlier in this preamble, the
Departments received many comments
opposing this provision as proposed,
including comments expressing
confusion as to how it is different from
the relevant data evaluation
requirements, questions regarding the
kind of documentation and evidence
needed to show compliance, and
concern that it is subjective and difficult
to operationalize.
The prohibition on discriminatory
factors and evidentiary standards is
intended to work together with the other
provisions of these final rules, including
the relevant data evaluation
requirements. Like all the provisions of
these final rules, the provision further
implements the statutory requirement
that NQTLs be no more restrictive with
respect to mental health or substance
use disorder benefits than the
predominant limitations applicable to
substantially all medical/surgical
benefits. The test specifically focuses on
the importance of ensuring that the
factors and evidentiary standards relied
upon by plans and issuers in designing
NQTLs do not have built-in biases (at
the time NQTLs are designed) against
mental health or substance use disorder
benefits as compared to medical/
surgical benefits. To the extent plans
and issuers rely upon factors and
evidentiary standards to design NQTLs
that systematically disfavor access or are
specifically designed to disfavor access
to mental health and substance use
disorder benefits, the resultant NQTLs
are more restrictive with respect to
mental health or substance use disorder
benefits than for medical/surgical
benefits.
The Departments note that a factor or
evidentiary standard may be based on or
include information that solely relates
to medical/surgical benefits (and is
silent or without corollary with respect
to mental health or substance use
disorder benefits). Such a factor or
evidentiary standard is not considered
discriminatory for this purpose. For
example, a plan can reasonably rely on
a source of information on the clinical
efficacy of a treatment or service to
inform a factor used to design a medical
management NQTL, even though that
source does not address the clinical
efficacy of any treatment of any mental
health conditions or substance use
disorders, without violating the
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prohibition on discriminatory factors
and evidentiary standards. However, the
use of such factor or evidentiary
standard must comply with the design
and application requirements, as
described earlier in this preamble.
In response to comments to provide
additional clarity, the final rules
elaborate on the meaning of the phrase
‘‘biased and not objective in a manner
that discriminates against mental health
or substance use disorder benefits.’’
Specifically, these final rules provide
that information, evidence, sources, or
standards are considered to be biased or
not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits
if, based on all the relevant facts and
circumstances, they systematically
disfavor access or are specifically
designed to disfavor access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits.
For purposes of determining whether
information, evidence, sources, or
standards are considered to be biased or
not objective under these final rules,
relevant facts and circumstances may
include, but are not limited to, the
reliability of information, evidence,
sources, or standards, including any
underlying data and the independence
of the information, evidence, sources,
and standards relied upon. The
Departments note that internal data or
information, such as claims data, would
generally not be considered
independent, but would not necessarily
be considered discriminatory on that
basis alone. In the Departments’ view,
independence is a relevant fact and
circumstance for determining whether
information, evidence, sources, or
standards are considered to be biased or
not objective. For example, a standard
that is created or funded by the plan or
issuer, or its service provider, would
likely lack independence compared to a
standard created by an impartial third
party or governmental entity, and might
require strong indicators of reliability in
order to demonstrate that it is objective
and unbiased. Additionally, relevant
facts and circumstances include the
analyses and methodologies employed
to select the information, evidence,
sources, or standards, and the
consistency of their application; and
any known safeguards deployed to
prevent reliance on skewed data or
metrics when determining whether they
are biased or not objective. The
Departments note that these final rules
only provide examples, and not a
comprehensive list, of relevant facts and
circumstances that indicate information,
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evidence, sources, or standards are
biased or not objective. Because plans
and issuers rely on myriad factors and
evidentiary standards to design NQTLs
for their own unique benefit designs,
this evaluation necessarily will be
specific to the particular plan or
coverage.
Under these final rules, information,
evidence, sources, and standards are not
considered biased or not objective for
purposes of the prohibition on
discriminatory factors and evidentiary
standards, if a plan or issuer has taken
steps necessary to address the bias or
lack of objectivity by correcting, curing,
or supplementing the information,
evidence, sources, or standards that
would have been biased or not objective
in the absence of such steps. If
information, evidence, sources, or
standards are corrected, cured, or
supplemented, they may be used by
plans and issuers as the basis for factors
and evidentiary standards used to
design an NQTL.
Several commenters asked about the
use of a fee schedule used by Medicare
and CMS-set standards, such as network
time and distance standards, by a plan
or issuer to inform plan design. For
example, some plans use the Medicare
Physician Fee Schedule 71 to establish
base rates for in-network physician
services. The Departments do not
consider fee schedules used by
Medicare and standards set by CMS to
be biased or not objective, as defined
under these rules, when used as the
basis for a factor or evidentiary standard
to design an NQTL such as
reimbursement rate methodology.
The Departments note, however, that
the mere use of the Medicare Physician
Fee Schedule, for example, as one type
of information, evidence, source, or
standard that informs a factor used to
design an NQTL does not automatically
71 The Medicare Physician Fee Schedule is
developed by CMS. To develop the Medicare
Physician Fee Schedule, CMS utilizes
recommendations from an independent assessment
by a multi-specialty body and other market-based
information sources, as well as independent
assessment by CMS medical officers, to develop
proposed relative value units for each physician
service. CMS then engages in notice and comment
rulemaking, including consideration of public
comments, before establishing payment rates for
specific services. Furthermore, CMS has made, and
continues to make, numerous adjustments to the
underlying methodology to increasingly ensure
appropriate reimbursement for services paid under
the Medicare Physician Fee Schedule, including
behavioral health services. See, e.g., Medicare and
Medicaid Programs; CY 2024 Payment Policies
Under the Physician Fee Schedule and Other
Changes to Part B Payment and Coverage Policies;
Medicare Shared Savings Program Requirements;
Medicare Advantage; Medicare and Medicaid
Provider and Supplier Enrollment Policies; and
Basic Health Program, 88 FR 78818 (Nov. 16, 2023).
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render the NQTL permissible. For
example, in most cases, a plan would be
unable to justify a reimbursement rate
methodology that paid physicians in
medical/surgical specialties 125 percent
of the Medicare Physician Fee Schedule
rate and that paid physicians in mental
health and substance use disorder
specialties 75 percent of the Medicare
Physician Fee Schedule rate.
The Departments received several
comments in support of the example
included in the preamble to the
proposed rules that illustrated the
prohibition on plans’ and issuers’
reliance on historical plan data or other
historical information from a time when
the plan or coverage was not subject to
MHPAEA, or not compliant with
MHPAEA. Some commenters
recognized that many plans and issuers
have used their own historical data from
a time when their plan or coverage was
not subject to MHPAEA and have
benefited from historic inequities in
benefit structures that MHPAEA sought
to prohibit. One commenter requested
that this example be codified in the
regulatory text of the final rules. The
Departments agree that the example
illustrating how the prohibition on
discriminatory factors and evidentiary
standards applies to the use of historical
data and information to design an NQTL
should be clearly set forth in the
regulation text at 26 CFR 54.9812–
1(c)(4)(ii)(B)(2), 29 CFR
2590.712(c)(4)(ii)(B)(2), and 45 CFR
146.136(c)(4)(ii)(B)(2). To ensure
compliance with this standard, plans
and issuers that utilize historical data or
information from a time when their plan
or coverage was not subject to, or not
compliant with, MHPAEA should
ensure that the use of such data and
information (for example, in cost
calculations and controls) for mental
health and substance use disorder
benefits does not include, as a baseline,
years when financial requirements and
treatment limitations that would have
been impermissible under MHPAEA
were imposed on such benefits (unless
they take steps to correct, cure, or
supplement the data or information, as
discussed earlier in this preamble).
Some commenters provided other
examples that they recommended
including as illustrations of
discriminatory factors and evidentiary
standards in these final rules, including
prior authorization for a prescription of
buprenorphine to treat opioid use
disorder (OUD) requiring additional
licensure or certification for mental
health and substance use disorder
providers that is not required of similar
medical/surgical providers; subjecting
mental health and substance use
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disorder claims to different fraud, waste,
and abuse processes, or requiring more
documentation, than for medical/
surgical claims; not covering nutrition
counseling for the treatment of eating
disorders while covering it for medical
conditions; and requiring that mental
health and substance use disorder
claims and appeals be filed with a TPA,
but not making this clear to enrollees,
nor properly coordinating operations
between the plan/issuer and TPA.
However, many of these examples
focus on the use of a factor to apply an
NQTL to mental health and substance
use disorder benefits in a manner that
is not comparable or is more stringent
than the use of the factor to apply an
NQTL to medical/surgical benefits, or
focus on the NQTL itself (rather than the
discriminatory factor or evidentiary
standard). The prohibition on
discriminatory factors and evidentiary
standards in these final rules, however,
focuses on the information, evidence,
sources, and standards that inform the
factors and evidentiary standards used
to design an NQTL. Factors and
evidentiary standards that incorporate
or otherwise rely on underlying data or
information that systematically disfavor
access or are specifically designed to
disfavor access to mental health or
substance use disorder benefits place a
greater burden on access to such
benefits. Therefore, these final rules
prohibit the use of any factor or
evidentiary standard to design an NQTL
if the underlying information, evidence,
sources, and standards are themselves
biased or not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
unless the plan or issuer takes steps to
correct, cure, or supplement the
information, evidence, sources and
standards to address the bias or lack of
objectivity.
These final rules set forth a general
rule to determine which specific factors
and evidentiary standards (and the
information, evidence, sources, and
standards on which they are based)
might or might not be biased and not
objective in a manner that discriminates
against mental health or substance use
disorder benefits as compared to
medical/surgical benefits. The
Departments have provided new
examples in these final rules illustrating
the prohibition on discriminatory
factors and evidentiary standards,
which are discussed later in this
preamble. The Departments
acknowledge that these examples are
not exhaustive and may provide
additional examples in future guidance.
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77607
Finally, as discussed in greater detail
later in this preamble, the Departments
are not finalizing the exceptions to the
prohibition on discriminatory factors
and evidentiary standards for
independent professional medical or
clinical standards and fraud, waste, and
abuse measures. However, these final
rules expressly clarify at 26 CFR
54.9812–1(c)(4)(i)(B)(3), 29 CFR
2590.712(c)(4)(i)(B)(3), and 45 CFR
146.136(c)(4)(i)(B)(3) that generally
recognized independent professional
medical or clinical standards and fraud
and abuse measures that minimize the
negative impact on access to appropriate
mental health and substance use
disorder benefits are not information,
evidence, sources, or standards that are
biased or not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
The Departments recognize that
commenters requested specificity as to
what qualifies as independent
professional medical or clinical
standards. To ensure that they are not
biased and are objective, independent
professional medical or clinical
standards should reflect the standards of
care and clinical practice that are
generally recognized in relevant clinical
specialties across a range of settings of
care and should be transparent. For
example, sources that include such
standards could be peer-reviewed
scientific studies and medical literature,
formal published recommendations of
Federal Government agencies, drug
labeling approved by the United States
Food and Drug Administration (FDA),
and recommendations of relevant
nonprofit health care provider
professional associations and specialty
societies, including, but not limited to,
patient placement criteria and clinical
practice guidelines. Additionally, fraud
and abuse measures should be reliably
established through unbiased and
objective data and narrowly tailored in
a manner that minimizes the negative
impact on access to appropriate mental
health and substance use disorder
benefits.
These final rules also clarify that
plans and issuers that rely on
independent professional medical or
clinical standards or fraud and abuse
measures must comply with the general
rule of the design and application
requirements at 26 CFR 54.9812–
1(c)(4)(i)(A), 29 CFR
2590.712(c)(4)(i)(A), and 45 CFR
146.136(c)(4)(i)(A). If such a standard or
measure is used as an NQTL, the plan
or issuer also must comply with the
relevant data evaluation requirements at
26 CFR 54.9812–1(c)(4)(iii), 29 CFR
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2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii) in these final rules.
c. Illustrative, Non-Exhaustive List of
NQTLs—26 CFR 54.9812–1(c)(4)(ii), 29
CFR 2590.712(c)(4)(ii), and 45 CFR
146.136(c)(4)(ii)
The proposed rules proposed to 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 list. First,
the Departments proposed amendments
to make clear that this illustrative list of
NQTLs is non-exhaustive and that there
are additional NQTLs not captured in
the list. The Departments also proposed
to amend the illustrative, nonexhaustive 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.’’
Additionally, the Departments proposed
to amend the description of the
illustrative NQTL ‘‘plan methods for
determining usual, customary, and
reasonable charges’’ 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, the Departments
proposed to 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.
Some commenters supported the
clarification in the proposed rules that
the illustrative list is non-exhaustive
and that there are additional NQTLs not
included in the list. In general, many
commenters found the list to be helpful
for plans and issuers to identify NQTLs.
Some of these commenters pointed out
that the non-exhaustive nature of the list
would allow new NQTLs developed by
plans and issuers to fall under the scope
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of the requirements in these final rules.
One commenter also noted that the
definition of an NQTL is sufficiently
clear such that an exhaustive list would
not be needed to put plans or issuers on
notice of their compliance obligations.
Other commenters requested that the
Departments instead provide an
exhaustive list of NQTLs to eliminate
uncertainty, promote consistency, and
clarify plans’ and issuers’ compliance
obligations. Several of these
commenters suggested that the
Departments update such an exhaustive
list as new NQTLs are identified and
allow adequate time for plans and
issuers to come into compliance with
respect to such NQTLs. Other
commenters advocated for an approach
where an exhaustive list of NQTLs
would also represent the scope of
NQTLs for which the relevant Secretary
could request a comparative analysis.
Some of these commenters requested
that to the extent the relevant Secretary
requested a comparative analysis for an
NQTL not on the list, plans and issuers
be provided with additional time to
respond.
The Departments agree with the
commenter generally stating that the
definition of an NQTL under 26 CFR
54.9812–1(a), 29 CFR 2590.712(a), and
45 CFR 146.136(a), in addition to the
non-exhaustive, illustrative list of
NQTLs, is sufficient to put plans and
issuers on notice that a given plan
provision would fall under the
definition of an NQTL. Therefore, the
Departments are finalizing as proposed
the clarification that this illustrative list
of NQTLs is non-exhaustive.
The Departments decline to provide
an exhaustive list of NQTLs, as
requested by commenters, in these final
rules; however, as described further
below, the Departments may consider
issuing separate guidance to add
additional examples if needed. Plans
and issuers, rather than the
Departments, are best positioned to
initially identify NQTLs, including any
NQTLs that plans and issuers newly
implement as their plan or coverage
designs evolve over time. MHPAEA
does not limit the scope of NQTLs that
plans and issuers may impose on mental
health and substance use disorder
benefits. However, for any NQTLs
applicable to such benefits, a plan or
issuer must comply with MHPAEA and
its implementing regulations. Any
exhaustive list of NQTLs published by
the Departments would likely lag
behind those actually utilized by plans
and issuers due to this information gap,
along with the wide variability in
NQTLs that exist now and could exist
in the future. Furthermore, while some
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commonalities exist, plans and issuers
generally do not use uniform
nomenclature to refer to their medical
management techniques or other
NQTLs, making the task of identifying
an exhaustive list difficult, if not
impossible.
An exhaustive list of NQTLs that does
not include the full scope of NQTLs
utilized by plans and issuers at any
given time would undermine the
fundamental purpose of MHPAEA and
these final rules. While the Departments
acknowledge and have considered
plans’ and issuers’ requests for a finite
list of NQTLs for which the
Departments may request comparative
analyses, the exhaustive nature of such
a list would leave open a compliance
loophole by incentivizing plans and
issuers to wait to evaluate, document,
and address compliance for an NQTL
that is newly developed or has not come
to the attention of the Departments. The
approach some commenters suggested
to expressly limit the comparative
analysis requirement under 26 CFR
54.9812–2, 29 CFR 2590.712–1, and 45
CFR 146.137 to only those NQTLs
identified in an exhaustive list is
similarly untenable due to a foreseeable
mismatch between the NQTLs included
on such an exhaustive list, and those
utilized by plans and issuers over time,
particularly where the Departments may
receive a complaint or have reason to
believe there may be a potential
violation. The Departments recognize
the desire of plans and issuers to have
a list of NQTLs on which the
Departments will focus their
enforcement efforts. The Departments
highlight that the most recent reports to
Congress on MHPAEA contain lists of
the NQTLs on which the Departments
have focused their enforcement efforts,
and the NQTLs the Departments have
mostly commonly found to be
noncompliant.72 Additionally, the 2020
MHPAEA Self-Compliance Tool
includes an illustrative, non-exhaustive
list of NQTLs.73 The statute, however,
requires the Departments to request
72 See, e.g., 2022 MHPAEA Report to Congress
(Jan. 2022), pg. 13, 19–20, https://www.dol.gov/
sites/dolgov/files/EBSA/laws-and-regulations/laws/
mental-health-parity/report-to-congress-2022realizing-parity-reducing-stigma-and-raisingawareness.pdf; 2023 MHPAEA Comparative
Analysis Report to Congress (July 2023), pg. 47–48,
55–56, https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/report-to-congress-2023-mhpaeacomparative-analysis.pdf and https://www.cms.gov/
cciio/resources/forms-reports-and-otherresources#mental-health-parity.
73 See Self-Compliance Tool for the Mental
Health Parity and Addiction Equity Act (MHPAEA)
(2020), https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/self-compliance-tool.pdf.
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comparative analyses from a plan or
issuer for any NQTL that involves
potential violations of MHPAEA or
complaints regarding noncompliance
with MHPAEA that concern NQTLs. To
limit the Departments to requesting
comparative analyses for only certain
NQTLs identified in a list would not
only be inconsistent with the statute but
would also limit the ability of the
Departments to dynamically respond to
new NQTLs that plans and issuers
design and apply that may restrict
participant and beneficiary access to
mental health and substance use
disorder benefits as compared to
medical/surgical benefits.
Additionally, allowing plans and
issuers to categorically have additional
time to assemble a comparative analysis
for NQTLs that are not on a finite list
of NQTLs, as requested by commenters,
would also be inconsistent with the
statutory requirement that, without
exception, plans and issuers perform
and document such comparative
analyses of NQTLs applicable to mental
health or substance use disorder
benefits, beginning 45 days after the
enactment of the CAA, 2021, and would
result in the post-hoc justifications
addressed with the CAA, 2021’s
enactment.74 The Departments
nonetheless acknowledge commenters’
requests for additional guidance about
plan provisions that would be
considered to be NQTLs and intend to
provide additional examples of NQTLs
through future reports to Congress,
updates to the 2020 MHPAEA SelfCompliance Tool, and other guidance.
The Departments received a handful
of comments on the proposed expansion
of the illustrative list’s description of
standards for provider admission to
participate in a network, including
reimbursement rates, to also refer 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. Some
commenters supported these proposed
amendments to ensure that patients
have an adequate provider network.
Others suggested that parity
requirements for provider networks
should address the administrative
burden and credentialing requirements
on providers when joining networks,
which may limit network adequacy. The
74 Code section 9812(a)(8)(A), ERISA section
712(a)(8)(A), and PHS Act section 2726(a)(8)(A).
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Departments are finalizing this
amendment as proposed. The
Departments agree with commenters
who stated that MHPAEA applies to
credentialing standards, as well as the
procedures to join a network, and note
that 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 are intended to be
interpreted broadly, consistent with the
fundamental purpose of MHPAEA.
Because these final rules do not retain
the proposed mathematical substantially
all and predominant tests, the
illustrative list appears in these final
rules at 26 CFR 54.9812–1(c)(4)(ii), 29
CFR 2590.712(c)(4)(ii), and 45 CFR
146.136(c)(4)(ii) instead of 26 CFR
54.9812–1(c)(4)(iii), 29 CFR
2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii) as in the proposed
rules.
d. Required Use of Outcomes Data and
Special Rule for NQTLs Related to
Network Composition—26 CFR
54.9812–1(c)(4)(iii), 29 CFR
2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii)
In the proposed rules, the
Departments proposed to amend the
2013 final regulations to add a
requirement 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 the NQTL, in operation,
complies with the proposed no more
restrictive requirement and the design
and application requirements. The
proposed rules included the general
types of data that plans and issuers
would have to collect and evaluate with
regard to all NQTLs and additional data
sets that would have to be collected and
evaluated for NQTLs related to network
composition standards. To the extent
the relevant data collected and
evaluated by the plan or issuer show
material differences in access to mental
health benefits and substance use
disorder benefits as compared to
medical/surgical benefits, under the
proposed rules, the differences would
be considered a strong indicator that the
plan or issuer violated the proposed
rules. In these instances, a plan or issuer
would be required to take reasonable
action to address any material
differences in access as necessary to
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77609
ensure compliance, in operation, 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), and
would also be required to document the
action that has been or is being taken by
the plan or issuer to mitigate any
material differences in access in the
plan’s or issuer’s comparative analysis
for the NQTL in that classification.
Additionally, the Departments noted
in the preamble to the proposed rules
their concerns about standards related
to network composition and other
related NQTLs. Specifically, the
Departments noted that network
composition is the result of the design
and application of myriad NQTLs and is
informed by various processes,
strategies, evidentiary standards, and
other factors, many of which interact in
complex ways. The Departments also
expressed concern that NQTLs related
to network composition inherently
impact a participant’s or beneficiary’s
access to mental health and substance
use disorder benefits. Accordingly, the
proposed rules included a special rule
applicable to NQTLs related to network
composition. Specifically, under the
proposed rules, when designing and
applying one or more NQTLs related to
network composition standards, a plan
or issuer would fail 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 benefits and substance
use disorder benefits as compared to innetwork medical/surgical benefits in a
classification.
The Departments also proposed that
plans and issuers would not be required
to comply with the relevant data
evaluation requirements for NQTLs that
impartially apply independent
professional medical or clinical
standards. However, proposed 26 CFR
54.9812–1(c)(4)(iv)(D), 29 CFR
2590.712(c)(4)(iv)(D), and 45 CFR
146.136(c)(4)(iv)(D) did not provide a
comparable exception for fraud, waste,
and abuse measures, as the Departments
stated these tools, while important, are
more likely to result in NQTLs that
improperly restrict access to mental
health or substance use disorder
benefits and therefore the impact of
those NQTLs should be assessed.
In General
The Departments received many
comments expressing general support
for the proposal to require plans and
issuers to collect and evaluate relevant
data to assess an NQTL’s impact on
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access to mental health and substance
use disorder benefits and medical/
surgical benefits, including the
proposed requirement related to data for
network composition NQTLs. These
commenters noted that the data
collection and evaluation requirements
would promote transparency and
compliance with MHPAEA, stating that
collecting and evaluating outcomes data
is essential to assessing in-operation
compliance and that plans and issuers
had failed to conduct and share such
analyses. Other commenters noted that
collection and evaluation of data is
critical to assessing an NQTL’s impact
on access to mental health and
substance use disorder benefits as
compared to medical/surgical benefits,
and by requiring plans and issuers to
collect and assess outcomes data and to
address material differences in access,
the Departments are better aligning the
focus of NQTL compliance with the
fundamental purpose of MHPAEA.
These commenters stated that, under the
2013 final regulations, plans and issuers
rarely appropriately measure and
analyze an NQTL’s impact on access in
the manner outlined in the proposed
rules, and instead rely on processrelated rationales to justify disparate
access to treatment for mental health
conditions and substance use disorders
as compared to access to treatment for
medical conditions and surgical
procedures.
Other commenters stated that
requiring plan sponsors to evaluate
outcomes data to determine whether
access to mental health and substance
use disorder benefits is in parity with
access to medical/surgical benefit is not
supported by the statute and stated this
provision of the proposed rules would
be a significant departure from previous
guidance under MHPAEA, under which
the Departments stated that outcomes
are not determinative of compliance.
These commenters also stated that,
because not all NQTLs are quantifiable,
data metrics should not be required to
determine parity, and disagreed with
the Departments’ interpretation of the
term ‘‘in operation’’ as the basis for the
requirement that plans and issuers
measure outcomes. The Departments
also received many comments on the
various components and specific
comment solicitations related to the
relevant data evaluation requirements in
the proposed rules.
The determination of whether an
NQTL is ‘‘more restrictive,’’ within the
meaning of the statute, as applied to
mental health and substance use
disorder benefits, cannot be divorced
from the impact the NQTL has on access
to these benefits. Accordingly, the
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Departments are finalizing the relevant
data evaluation requirements, with
some modifications based on the
comments. These final rules require that
plans and issuers be attentive to the
impact of their NQTLs, in operation, by
collecting and evaluating relevant data
in a manner reasonably designed to
assess the impact of the NQTL on
relevant outcomes related to access, and
carefully considering the impact as part
of the plan’s or issuer’s evaluation.
For this purpose, the term ‘‘relevant
data’’ under these final rules is meant to
be interpreted broadly but does not
require a plan or issuer to collect and
evaluate duplicative or overlapping data
that reflect the same analysis. The
obligation is to collect and evaluate
relevant data in a manner reasonably
designed to assess the impact of NQTLs.
It is not a requirement to exhaustively
survey all available data, nor a
requirement that plans and issuers
evaluate additional data that is
duplicative or unlikely to change the
determination of whether there is a
material difference in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits. However, as discussed
later in this preamble, a plan or issuer
may be required to collect and evaluate
more than one form of data to assess the
aggregate impact of the NQTL (or
NQTLs as related to network
composition). For example, under these
final rules, to assess the aggregate
impact of NQTLs related to network
composition, a plan or issuer could
evaluate, as appropriate, 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 (for comparable services and as
benchmarked to a reference standard).
Further, a plan’s or issuer’s data
collection and evaluation approach will
not be considered to be conducted in a
manner reasonably designed to assess
the impact of an NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits if
the plan or issuer does not consider data
that it knows or reasonably should
know suggest that the NQTL is
associated with a material difference in
access. The Departments expect that, in
designing their data collection and
evaluation approach, plans and issuers
will consider outcomes data as
necessary to assess the impact of the
NQTL on access to mental health and
substance use disorder benefits and
medical/surgical benefits in the same
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classification. As explained later in this
preamble, the plan’s or issuer’s
evaluation of this data must be included
as part of the comparative analysis of
the NQTL. The Departments may
require a plan or issuer to submit
additional information to ensure that
plans and issuers do not only collect
and evaluate the impact of some
relevant data, while disregarding other
relevant data that is reasonably available
and suggests the NQTL contributes to
material differences in access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits.
The statutory language requires that a
plan or issuer ensure that the treatment
limitations (quantitative or
nonquantitative) themselves that are
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).75 The relevant data
evaluation requirements at 26 CFR
54.9812–1(c)(4)(iii), 29 CFR
2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii) are intended to give
particular meaning to the statutory
language with respect to an NQTL itself,
which, in these final rules, also requires
compliance, in operation, with the
design and application requirements
under 26 CFR 54.9812–1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i). The Departments agree
with commenters who noted that these
requirements will promote transparency
and compliance with MHPAEA, that
such information is critical to assessing
an NQTL’s compliance with the statute,
and that requiring plans and issuers to
collect and assess outcomes data and
address material differences in access
appropriately aligns the focus of NQTL
compliance more closely with the
fundamental purpose of MHPAEA.
As stated in the preamble to the
proposed rules, it is necessary to review
and consider quantitative outcomes data
to ascertain how the NQTL functions in
the context of the plan’s or issuer’s
administration and provision of
benefits.76 Because the relevant data
evaluation requirements in these final
rules are meant to ensure and determine
compliance, in operation, with the
statutory language in Code section
9812(a)(3)(A)(ii), ERISA section
712(a)(3)(A)(ii), and PHS Act section
2726(a)(3)(A)(ii), as noted earlier in this
75 Code section 9812(a)(3)(A)(ii), ERISA section
712(a)(3)(A)(ii), and PHS Act section
2726(a)(3)(A)(ii).
76 88 FR 51552, 51575. (Aug. 3, 2023).
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preamble, plans and issuers must
comply with both the design and
application requirements and the
relevant data evaluation requirements in
these final rules to demonstrate
compliance with MHPAEA. That is, if,
with respect to an NQTL, a plan or
issuer fails to comply with either set of
requirements in 26 CFR 54.9812–
1(c)(4)(i) or (iii), 29 CFR
2590.712(c)(4)(i) or (iii), and 45 CFR
146.136(c)(4)(i) or (iii), as applicable,
the plan or issuer will be considered to
violate MHPAEA and the relevant
NQTL may not be imposed with respect
to mental health or substance use
disorder benefits in the classification
unless and until the plan or issuer takes
appropriate action to remedy the
violation.
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Relevant Data
The proposed rules identified types of
relevant data that plans and issuers
would be required to collect and
evaluate for all NQTLs in each
individual comparative analysis. Under
the proposed rules, relevant data for all
NQTLs would include, but would not be
limited to, the number and percentage
of claims denials and any other data
relevant to the NQTL as required by
State law or private accreditation
standards. Additionally, relevant data
for network composition NQTLs would
include, but would not be limited to, 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). The
proposed rules further provided that the
Departments may specify the type, form,
and manner for the relevant data
evaluation requirements in future
guidance.77
Many commenters supported the
required use of data outcomes as
proposed. Several commenters noted
that many plans and issuers do not have
77 Contemporaneously with the proposed rules,
DOL, in collaboration with HHS and the Treasury,
issued Technical Release 2023–01P, which set out
principles and asked for public comment to inform
future guidance with respect to data submissions
for NQTLs related to network composition and a
potential enforcement safe harbor. The comment
period for the Technical Release closed on October
2, 2023. Comments on the Technical Release are
available on DOL’s website at https://www.dol.gov/
agencies/ebsa/laws-and-regulations/rules-andregulations/public-comments/tr-23-01. Those
comments were solicited separately and are not
addressed in these final rules. Plans and issuers
would be allowed adequate time to conform to any
future guidance on the type, form, and manner of
collection and evaluation for the relevant data
required under the final rules.
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access to the data they would need to
comply with the relevant data
evaluation requirements. Specifically,
the Departments received several
comments regarding limited access to
data held by service providers,
highlighting inconsistencies in service
providers’ willingness or ability to
provide data and the extensive systems
changes and expenses necessary to
allow data to be provided. Some
commenters suggested that, because
plan sponsors do not have access to
complete and reliable sets of claims
data, the final rules should specify that
a plan or issuer can meet its obligations
related to the relevant data evaluation
requirements by requesting access to
data, documenting such requests, and
advising service providers that their
refusal to provide data will be relayed
to the Departments.
Some commenters suggested the
Departments issue the ‘‘type, form, and
manner of collection and evaluation’’
for the relevant data evaluation
requirements in guidance that can be
periodically updated. Other commenters
suggested that the final rules provide an
exception from the relevant data
evaluation requirements for NQTLs for
which no such data are reasonably
available, and that data evaluation be
required only for outcomes that can be
reasonably measured. One of these
commenters highlighted that many
NQTLs, including certain types of
medical management techniques,
assessments related to medical
necessity, and exclusions for
experimental/investigational treatments,
are not generally associated with claims.
Some commenters requested that the
Departments provide an exhaustive list
of a uniform set of outcomes data that
plans and issuers are required to collect
and assess as part of their comparative
analysis with respect to an NQTL.
Commenters suggested additional or
different types of data that should be
considered relevant data and that could
be provided by plans and issuers, as
well as their service providers,
including the percentage of in-network
claims covered vs. those submitted; time
and distance data that includes virtual
or telehealth visits; median in-network
payments as compared to Medicare rates
for inpatient benefits, office visits, and
outpatient benefits; member satisfaction,
as reported by standardized surveys
such as the Consumer Assessment of
Healthcare Providers and Systems
program; and allowed amounts for
certain specific Current Procedural
Terminology (CPT) codes for various
types of mental health and substance
use disorder and medical/surgical
providers. Many commenters suggested
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that relevant data include the number of
authorizations issued for participants
and beneficiaries for each of the levels
(and sub-levels) of care described in the
American Society for Addiction
Medicine (ASAM) criteria and the agespecific Level of Care Utilization
Services family of criteria. Some of
these commenters also suggested
outcomes data be reported separately for
both mental health and substance use
disorder services. Another commenter
also suggested that relevant data include
the number and percentage of drugs
subject to prior authorization and step
therapy (as an alternative to claims
denials for the prescription drug
classification), turnaround time for prior
authorization, and inter-rater reliability.
One commenter suggested using, as a
parity indicator, a ratio of mental health
utilization to primary care (for both
initial and follow-up services) using
data from the Medical Expenditure
Panel Survey. Some commenters
requested that, for fully insured
coverage, the relevant data evaluation
requirements apply at the issuer or
‘‘product’’ level instead of the ‘‘plan’’
level (as those terms are defined in 45
CFR 144.103),78 while others sought
clarification regarding whether the data
to be analyzed should be group-specific
or aggregate-level, as well as any
differences in the level of data needed
for fully insured and self-funded plans.
Some commenters objected to the
proposal to require the collection and
evaluation of out-of-network utilization
data for NQTLs related to network
composition, stating that high out-ofnetwork utilization of mental health and
substance use disorder services alone
does not necessarily indicate a network
access deficiency and could instead be
the product of other factors, such as a
patient’s preference to use a particular
provider. One commenter suggested
requiring the collection and evaluation
of provider-to-enrollee ratio data, and
another commenter expressed support
for requiring the collection and
evaluation of data on whether innetwork providers are accepting new
patients. Some commenters expressed
support for the collection and
evaluation of data on appointment wait
times, time and distance data, types and
numbers of mental health and substance
78 45 CFR 144.103 states ‘‘[p]roduct’’ means ‘‘a
discrete package of health insurance coverage
benefits that are offered using a particular product
network type (such as health maintenance
organization, preferred provider organization,
exclusive provider organization, point of service, or
indemnity) within a service area’’ and ‘‘[p]lan’’
means, ‘‘with respect to a product, the pairing of the
health insurance coverage benefits under the
product with a particular cost-sharing structure,
provider network, and service area.’’
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use disorder providers that are available
in a network, and telehealth. Some
commenters suggested collection and
evaluation of provider reimbursement
rates, stating that those rates have an
impact on whether providers are able to
join a network, how many patients they
treat, and whether they can provide
wages to attract and retain staff. Other
commenters objected to the requirement
to collect and evaluate provider
reimbursement data, arguing that
reimbursement rates are not equivalent
data when comparing between medical/
surgical and mental health and
substance use disorder benefits because
of the nature of mental health and
substance use disorder treatment and
the associated time and cost. Other
commenters objected to the inclusion of
billed charges, arguing that these are
arbitrary amounts not necessarily tied to
any independent standard or benchmark
of what is a reasonable charge and that
Medicare rates should be used instead.
After review of the comments, the
Departments decline to provide a list of
all relevant outcomes data required to
be collected and evaluated by plans and
issuers at this time; however, the
Departments intend to issue in future
guidance the type, form, and manner of
collection and evaluation for the data
required and the lists of examples of
data that are relevant across the majority
of NQTLs,79 as well as additional
relevant data for NQTLs related to
network composition. As part of this
guidance, the Departments intend to
update the MHPAEA Self-Compliance
Tool to provide a robust framework and
roadmap for plans and issuers to
determine which data to collect and
evaluate.
While, as discussed earlier in this
preamble, commenters provided various
suggestions for relevant outcomes data
to be collected and evaluated, many
comments also suggested that what data
are considered relevant depends on the
nature of an NQTL. The Departments
agree and intend to issue future
guidance to help ensure that the data
required to be collected and evaluated
under the relevant data evaluation
requirements of these final rules provide
a meaningful representation of whether
a plan or issuer is improperly applying
an NQTL under MHPAEA. In
developing this guidance, the
79 As explained later in this preamble, these final
rules provide additional provisions on how to
comply with the relevant data evaluation
requirements for an NQTL newly imposed by a plan
or issuer or an NQTL where no data exist that can
reasonably assess any relevant impact of the NQTL
on access. The provisions of these final rules with
respect to these types of NQTLs shall only apply in
very limited circumstances.
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Departments intend to take into
consideration the feedback received
regarding relevant data elements.
Until additional guidance is provided,
the Departments expect a plan or issuer
with a typical plan or coverage design
will collect and evaluate certain data
that are likely to be relevant for the
majority of NQTLs under the relevant
data evaluation requirements. As the
relevant data for any given NQTL will
depend on the facts and circumstances
of the NQTL at issue and the
circumstances under which the NQTL
was designed and applied, these final
rules provide some flexibility for plans
and issuers to determine what relevant
data should be collected and evaluated,
as appropriate.
Under these final rules, relevant data
for the majority of NQTLs could
include, as appropriate, but are not
limited to, the number and percentage
of claims denials in a classification of
benefits and any other data relevant to
the NQTL required by State law or
private accreditation standards.
However, the Departments note that
these final rules do not mandate that
plans or issuers use private
accreditation standards or evaluate data
under State laws to which they are not
subject. In addition, relevant data for a
typical plan or coverage might include
utilization data for mental health and
substance use disorder services and
medical/surgical services. For NQTLs
such as prior authorization, relevant
data could include rates of approvals
and denials of prior authorization
requests, rates of denials of post-service
claims, application of penalties for a
failure to obtain prior authorization, and
turnaround times for prior authorization
requests. Such information could be
provided for benefits subject to prior
authorization in each benefit
classification in which the NQTL is
imposed on mental health and
substance use disorder benefits and
medical/surgical benefits. All such
examples of relevant data are nonexhaustive and whether any particular
type of data is relevant for a plan or
coverage is based on each plan’s or
coverage’s unique design.
Relevant data for NQTLs related to
network composition standards could
include, as appropriate, but are not
limited to, in-network and out-ofnetwork 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 (for
comparable services and as
benchmarked to a reference standard).
The Departments modified this
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illustrative list of relevant data for
NQTLs related to network composition
by specifying that provider
reimbursement rates should be analyzed
for comparable services and as
benchmarked to a reference standard, to
better ensure that comparisons between
access to mental health and substance
use disorder benefits and medical/
surgical benefits will be informative.
Thus, for example, the Departments
expect a plan or issuer with a typical
plan or coverage design could look at
the ratio of inpatient, in-network and
outpatient, in-network mental health
and substance use disorder and
medical/surgical claims, as compared to
inpatient, out-of-network and
outpatient, out-of-network mental
health and substance use disorder and
medical/surgical claims. Plans and
issuers could also look at the number of
providers (or facilities) within specified
mental health and substance use
disorder and medical/surgical provider
categories (or categories of facilities) per
1,000 participants and beneficiaries who
have actively submitted claims within
the past 6 months, which would reflect
the experience of a plan’s or issuer’s
participants and beneficiaries within a
recent period of time, controlled for
plan or issuer size. Additionally, a plan
or issuer could look at the turnaround
time for applications to be approved for
a provider to join the plan’s or issuer’s
network and the approval and denial
rates for applications submitted by
mental health and substance use
disorder providers as compared to
medical/surgical providers. The
Departments recognize that providers
may differ in education, training, and
specialization, and the categories of
mental health and substance use
disorder and medical/surgical providers
for which data is compared should take
this into account. Additionally, relevant
data could include the percentage of
participants and beneficiaries who can
access, within a specified time and
distance by county-type designation,
one (or more) in-network providers who
are available to accept new patients for
mental health and substance use
disorder and medical/surgical provider
categories. Relevant data for NQTLs
related to network composition could
also include median in-network
reimbursement rates for services with
the same CPT codes, as well as median
in-network reimbursement rates for
inpatient mental health and substance
use disorder benefits and medical/
surgical benefits, as compared to
Medicare rates; and median in-network
reimbursement rates for outpatient
mental health and substance use
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disorder benefits, and medical/surgical
benefits, as compared to Medicare rates.
The Departments have the authority
to request data—in addition to what a
plan or issuer determines to be relevant
data for any particular NQTL and
includes in its comparative analyses—to
sufficiently analyze the plan’s or
issuer’s assertions, pursuant to the
applicable enforcement statutes and as
permitted by the amendments made by
the CAA, 2021 to the Code, ERISA, and
the PHS Act.80 Similarly, nothing in
these final rules would prohibit an
applicable State authority from
requesting additional data with regard
to an issuer’s comparative analysis.
Accordingly, plans and issuers may be
required to take reasonable action if the
additional data requested by the
Departments or an applicable State
authority reveal material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits.
The Departments understand that
many plans and issuers rely on TPAs
and other service providers to
administer a group health plan or health
insurance coverage and acknowledge
that several commenters highlighted the
difficulty plans and issuers sometimes
face obtaining the necessary information
from their service providers to perform
and document their comparative
analyses. However, other commenters
highlighted categories of data that TPAs
and other service providers are able to
provide for purposes of the relevant data
evaluation requirements. Plans and
issuers remain responsible for
compliance with MHPAEA, and for
ERISA-covered group health plans,
fiduciaries, including TPAs or other
service providers who are acting as
fiduciaries, must work with plan
sponsors and issuers to ensure that the
plans and coverage they help establish
and administer comply with the law. In
the preamble to the proposed rules, the
Departments highlighted that, under
ERISA, TPAs may be fiduciaries with
respect to private sector, employmentbased group health plans. To the extent
these TPAs are fiduciaries for those
plans, they are subject to the provisions
governing fiduciary conduct and
liability, including the provisions for cofiduciary liability under ERISA section
405. The Departments also noted their
commitment to using all available
authority to ensure compliance by plans
and issuers with MHPAEA and
requested specific comments on how
best to ensure all the entities involved
80 See Code section 9812(a)(8)(B)(ii), ERISA
sections 504 and 712(a)(8)(B)(ii), and PHS Act
sections 2723 and 2726(a)(8)(B)(ii).
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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.
Some commenters requested that the
Departments require that plan sponsors
include MHPAEA compliance
provisions in their contracts with TPAs,
likening such a requirement to actions
taken by HHS to require that covered
entities include provisions in their
contracts with outside entities related to
obligations under the Health Insurance
Portability and Accountability Act
(HIPAA) Privacy Rule. Others suggested
focusing on compliance at the service
provider level and working with
Congress to obtain the ability to issue
civil monetary penalties for violations of
MHPAEA.
The Departments decline to make any
changes in these final rules to
specifically address these issues after
consideration of the suggestions
contained in the comments. These
proposals, including requiring the
inclusion of contracting provisions
similar to HIPAA ‘‘business associate
agreements,’’ would go beyond the
scope of this rulemaking. However,
these types of contract provisions are a
best practice that could be helpful to
many plans and issuers in complying
with their obligations to perform and
document comparative analyses of
NQTLs applied to mental health or
substance use disorder benefits and
medical/surgical benefits.
Additionally, DOL also underscores
its commitment to holding fiduciaries of
ERISA-covered group health plans liable
through existing means and working
with all relevant entities, including
service providers, to effectuate
MHPAEA compliance. DOL remains
committed to its current enforcement
approach, which prioritizes potential
violations that affect not just one plan
or coverage, but hundreds or thousands
of plans that provide coverage for
thousands or millions of individuals.
Where NQTL violations are identified in
a plan or coverage, DOL generally
examines the role that each of the plan’s
or issuer’s service providers have in the
design and administration of each
NQTL to ascertain whether any of the
service providers play a similar role
serving other plans or issuers that might
have the same violations, and seeks to
bring them into compliance. Where
necessary, DOL determines who is a
fiduciary under ERISA and what
additional enforcement actions are
necessary. DOL notes that
determinations of fiduciary liability are
often based on the facts and
circumstances specific to individual
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77613
cases, but to the extent a TPA exercises
discretionary authority or discretionary
responsibility in the administration of
an ERISA-covered health plan, DOL
generally considers them to be
fiduciaries.81
The Departments acknowledge both
the challenges, cost, and complexity of
collecting and evaluating data and the
importance of data to measure the
impact of an NQTL on access. The
Departments also understand the
importance of performing and
documenting comparative analyses
consistent with the statute. Therefore,
these final rules provide additional
provisions on how to comply with the
relevant data evaluation requirements
for an NQTL newly imposed by a plan
or issuer or an NQTL where no data
exist that can reasonably assess any
relevant impact of the NQTL on access.
A rule of construction at 26 CFR
54.9812–1(c)(4)(iii)(A)(3)(iii), 29 CFR
2590.712(c)(4)(iii)(A)(3)(iii), and 45 CFR
146.136(c)(4)(iii)(A)(3)(iii) in these final
rules explains that the provisions of
these final rules with respect to these
types of NQTLs shall only apply in very
limited circumstances and, where
applicable, shall be construed narrowly,
consistent with the fundamental
purpose of MHPAEA. The Departments
are of the view that relevant data can be
collected and evaluated for nearly all
NQTLs, and note that, when designing
a new NQTL, or making changes to an
existing NQTL, plans and issuers must
consider what data is relevant and how
it will be collected and evaluated.
The Departments recognize that there
may be a lag between when an NQTL is
newly designed and applied and when
relevant data are available if there are no
data available initially to assess the
NQTL’s impact on access to mental
health and substance use disorder
benefits and medical/surgical benefits.
Under these final rules, if a plan or
issuer newly imposes an NQTL
(including because the plan or coverage
itself is newly offered) for which data
are initially and temporarily
unavailable, and the plan or issuer
therefore cannot comply with the
relevant data evaluation requirements
for the NQTL, a plan or issuer must
include in its comparative analysis a
detailed explanation of the lack of
relevant data, the basis for the plan’s or
81 ERISA section 3(21)(A). See, e.g., Mertens v.
Hewitt Assocs., 508 U.S. 248, 262 (1993) (stating
that a fiduciary is defined ‘‘not in terms of formal
trusteeship, but in functional terms of control and
authority over the plan’’); Hamilton v. Allen–
Bradley Co., Inc. 244 F.3d 819, 824 (11th Cir. 2001)
(stating a person is a fiduciary ‘‘to the extent’’ that
‘‘he has any discretionary authority or discretionary
responsibility in the administration of such plan’’).
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issuer’s conclusion that there is a lack
of relevant data, and when and how the
data will become available and be
collected and analyzed. Additionally,
the plan or issuer must comply with the
relevant data evaluation requirements as
soon as practicable once relevant data
becomes available. These additional
provisions are intended to be applicable
only in very limited circumstances
where a plan or issuer newly imposes
an NQTL for which no relevant data is
available for a limited time after it is
first imposed, and will not be available
for a new NQTL where data is available
but not evaluated due to lack of
collection. The Departments note that a
change in an NQTL’s design or
application is generally not considered
a new NQTL for which there is no data
initially available. In the very limited
situations where a data lag exists for a
new NQTL, the Departments expect a
plan or issuer to comply with the
relevant data evaluation requirements
and include data in its comparative
analyses within a limited amount of
time (as soon as practicable, but no later
than the end of the second plan year
that follows the imposition of a new
NQTL).
These final rules also acknowledge
that some limited circumstances may
exist in which no data exists that can
reasonably assess any relevant impact of
an NQTL on access to mental health and
substance use disorder benefits as
compared to medical/surgical benefits.
Such NQTLs might include, in certain
circumstances, for example, some
exclusions based on whether a
treatment is experimental or
investigative. As commenters have
highlighted, these NQTLs are not
generally attached to claims, so plans
and issuers may not have reliable data
on the impact of these excluded services
with respect to participants and
beneficiaries. In the limited
circumstances where no relevant data
exist relating to an NQTL, these final
rules require the plan or issuer to
include in its comparative analysis a
reasoned justification as to the basis for
its conclusion that there are no data that
can reasonably assess the NQTL’s
impact, why the nature of the NQTL
prevents the plan or issuer from
reasonably measuring its impact, an
explanation of what data was
considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
that the NQTL complies with MHPAEA.
A plan or issuer also must comply with
the relevant data evaluation
requirements as soon as practicable if
the plan or issuer becomes aware (or
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reasonably should become aware) of
data that can reasonably assess any
relevant impact of the NQTL.
The Departments also note that the
unavailability of data for purposes of the
relevant data evaluation requirements of
these final rules does not affect the
plan’s or issuer’s obligation to comply
with the design and application
requirements.
Material Differences in Access
Under the proposed rules, to the
extent the relevant data evaluated show
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 has violated the proposed
no more restrictive requirements or the
design and application requirements. In
such instances, the proposed rules
would require plans and issuers to take
reasonable action to address the
material differences in access as
necessary to ensure compliance, in
operation, with the proposed no more
restrictive requirement and design and
application requirements, and
document the action that has been or is
being taken by the plan or issuer to
address any material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits. The
Departments stated in the preamble to
the proposed rules that material
differences alone would not
automatically result in a finding of
noncompliance, except where related to
network composition, as discussed in
more detail later in this preamble.
Some commenters supported the
proposal that material differences in
access would constitute a strong
indicator of noncompliance, stating that
such approach is a reasonable method to
identify potential instances of
noncompliance while allowing for
instances where disparities in access are
due to factors beyond the plan’s or
issuer’s control. Several commenters
opposed the proposal that material
differences would constitute a strong
indicator of noncompliance, stating that
this would be inconsistent with the
Departments’ previous statements in the
2020 MHPAEA Self-Compliance Tool
that negative outcomes data is a red flag,
but not determinative of compliance.
One commenter stressed that it was
important to provide clarity on how the
Departments would impose this
standard.
Several commenters requested that
the Departments define the term
‘‘material differences,’’ and many
commenters provided suggested
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meanings for the term. A number of
commenters requested that the term be
defined as a serious or significant
variation, or one that would have a
major effect on access to care. One
commenter suggested that the definition
of material differences should set a high
standard to identify clear outliers and
major differences in access rather than
moderate variations. Some commenters
stated that any definition of material
differences in access should be based
only on statistical significance. One
commenter suggested a 10-percent
difference as the definition of a material
difference. Other commenters requested
that the Departments adopt a ‘‘de
minimis’’ standard, rather than a
material differences in access standard.
Additionally, some commenters
suggested that material differences in
access should mean that a substantial
number of members could not access
mental health and substance use
disorder benefits. Several other
commenters suggested that material
differences be defined to allow an
acceptable level of difference in access
to mental health and substance use
disorder benefits as compared to
medical/surgical benefits, accounting
for participant behavior as a driver of
accessibility, with consideration of data
credibility and the amount of available
data. Another commenter highlighted
that relevant factors should include the
size of the data pool, variability over
time, availability of complementary
measures, and the degree of control.
Some commenters suggested that
differences in data outcomes might
result from a wide variety of reasons
that do not indicate noncompliance,
including random variability, provider
or member behavior, changes to
unrelated Federal or State laws, or other
factors that are outside of the plan’s or
issuer’s control. One commenter
requested that plans and issuers be
permitted to take into account relevant
context (for example, there are many
more drugs that are considered medical/
surgical benefits than mental health and
substance use disorder benefits, so the
percentage of mental health and
substance use disorder drugs to which
NQTLs apply may be higher).
The Departments are finalizing
language specifying that, to the extent
the relevant data evaluated suggest that
the NQTL contributes to material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits
in a classification, such differences will
be considered a strong indicator that the
plan or issuer is in violation of
MHPAEA. The material differences
standard reflects an interpretation of the
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statutory terms ‘‘substantially all’’ and
‘‘predominant’’ in a manner that takes
into account the multifaceted nature of
NQTLs, as well as the complexity of
analyzing such NQTLs. The material
differences standard is intended to set
forth a principle-based approach to
determining whether relevant data
suggest that an NQTL applied to mental
health or substance use disorder
benefits is more restrictive than the
predominant NQTL applied to
substantially all medical/surgical
benefits in a classification. The standard
also allows plans and issuers, when
applying an outcomes-based analysis,
the flexibility to assess comparability in
a way that can be tailored to a variety
of different types of NQTLs, and to
account for outliers or claims
experience that may not be reflective of
a difference in access resulting from the
NQTL itself.
The Departments emphasize that the
material differences standard works
together with the other requirements
contained in these final rules. A plan or
issuer cannot determine whether an
NQTL applied to mental health or
substance use disorder benefits is more
restrictive than the predominant NQTL
applied to substantially all medical/
surgical benefits without evaluating the
effect of imposing the NQTL on access
to mental health and substance use
disorder benefits as compared to
medical/surgical benefits. Additionally,
when the plan or issuer knows or
should know that one or more of its
NQTLs is contributing to material
differences in access, it cannot simply
disregard or avoid ascertaining that
information, and continue its current
practices, but instead must act
consistent with its obligation to ensure
that NQTLs applied to mental health
and substance use disorder benefits
generally are no more restrictive than
those applied to medical/surgical
benefits.
While the preamble to the 2013 final
regulations stated that ‘‘[d]isparate
results alone do not mean that the
NQTLs in use do not comply with these
requirements,’’ 82 the Departments have
consistently stressed in subregulatory
guidance that disparate results are a red
flag or a warning sign of
noncompliance, including in the 2020
MHPAEA Self-Compliance Tool, which
states that ‘‘. . . while outcomes are not
determinative of a MHPAEA violation,
they can often serve as red flags or
warning signs to alert the plan or issuer
that a particular provision may warrant
82 78
FR 68240, 68245 (Nov. 13, 2013).
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further review.’’ 83 The experience of the
Departments in enforcing MHPAEA,
moreover, has shown that plans and
issuers are commonly unprepared to
explain material differences in
outcomes data, and in some cases, have
mistakenly considered the 2013 final
regulations as granting freedom to
ignore potentially problematic or
significant differences, even where such
differences appear to have a direct
causal link to the plan’s practices and
limitations.
These final rules, as discussed later in
this preamble, make clear that plans and
issuers must consider whether such
material differences exist, and whether
the differences are attributable to the
NQTL. In instances where the relevant
data suggest that the NQTL contributes
to material differences, these final rules
require plans and issuers to take
reasonable action, as necessary, to
address the material differences and to
document that such action has or will
be taken to ensure compliance, in
operation, with the requirements for
NQTLs under these final rules.
This increased emphasis on outcomes
data and the material differences
standard will help ensure that more
restrictive NQTLs are not imposed on
mental health and substance use
disorder benefits as compared to the
predominant NQTLs applied to
substantially all medical/surgical
benefits in the same classification by
identifying when an NQTL results in
differences in access that are likely to
have a negative impact on access to
mental health or substance use disorder
benefits as compared to medical/
surgical benefits. This standard
generally would not include a de
minimis difference in access or a
difference driven by an outlier, such as
a single plan participant’s claims
experience or a single claim. The
Departments also note that the existence
of material differences in access do not
automatically result in a finding of
noncompliance, and that plans and
issuers will continue to have the
opportunity provide additional
information as part of the NQTL
comparative analysis process, as well as
to respond to the Departments in any
83 Final FAQs About Mental Health and
Substance Use Disorder Parity Implementation and
the 21st Century Cures Act Part 39, Q 7 (Sept. 5,
2019), https://www.dol.gov/sites/dolgov/files/EBSA/
about-ebsa/our-activities/resource-center/faqs/acapart-39-final.pdf and https://www.hhs.gov/
guidance/document/affordable-care-actimplementation-faqs-final-set-39 (FAQs Part 39);
EBSA, Self-Compliance Tool for the Mental Health
Parity and Addiction Equity Act (MHPAEA) (2020),
pg. 27, https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/self-compliance-tool.pdf.
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77615
enforcement actions, by submitting
additional data, the sources of the data,
explanatory material, related
documents, evidence of reasonable
actions that have been or are being taken
by the plan or issuer to address such
differences, and other material and
information to demonstrate compliance
with MHPAEA.
The Departments acknowledge
comments from plans and issuers asking
for guidance on how to determine
whether a difference is material for
purposes of the relevant data evaluation
requirements, as well as those asking for
a principle-based approach rather than
specific thresholds for each outcome
measure, because what is material will
likely vary by NQTL, market, plan, and
benefit classification for each item or
service, as well as the number of
participants and beneficiaries affected.
In these final rules, the Departments set
forth a standard that takes into account
the range of commenters’ suggestions
and incorporates them into a single
standard, while helping to ensure that
participants’ and beneficiaries’ access to
mental health and substance use
disorder benefits is in parity with their
access to medical/surgical benefits.
Specifically, under these final rules,
relevant data are considered to suggest
that the NQTL contributes to material
differences in access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits
if, based on all relevant facts and
circumstances, and taking into account
specific considerations,84 the difference
in the data suggests that the NQTL is
likely to have a negative impact on
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits. For this
purpose, these final rules specify that
relevant facts and circumstances may
include, but are not limited to, the terms
of the NQTL at issue, the quality or
limitations of the data, causal
explanations and analyses, evidence as
to the recurring or non-recurring nature
of the results, and the magnitude of any
disparities. The Departments note that
plans and issuers may consider other
84 The considerations outlined in these final rules
refer to differences in access to mental health or
substance use disorder benefits attributable to
generally recognized independent professional
medical or clinical standards or carefully
circumscribed measures reasonably and
appropriately designed to detect or prevent and
prove fraud and abuse that minimize the negative
impact on access to appropriate mental health and
substance use disorder benefits. See 26 CFR
54.9812–1(c)(4)(iii)(B)(2)(ii), 29 CFR
2590.712(c)(4)(iii)(B)(2)(ii), and 45 CFR
146.136(c)(4)(iii)(B)(2)(ii). Differences solely
attributable to such standards or measures are not
treated as material differences for purposes of these
final rules.
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relevant facts and circumstances that are
not specifically listed in these final
rules, as appropriate, and that
differences in access to mental health or
substance use disorder benefits
attributable to independent professional
medical or clinical standards or fraud
and abuse measures are not considered
to be material, as discussed later in this
preamble.
The Departments are of the view that
the quality or limitations of the relevant
data are a key consideration in
determining whether a difference in the
data suggests that an NQTL contributes
to a material difference in access to
mental health and substance use
disorder benefits as compared to
medical/surgical benefits. As discussed
earlier in this preamble, the
Departments acknowledge the difficulty
some plans and issuers may face in
obtaining the necessary information,
including data, from their service
providers to perform and document
their comparative analyses. The
Departments are also aware that plans
and issuers might not have direct
control over the quality of the data they
receive from a service provider. Despite
this, the Departments do not intend for
this consideration to create a loophole
that allows plans and issuers to avoid
determining materiality when
evaluating differences in relevant data.
Rather, the Departments expect plans
and issuers to consider the quality and
limitations of any available relevant
data as just one of multiple potential
facts and circumstances when assessing
the impact of an NQTL on access to
mental health and substance use
disorder benefits and medical/surgical
benefits.
When considering causal
explanations and analyses in
determining whether a difference in the
data suggests that an NQTL contributes
to a material difference in access, plans
and issuers should consider whether
they are attributable to the NQTL,
instead of being attributable to other
factors or considerations. As discussed
in more detail later in this preamble, a
plan’s or issuer’s comparative analysis
for an NQTL applicable to mental health
and substance use disorder benefits and
medical/surgical benefits must include a
discussion of the actions that have been
or are being taken by the plan or issuer
to address any material differences in
access. This discussion must include, as
applicable, a reasoned explanation of
any considerations beyond a plan’s or
issuer’s control that contribute to the
existence of material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits, including
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those that result in the persistence of
such material differences despite
reasonable actions that have been or are
being taken to address such differences
by the plan or issuer.
For example, if a plan or issuer
identifies, based on reliably established
indicia of fraud and abuse, that a
particular provider or facility has
submitted fraudulent claims for mental
health or substance use disorder
benefits, resulting in a higher percentage
of denials of claims for mental health or
substance use disorder benefits than for
medical/surgical benefits in the same
classification, the evidence of fraud and
abuse could be considered part of the
relevant facts and circumstances for
purposes of determining whether a
material difference in access exists.
Further, if a material difference in
access exists, the evidence of fraud and
abuse could also be considered part of
the relevant facts and circumstances for
purposes of determining whether the
difference is attributable to the NQTL.
In such a case, the plan or issuer might
reasonably conclude that the difference
in outcomes is attributable to higher
underlying levels of fraud for mental
health and substance use disorder
benefits than for medical/surgical
benefits in the same classification (with
the commission of the fraud being a
circumstance that is beyond the plan’s
or issuer’s control), rather than the
application of a more restrictive NQTL
to mental health or substance use
disorder benefits. As explained later in
this preamble, under these final rules,
the plan or issuer must include in its
comparative analysis a reasoned
explanation of the reliably established
indicia of fraud and abuse beyond the
plan’s or issuer’s control that contribute
to the existence of material differences
in access to mental health or substance
use disorder benefits as compared to
medical/surgical benefits.
The Departments note that a
difference in access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits
that is driven by an outlier, such as a
single plan participant’s claims
experience or a single claim, will
generally not be considered material for
this purpose because the nature of the
results of the evaluation of relevant data
would not be considered recurring.
Therefore, such a difference would not
trigger the requirement to take
reasonable action, as necessary, under
these final rules.
In the preamble to the proposed rules,
the Departments solicited comments on
whether materiality should be defined
in terms of the results of statistical
testing and requested feedback from
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interested parties on the optimal
method for assembling data and
statistical analysis. As highlighted
earlier in this preamble, commenters
requested that the definition of material
differences account for statistically
significant differences, and take into
account the amount of available data,
while also excluding differences related
to random variability. The Departments
are of the view that plans and issuers
can explain in their comparative
analyses whether differences are or are
not statistically significant and why,
based on the relevant facts and
circumstances, such differences are
determined to be or not to be material.
However, the Departments also
recognize that statistical significance
might not always be appropriate to
consider, and that there would be
challenges with requiring plans and
issuers to use a statistical analysis in
determining whether material
differences in access exist for all
NQTLs, as well as whether and how
those differences are attributable to the
NQTL or NQTLs in question.85
Plans and issuers should carefully
consider the magnitude of any negative
impact on access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits
and whether the relevant data therefore
suggest an NQTL contributes to a
material difference in access that might
require the plan or issuer to take
reasonable action, as necessary, to
ensure compliance, in operation, with
the requirements for NQTLs under these
final rules. As noted earlier in this
preamble, a difference in access to
mental health or substance use disorder
benefits as compared to medical/
surgical benefits that is de minimis will
not be considered material for purposes
of the relevant data evaluation
requirements. The size of any negative
impact on access, even if small, is part
of the relevant facts and circumstances
that could determine whether a
disparity in access is material. These
final rules do not require a plan or
issuer to obtain a statistical, actuarial, or
other equivalent opinion to support a
conclusion as to whether a difference in
access demonstrated by relevant data is
material, based on the relevant facts and
85 The Departments also recognize that smaller
plans may have limited relevant data to evaluate,
which could result in the plan not having sufficient
data to identify statistically significant differences
in the data. The Departments note that, because
these final rules do not require that a difference be
statistically significant to constitute a material
difference, small sample size does not amount to
circumstances under which the provisions in 26
CFR 54.9812–1(c)(4)(iii)(A)(3), 29 CFR
2590.712(c)(4)(iii)(A)(3), and 45 CFR
146.136(c)(4)(iii)(A)(3) would apply.
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circumstances. However, a plan or
issuer may obtain such an opinion, and
if relying on it as part of performing its
comparative analysis, the plan or issuer
should document the relevance of that
opinion to the conclusion that a
difference in data suggests or does not
suggest material difference in access, as
part of the comparative analysis. For
plans and issuers that do use such an
opinion to support a conclusion as to
the materiality of differences in access,
the Departments would expect these
opinions or determinations to be made
by a qualified and, if applicable,
licensed or otherwise accredited
individual or organization.
Additionally, the individual’s or
organization’s qualifications must be
documented as part of the comparative
analysis, along with a description of the
extent to which the plan or issuer
ultimately relied upon the individual’s
or organization’s evaluation in
performing and documenting the
comparative analysis of the design and
application of the NQTL, as discussed
in more detail later in this preamble.
The Departments note that a statistical,
actuarial, or other equivalent opinion
obtained by a plan or issuer to support
a conclusion as to whether a difference
in access based on relevant data is or is
not material is not dispositive simply
because it is made by a qualified,
licensed or otherwise accredited
individual or organization. In the course
of enforcement, the Departments and
applicable State authorities may review
and assess the validity of the assertions,
and the factors upon which such
assertions are based, contained in such
an opinion, as well as a plan’s or
issuer’s determination as to whether any
particular difference in access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits is or is not material.
In these final rules, the Departments
decline to finalize the proposed
exception to the relevant data
evaluation requirements for
independent professional medical or
clinical standards, as discussed later in
this preamble. The Departments are of
the view that plans and issuers that
impose NQTLs that utilize such
standards as the basis for, or as, factors
or evidentiary standards, should collect
and evaluate relevant data, to determine
the impact of NQTLs developed or
applied using these standards on access
to mental health and substance use
disorder benefits as compared to
medical/surgical benefits. However,
reliance on such standards can improve
care and health outcomes for
participants and beneficiaries. The
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Departments also recognize that clinical
differences between mental health
conditions, substance use disorders,
medical conditions, and surgical
procedures may sometimes drive
apparent differences in data outcomes,
even where plans and issuers rely on
independent professional medical or
clinical standards. Therefore, under
these final rules, differences in access to
mental health or substance use disorder
benefits attributable to generally
recognized independent professional
medical or clinical standards that are
used as the basis for a factor or
evidentiary standard used to design or
apply an NQTL are not considered to be
material. To the extent a plan or issuer
attributes any differences in access to
the application of such standards, the
plan or issuer must explain its bases for
that conclusion in the plan’s or issuer’s
comparative analysis, as discussed later
in this preamble.
The Departments did not propose that
NQTLs related to fraud, waste, and
abuse measures would be excepted from
the relevant data evaluation
requirements. However, as discussed
earlier in this preamble, reliably
established indicia of fraud and abuse
could, if appropriate, be considered
relevant facts and circumstances taken
into account by a plan or issuer when
determining whether a difference in
access is material. Indicia of fraud and
abuse could also be relevant in
determining whether a material
difference in access is attributable to an
NQTL or, instead, is attributable to the
use of fraud and abuse measures.
Therefore, under these final rules, a
difference in access to mental health or
substance use disorder benefits
attributable to carefully circumscribed
measures reasonably and appropriately
designed to detect or prevent and prove
fraud and abuse that minimize the
negative impact on access to appropriate
mental health and substance use
disorder benefits are not considered to
be material. As discussed later in this
preamble, in such a case, a plan’s or
issuer’s comparative analysis must
provide a thorough and reasoned
explanation that indicia for fraud and
abuse have been reliably established
through objective and unbiased data,
and that such measures are narrowly
designed to minimize the negative
impact on access to appropriate mental
health and substance use disorder
benefits as compared to medical/
surgical benefits in the same
classification.
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Reasonable Action, as Necessary, To
Address Material Differences in Access
The proposed rules provided that 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 the proposed no more
restrictive requirement and design and
application requirements. The preamble
to the proposed rules noted that
whether any particular action would be
considered reasonable in response to
any 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 proposed that, in addition
to taking reasonable action to address
material differences, a plan or issuer
would also be required to document in
its comparative analyses any such
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. The Departments
noted in the preamble to the proposed
rules that plans and issuers could use
this documentation to explain why
material differences demonstrated by
the relevant outcomes data should not
be considered a violation of the rules for
NQTLs (other than NQTLs related to
network composition) and solicited
comments on what additional
information is necessary to clarify what
would constitute reasonable action in
response to relevant data that reveal
material differences in access.
Several commenters supported the
requirement to take reasonable action in
response to relevant data that reveals
material differences in access. Some
commenters suggested that ‘‘reasonable
action’’ should be defined and should
mean actions, including, but not limited
to, internal reforms and modifications or
elimination of the NQTL to resolve the
material differences. One commenter
stated that requiring reasonable action
where there is no violation of the law
and without an opportunity to explain
why material differences in access may
not in fact be a violation of MHPAEA is
arbitrary and capricious and goes
beyond the authority of the
Departments. Therefore, the commenter
noted reasonable action should be
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required only after an opportunity to
rebut a presumption of noncompliance.
Under these final rules, when a plan
or issuer knows or reasonably should
know that NQTLs may be contributing
to material differences in access, it must
take reasonable action, as necessary, to
ensure compliance, in operation, with
the requirements for NQTLs under these
final rules. The standard is not focused
on inconsequential differences, but
rather only on those that are material,
meaning those that are likely to have a
negative impact on access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits. If a plan or issuer is
aware of information that suggests a
potential violation of MHPAEA, the
statute requires the plan or issuer to
address such potential violations as
necessary to satisfy its obligation to
ensure that the NQTLs comply with the
substantive requirements of the
statute,86 and to be able to continue to
impose the NQTL. The requirement to
take reasonable action, as necessary,
where material differences in access
exist is consistent with the statutory
requirement that plans and issuers
ensure that treatment limitations
(including NQTLs) applicable to mental
health or substance use disorder
benefits are no more restrictive than the
predominant treatment limitations
applied to substantially all medical/
surgical benefits. If the relevant data
suggest that an NQTL contributes to
material differences in access, a plan or
issuer generally is not able to ensure
compliance with MHPAEA, in
operation, unless the plan or issuer
takes action that is reasonably designed
to try to close the gap and address those
differences.
The proposed rules would have
required plans and issuers to take
reasonable action to address material
differences in access as necessary to
ensure compliance, in operation, with
the proposed no more restrictive
requirement and design and application
requirements. However, as discussed
earlier in this preamble, these final rules
do not retain the proposed mathematical
substantially all and predominant tests
and instead retain language that
incorporates the statutory requirements
of Code section 9812(a)(3)(A), ERISA
section 712(a)(3)(A), and PHS Act
section 2726(a)(3)(A), as the general rule
for NQTLs. Therefore, these final rules
make technical changes to replace the
cross-references in the material
differences standard to the proposed no
more restrictive requirement and design
86 Code section 9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
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and application requirements, and
replace them with a cross-reference to
the general rule for NQTLs.
The Departments acknowledge
commenters’ requests for guidance on
what constitutes reasonable action for
this purpose. The Departments
anticipate that, in many cases, the
reasonable actions that plans and
issuers might take, as necessary, to
address material differences in access
will be similar to actions they might
have taken independent of the
requirements contained in these final
rules. For example, some plans and
issuers may already take certain action
in response to changes in demand for
services, needs of patients, or requests
from plan sponsors, which could be
considered reasonable action for this
purpose, depending on the relevant
facts and circumstances. Commenters
highlighted that, since the enactment of
MHPAEA, plans and issuers have
increased spending and raised
reimbursement rates for mental health
and substance use disorder services, and
invested in programs to help members
identify mental health and substance
use disorder care needs and to connect
them to the appropriate services as early
as possible. Commenters also
highlighted that plans and issuers have
also developed mental health
assessment screening tools for youth
populations to detect those at risk.
Depending on the facts and
circumstances, all of these actions could
be examples of reasonable actions that
plans and issuers can take, as necessary,
where the relevant data suggest that an
NQTL contributes to material
differences, as required under these
final rules. However, plans and issuers
will ultimately be responsible for
assessing the nature of a material
difference in access to determine what
reasonable action should be taken, as
necessary, to address those differences.
In addition, a plan or issuer must
document the actions that have been or
are being taken in the plan’s or issuer’s
comparative analysis and include a
reasoned explanation of any material
differences in access that persist despite
reasonable actions that have been or are
being taken. For a plan or issuer
designing and applying one or more
NQTLs related to network composition
standards, the comparative analysis
must include a discussion of the actions
that have been or are being taken to
address material differences in access to
in-network mental health and substance
use disorder benefits as compared to innetwork medical/surgical benefits.
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Special Rule for NQTLs Related to
Network Composition
In the preamble to the proposed rules,
the Departments noted a growing
disparity between in-network
reimbursement rates for mental health
and substance use disorder providers
and medical/surgical providers, as well
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. The Departments also
expressed their specific concerns about
standards related to network
composition and other related NQTLs,
because these standards are critical to
ensuring parity in access to mental
health and substance use disorder
benefits for participants and
beneficiaries. Therefore, the
Departments included in the proposed
rules a requirement that, in addition to
the relevant data required for all NQTLs,
plans and issuers would also be
required to collect and evaluate relevant
data for NQTLs related to network
composition. For this purpose, the
proposed rules stated that network
composition NQTLs 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. Under the
proposed special rule, when designing
and applying one or more NQTLs
related to network composition
standards, a plan or issuer would fail to
meet the requirements of the proposed
no more restrictive requirement and
design and application requirements, in
operation, if the relevant data show
material differences in access to innetwork mental health or substance use
disorder benefits as compared to innetwork medical/surgical benefits in a
classification. This standard proposed to
set a higher bar for NQTLs related to
network composition than for other
NQTLs by treating material differences
in access to in-network mental health or
substance use disorder benefits as
compared to in-network medical/
surgical benefits as a failure to meet the
requirements of MHPAEA, instead of as
a strong indicator of a violation of
MHPAEA.
The Departments proposed that plans
and issuers be required to take action to
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address material differences in access
for NQTLs related to network
composition or no longer impose the
relevant NQTLs to avoid a violation of
MHPAEA. Examples of such actions
listed by the Departments in the
preamble to the proposed rules for
NQTLs related to network composition
include ensuring that plans and issuers
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 plan’s or issuer’s
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 also recognized that
shortages of mental health and
substance use disorder providers could
pose challenges to issuers, plans, and
their service providers. The preamble to
the proposed rules noted that, if, despite
taking appropriate action, relevant data
collected and evaluated for NQTLs
related to network composition
continue to reveal material differences
due to, for example, 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 the
proposed relevant data evaluation
requirements with respect to NQTLs
related to network composition if the
plan or issuer otherwise complied with
other applicable MHPAEA
requirements. However, the
Departments noted that plans and
issuers should be prepared 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.
Several commenters supported the
special rule for NQTLs related to
network composition, stating that it
would address significant barriers to
accessing mental health and substance
use disorder services, and requested that
the heightened requirement for such
NQTLs be maintained in the final rules.
Some commenters questioned the
justification for treating standards for
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network composition differently than all
other NQTLs. Several commenters
stated that the Departments
misrepresented several of the key
studies they relied on to support the
proposed special rule. Some
commenters highlighted that analyzing
outcomes data related to network
composition is a long-recognized and
widely accepted tool in population
health management but stated that the
proposed rules would turn this tool into
a compliance standard that would be
virtually impossible to satisfy. One
commenter highlighted that MHPAEA
requires equity in treatment, not equity
in outcomes, and that the special rule
would go beyond what is required by
statute, as well as the Departments’ own
admission that parity across mental
health and substance use disorder and
medical/surgical networks does not
necessarily mean an equal number of
providers in a classification. Another
commenter stressed that the special rule
was inappropriate without clarity about
what the definition of a material
difference would be. This commenter
stated that the Departments should
finalize, following additional public
comment, an NQTL definition, a
specific set of measures with technical
specifications, and a benchmark for
what they will consider to be ‘‘material
difference’’ for each NQTL type. Other
commenters suggested that the
Departments not finalize this proposed
provision.
Some commenters noted that there
can be many reasons why outcomes
might be different for mental health and
substance use disorder benefits than
medical/surgical benefits when
evaluating relevant data, particularly
with respect to network composition.
Some of these commenters highlighted
reasons that are outside the control of
plans and issuers, such as shortages of
mental health and substance use
disorder providers or specialists. Some
commenters requested that the final
rules address situations where material
differences in access are due to a lack
of mental health and substance use
disorder providers, while other
commenters stated that general citations
to provider shortages as the only cause
of material differences in access should
be rejected as inadequate, especially
without evidence that those shortages
drove disparities, rather than plan or
issuer choices. One commenter argued
that plans and issuers should have the
opportunity to address any apparent
gaps in network access and explain
long-term initiatives to address those
gaps.
Several commenters expressed
concern that the special rule as
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77619
proposed would have adverse
consequences for patient outcomes and
safety because it would encourage plans
and issuers to accept lower quality
providers into their networks. One
commenter noted that behavioral health
care is commonly provided by primary
care providers, and without including
those providers in relevant data, a
significant percentage of mental health
treatment would not be captured when
determining whether material
differences in access exist. Other
commenters expressed the importance
of taking into account telehealth
providers when analyzing relevant data
for purposes of NQTLs related to
network composition.
The Departments acknowledge the
concerns raised by commenters on this
aspect of the proposed rules; namely,
the fact that a variety of metrics could
be consulted as a plan or issuer
evaluates its parity compliance
regarding NQTLs related to network
composition, and that parity for mental
health and substance use disorder
benefits as compared to medical/
surgical benefits does not necessarily
mean an equal number of mental health
or substance use disorder and medical/
surgical network providers. The
Departments also understand the value
of a consistent approach with regard to
all NQTLs, while recognizing the impact
of NQTLs related to network
composition on access to care.
Additionally, the Departments
acknowledge the questions some
commenters raised requesting more
specific details on how to account for
material differences in access for
network composition NQTLs, including
those due to provider shortages, which
plans and issuers may not be able to
effectively address through no fault of
their own despite taking reasonable
action. The Departments also note that
certain outcomes measures, such as high
out-of-network utilization for mental
health or substance use disorder
benefits as compared to medical/
surgical benefits, may not necessarily
represent a per se violation of MHPAEA.
The Departments agree with
commenters that it is important to allow
plans and issuers to address apparent
gaps in relevant data, and that it is also
important that the regulatory standard
for NQTLs related to network
composition is one that plans and
issuers are able to satisfy. However, as
stated in the preamble to the proposed
rules, the Departments also recognize
that network composition and access to
mental health and substance use
disorder benefits are the product of
myriad NQTLs; processes, strategies,
evidentiary standards, and other factors
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used to design and apply NQTLs; and
information, evidence, sources, and
standards on which factors and
evidentiary standards are based. As a
result, the Departments remain
concerned that plans and issuers could
too readily evade their obligations under
MHPAEA, if they were not obligated to
diligently collect and evaluate relevant
data, perform a careful analysis to
determine whether material differences
in access to mental health and substance
use disorder benefits exist as a result of
the cumulative impact of NQTLs related
to network composition, and take
reasonable actions that meaningfully
address such differences in access.
After consideration of the comments,
the Departments are not finalizing the
proposed special rule for NQTLs related
to network composition, and are instead
including language in these final rules
to explain how plans and issuers are
expected to comply with the relevant
data evaluation requirements with
respect to those NQTLs. Specifically,
these final rules require that a plan or
issuer must collect and evaluate data in
a manner reasonably designed to assess
the aggregate impact of all such NQTLs
on access to mental health and
substance use disorder benefits and
medical/surgical benefits, instead of
evaluating relevant data for each NQTL
separately (which is generally required
under these final rules for NQTLs other
than those related to network
composition), to determine if there is a
material difference in access.
Furthermore, the final rules provide
examples of possible actions that a plan
or issuer could take to comply with the
requirement to take reasonable action,
as necessary, to address any material
differences in access with respect to
network composition NQTLs. While
under these final rules, material
differences in access related to network
composition NQTLs are not
automatically treated as a violation of
MHPAEA (and instead are treated as a
strong indicator of a violation, the same
as all other NQTLs), the Departments
emphasize that plans and issuers must
engage in, and document in their
comparative analyses, all reasonable
actions, as necessary, to address any
material differences in access.
While the approach to material
differences for NQTLs related to
network composition is different than
that set forth in the proposed rules,
these final rules will achieve the same
goal of ensuring access to mental health
and substance use disorder benefits in
parity with access to medical/surgical
benefits, by requiring plans and issuers
to take reasonable action, as necessary,
to address material differences in access
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for in-network mental health and
substance use disorder benefits as
compared to in-network medical/
surgical benefits. Furthermore, the
approach for NQTLs related to network
composition in these final rules will
ensure that participants and
beneficiaries are not subject to NQTLs
with respect to mental health and
substance use disorder benefits that are
more restrictive than the predominant
NQTLs applied to substantially all
medical/surgical benefits under the plan
or coverage.
The Departments stress the
importance of the requirement under
these final rules that plans and issuers
take reasonable action, as necessary,
where relevant data suggest that NQTLs
related to network composition
contribute to a material difference in
access to in-network mental health and
substance use disorder benefits as
compared to in-network medical/
surgical benefits in a classification, to
ensure compliance with MHPAEA.
These final rules provide an illustrative
list of possible actions the Departments
expect plans and issuers, working with
their service providers, to take, as
necessary, to address any material
differences in access with respect to
NQTLs related to network composition
under the relevant data evaluation
requirements. This includes plans and
issuers working with their service
providers, as applicable, to strengthen
efforts to recruit and encourage a broad
range of available mental health and
substance use disorder providers and
facilities to join the plan’s or issuer’s
network of providers, including taking
actions to increase compensation or
other inducements, streamline
credentialing processes, or contact
providers reimbursed for items and
services provided on an out-of-network
basis to offer participation in the
network, and expand the availability of
telehealth arrangements to mitigate
overall mental health and substance use
disorder provider shortages in a
geographic area. Additionally, plans and
issuers should provide additional
outreach and assistance to participants
and beneficiaries enrolled in the plan or
coverage to assist them in finding
available in-network mental health and
substance use disorder providers and
facilities, and ensure that provider
directories are accurate and reliable
(including in accordance with Code
section 9820(a), ERISA section 720(a),
PHS Act section 2799A–5(a), and future
implementing regulations and
guidance). The Departments also expect
plans and issuers to take other
reasonable actions, as necessary, that are
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intended to mitigate any material
differences (even if not enumerated in
these final rules).
As with other types of NQTLs, these
final rules require plans and issuers to
explain in their comparative analyses
for NQTLs related to network
composition the circumstances of any
material differences in access and the
actions that have been or are being taken
to address these differences. If such
actions do not fully resolve the material
differences, a plan or issuer must
provide a reasoned explanation in its
comparative analysis of any material
differences that persist despite
reasonable actions that have been or are
being taken. The Departments stress that
a comparative analysis making only a
cursory reference to provider shortages
with little or no explanation of
reasonable actions taken to address
material differences in access will likely
result in a finding by the relevant
Secretary that the comparative analysis
is insufficient and, without additional
comparative analyses in response to an
insufficiency notice or initial
determination of noncompliance from
the Secretary, may result in a final
determination of noncompliance. As
noted elsewhere in this preamble, the
Departments expect that, if a plan or
issuer intends to rely on an explanation
of existing circumstances that cannot
effectively be addressed through
reasonable action, the explanation
should include significant detail as to
the circumstances resulting in material
differences in access that are outside the
plan’s or issuer’s control, and a robust
discussion of the reasonable actions the
plan or issuer has taken or is taking in
an attempt to address such material
differences.
Exception for Independent Professional
Medical or Clinical Standards
The proposed rules specified a narrow
exception under which plans and
issuers would not be required to comply
with the relevant data evaluation
requirements for NQTLs that impartially
apply independent professional medical
or clinical standards.87 As discussed in
the following section of the preamble to
these final rules, the Departments are
not finalizing this proposed exception.
e. Independent Professional Medical or
Clinical Standards and Fraud and Abuse
Measures
In the preamble to the proposed rules,
the Departments acknowledged that the
application of independent professional
87 The proposed rules did not include a similar
exception from the relevant data evaluation
requirements for standards related to fraud, waste,
and abuse.
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medical or clinical standards and fraud,
waste, and abuse measures generally
improve and help to ensure appropriate
care for participants and beneficiaries,
rather than restrict access to needed
benefits. The Departments stated that
NQTLs that reflect independent
professional medical or clinical
standards or guard against fraud, waste,
and abuse (while minimizing the
negative impact on access to appropriate
benefits) are premised on standards that
generally provide an independent and
less suspect basis for determining access
to mental health and substance use
disorder treatment. Accordingly, the
Departments proposed two narrow
exceptions; one for NQTLs that
impartially apply independent
professional medical or clinical
standards, and one for NQTLs
reasonably designed to detect or prevent
and prove fraud, waste, and abuse.
Under those proposed exceptions, an
NQTL that, with respect to mental
health or substance use disorder
benefits in any classification,
impartially applies independent
professional medical or clinical
standards (consistent with generally
accepted standards of care) would not
be considered under the proposed rules
to violate the proposed no more
restrictive requirements, the prohibition
on discriminatory factors and
evidentiary standards, and the relevant
data evaluation requirements. An NQTL
that applies fraud, waste, and abuse
measures would not be considered
under the proposed rules to violate the
proposed no more restrictive
requirements or the prohibition on
discriminatory factors and evidentiary
standards.
The Departments noted in the
preamble to the proposed rules that they
do not intend to interfere with a plan’s
or issuer’s ability to ensure that
coverage for benefits for the treatment of
mental health conditions and substance
use disorders is consistent with
independent professional medical or
clinical standards or fraud, waste, and
abuse measures. The Departments also
recognized that there are instances in
which the application of independent
professional medical or clinical
standards or fraud, waste, and abuse
measures might result in differences in
the design or application of NQTLs to
mental health or substance use disorder
benefits as compared to medical/
surgical benefits due to clinical
differences between mental health
conditions and substance use disorders
and medical/surgical conditions, as well
as differences in the model of care, in
a manner that could otherwise violate
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certain aspects of the requirements for
NQTLs in the proposed rules.
Several commenters opposed the
proposed exceptions because they stated
that plans and issuers would exploit
them to improperly limit access to
mental health and substance use
disorder services. Some of these
commenters stated that the Departments
lack authority or a legal basis to
implement the proposed exceptions
because, in their view, the statute does
not provide authority to establish
exceptions to MHPAEA’s requirements.
Commenters also stated that the
proposed exceptions could significantly
undermine the other provisions of the
proposed rules that would otherwise
strengthen MHPAEA protections by
creating opportunities for misuse or
exploitation. Conversely, some
commenters generally supported the
proposed exceptions, but highlighted
ambiguities related to how the
exceptions would operate under the
proposed rules to allow NQTLs to be
applied with respect to mental health
and substance use disorder benefits.
These commenters also stated that the
exceptions may be too narrow as
proposed and that it is unclear how and
what a plan or issuer must demonstrate
to confidently rely on the proposed
exceptions.
The Departments acknowledge these
comments, as well as the comments
received on each of the two proposed
exceptions, which are addressed in
more detail in this section of the
preamble. After considering the
comments, and for the reasons
discussed later in this preamble, the
Departments are not finalizing the
proposed exceptions for independent
professional medical or clinical
standards or fraud, waste, and abuse
measures, but explain how plans and
issuers can account for such standards
and fraud and abuse measures in
implementing the provisions of these
final rules.
Exception for Independent Professional
Medical or Clinical Standards
To qualify for the exception for
independent professional medical or
clinical standards under the proposed
rules, an NQTL would have to
impartially apply those standards
(consistent with generally accepted
standards of care) to medical/surgical
benefits and mental health or substance
use disorder benefits. The NQTL could
not deviate from those standards in any
way, such as by modifying or otherwise
imposing additional or different
requirements. Under the proposed rules,
an NQTL qualifying for this exception
would not be required to satisfy the
PO 00000
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77621
proposed no more restrictive
requirement or the proposed relevant
data evaluation requirements. In
addition, the independent professional
medical or clinical standards would not
be considered a discriminatory factor or
evidentiary standard. The Departments
noted that, under the proposed rules,
the plan or issuer would still be
required to ensure that such an NQTL
complies with the rest of the design and
application requirements. Additionally,
the plan or issuer would be required to
perform and document comparative
analyses for NQTLs that impartially
apply independent professional medical
or clinical standards.
Some commenters stated that the
exception for NQTLs that impartially
apply independent professional medical
or clinical standards should not be
finalized, because the Departments
rejected a similar exception in previous
rulemaking. Specifically, these
commenters highlighted that the
Departments included an exception to
the NQTL requirements for ‘‘recognized
clinically appropriate standards of care’’
in the 2010 MHPAEA interim final
regulations, which was later deleted in
the 2013 final regulations. The preamble
to the 2013 final regulations supported
the decision to eliminate the exception
by pointing to commenters’ concern
about abuse and the use of this
exception by plans and issuers to try to
justify stricter application of NQTLs.88
These commenters highlighted that
MHPAEA’s statutory standard, as
amended by the CAA, 2021 does not
contain such exceptions to the NQTL
requirements.
Some commenters urged the
Departments to not finalize the
proposed exception for NQTLs that
impartially apply independent
professional medical or clinical
standards and instead require those
standards to be considered as a factor in
the NQTL comparative analysis, subject
to all applicable requirements for
NQTLs under the proposed rules.
Alternatively, commenters requested
that plans and issuers be required to
document in their comparative analyses
the ways in which the clinical standards
and practices used to design and apply
NQTLs deviate from independent
professional medical or clinical
standards, which should be tied to
criteria or guidelines from relevant
nonprofit clinical specialty associations.
These commenters also stated that they
support analogous State definitions of
‘‘generally accepted standards of care’’
instead of the proposed ‘‘generally
recognized independent professional
88 78
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medical or clinical standards.’’ 89
Additionally, they suggested support for
tying the definition to the criteria or
guidelines from the relevant nonprofit
clinical specialty associations.
Some commenters highlighted that
the proposed exception appears to
presume that there is a single set or
‘‘gold standard’’ of independent
professional medical or clinical
standards, when in practice, these
standards can vary greatly, and
consensus may not always exist for a
particular condition. The commenters
noted that medical and clinical
standards are generally designed to
guide health care providers and
facilities in determining appropriate
care for a given diagnosis or stage of
treatment, not to determine how the
standards should best be utilized for
other purposes, so plans and issuers
may need to adapt clinical standards to
apply them in the context of health
coverage. Therefore, they stated, it is
unclear that the exception for
independent professional medical or
clinical standards as proposed could be
relied on by plans and issuers as they
design and apply NQTLs as it is unclear
if this necessary adaptation would cause
a plan or issuer to fail to impartially
apply such standards.
Other commenters, who generally
supported this proposed exception,
stated that they found it to be generally
vague and undefined. These
commenters urged the Departments to
define more clearly what constitutes
independent professional medical or
clinical standards for purposes of the
proposed exception, and many
commenters suggested language for the
Departments to consider providing as
additional clarifications. Some
commenters noted that to ‘‘apply’’ such
standards should be understood to mean
to primarily rely on these resources
when developing NQTLs and claimed
that these standards lack the precision
and detail necessary for the exception to
be useful. Additionally, commenters
requested that the Departments provide
examples of standards that would
qualify for the proposed exception and
descriptions of their application.
After considering the comments, the
Departments are not finalizing the
exception for independent professional
medical or clinical standards as
89 215 Ill. Comp. Stat. 5/370c, https://
www.ilga.gov/legislation/ilcs/fulltext.asp?
DocName=021500050K370c; Cal. Health & Saf.
Code section 1374.72, https://
leginfo.legislature.ca.gov/faces/bill
TextClient.xhtml?bill_id=201920200SB855; Ga.
Code section 33–1–27 https://www.legis.ga.gov/api/
legislation/document/20212022/211212; and N.M.
Stat. section 59A–23–22, https://www.nmlegis.gov/
Sessions/23%20Regular/final/SB0273.pdf.
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proposed. In light of the modifications
to the requirements made in the final
rules, the Departments agree with
commenters that it is more appropriate
for plans and issuers to include
independent professional medical or
clinical standards under the framework
of the existing NQTL parity analysis
than to provide an exception from the
requirements of the final rules.
Therefore, instead of finalizing the
exception, the Departments are instead
providing clarifications for how
independent professional medical and
clinical standards will be treated under
these final rules. Specifically, NQTLs
that are designed or applied, are based
on, or are related to independent
professional medical or clinical
standards are subject to the design and
application requirements and the
relevant data evaluation requirements.
As noted earlier in this preamble, such
medical or clinical standards are not
information, evidence, sources, or
standards that are biased or not
objective in a manner that discriminates
against mental health or substance use
disorder benefits as compared to
medical/surgical benefits. Additionally,
for purposes of the relevant data
evaluation requirements, differences in
access to mental health or substance use
disorder benefits that are attributable to
the use of independent professional
medical or clinical standards as the
basis for a factor or evidentiary standard
used to design or apply an NQTL are not
considered to be material. To the extent
the plan or issuer attributes any
differences in access to the application
of such standards, the plan or issuer
must explain the bases for that
conclusion in their comparative
analysis.
Exception for Measures To Detect or
Prevent and Prove Fraud and Abuse
The Departments also proposed an
exception for NQTLs reasonably
designed to detect or prevent and prove
fraud, waste, and abuse. To qualify for
the exception under the proposed rules,
fraud, waste, and abuse measures would
have to be reasonably designed to detect
or prevent and prove fraud, waste, and
abuse, based on indicia that have been
reliably established through objective
and unbiased data. The proposed rules
also required that such standards be
narrowly designed to minimize the
negative impact on access to appropriate
mental health and substance use
disorder benefits. Under the proposed
rules, an NQTL qualifying for this
exception would not be required to
satisfy the proposed no more restrictive
requirement. In addition, fraud, waste,
and abuse measures would not be
PO 00000
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Fmt 4701
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considered a discriminatory factor or
evidentiary standard. The Departments
noted that, under the proposed rules,
the plan or issuer would still be
required to ensure that such an NQTL
complies with the rest of the design and
application requirements. The proposed
rules would also apply the relevant data
evaluation requirements to these
NQTLs, as the Departments stated that
these tools, while important, are more
likely than independent professional
medical or clinical standards to result in
NQTLs that may improperly restrict
access to mental health and substance
use disorder benefits because these
NQTLs are largely both designed by,
and applied within the control of, the
plan or issuer. Additionally, the plan or
issuer would be required to perform and
document comparative analyses for
NQTLs that are fraud, waste, and abuse
measures.
Many commenters opposed the
exception for NQTLs that are fraud,
waste, and abuse measures. Similar to
the objections to the exception for
independent professional medical or
clinical standards, these commenters
highlighted that MHPAEA’s statutory
language, as amended by the CAA, 2021
does not contain exceptions for any
NQTLs. These commenters voiced
concern that the two proposed
exceptions, together, could allow plans
and issuers to avoid compliance with
the strengthened requirements of
MHPAEA set forth in the proposed
rules. Commenters opposing the fraud,
waste, and abuse exception generally
recommended that the Departments
remove it altogether; however, some
commenters recommended that, if
retained, the exception should include
stronger language limiting plans’ and
issuers’ ability to invoke the exception.
These commenters also recommended
that the Departments eliminate
references to ‘‘waste,’’ as this is arguably
targeted by all forms of utilization
management. Commenters requested
that, alternatively, plans and issuers be
required to document in their
comparative analyses how their efforts
to combat fraud, waste, and abuse
comply with MHPAEA (including as a
factor used to design or apply an
NQTL).
Other commenters were generally
supportive of the exception but
expressed concerns that the
Departments would interpret it too
narrowly. They generally recommended
that the Departments add definitional
clarity to allow for flexibility and
account for the use of a range of NQTLs
that are fraud, waste, and abuse
measures and provide examples. Some
commenters also sought clarification
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about the documentation or evidence
required for a plan or issuer to prove its
qualification for the exception.
The Departments acknowledge that
many NQTLs consider the potential for
fraud, waste, and abuse as a factor in
their design and application and have
concluded that it is appropriate for
plans and issuers to be required to treat
these types of factors and NQTLs
following the same framework as other
NQTLs, subject to all applicable
requirements. The Departments also
agree that the term ‘‘waste’’ is too broad
and could arguably include all forms of
utilization management. Therefore,
instead of finalizing the exception as
proposed, the Departments are
providing clarifications on how fraud
and abuse measures will be treated
under these final rules. Specifically,
NQTLs that are designed or applied, are
based on, or are related to fraud and
abuse measures are subject to the design
and application requirements and the
relevant data evaluation requirements.
However, for purposes of the
prohibition on discriminatory factors
and evidentiary standards, the final
rules provide that fraud and abuse
measures are not information, evidence,
sources, or standards that are biased or
not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
Additionally, for purposes of the
relevant data evaluation requirements, a
difference in access to mental health
and substance use disorder benefits
attributable to the use of fraud and
abuse measures as the basis for a factor
or evidentiary standard used to design
or apply an NQTL is not considered to
be material. To the extent that a plan or
issuer attributes any differences in
access to the application of such
measures, the plan or issuer must
explain the bases for that conclusion in
their comparative analyses.
Requests for Additional Exceptions
Some commenters suggested
additional exceptions to the
requirements for NQTLs that the
Departments should consider adding to
the final rules. Specifically, some
commenters requested an exception for
NQTLs related to the quality and safety
of mental health and substance use
disorder services. Similarly, another
commenter recommended the
Departments include an exception for
practices to ensure high-quality care,
based on the view that the two
exceptions (for independent
professional medical or clinical
standards and fraud, waste, and abuse
measures) in the proposed rules are not
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sufficient to curb substandard and
ineffective treatment that does not reach
the level of fraud, waste, and abuse.
Other commenters suggested exceptions
for compliance with Federal and State
law, an exception to ensure the quality
and safety of mental health and
substance use disorder benefits, an
exception to the quantitative testing and
discriminatory factor analysis for
Network NQTLs, and an exception for
when no outcomes data are reasonably
available.
The Departments have considered
whether additional exceptions beyond
those included in the proposed rules
should be included in these final rules.
As discussed earlier in this preamble,
there are a very limited number of
NQTLs where no data exist that can
reasonably assess the NQTL’s impact on
access. Such NQTLs might include, for
example, exclusions based on whether
the treatment is experimental or
investigative. Therefore, the
Departments have provided guidance in
these final rules on how plans and
issuers must comply with the relevant
data evaluation requirements for such
NQTLs. However, as noted earlier in
this preamble, such plans and issuers
must still consider whether data can be
used to reasonably assess the impact of
the NQTL on relevant outcomes related
to mental health and substance use
disorder benefits and medical/surgical
benefits. Consistent with the reasons
described earlier in this preamble as to
why the Departments declined to
finalize the exceptions contained in the
proposed rules, these final rules do not
contain any additional exceptions.
f. Effect of Final Determination of
Noncompliance—26 CFR 54.9812–
1(c)(4)(v), 29 CFR 2590.712(c)(4)(v), and
45 CFR 146.136(c)(4)(v)
The proposed rules provided that if a
plan or issuer receives a final
determination from the relevant
Secretary that it is not in compliance
with the comparative analysis
requirements with respect to an NQTL,
the NQTL would violate the substantive
requirements for NQTLs,90 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 proposed 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
90 See
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77623
first instance unless it meets all of the
applicable substantive requirements for
NQTLs under the 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 Departments noted in the
proposed rules that MHPAEA requires
that ‘‘such plan or coverage shall ensure
that’’ the treatment limitations comply
with the substantive requirements of the
statute.91 The Departments also noted
that the statute further requires that the
plan or issuer perform and document
adequate comparative analyses for
NQTLs to ensure compliance.92
Therefore, to comply with MHPAEA,
plans and issuers must comply with
both the substantive MHPAEA
requirements and the documentation
requirements. Under the proposed rules,
plans and issuers would be required to
ensure both that they are complying
with MHPAEA’s substantive
requirements at all times an NQTL is
imposed with respect to mental health
or substance use disorder benefits, and
that they have properly performed and
documented comparative analyses for
the NQTLs imposed on mental health or
substance use disorder benefits
(regardless of the timing of any request
for such documentation).
Under the proposed rules, when a
plan or issuer receives a final
determination from the Departments
with respect to an NQTL that it has
failed to demonstrate compliance with
the NQTL comparative analysis
documentation requirements under
proposed 26 CFR 54.9812–2, 29 CFR
2590.712–1, or 45 CFR 146.137,
including because the plan or issuer has
not submitted a sufficient comparative
analysis to demonstrate compliance, the
failure would be treated 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 acknowledged that
immediate cessation of the application
of an NQTL may not be feasible for all
NQTLs. Therefore, under the proposed
rules, a determination by the
Departments of whether to require
immediate cessation would be based on
the evaluation of facts and
91 Code section 9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
92 Code section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section 2726(a)(8).
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circumstances involved in the specific
violation and nature of the underlying
NQTL. The Departments provided
examples of such facts and
circumstances, including 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 needed to cease or
modify the NQTL. Additionally, the
Departments noted that this kind of
determination would take into account
feedback from the plan or issuer. The
Departments provided that 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 solicited comments on
this proposed provision, including
whether there are specific challenges or
considerations the Departments should
be aware of regarding ceasing
application of particular NQTLs.
Several commenters supported a
provision that would give the
Secretaries the ability to direct a plan or
issuer to not impose an NQTL after a
final determination of noncompliance
and stated that meaningful
consequences are important to
incentivize plans and issuers to comply
with MHPAEA. Some commenters
urged the Departments to change the
proposed language stating that ‘‘the
relevant Secretary may direct the plan
or issuer not to impose the NQTL’’ to
‘‘the relevant Secretary shall direct the
plan or issuer not to impose the NQTL’’
to indicate that a plan or issuer will not
be permitted to apply a noncompliant
NQTL. Several commenters
recommended extending this provision
to States with primary enforcement
authority for MHPAEA with respect to
issuers. Some commenters opposed the
proposed provision, stating that in their
view there is no legal authority under
MHPAEA or the CAA, 2021 to demand
immediate cessation of an NQTL
without intervention of a court of law.
Some commenters raised concerns
about the ability of plans and issuers to
immediately stop imposing an NQTL,
particularly mid-year, and with regard
to NQTLs related to network
composition. Several commenters
suggested that, in light of the significant
potential consequences of a final
determination of noncompliance, the
Departments should provide some type
of appeals process modeled on the
process for appeals of civil money
penalties for Medicare Advantage
Organizations or require review by
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EBSA’s national office or the director of
the Center for Consumer Information
and Insurance Oversight (CCIIO) within
CMS before taking such action when
there is a final determination of
noncompliance.
The Departments are finalizing the
provision governing the effect of a final
determination of noncompliance, with
modifications. The language contained
in proposed 26 CFR 54.9812–1(c)(4)(vii),
29 CFR 2590.712(c)(4)(vii), and 45 CFR
146.136(c)(4)(vii) is being finalized at 26
CFR 54.9812–1(c)(4)(v)(A), 29 CFR
2590.712(c)(4)(v)(A), and 45 CFR
146.136(c)(4)(v)(A). These final rules
add references to the relevant statutory
citation,93 to make clear that the effect
of the final determination of
noncompliance provision of these final
rules, including the evaluation of the
relevant facts and circumstances used to
determine whether cessation of an
NQTL is appropriate, is only applicable
with respect to a plan’s or issuer’s
violation of the comparative analysis
requirements, as set forth in Code
section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section
2726(a)(8). If, however, the plan or
issuer violates MHPAEA’s substantive
requirements, as set forth in Code
section 9812(a)(3), ERISA section
712(a)(3), and PHS Act section
2726(a)(3), and 26 CFR 54.9812–1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4), by imposing an NQTL
that violates the ‘‘no more restrictive’’
standard, the statute clearly
contemplates that the plan or issuer not
apply the NQTL, and the Departments
have full authority to prohibit the plan
or issuer from continuing to impose the
unlawful NQTL.94
The HHS final rules at 45 CFR
146.136(c)(4)(v)(A) also add references
to an applicable State authority, as
requested by commenters, so that the
regulations are clear that, like the
Departments, States with enforcement
93 Code section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section 2726(a)(8).
94 Specifically, Code section 9812(a)(3)(A), ERISA
section 712(a)(3)(A), and PHS Act section
2726(a)(3)(A) state that a plan or coverage ‘‘shall
ensure that . . . the treatment limitations
applicable to such 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). If a plan or
coverage does not ensure compliance with these
statutory requirements, the Departments may
require the plan or issuer to no longer impose the
NQTL or to otherwise come into compliance.
Similarly, 26 CFR 54.9812–1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR 146.136(c)(4) of these
final rules state that a plan (or coverage) may not
impose any NQTL unless it complies with the
statutory requirement in Code section 9812(a)(3)(A),
ERISA section 712(a)(3)(A), and PHS Act section
2726(a)(3)(A).
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authority with respect to MHPAEA 95
are also permitted to direct issuers not
to impose an NQTL when there is a final
determination of noncompliance, unless
and until the issuer demonstrates
compliance or takes appropriate action
to remedy the violation. These final
rules also provide additional specificity
by clarifying that this provision allows
the Departments (and an applicable
State authority) to direct a plan or issuer
not to impose an NQTL with respect to
mental health or substance use disorder
benefits in the relevant classification.
Additionally, these final rules add
new paragraph (c)(4)(v)(B) to make clear
that a determination of whether the
Departments will require cessation of
the application of an NQTL will be
based on an evaluation of the relevant
facts and circumstances involved in the
specific final determination and the
nature of the underlying NQTL. For this
purpose, the Departments expect that
such facts and circumstances may
include, but are not limited to, 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 of
continuing or ceasing to apply the
NQTL, and the likely time needed to
cease or modify the NQTL. Under these
final rules, such a determination will
also take into account the interest of
plan participants and beneficiaries and
feedback from the plan or issuer. States
that are the primary enforcers of
MHPAEA may take into account these
or other facts and circumstances when
determining whether the State will
require cessation of application of an
NQTL.
The Departments decline to modify
the proposed language to provide that
the Secretary ‘‘shall’’ direct the plan or
issuer not to impose the NQTL after a
final determination of noncompliance
with the comparative analysis
requirements. In the preamble to the
proposed rules and in these final rules,
the Departments acknowledged that
immediate cessation of the application
of an NQTL may not be feasible for all
NQTLs and that feedback from the plan
or issuer would be taken into account.
The Departments understand that not
requiring immediate cessation of a
noncompliant NQTL in every situation
that involves a final determination of
noncompliance with the comparative
analysis requirements may allow
participants and beneficiaries to be
subject to noncompliant NQTLs. As
these commenters noted, meaningful
95 PHS
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consequences are important to
incentivize plans and issuers to comply
with MHPAEA. However, the
Departments are of the view that the
potential negative impacts for
participants and beneficiaries of
continuing to apply the NQTL should be
balanced with the operational feasibility
of immediately modifying business
practices, particularly for NQTLs that
are inherent to the plan design and may
require time to reform. Such potential
negative impacts for participants and
beneficiaries may be better evaluated
after the Departments review the
specific facts and circumstances of the
relevant determination of
noncompliance with the comparative
analysis requirements. Therefore, these
final rules specify that, when
determining the effect of a final
determination of noncompliance with
the comparative analysis requirements,
each specific violation will have its own
analysis of the applicable facts and
circumstances that will be taken into
account.
The Departments stress that MHPAEA
requires plans and issuers to ensure that
the treatment limitations, including
NQTLs imposed on mental health or
substance use disorder benefits in a
classification, are not more restrictive
than those applied to medical/surgical
benefits in the same classification. In
many cases, a failure to submit a
sufficient or compliant comparative
analysis is evidence that a plan or issuer
cannot substantiate an NQTL’s
compliance with these applicable
requirements, and therefore is violating
MHPAEA’s substantive parity
requirements. Therefore, where the
Departments have come to a final
conclusion that a comparative analysis
is not compliant and are issuing a final
determination of noncompliance,
including because the plan or issuer has
not submitted a sufficient comparative
analysis to demonstrate compliance, the
required corrective action may include
the removal of such NQTL. The CAA,
2021 also requires the Departments to
specify the actions a plan or issuer must
take to address the violation, and
include the required actions in the
annual report to Congress.96 This
provision makes clear the Departments
have broad authority to determine the
appropriate remedy where a plan’s or
issuer’s comparative analysis is not
compliant, and this authority allows the
Departments, depending on the relevant
facts and circumstances, to specify
removal of the NQTL as the appropriate
96 Code section 9812(a)(8)(B)(iv)(V), ERISA
section 712(a)(8)(B)(iv)(V), and PHS Act section
2726(a)(8)(B)(iv)(V).
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remedy to address a determination of
noncompliance. Nothing, however,
prevents the Departments or applicable
State authorities from specifying other
or additional corrective actions or from
taking enforcement action within their
respective authorities.
As stressed in the Departments’
reports to Congress, the Departments
generally engage plans and issuers in
repeated exchanges—asking follow-up
questions, seeking additional
documentation, performing further
assessments, and affording
opportunities for explanation—before
making a final determination of
noncompliance.97 The Departments
note that plans and issuers are given
multiple opportunities to engage with
the Departments after an initial request
for comparative analysis and before a
final determination of noncompliance.
As described later in this preamble, after
an initial request for a comparative
analysis, if the Department concludes
that a plan or issuer has not submitted
sufficient information to review the
requested comparative analyses, the
plan or issuer will be provided with
another opportunity to respond to the
Department’s initial request. If the
Department reviews the comparative
analyses (and any additional
information submitted upon request)
and makes an initial determination that
the plan or issuer is not in compliance,
the plan or issuer is provided another
opportunity to respond to the
Department. Because of the multiple
opportunities to engage with the
Departments prior to a final
determination of noncompliance, the
Departments decline to add any
additional formal appeal or review
requirements beyond that required
under the statute. Any direction not to
impose an NQTL provided to a plan or
issuer by the relevant Department will
take into account all correspondence
and discussions with the plan or issuer.
g. NQTL Examples—26 CFR 54.9812–
1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi),
and 45 CFR 146.136(c)(4)(vi)
The proposed rules contained thirteen
examples illustrating the NQTL
requirements, including revised
versions of some examples included in
the 2013 final regulations and several
new examples. Additionally, the
proposed rules proposed to eliminate
some examples that were included in
97 See, e.g., 2023 MHPAEA Comparative Analysis
Report to Congress (July 2023), pg. 52, https://
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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77625
the 2013 final regulations, in light of the
additional proposed requirements.
The Departments received comments
on each of the proposed examples and
comments recommending additional
examples be added. Some commenters
suggested the Departments use different
data elements in the examples related to
the relevant data evaluation
requirements that in their view would
better evaluate compliance with
MHPAEA. Other commenters expressed
concerns regarding how the proposed
exceptions to the NQTL requirements
discussed earlier in this preamble
would apply and requested that the
examples address what a plan or issuer
would be required to document to rely
on these exceptions. One of these
commenters also requested an example
showing analysis of an NQTL that is
developed based on multiple standards,
some of which qualify for the proposed
exception for independent professional
medical or clinical standards and some
of which do not. Some commenters
expressed concern regarding whether
the proposed mathematical substantially
all and predominant tests could be
performed on all NQTLs and requested
more detailed examples of how to apply
such tests.
As noted earlier in this preamble, the
Departments are declining to finalize
the proposed mathematical substantially
all and predominant tests, as well as the
proposed exceptions for NQTLs that
impartially apply independent
professional medical or clinical
standards or fraud, waste, and abuse
measures. Therefore, rather than
providing examples to address these
provisions, the examples address the
substantive provisions the Departments
are finalizing in these final rules,
including the general requirement that
NQTLs for mental health and substance
use disorder benefits not be more
restrictive, as written or in operation,
than the predominant NQTL that
applies to substantially all medical/
surgical benefits in the same
classification, the design and
application requirements, and the
relevant data evaluation requirements
(including potential data elements that
plans and issuers may consider to be
relevant data with respect to an NQTL).
The Departments are adapting some of
the fact patterns used in the examples
in the proposed rules related to
provisions that are not being finalized to
instead illustrate concepts applicable in
these final rules, but these final rules do
not include all of the examples included
in the proposed rules (or all of the
examples included in the 2013 final
regulations). The Departments note that
the exclusion in these final rules of any
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particular fact pattern that was
previously addressed in examples in the
proposed rules or the 2013 final
regulations is not intended to indicate
that any particular set of facts is
permissible or prohibited under these
final rules. Rather, the examples in
these final rules are included to
illustrate the application of the various
provisions included in these final rules.
Thus, plans and issuers are expected to
apply the requirements in paragraph
(c)(4) of these final rules to the specific
facts and circumstances of the benefit
design of their respective plans and
coverage options with respect to all
NQTLs applicable to mental health and
substance use disorder benefits, as well
as the processes, strategies, evidentiary
standards, and other factors used to
design or apply them, and any
information, evidence, sources, or
standards on which a factor or
evidentiary standard is based.
Additionally, as in the proposed rules,
any example that concludes that the
plan violates or complies with a
requirement of these final rules for
NQTLs should not be read to imply
compliance with any other requirements
of these final rules for NQTLs.
Example 1—Not comparable and
more stringent factors for
reimbursement rate methodology, in
operation. In the proposed rules,
Example 4 illustrated how plans and
issuers would be required to ensure
compliance in operation with the
proposed design and application
requirements for a plan’s reimbursement
rate methodology NQTL.98 These final
rules redesignate proposed Example 4 as
Example 1 and illustrate the application
of the general rule of the design and
application requirements of these final
rules with respect to a plan’s
reimbursement rate methodology NQTL.
The language in the facts and
conclusion of proposed Example 4
referencing an assumption that the
plan’s methods for determining
reimbursement rates for mental health
and substance use disorder benefits
satisfy the no more restrictive
requirement has been eliminated to
reflect, as discussed earlier in this
preamble, that the Departments decline
to finalize the proposed mathematical
substantially all and predominant tests
in these final rules.
Accordingly, the facts of Example 1 in
these final rules assume a plan’s
98 As stated in the preamble to the proposed rules,
Example 4 was based in part on guidance in FAQs
Part 39, Q6, 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-actimplementation-faqs-final-set-39.
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reimbursement rate methodology for
outpatient, in-network providers is
based on a variety of factors. As written,
for mental health, substance use
disorder, and medical/surgical benefits,
all reimbursement rates for physicians
and non-physician practitioners for the
same CPT code are based on a
combination of factors, such as the
nature of the service, duration of the
service, intensity and specialization of
training, provider licensure and type,
number of providers qualified to
provide the service in a given
geographic area, and market need
(demand). In operation, the plan utilizes
an additional strategy to further reduce
reimbursement rates for mental health
and substance use disorder nonphysician providers from those 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.
Example 1 concludes that the plan
violates the rules of paragraph (c)(4).
The plan reimburses non-physician
providers of mental health and
substance use disorder services by
reducing their reimbursement rates from
the rates for physician providers of such
services by the same percentage for
every CPT code but does not apply the
same reduction to non-physician
providers of medical/surgical services
from the rate for physician providers of
medical/surgical services. Therefore, in
operation, the factors used in designing
and applying the NQTL to mental health
and substance use disorder benefits in
the outpatient, in-network classification
are not comparable to, and are applied
more stringently than, the factors used
in designing and applying the NQTL
with respect to medical/surgical benefits
in the same classification. As a result,
the NQTL with respect to mental health
or substance use disorder benefits in the
outpatient, in-network classification is
more restrictive than the predominant
NQTL that applies to substantially all
medical/surgical benefits in the same
classification, in violation of 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4) of these final
rules. This example illustrates that the
plan violates the design and application
requirements and does not address
whether the plan complies with the
relevant data evaluation requirements.
Example 2—Strategy for exclusion for
experimental or investigative treatment
more stringently applied to Applied
Behavior Analysis (ABA) therapy in
operation. These final rules redesignate
proposed Example 10 as Example 2 with
modifications to the conclusion.
Proposed Example 10 concluded that
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the plan violates the proposed no more
restrictive requirements because, in
operation, the plan’s exclusion for
experimental or investigative treatment
imposed on ABA therapy 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. As discussed earlier in
this preamble, the Departments declined
to finalize the proposed mathematical
substantially all and predominant tests.
However, multiple commenters in
response to the proposed rules
expressed support for including an
example that specifically addresses the
exclusion of benefits to treat ASD.
Therefore, in Example 2 of these final
rules, the Departments are adapting
proposed Example 10 to demonstrate
how a strategy for a plan’s exclusion of
benefits for experimental or
investigative treatment that applies
more stringently to ABA therapy, in
operation, violates the design and
application requirements, and therefore
violates the requirements for NQTLs
under these final rules.
In Example 2, the facts of proposed
Example 10 are generally unchanged. A
plan, as written, generally excludes
coverage for all treatments that are
experimental or investigative for
medical/surgical benefits and mental
health and substance use disorder
benefits in the outpatient, in-network
classification. As a result, the plan
generally excludes, as experimental, a
treatment or procedure when no
professionally recognized treatment
guidelines include the treatment or
procedure as a clinically appropriate
standard 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. As written, the plan provides
benefits for the treatment of ASD, which
is a mental health condition, but, in
operation, 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 as including
ABA therapy and more than two
randomized controlled trials are
available to support the use of ABA
therapy as one intervention to treat
certain children with ASD.
Example 2 concludes that the plan
violates the design and application
requirements with respect to the
exclusion of ABA therapy because, in
operation, the plan deviates from its
strategy to exclude coverage of
experimental treatment of medical
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conditions and surgical procedures,
mental health conditions, and substance
use disorders because more than one
professionally recognized treatment
guideline defines clinically appropriate
standards of care for ASD as including
ABA therapy to treat certain children
with ASD and more than two
randomized controlled trials are
available to support the use of ABA
therapy as one intervention to treat
certain children with ASD. Therefore, in
operation, the strategy used to design
the NQTL for benefits for the treatment
of ASD, which is a mental health
condition for purposes of MHPAEA, in
the outpatient, in-network classification
is not comparable to, and is applied
more stringently than, the strategy used
to design and apply the NQTL for
medical/surgical benefits in the same
classification. As a result, the example
concludes that the NQTL is more
restrictive and therefore violates
MHPAEA. This example illustrates that
the plan violates the design and
application requirements and does not
address whether the plan complies with
the relevant data evaluation
requirements.
Example 3—Step therapy protocol
with exception for severe or irreversible
consequences, discriminatory factor.
The Departments received several
comments asking the Departments to
provide additional clarification on what
would be considered discriminatory
factors and evidentiary standards for
purposes of determining compliance
with the design and application
requirements. Accordingly, the
Departments are including in these final
rules a new Example 3 to provide an
example of circumstances under which
a plan or issuer would violate the
prohibition against discriminatory
factors and evidentiary standards in the
context of step therapy with exceptions
for severe or irreversible consequences.
The facts of Example 3 assume a plan
has a step therapy protocol that requires
participants and beneficiaries who are
prescribed certain drugs to try and fail
a generic or preferred brand name drug
before the plan will cover the treatment
or medication originally prescribed by a
provider. The plan has an exception to
this protocol that was developed solely
by relying on a methodology developed
by an external third-party organization.
The third-party organization’s
methodology, which is not based on an
independent professional medical or
clinical standard, identifies instances in
which a delay in treatment with a drug
prescribed for a medical condition or
surgical procedure could result in either
severe or irreversible consequences.
However, with respect to a drug
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prescribed for a mental health condition
or a substance use disorder, the thirdparty organization’s methodology only
identifies instances in which a delay in
treatment could result in both severe
and irreversible consequences. The plan
does not take any steps to correct, cure,
or supplement the methodology.
The conclusion to Example 3 explains
that the plan violates the prohibition on
discriminatory factors and evidentiary
standards under 26 CFR 54.9812–
1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B),
and 45 CFR 146.136 (c)(4)(i)(B). The
source upon which the factor used to
apply the step therapy protocol is based
is biased or not objective in a manner
that discriminates against mental health
or substance use disorder benefits as
compared to medical/surgical benefits
because it addresses instances in which
a delay in treatment with a drug
prescribed for a medical condition or
surgical procedure could result in either
severe or irreversible consequences, but
only addresses instances in which a
delay in treatment with a drug
prescribed for a mental health condition
or substance use disorder could result in
both severe and irreversible
consequences, and the plan fails to take
the steps necessary to correct, cure, or
supplement the methodology so that it
is not biased and is objective. Based on
the relevant facts and circumstances,
this source systematically disfavors
access or is specifically designed to
disfavor access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
Therefore, the factor used to design
exceptions to the step therapy protocol
is discriminatory, for purposes of
determining comparability and
stringency under the design and
application requirements, and it may
not be relied upon by the plan unless
the plan takes the steps necessary to
correct, cure, or supplement it (by, for
example, taking into account instances
in which a delay in treatment with a
drug prescribed for a mental health
condition or a substance use disorder
could result in severe or irreversible
consequences).
Example 4—Use of historical plan
data and steps the plan or issuer can
take to correct, cure, or supplement. The
Departments are including as Example 4
of these final rules a revised example
illustrating how plans and issuers can
correct, cure or supplement the use of
historical 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 so that the information is
not considered to be biased or not
objective and can be used as the basis
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for a factor or evidentiary standard that
is not discriminatory. The Departments
stated in the preamble to the proposed
rules that the proposed rules would
prohibit reliance 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) and
provided an example addressing
calculation of reimbursement rates
based on historical data on total plan
spending. Example 4 of these final rules
references the fact pattern from Example
4 in the proposed rules but provides
additional detail and analysis to
illustrate the application of the
prohibition on discriminatory factors
and evidentiary standards under these
final rules, including how a plan or
issuer could correct, cure, or
supplement the use of such data so that
the information is not considered to be
biased or not objective.
Specifically, the facts of Example 4
assume a plan’s methodology for
calculating provider reimbursement
rates relies only on historical plan data
on total plan spending for each
specialty, divided between mental
health and substance use disorder
providers and medical/surgical
providers from a time where the plan
was not subject to MHPAEA. The plan
used these historical plan data for many
years to establish base reimbursement
rates in all provider specialties for
which it provides medical/surgical,
mental health, and substance use
disorder benefits in the inpatient, innetwork classification. In evaluating the
use of these historical plan data in the
design of the methodology for
calculating provider reimbursement
rates, the plan determined, based on all
the relevant facts and circumstances,
that the historical plan data
systematically disfavor access or are
specifically designed to disfavor access
to mental health or substance use
disorder benefits as compared to
medical/surgical benefits. To ensure this
information about historical
reimbursement rates is not biased and is
objective, the plan supplements its
methodology to develop the base
reimbursement rates for mental health
and substance use disorder providers in
accordance with additional information,
evidence, sources, and standards that
reflect the increased demand for mental
health and substance use disorder
benefits in the inpatient, in-network
classification and to attract sufficient
mental health and substance use
disorder providers to the network. The
relevant facts and circumstances
indicate that the supplemented
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information, evidence, sources, or
standards do not systematically disfavor
access and are not specifically designed
to disfavor access to mental health and
substance use disorder benefits as
compared to medical/surgical benefits.
Example 4 of these final rules
concludes that the plan does not violate
the prohibition on discriminatory
factors and evidentiary standards with
respect to the plan’s methodology for
calculating provider reimbursement
rates in the inpatient, in-network
classification. The relevant facts and
circumstances indicate that the plan’s
use of only historical plan data to design
its methodology for calculating its
provider reimbursement rates in the
inpatient, in-network classification
would otherwise be considered to be
biased or not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits
since the historical data systematically
disfavor access or are specifically
designed to disfavor access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits. However, the plan
took the steps necessary to supplement
the information, evidence, sources, and
standards to reasonably reflect the
increased demand for mental health and
substance use disorder benefits in the
inpatient, in-network classification, and
adjusted the methodology to increase
reimbursement rates for those benefits,
thereby ensuring that the information,
evidence, sources, and standards relied
upon by the plan for this purpose are
not biased and are objective. Therefore,
the factors and evidentiary standards
used to design the plan’s methodology
for calculating provider reimbursement
rates in the inpatient, in-network
classification are not considered
discriminatory factors and evidentiary
standards.
Example 5—Generally recognized
independent professional medical or
clinical standards and more stringent
prior authorization requirement in
operation. In the proposed rules, the
Departments proposed Example 6 to
illustrate the exception for impartially
applied independent professional
medical or clinical standards and when
a plan fails to satisfy the exception. The
Departments received comments
requesting examples to provide further
clarity on how a plan or issuer may
properly rely on independent
professional medical or clinical
standards in the design and application
of NQTLs. As described earlier in this
preamble, the Departments are not
finalizing this exception as proposed.
Instead, these final rules specify that the
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use of independent professional medical
or clinical standards generally will not
be considered to be biased and not
objective under these final rules. The
Departments note that, under these final
rules, the use of such standards must
also comply with the other provisions of
these final rules, including the general
rule in the design and application
requirements and the relevant data
evaluation requirements. Therefore, the
Departments are modifying proposed
Example 6 and redesignating it as
Example 5 in these final rules, to
illustrate a violation of the design and
application requirements of these final
rules when a plan relies on independent
professional medical or clinical
standards to inform a factor used to
design an NQTL with respect to mental
health and substance use disorder
benefits that, in operation, is not
comparable to, and is applied more
stringently than, the same factor used to
design the NQTL for medical/surgical
benefits in the same classification.
In Example 5 of these final rules, the
provisions of a plan state that it relies
on, and does not deviate from,
independent professional medical or
clinical standards to inform the factor
used to design prior authorization
requirements for both medical/surgical
and mental health and substance use
disorder benefits in the prescription
drug classification. In this example, the
plan uses the ASAM national practice
guidelines as the independent
professional medical or clinical
standard to inform the factors used to
design and apply the prior authorization
requirement for treatment of OUD. The
ASAM practice guidelines do not
support prior authorization every 30
days for buprenorphine/naloxone
combination for treatment of OUD.
However, in operation, the plan requires
prior authorization for buprenorphine/
naloxone combination for treatment of
OUD every 30 days, which is
inconsistent with independent
professional medical standards on
which the factor used to design the
limitation is based. The plan’s factor
used to design and apply prior
authorization requirements for medical/
surgical benefits in the prescription
drug classification relies on, and does
not deviate from, independent
professional medical or clinical
standards.
The conclusion to Example 5 in these
final rules states that the plan violates
the requirements for NQTLs. The ASAM
national practice guidelines on which
the factor used to design prior
authorization requirements for
substance use disorder benefits is based
are independent professional medical or
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clinical standards that are not
considered to be biased or not objective
in a manner that discriminates against
mental health and substance use
disorder benefits under these final rules.
However, the plan must comply with
other requirements in these final rules
for NQTLs, as applicable, with respect
to such standards or measures that are
used as the basis for a factor or
evidentiary standard used to design or
apply an NQTL. In operation, the plan’s
factor used to design and apply prior
authorization requirements with respect
to substance use disorder benefits is not
comparable to, and is applied more
stringently than, the same factor used to
design and apply prior authorization
requirements for medical/surgical
benefits, because the factor relies on,
and does not deviate from, independent
professional medical or clinical
standards for medical/surgical benefits,
but deviates from the relevant
guidelines for substance use disorder
benefits. As a result, the NQTL with
respect to substance use disorder
benefits in the prescription drug
classification is more restrictive than the
predominant NQTL that applies to
substantially all medical/surgical
benefits in the same classification.
Example 6—Plan claims no data exist
to reasonably measure impact of NQTL
on access; medical necessity criteria. As
described earlier in this preamble, these
final rules require plans and issuers to
collect and evaluate relevant data in a
manner reasonably designed to assess
the impact of an NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits. Additionally, these
final rules provide guidance for plans
and issuers to comply with the relevant
data evaluation requirements when data
are initially temporarily unavailable for
a newly imposed NQTL or no data exist
that can reasonably measure any
relevant impact of an NQTL on access.99
Under the facts of new Example 6, a
plan approves or denies claims for
mental health and substance use
disorder benefits and for medical/
surgical benefits in the inpatient, innetwork and outpatient, in-network
classifications based on medical
necessity criteria. The plan states in its
comparative analysis that no data exist
that can reasonably measure any
99 As explained earlier in this preamble, these
final rules state that the provisions with respect to
these types of NQTLs shall only apply in very
limited circumstances and, where applicable, shall
be construed narrowly, consistent with the
fundamental purpose of MHPAEA. The
Departments are of the view that data can be
collected and evaluated for nearly all NQTLs.
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relevant impact of the medical necessity
criteria NQTL on access to mental
health or substance use disorder
benefits as compared to the NQTL’s
impact on access to medical/surgical
benefits in the relevant classifications,
without further explanation.
The example concludes that the plan
violates the requirements of these final
rules. The plan does not comply with
the requirements under these final rules
for NQTLs where no data exist that can
reasonably measure any relevant impact
of the NQTL on access because the plan
did not include in its comparative
analysis a reasoned justification as to
the basis for its conclusion that there are
no data that can reasonably measure the
NQTL’s impact, an explanation of why
the nature of the NQTL prevents the
plan from reasonably measuring its
impact, an explanation of what data was
considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
the NQTL complies with the
requirements of MHPAEA. For example,
data the plan could have considered
that could reasonably assess the NQTL’s
impact might include the number and
percentage of claims denials, or the
number and percentage of claims that
were approved for a lower level of care
than the level requested on the initial
claim. The plan has violated the
relevant data evaluation requirements,
as it has not collected and evaluated
relevant data in a manner reasonably
designed to assess the impact of the
NQTL on relevant outcomes related to
access nor did it include sufficient
information it its comparative analysis
with respect to the lack of relevant data.
Example 7—Concurrent review data
collection; no material difference in
access. Example 7 in these final rules
illustrates the application of the relevant
data evaluation requirements to a
concurrent review NQTL. This example
is based on similar facts from Example
2 in the proposed rules, but language in
the facts and conclusion of proposed
Example 2 referencing the no more
restrictive requirement have been
eliminated to reflect, as discussed
earlier in this preamble, that the
Departments decline to finalize the
proposed mathematical substantially all
and predominant tests in these final
rules (that would prohibit any NQTL
that is more restrictive than the most
common or most frequent variation of
the NQTL applied to at least two-third
of medical/surgical benefits in a
classification).
In this example as modified in these
final rules, a plan follows a written
process to apply a concurrent review
NQTL to all medical/surgical benefits
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and mental health and substance use
disorder benefits within the inpatient,
in-network classification. Under this
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.
The plan collects relevant data,
including the number of referrals to
second-level review, and the number of
denials of concurrent review claims as
compared to the total number of
concurrent review claims in the
inpatient, in-network classification. The
plan also collects the number of denied
claims that are overturned on appeal,
separately for mental health and
substance use disorder benefits and
medical/surgical benefits in the
inpatient, in-network classification. The
plan evaluates the relevant data and
determines that, based on the facts and
circumstances, the data do not suggest
that the concurrent review NQTL
contributes to material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits in the
inpatient, in-network classification.
Upon requesting the plan’s comparative
analysis for the concurrent review
NQTL and reviewing the relevant data,
the Secretary does not request
additional data and agrees that the data
do not suggest material differences in
access.
In Example 7 of these final rules, the
conclusion explains that the plan does
not violate the relevant data evaluation
requirements as it collected and
evaluated relevant data in a manner
reasonably designed to assess the
impact of the NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits
and considered the impact as part of its
evaluation. Because the relevant data do
not suggest that the NQTL contributes to
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits in the inpatient, innetwork classification, there is no strong
indicator that the plan violates the
requirements for NQTLs under these
final rules. However, the plan is still
required to comply with the design and
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application requirements under these
final rules, including the prohibition on
discriminatory factors and evidentiary
standards.
Example 8—Material difference in
access for prior authorization
requirement with reasonable action. In
the proposed rules, Example 1
illustrates the effect of a disparity in the
routine approval of benefits for mental
health conditions and substance use
disorders compared to benefits for
medical/surgical conditions in a
classification under the no more
restrictive requirement in the proposed
rules. However, as discussed earlier in
this preamble, the Departments have
declined to finalize the proposed
mathematical substantially all and
predominant tests. Therefore, the
Departments are adapting proposed
Example 1 for use as Example 8 of these
final rules to illustrate how a plan or
issuer can satisfy the requirement to
take reasonable action to address any
material differences in access as
necessary to ensure compliance with the
relevant data evaluation requirements,
in the context of material differences in
access in the routine approval of
benefits for mental health conditions
and substance use disorders compared
to medical/surgical benefits in a
classification.
In Example 8 of these final rules, a
plan requires prior authorization 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. The plan collects and
evaluates relevant data in a manner
reasonably designed to assess the
impact of the prior authorization
requirement on relevant outcomes
related to access to mental health and
substance use disorder benefits and
medical/surgical benefits in the
inpatient, in-network classification. The
plan’s written process for prior
authorization states that the plan
approves inpatient, in-network benefits
for medical conditions and surgical
procedures and mental health and
substance use disorder benefits 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. Approvals for
mental health and substance use
disorder benefits are most commonly
given only for 1 day, after which a
treatment plan must be submitted by the
patient’s attending provider and
approved by the plan. The relevant data
show that approvals for 7 days are most
common for medical conditions and
surgical procedures under this plan.
Based on all the relevant facts and
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circumstances, the difference in the data
suggests that the NQTL is likely to have
a negative impact on access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits. Therefore, the
differences in the data suggest that the
NQTL contributes to material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
To address these material differences,
the plan consults more recent medical
guidelines to update the factors that
inform its medical necessity NQTLs and
modifies the prior authorization NQTL
so that inpatient, in-network prior
authorization requests for mental health
or substance use disorder benefits are
approved for similar periods to what is
approved for medical/surgical benefits.
The plan includes documentation of
this action as part of its comparative
analysis.
The conclusion to Example 8 provides
that, while relevant data for the plan’s
prior authorization requirements
suggested that the NQTL contributes to
material differences in access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits in the classification,
the plan has taken reasonable action, as
necessary, to ensure compliance, in
operation, with the requirements for
NQTLs under these final rules by
updating the factors that inform its prior
authorization NQTL for inpatient, innetwork mental health and substance
use disorder benefits, so that such
benefits are approved for similar periods
to what is approved for medical/surgical
benefits, and documenting its action
taken to address material differences in
access to inpatient, in-network benefits,
as required under these final rules.
Example 9—Differences attributable
to the use of independent professional
medical or clinical standards. In the
proposed rules, the Departments
proposed to add new Example 5 to
illustrate how a plan may satisfy the
proposed exception for independent
professional medical or clinical
standards. As noted earlier in this
preamble, the Departments are not
finalizing that exception, and instead,
under these final rules, the use of
independent professional medical or
clinical standards are not considered to
be information, evidence, sources, or
standards that are biased and not
objective in a manner that discriminates
against mental health or substance use
disorder benefits as compared to
medical/surgical benefits, as long as the
use of these standards to design or apply
an NQTL complies with other
applicable requirements. Furthermore,
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under these final rules, differences in
access attributable to the use of
independent professional medical or
clinical standards for both medical/
surgical benefits and mental health and
substance use disorder benefits are not
considered to be material. However, to
the extent a plan or issuer attributes any
differences in access to the application
of such standards, the plan or issuer
must explain its bases for reaching that
conclusion in its comparative analysis.
Therefore, the Departments are adapting
Example 5 of the proposed rules for use
as Example 9 of these final rules to
illustrate the treatment of the use of
independent professional medical or
clinical standards.
In Example 9 of these final rules, a
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 factors and evidentiary standards
used to design and apply the medical
management requirement rely on
independent professional medical or
clinical standards that are generally
recognized by health care providers and
facilities in relevant clinical specialties.
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. The plan collects and evaluates
relevant data in a manner reasonably
designed to assess the impact of the
medical management NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits,
and considers the impact as part of the
plan’s evaluation. 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. The plan correctly
determines that these differences in
access are attributable to the
independent professional medical or
clinical standards that are used as the
basis for the factors and evidentiary
standards used to design or apply the
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NQTL and adequately explains the
bases for that conclusion as part of its
comparative analysis.
Example 9 concludes that the plan
does not violate the requirements under
these final rules for its medical
management NQTL. Independent
professional medical or clinical
standards are not considered to be
information, evidence, sources, or
standards that are biased and not
objective in a manner that discriminates
against mental health or substance use
disorder benefits as compared to
medical/surgical benefits and the plan
otherwise complies with the design and
application requirements. Additionally,
the plan does not violate the relevant
data evaluation requirements because it
has collected and evaluated relevant
data, the differences in access are
attributable to the independent
professional medical or clinical
standards that are used as the basis for
the factors and evidentiary standards
used to design or apply the medical
management NQTL, and the plan
explains the bases for this conclusion in
its comparative analysis. As a result, the
NQTL with respect to mental health or
substance use disorder benefits in the
inpatient, out-of-network classification
is no more restrictive than the
predominant NQTL that applies to
substantially all medical/surgical
benefits in the same classification.
Example 10—Material difference in
access for standards for provider
admission to a network with reasonable
action. In the proposed rules, the
Departments proposed new Example 13
to illustrate how plans and issuers may
comply with the proposed relevant data
evaluation requirements with respect to
NQTLs related to network composition,
including NQTLs 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.
These final rules largely adopt Example
13 as proposed, with some
modifications to reflect the standards
included in these final rules, and
redesignate it as Example 10.
In Example 10 of these final rules, a
plan applies NQTLs related to network
composition in the inpatient, innetwork and outpatient, 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 also assume
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that the processes, strategies,
evidentiary standards, and other factors
used in designing and applying the
NQTLs related to network composition
for mental health or substance use
disorder benefits in the inpatient, innetwork and outpatient, 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 NQTLs with
respect to medical/surgical benefits in
the same classifications. In order to
ensure, in operation, that the NQTLs are
no more restrictive than the
predominant NQTLs applied to
substantially all medical/surgical
benefits in the classification, the plan
collects and evaluates relevant data in a
manner reasonably designed to assess
the aggregate impact of all the NQTLs
related to network composition on
relevant outcomes related to access to
mental health and substance use
disorder benefits as compared with
medical/surgical benefits and considers
the impact as part of the plan’s
evaluation. The plan considers relevant
data that is known, or reasonably should
be known, including 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 (for
comparable services and benchmarked
to a reference standard, as appropriate);
and in-network and out-of-network
utilization rates (including data related
to the dollar value and number of
provider claims submissions). The plan
determines that the relevant data
suggest that the NQTLs in the aggregate
contribute to material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits in the
classifications because, based on all the
relevant facts and circumstances, the
differences in the data suggest that the
plan’s NQTLs related to network
composition are likely to have a
negative impact on access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits in the same
classifications. The plan takes
reasonable actions, as necessary, to
address the material differences in
access, to ensure compliance, in
operation, with the requirements for
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NQTLs under these final rules, by
strengthening its efforts to recruit and
encourage a broad range of available
providers and facilities to join the plan’s
network of providers, including by
taking actions to increase compensation
and other inducements, streamline
credentialing processes, contact
providers reimbursed for items and
services provided on an out-of-network
basis to offer participation in the
network, and develop a process to
monitor the effects of such efforts;
expanding the availability of telehealth
arrangements to mitigate overall
provider shortages in certain geographic
areas; providing additional outreach and
assistance to participants and
beneficiaries enrolled in the plan to
assist them in finding available innetwork providers and facilities; and
ensuring that the plan’s provider
directories are accurate and reliable.
The plan documents the efforts that it
has taken to address the material
differences in access that the data
revealed, and also documents the
reasons beyond the plan’s control that
the plan believes may contribute to the
material differences in access, and the
plan includes the documentation as part
of its comparative analysis submission.
Example 10 concludes that the plan
does not violate the requirements for
NQTLs under these final rules. The plan
complies with the design and
application requirements, and also
collects and evaluates relevant data, as
required under these final rules, in a
manner reasonably designed to assess
the aggregate impact of all such NQTLs
on relevant outcomes related to access
to mental health and substance use
disorder benefits and medical/surgical
benefits. While the data suggest that the
NQTLs contribute to material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits,
the plan takes reasonable action, as
necessary, to ensure compliance with
these final rules. The plan also
documents the actions that have been
and are being taken by the plan to
address material differences in access
and documents the reasons beyond the
plan’s control that the plan believes may
contribute to the material differences in
access. As a result, the network
composition NQTLs with respect to
mental health or substance use disorder
benefits in the inpatient, in-network and
outpatient, in-network classifications
are no more restrictive than the
predominant NQTLs that apply to
substantially all medical/surgical
benefits in the same classifications.
Example 11—Separate employee
assistance program (EAP) exhaustion
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treatment limitation applicable only to
mental health or substance use disorder
benefits. Example 11 in the proposed
rules amended Example 6 of the 2013
final regulations. These final rules retain
this example as proposed with minor,
non-substantive changes.
Specifically, in Example 11, an
employer maintains both a major
medical plan and an EAP. The EAP
provides, among other benefits, a
limited number of mental health or
substance use disorder counseling
sessions. These sessions, 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, and no similar exhaustion
requirement applies with respect to
medical/surgical benefits provided
under the major medical plan.
Example 11 concludes that the
requirement that limits eligibility for
mental health and substance use
disorder benefits under the major
medical plan until benefits under an
EAP are exhausted is an NQTL subject
to MHPAEA. Because the limitation
does not apply to medical/surgical
benefits, it violates the prohibition on a
separate NQTL applicable only to
mental health or substance use disorder
benefits. The Departments have also
included language to note that under
other Departmental regulations,100 the
EAP does not qualify as excepted
benefits because participants in the
major medical plan are required to use
and exhaust benefits under the EAP
(making the EAP a gatekeeper) before
they are eligible for benefits under the
plan.
Example 12—Separate exclusion for
treatment in a residential facility
applicable only to mental health and
substance use disorder benefits. Under
Example 12 of these final rules, which
is substantively identical to Example 12
in the proposed rules and only includes
minor, non-substantive changes, a plan
generally covers inpatient, in-network
and inpatient, out-of-network treatment
without any limitations on setting,
including skilled nursing facilities and
rehabilitation hospitals, provided other
medical necessity standards are
satisfied. The plan has an exclusion for
treatment at residential facilities, which
the plan defines as an inpatient benefit
for mental health and substance use
disorder benefits. This exclusion was
100 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).
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not generated through any broader
NQTL (such as medical necessity or
other clinical guideline).
Example 12 concludes that the plan
violates these final rules. 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 because
the plan does not apply a comparable
exclusion with respect to any medical/
surgical benefits in the same benefit
classification.
Example 13—Impermissible NQTL
imposed following a final determination
of noncompliance and direction by the
Secretary. In the proposed rules,
Example 7 provides that a plan that
continues to impose an NQTL after the
Secretary issues a final determination of
noncompliance with the NQTL
comparative analysis documentation
requirements and directs the plan not to
impose the NQTL by a certain date,
would not comply with the
requirements applicable to NQTLs.
These final rules retain this example
with modifications to add specificity
and reflect the substantive provisions of
the final rule and redesignate it as
Example 13.
In this example, following an initial
request by the Secretary for a plan’s
comparative analysis of the plan’s
exclusion of mental health and
substance use disorder benefits for
failure to complete a course of treatment
in the inpatient, in-network
classification, the plan submits a
comparative analysis for the NQTL. The
comparative analysis included
insufficient information to conduct an
appropriate comparison of the NQTL.
After review of the comparative
analysis, as well as additional
information submitted by the plan after
the Secretary determines that the plan
has not submitted sufficient information
to be responsive to the request, 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 exclusion to mental health
or substance use disorder benefits in the
inpatient, in-network classification are
comparable to, and applied no more
stringently than, those used in designing
and applying the NQTL to medical/
surgical benefits in the classification.
Although the plan submits a corrective
action plan and additional comparative
analyses within 45 calendar days after
the initial determination, it does not
eliminate or alter the exclusion or alter
the processes, strategies, evidentiary
standards, and other factors used in
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designing and applying the exclusion.
Moreover, the additional comparative
analysis still does not include sufficient
information. The Secretary determines
that the additional comparative analyses
do not demonstrate compliance with the
requirements for NQTLs under
MHPAEA. Accordingly, the plan
receives a final determination of
noncompliance with the statutory
comparative analysis documentation
requirements from the Secretary, which
concludes that the plan did not
demonstrate compliance through the
comparative analysis process. After
considering the relevant facts and
circumstances, and considering the
interests of plan participants and
beneficiaries, as well as feedback from
the plan, the Secretary directs the plan
not to impose the NQTL 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 exclusion
of benefits for failure to complete a
course of treatment in the inpatient, innetwork classification.
This Example 13 concludes that, by
continuing to impose the exclusion of
mental health and substance use
disorder benefits for failure to complete
a course of treatment in the inpatient,
in-network classification after the
Secretary directs the plan not to impose
this NQTL, the plan violates the
requirements of these final rules related
to the effect of a final determination of
noncompliance.
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)(iv), 29 CFR 2590.712(c)(2)(i) and
(c)(4)(iv), and 45 CFR 146.136(c)(2)(i)
and (c)(4)(iv)
The Departments proposed 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
preamble to the proposed rules noted
that the 2013 final regulations do not
explicitly incorporate the statutory
prohibitions on separate financial
requirements and treatment limitations
that are imposed only with respect to
mental health or substance use
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disorders in Code sections
9812(a)(3)(A)(i) and (ii), ERISA sections
712(a)(3)(A)(i) and (ii), and PHS Act
sections 2726(a)(3)(A)(i) and (ii),
respectively, but noted that financial
requirements and quantitative treatment
limitations imposed only with respect to
mental health or substance use disorder
benefits generally could not comply
with the parity requirements contained
in paragraph (c)(3) of 26 CFR 54.9812–
1, 29 CFR 2590.712, and 45 CFR
146.136. Additionally, the Departments
referred to an example in the 2013 final
regulations that demonstrates and
affirms that an NQTL applied only to
mental health or substance use disorder
benefits would not be permissible.101
The Departments noted in the proposed
rules that these amendments would
directly incorporate the statutory
prohibitions by expressly stating that
plans and issuers are not permitted to
impose any type 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.
Additionally, since the 2013 final
regulations state that the application of
paragraph (c)(2) to NQTLs is addressed
in paragraph (c)(4) of the regulations,
the Departments also proposed to add
similar language to the 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-reference the language proposed to
be added to 26 CFR 54.9812–1(c)(2)(i),
29 CFR 2590.712(c)(2)(i), and 45 CFR
146.136(c)(2)(i). The Departments
proposed 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. The Departments noted
that 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. As a result, such an NQTL
would be evaluated to determine
whether such NQTL complies with all
applicable requirements of these final
rules.
101 See 26 CFR 54.9812–1(c)(4)(iii), Example 6, 29
CFR 2590.712(c)(4)(iii), Example 6, and 45 CFR
146.136(c)(4)(iii), Example 6.
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Many commenters supported
reiterating the statutory requirement
that a plan or issuer must not impose a
financial requirement or treatment
limitation that is applicable only to
mental health or substance use disorder
benefits and specifying that if an
exclusion of a mental health or
substance use disorder treatment or
service is not due to the application of
another NQTL to both mental health or
substance use disorder benefits and
medical/surgical benefits in a
classification, such exclusion would be
subject to this prohibition. Commenters
also agreed with the Departments that,
if an exclusion of benefits for a mental
health condition or substance use
disorder is not generated through a
process, strategy, or factor, or informed
by an evidentiary standard of a broader
NQTL like medical necessity, such an
exclusion would need to be evaluated
for parity compliance (and would
therefore be prohibited, provided it does
not apply to medical/surgical benefits).
One commenter requested the
Departments clarify that a specific
NQTL need not be applicable to
medical/surgical benefits in the same
classification to overcome the notion
that the limitation is separately
applicable.
The Departments agree with
commenters that the proposed
prohibition on NQTLs applicable only
to mental health or substance use
disorder benefits is consistent with the
statute, and that an exclusion of benefits
for a mental health condition or
substance use disorder otherwise
covered under the plan or coverage not
generated through a process, strategy, or
factor, or informed by an evidentiary
standard of a broader NQTL like
medical necessity should be evaluated
for MHPAEA compliance. This
exclusion is prohibited as an
impermissible separate treatment
limitation if a comparable exclusion
does not apply to medical/surgical
benefits in the classification.
Additionally, as evaluation of a plan’s
or issuer’s compliance with MHPAEA is
generally assessed within a
classification of benefits, the prohibition
on separately applicable financial
requirements or treatment limitations
applies with respect to benefits in the
same benefit classification. Therefore,
the Departments are finalizing these
amendments as proposed at 26 CFR
54.9812–1(c)(2)(i) and (c)(4)(iv), 29 CFR
2590.712(c)(2)(i) and (c)(4)(iv), and 45
CFR 146.136(c)(2)(i) and (c)(4)(iv) to
reiterate that a plan or issuer may not
impose any financial requirement or
treatment limitation that is applicable
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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.
5. Other Amendments
a. Meaningful Benefits
The Departments proposed to amend
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) to specify that, if a
plan (or health insurance coverage)
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. The proposed rules proposed
that for purposes of this provision, if a
plan (or health insurance coverage)
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 conditions and surgical
procedures in such classification. The
Departments noted in the preamble to
the proposed rules that 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 requested comments on
this provision of the proposed rules,
including whether and how to define
‘‘meaningful benefits’’ and other
potential alternatives.
Many commenters expressed support
for this provision of the proposed rules.
Several of these commenters noted that
this requirement is essential to ensure
that plans and issuers are no longer able
to deny reimbursement of fundamental
evidence-based services for the
treatment of mental health conditions
and substance use disorders in a way
that similar services would never be
excluded for medical/surgical care.
Conversely, some commenters
opposed adopting any ‘‘meaningful
benefit’’ or similar standard in these
final rules. Several commenters argued
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that this proposed requirement exceeds
the Departments’ statutory authority,
and that by requiring ‘‘meaningful
benefits,’’ the Departments would
convert MHPAEA into a mandate to
cover mental health and substance use
disorder benefits. Other commenters
stated that the approach would require
plans and issuers to compare specific
treatments, which is inconsistent with
congressional intent to preserve the
ability of a plan or issuer to determine
whether a specific treatment is
medically necessary or appropriate,
instead of comparing coverage for
medical/surgical benefits and mental
health or substance use disorder
benefits more generally. Additionally,
one commenter stated this provision
would significantly broaden the scope
and complexity of a plan’s or issuer’s
compliance analysis and limit flexibility
in benefit design. Some commenters
noted that the meaningful benefits
standard, as proposed, might adversely
affect the operation of closed panel
plans, as the provision of any services
outside the network could require such
plans to evaluate and expand the scope
of covered mental health and substance
use disorder benefits, or alternatively,
restrict out-of-network benefits.
Commenters also expressed concern
that the term ‘‘meaningful benefits’’ may
not include services such as coordinated
specialty care for first episode
psychosis, and without a clear
definition of the term, such services
would not be covered for privately
insured individuals. Another
commenter stated that the proposed
meaningful benefit standard may
overlook and devalue the mental health
and substance use disorder services
provided by primary care physicians
and pediatricians, who are generally
considered to be medical/surgical
providers.
The Departments received many
comments on how to define the term
‘‘meaningful benefits,’’ as well as
potential alternatives, including
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. Many
commenters generally recommended
defining ‘‘meaningful benefits’’ based on
independent medical and clinical
guidelines or primary evidence-based
treatment based on independent
standards of current medical practice.
Some commenters recommended that
‘‘meaningful benefits’’ be defined as the
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full continuum of services that are
consistent with independent
professional medical or clinical
standards (or, equivalently, the term
‘‘generally accepted standards of care’’).
Other commenters recommended that
these final rules require coverage of at
least one primary treatment for a mental
health condition or substance use
disorder in a classification or coverage
that aligns with coverage under the
State’s designated EHB-benchmark plan.
A few commenters recommended that
the definition of ‘‘meaningful benefits’’
or primary treatment be further
developed through additional notice
and comment rulemaking or a request
for information.
The Departments recognize, as
commenters stated, that additional
clarifications are warranted regarding
the definition of the term ‘‘meaningful
benefits.’’ With regard to comments
stating that this provision of the
proposed rules is a benefit mandate that
would require plans and issuers to cover
specific treatments, as well as comments
that raised concerns about specific
mental health and substance use
disorder services not being considered
meaningful benefits (and therefore not
being covered by plans and issuers), the
Departments reiterate that this
requirement does not require plans and
issuers to cover mental health and
substance use disorder benefits
independently or irrespective of what is
provided with respect to medical/
surgical benefits.
After considering comments received,
the Departments are finalizing the
proposed meaningful benefits standard,
with modifications and clarifications.
These final rules require that, if a plan
(or health insurance coverage) provides
any benefits for a mental health
condition or substance use disorder in
any classification of benefits, it must
provide meaningful benefits for that
mental health condition or substance
use disorder in every classification in
which medical/surgical benefits are
provided. For this purpose, whether the
benefits provided are meaningful
benefits is determined in comparison to
the benefits provided for medical
conditions and surgical procedures in
the classification, and requires, at a
minimum, coverage of benefits for that
condition or disorder in each
classification in which the plan (or
coverage) provides benefits for one or
more medical conditions or surgical
procedures. Additionally, a plan (or
coverage) does not provide meaningful
benefits under these final rules unless it
also provides benefits for a core
treatment for that condition or disorder
in each classification in which the plan
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(or coverage) provides benefits for a core
treatment for one or more medical
conditions or surgical procedures.
The Departments note that, while
these final rules only require plans and
issuers to cover a minimum of one core
treatment for a covered mental health
condition or substance use disorder in
every classification of benefits in which
the plan (or coverage) provides benefits
for a core treatment for one or more
medical conditions or surgical
procedures, plans and issuers are
strongly encouraged to provide more
robust coverage to ensure that
participants and beneficiaries have
access to the mental health and
substance disorder care they need. The
Departments incorporate this
requirement in 26 CFR 54.9812–
1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and
45 CFR 146.136(c)(2)(ii) of these final
rules, as suggested by commenters, to
ensure that plans and issuers offering
mental health or substance use disorder
benefits do not provide coverage for the
full range of medical/surgical benefits in
a classification, yet cover only one or a
few isolated ancillary benefits for a
covered mental health condition or
substance use disorder in the same
classification. As noted earlier in this
preamble, a commenter expressed the
concern that this requirement would
broaden the scope and complexity of
analyzing MHPAEA NQTL compliance
and limit benefit design. However, as
noted above, this provision amends the
general requirement and limits the
ability of a plan or issuer to implement
a benefit design that provides robust
benefits for medical conditions and
surgical procedures while offering
minimal benefits for mental health
conditions and substance use disorders.
This requirement, in combination with
the other amendments to these final
rules, will help to better ensure
equitable access to mental health and
substance use disorder benefits as
compared to medical/surgical benefits.
For purposes of these final rules, a
core treatment for a condition or
disorder is a standard treatment or
course of treatment, therapy, service, or
intervention indicated by generally
recognized independent standards of
current medical practice. This definition
of ‘‘meaningful benefits’’ takes an
approach that is similar to the
suggestion made by multiple
commenters, as noted earlier in this
preamble, that meaningful benefits be
defined as the primary treatment for a
condition or disorder based on generally
recognized independent standards of
current medical practice. However,
instead of defining ‘‘meaningful
benefits’’ as coverage for the primary
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treatment for a condition or disorder in
a classification, these final rules require
the coverage of a core treatment
because, from a medical or clinical
perspective, there may not be a single
primary treatment in many cases for a
given condition or disorder (even where
there are evidence-based treatments,
services, therapies, and standards of
care).
These final rules do not set forth
specific requirements for plans and
issuers to determine what constitutes a
core treatment for any particular
condition or disorder, but plans and
issuers, in determining a core treatment
for a condition or disorder in this
context, should rely on current
evidence-based medical and clinical
information. The Departments note that
a core treatment for a particular
condition or disorder may not
necessarily refer to a single item or
service but may instead encompass a
suite of items and services that together
constitute a core treatment, depending
on the relevant generally recognized
independent standards of current
medical practice. In such a case, the
Departments expect that under this
provision, plans and issuers will cover
all components of at least one core
treatment if the items and services
provided as part of the treatment span
a number of classifications, provided
the plan or coverage provides benefits
for one or more core treatments for any
medical conditions or surgical
procedures in those classifications. For
example, one core treatment for major
depressive disorder generally includes
prescription drugs and psychotherapy.
However, a core treatment may also
include only prescription drugs or only
psychotherapy (and in cases of severe
depression, may also include inpatient
hospitalization or other types of
residential or outpatient treatment). The
Departments note that a core treatment,
with respect to a classification, may
include the same item or service in
other benefit classifications. For
example, for major depressive disorder,
psychotherapy could be a core treatment
with respect to both the outpatient, innetwork and outpatient, out-of-network
classifications. In response to
commenter requests for examples of
meaningful benefits, the Departments
have modified proposed Examples 5
and 6, and added examples that further
illustrate the application of the
meaningful benefit standard, as
discussed in more detail later in this
preamble.
The Departments also recognize the
workability concerns raised by
commenters with respect to the
proposed meaningful benefits standard
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in the proposed rules. In response to
these comments, the Departments
include language in these final rules to
provide that, if there is no core
treatment for a mental health condition
or substance use disorder with respect
to a classification, the plan (or coverage)
is not required to provide benefits for a
core treatment for such condition or
disorder in that classification. Instead,
the plan (or coverage) must provide
benefits for such condition or disorder
in every classification in which
medical/surgical benefits are provided.
Additionally, under these final rules, if
the plan (or coverage) does not provide
meaningful benefits for any medical
condition or surgical procedure in a
classification, the plan (or coverage) is
not required to provide meaningful
benefits for any mental health
conditions or substance use disorders in
the classification. This language further
makes clear that the requirement to
provide coverage of meaningful benefits
for a condition or disorder is not a
coverage mandate, but rather another
approach to ensuring parity between
mental health or substance use disorder
benefits and medical/surgical benefits in
a classification.
The Departments also stated in the
preamble to the proposed rules that they
recognize that the meaningful benefits
proposal is related to an issue
characterized as ‘‘scope of services’’ or
‘‘continuum of care,’’ as addressed in
the preamble to the 2013 final
regulations.102 ‘‘Scope of services,’’
when used in this context, generally
refers to the types of treatment and
treatment settings that are covered by a
plan or coverage. The Departments
requested comments on whether
additional guidance is needed regarding
how the proposed meaningful benefits
standard would interact with the
approach related to scope of services
adopted under the 2013 final
regulations.
Commenters suggested the
Departments add ‘‘scope of services’’ or
‘‘scope of covered services’’ to the
illustrative, non-exhaustive list of
NQTLs. These commenters noted the
importance of psychiatric care being
fully integrated with the rest of
medicine in primary care settings and in
hospitals. Despite the language in the
2013 final regulations on intermediate
services,103 these commenters
102 See 78 FR 68240, 68246–68247 (Nov. 13,
2013).
103 Ibid. In the preamble to the 2013 final
regulations, the Departments stated that plans and
issuers must assign covered intermediate mental
health and substance use disorder benefits to the
existing six benefit classifications in the same way
that they assign comparable intermediate medical/
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highlighted that plans and issuers
sometimes exclude fundamental
services and do not assess those
exclusions as NQTLs. These
commenters noted that identifying
‘‘scope of services’’ or ‘‘scope of covered
services’’ as a covered NQTL would
remove ambiguity and require plans and
issuers to determine whether an
exclusion of mental health or substance
use disorder benefits met the NQTL
comparability and stringency test.
The Departments acknowledge these
comments and the importance of
psychiatric care being fully integrated in
primary care settings and in hospitals
but decline to add scope of services as
an NQTL in the illustrative list in these
final rules. Like the 2013 final
regulations, these final rules are not
intended to mandate coverage of any
particular benefits. These final rules
continue to require mental health and
substance use disorder benefits and
medical/surgical benefits to be assigned
to the six classifications set forth in the
regulations. For intermediate services
like residential treatment, partial
hospitalization, and intensive outpatient
treatment, the Departments continue to
require plans and issuers to assign
covered intermediate mental health and
substance use disorder benefits to the
existing six benefit classifications in the
same way that they assign comparable
intermediate medical/surgical benefits
to these classifications.104 The
Departments point to the examples in
these final rules that address coverage
restrictions based on geographic
location, facility types, provider
specialty, and other criteria that limit
the scope or duration of benefits. Plans
and issuers are required to comply with
the NQTL requirements with respect to
these types of restrictions. Further, the
Departments note that exclusions of
services to treat a condition or disorder
otherwise covered by the plan or
coverage are NQTLs that must comply
surgical benefits to these classifications. The 2013
final regulations also included additional examples
illustrating the application of the NQTL rules to
plan exclusions affecting the scope of services and
clarified that plan or coverage restrictions based on
geographic location, facility type, provider
specialty, and other criteria that limit the scope or
duration of treatment must comply with the NQTL
parity standard under the final rules.
104 Id. at 68247. For example, as described in the
preamble to the 2013 final regulations, 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 use 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.
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with the provisions applicable to
NQTLs under the final rules (including
that there are no separate NQTLs that
apply only to mental health or
substance use disorder benefits in a
classification).
In response to questions about
whether the No Surprises Act’s
requirements that certain out-of-network
items and services be covered by plans
and issuers might adversely affect the
operation of closed panel plans by
effectively requiring the coverage of outof-network mental health or substance
use disorder benefits (including in the
context of the meaningful benefits
standard in these final rules), the
Departments note that nothing in these
final rules requires a plan or coverage
that provides coverage for medical/
surgical benefits in the inpatient, out-ofnetwork and outpatient, out-of-network
classifications only to the extent
required under Code sections 9816 and
9817, ERISA sections 716 and 717, and
PHS Act sections 2799A–1 and 2799A–
2 to provide additional mental health or
substance use disorder benefits in the
inpatient, out-of-network and
outpatient, out-of-network
classifications in accordance with this
section. This approach is consistent
with language in the 2013 final
regulations which stated that
compliance with PHS Act section 2713
(requiring coverage for recommended
preventive services without any costsharing requirements) should not
require that the full range of benefits for
a mental health condition or substance
use disorder be provided under
MHPAEA. 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 make
explicit the Departments’ interpretation
that the requirement to provide coverage
for mental health and substance use
disorder benefits 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 2010
interim final rules implementing
MHPAEA.105
The Departments solicited comments
on the provisions of the 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
received very few comments on this
issue. Most of the comments received
related to the classification of certain
105 75
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benefits as medical/surgical instead of
mental health or substance use disorder.
One comment suggested that a new
classification of ‘‘urgent/crisis care’’
should be added to encompass both
medical/surgical urgent care and mental
health or substance use disorder crisis
services. Because additional
classifications are not required or
necessary, the Departments are
finalizing these amendments as
proposed. Plans and issuers are
reminded that the list of the current
classifications in these final rules is
exhaustive. Classification of benefits as
medical/surgical benefits instead of
mental health or substance use disorder
benefits is discussed in more detail
earlier in this preamble. The
Departments will consider whether and
to what extent additional guidance may
be needed to address the application of
MHPAEA to urgent/crisis care.
In the proposed rules, the
Departments proposed to add two
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. The Departments are
finalizing these examples with
modifications to align with these final
rules and are providing additional
clarity on the application of the
meaningful benefits standard to plans
and issuers by redesignating proposed
Example 6 as Example 7 and adding
new Examples 6 and 8.
In proposed Example 5, a plan
generally covers treatment for ASD, a
mental health condition,106 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. The preamble of the
proposed rules stated that, based on
generally recognized independent
standards of current medical practice
consulted, ABA therapy is the primary
treatment for ASD in children. In this
proposed example, the plan generally
covers the full range of outpatient
treatments and treatment settings,
including primary treatments, for
medical conditions and surgical
procedures when provided on an out-ofnetwork basis. The proposed example
106 As stated earlier in this preamble, the
proposed rules stated, and these final rules
continue to state, that for purposes of MHPAEA,
ASD is a mental health condition under generally
recognized independent standards of current
medical practice. Therefore, benefits for this
condition are considered mental health benefits,
and are subject to the protections of MHPAEA and
its implementing regulations.
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concluded that the plan violates the
proposed meaningful benefits standard
because, by not providing benefits for
ABA therapy, it fails to provide
meaningful benefits for ASD in the
outpatient, out-of-network
classification, but generally covers the
full range of medical/surgical benefits in
the classification.
In 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. The example in the
proposed rules noted that nutrition
counseling is the primary treatment for
eating disorders in the outpatient, innetwork classification and stated that
the plan generally provides benefits for
the primary treatments for medical
conditions and surgical procedures in
the outpatient, in-network classification.
The proposed example concluded that
the plan violates the proposed
meaningful benefits standard because,
by not providing benefits for nutrition
counseling, it fails 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. The Departments noted
that, if the plan covers medical/surgical
benefits for nutrition counseling, the
plan would also violate the prohibition
on separate NQTLs applicable only to
mental health or substance use disorder
benefits.
Several commenters generally
expressed support for the proposed
Examples 5 and 6, which illustrated
clear instances where exclusions of key
services for ASD and eating disorders
violate MHPAEA, noting that these
examples remove any ambiguity
whether such exclusions are
inconsistent with MHPAEA’s
requirements. One commenter
expressed concerns about references to
ABA therapy specifically because
referring to a specific treatment may be
limiting as evidence evolves regarding
ASD. This commenter also cited a
relatively weak evidence base for ABA
therapy as a reason why the example
should not specifically reference ABA
therapy. Another commenter requested
that Example 6 define ‘‘primary
treatments’’ and ‘‘meaningful benefits’’
based on independent medical and
clinical guidelines. A few commenters
suggested that the Departments use the
term ‘‘medical nutrition therapy’’
instead of nutrition counseling, to better
reflect the clinical term used in
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treatment codes. Another commenter
suggested providing an additional
example related to the treatment of
OUD, to reinforce the clear requirement
to cover opioid treatment program
services as part of the ‘‘meaningful’’
coverage of substance use disorder
benefits in all classifications in which
meaningful medical/surgical services
are covered.
After considering comments, the
Departments are finalizing Examples 5
and 6 in the proposed rules with
modifications, to make the examples
consistent with the clarifications
described earlier in this preamble
stating that a plan or issuer will be
required to provide meaningful benefits
for a mental health condition or
substance use disorder in a
classification if it provides meaningful
benefits for one or more medical
conditions or surgical procedures in the
same classification. These final rules
also make minor clarifying changes to
reflect more appropriate clinical
terminology and introduce two new,
additional examples. In each example in
these final rules that illustrates the
meaningful benefits standard, the group
health plan is subject to the
requirements of MHPAEA and provides
both medical/surgical benefits and
mental health and substance use
disorder benefits. Additionally, these
final rules note that references in these
examples to any particular core
treatment are included for illustrative
purposes only and are not intended to
limit coverage in any way. The
Departments remind plans and issuers
that they must consult generally
recognized independent standards of
current medical practice to determine
the applicable core treatment, therapy,
service, or intervention for any covered
condition or disorder, and note that, as
medical evidence evolves, the core
treatment options for any condition or
disorder may change.
In Example 5 of these final rules, a
plan covers treatment for ASD. As
explained earlier in this preamble and
in the proposed rules, for purposes of
MHPAEA, ASD is a mental health
condition under generally recognized
independent standards of current
medical practice.107 Specifically, the
plan covers outpatient, out-of-network
developmental screenings for ASD, but
excludes all other benefits for outpatient
treatment for ASD, including ABA
therapy, when provided on an out-ofnetwork basis. The plan generally
covers the full range of outpatient
treatments (including core treatments)
107 DSM (5th ed.), Section II: Diagnostic Criteria
and Codes, Autism Spectrum Disorder.
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and treatment settings for medical
conditions and surgical procedures
when provided on an out-of-network
basis. Under the generally recognized
independent standards of current
medical practice consulted by the plan,
developmental screenings alone that are
covered for diagnostic purposes,
without any coverage for a therapeutic
intervention, do not constitute a core
treatment for ASD. Example 5 concludes
that the plan violates these final rules.
Although the plan covers benefits for
ASD, in the outpatient, out-of-network
classification, it only covers
developmental screenings, so it does not
cover a core treatment for ASD in the
classification. Since the plan generally
covers the full range of medical/surgical
benefits including a core treatment for
one or more medical conditions or
surgical procedures in the classification,
it fails to provide meaningful benefits
for treatment of ASD in the
classification, as required under these
final rules.
New Example 6 of these final rules
starts with the same facts as Example 5
and illustrates how these final rules
apply where a plan or issuer does not
cover a core treatment for any medical
conditions or surgical procedures in a
classification. The facts of new Example
6 state that the plan is a health
maintenance organization (HMO) that
does not cover the full range of medical/
surgical benefits, including a core
treatment for any medical conditions or
surgical procedures in the outpatient,
out-of-network classification (except as
required under Code sections 9816 and
9817, ERISA sections 716 and 717, and
PHS Act sections 2799A–1 and 2799A–
2), but covers benefits for medical
conditions and surgical procedures in
the inpatient, in-network; outpatient, innetwork; emergency care, and
prescription drug classifications.
Example 6 concludes that the plan does
not violate the 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 the
plan does not provide meaningful
benefits including a core treatment for
any medical condition or surgical
procedure in the outpatient, out-ofnetwork classification (except as
required under Code sections 9816 and
9817, ERISA sections 716 and 717, and
PHS Act sections 2799A–1 and 2799A–
2), the plan is not required to provide
meaningful benefits, for any mental
health conditions or substance use
disorders in that classification.108 The
108 As discussed earlier in this preamble, the
Departments note that this conclusion would hold
if the plan provides benefits for a core treatment for
a medical/surgical condition in the outpatient, out-
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Departments note that, nevertheless, the
plan must provide meaningful benefits
for each mental health condition and
substance use disorder for which the
plan provides benefits in every
classification in which meaningful
medical/surgical benefits are provided.
Additionally, the Departments note that
plans and issuers must comply with
other requirements of these final rules,
as applicable, including the prohibition
on NQTLs applicable only to mental
health and substance use disorder
benefits.109
In Example 7 of these final rules,
which was redesignated from Example 6
in the proposed rules, a plan provides
extensive benefits, including for core
treatments for many medical conditions
and surgical procedures in the
outpatient, in-network classification,
including nutrition counseling for
diabetes and obesity. The plan also
generally covers diagnosis and
treatment for eating disorders, which are
mental health conditions, including
coverage for nutrition counseling 110 to
treat eating disorders in the outpatient,
in-network classification. Under this
example, nutrition counseling is a core
treatment for eating disorders, in
accordance with generally recognized
independent standards of current
medical practice consulted by the plan.
Example 7 concludes that the plan does
not violate the meaningful benefits
standard in these final rules. The
coverage of diagnosis and treatment for
eating disorders, including nutrition
counseling, in the outpatient, innetwork classification results in the
plan providing meaningful benefits for
the treatment of eating disorders in the
classification, as determined in
of-network classification, solely to meet
requirements under the provisions of the No
Surprises Act.
109 For example, if the plan excludes coverage for
ABA therapy and the exclusion does not comply
with the provisions applicable to NQTLs under the
final rules—including the design and application
requirements and the relevant data evaluation
requirements (if the exclusion was generated
through a broader NQTL such as medical necessity
or other clinical guideline that also applies to
medical/surgical benefits in the relevant
classification), or the requirement that there are no
separate NQTLs that apply only to mental health or
substance use disorder benefits in a classification—
the plan violates the rules of 26 CFR 54.9812–
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4).
110 The proposed rules and these final rules refer
to benefits for ‘‘nutrition counseling.’’ The
Departments acknowledge several commenters who
noted that other terminology may be more
appropriate, such as ‘‘medical nutrition therapy’’ or
‘‘medical nutrition therapy provided by a dietitian’’
using specific CPT codes. The Departments intend
that references to nutritional counseling for eating
disorders be interpreted broadly to include these
and other appropriate types of treatment for eating
disorders.
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comparison to the benefits provided for
medical conditions and surgical
procedures in the classification.
In response to commenters who
requested an additional example
illustrating what plans and issuers must
do to provide meaningful benefits for
the treatment of OUD, the Departments
are also finalizing new Example 8. In
this new example, a plan provides
extensive benefits for the core
treatments for many medical conditions
and surgical procedures in the
outpatient, in-network and prescription
drug classifications. The plan provides
coverage for diagnosis and treatment for
OUD, a substance use disorder, in the
outpatient, in-network classification, by
covering counseling and behavioral
therapies, also referred to as
psychosocial treatments. Additionally,
the plan provides coverage for diagnosis
and treatment for OUD, in the
prescription drug classification, by
covering medications to treat opioid use
disorder (MOUD). Under this example,
counseling and behavioral therapies and
MOUD, in combination, are one of the
core treatments for OUD, in accordance
with generally recognized independent
standards of current medical practice
consulted by the plan.
Example 8 concludes that the plan
does not violate these final rules. The
coverage of counseling and behavioral
therapies and MOUD, in combination,
in the outpatient, in-network
classification and prescription drug
classification, respectively, results in
the plan providing meaningful benefits
for the treatment of OUD in the
outpatient, in-network and prescription
drug classifications.
b. Classification of 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. The Departments proposed
to reiterate 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 a plan
or issuer may not divide benefits into
any sub-classifications other than those
specifically permitted under the
regulations. The Departments did not
propose any substantive changes to the
existing sub-classifications or to permit
any new sub-classifications. The
Departments also proposed nonsubstantive changes to 26 CFR 54.9812–
1(c)(3)(iv), 29 CFR 2590.712(c)(3)(iv),
and 45 CFR 146.136(c)(3)(iv) to label the
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tables in the examples, update
references in the examples, and
redesignate the examples as paragraphs.
A few commenters expressed
concerns about the classification of
certain types of benefits and providers
into existing classifications and subclassifications, including intensive
outpatient treatment, partial
hospitalization programs, and other
team-based models of care. Some
commenters requested additional
clarification, including a standard
definition for the outpatient subclassifications, citing the fact that some
plans and issuers use differing
variations to define the outpatient,
office visit sub-classification. One
commenter requested that the
Departments indicate that the subclassifications applicable to financial
requirements and quantitative treatment
limitations under paragraph (c)(3)(iii) of
the 2013 final regulations may also be
used for NQTLs.
As discussed earlier in this preamble,
plans and issuers must assign covered
intermediate mental health and
substance use disorder benefits to the
existing six benefit classifications in the
same way that they assign comparable
intermediate medical/surgical benefits
to these classifications. Additionally,
plans and issuers that opt to use subclassifications for outpatient benefits
must assign covered outpatient benefits
to the permissible outpatient subclassifications for mental health and
substance use disorder benefits in the
same way they assign comparable
medical/surgical benefits. The
Departments are finalizing the
clarification that a plan or issuer is not
permitted to divide benefits into any
sub-classifications other than those
specifically permitted under the
regulations,111 as well as the
clarification 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.112 Consistent with
the proposed rules, the Departments are
not making any substantive changes to
the existing sub-classifications or to
permit any new sub-classifications of
benefits in these final rules. The
Departments are also finalizing the nonsubstantive changes to 26 CFR 54.9812–
1(c)(3)(iv), 29 CFR 2590.712(c)(3)(iv),
and 45 CFR 146.136(c)(3)(iv), for which
no comments were received.
111 26 CFR 54.9812–1(c)(3)(iii), 29 CFR
2590.712(c)(3)(iii), and 45 CFR 146.136(c)(3)(iii).
112 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).
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The Departments noted in the
preamble to the proposed rules that they
have received questions and requests for
guidance on how to comply with
MHPAEA’s requirements with respect to
telehealth benefits, including where
telehealth fits into the existing
classifications and sub-classifications of
benefits and whether changes are
necessary to account for telehealth
benefits. The Departments did not
propose any changes in the proposed
rules with respect to telehealth benefits
and instead stated that they expected
plans and issuers to treat telehealth
benefits the same way they treat those
benefits when provided in person in
determining the classification or subclassifications in which a particular
benefit belongs. The Departments
requested comments on whether
changes to the framework and existing
regulations implementing MHPAEA
were necessary to account for telehealth
benefits.
Several commenters stated that the
expansion of telehealth services can
supplement a plan’s or issuer’s network
where there are in-person provider
shortages and expressed support for
treating telehealth benefits the same
way those benefits are treated when
provided in person. Some commenters
discussed the growth and sustained
usage of telehealth services since the
start of the COVID–19 pandemic,
particularly for mental health and
substance use disorder services.
Commenters stressed that telehealth is
particularly valuable in rural and
medically underserved areas. However,
commenters stressed that telehealth may
not be appropriate for all patients and
does not fully replace in-person mental
health and substance use disorder care.
The Departments reiterate that plans
and issuers are expected to treat
telehealth benefits the same way they
treat those benefits when provided in
person in determining the classification
or sub-classifications in which a
particular benefit belongs.
As discussed earlier in the preamble,
several commenters requested the
Departments take into account
telehealth in the relevant data
evaluation requirements, as well as the
requirements for standards related to
network composition; however, the
Departments are not addressing any
specific data metrics for telehealth in
these final rules. After reviewing the
comments received on this issue, the
Departments are not making changes in
these final rules to address how to
classify telehealth benefits. The
Departments understand that telehealth
plays a vital role in the provision of
health care, particularly following the
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COVID–19 pandemic, and may support
access to services for those with
transportation barriers. When evaluating
MHPAEA compliance, plans and issuers
must include any covered telehealth
benefits in the six classifications used to
apply the parity requirements. The
Departments also understand that
telehealth can be used by plans and
issuers as a tool to address provider
shortages. These final rules also
acknowledge telehealth can be
leveraged to mitigate provider shortages
in a geographic area and that leveraging
telehealth is a potential reasonable
action that can be used to address
material differences in in-network
access.
c. Availability of Plan Information
Treasury and DOL proposed 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 to clarify that
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 proposed
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 the 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. The
Departments noted that this clarification
is consistent with proposed 26 CFR
54.9812–2(e)(2), 29 CFR 2590.712–
1(e)(2), and 45 CFR 146.137(e)(2), 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 when requested by 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. The Departments noted in the
preamble to the proposed rules that
participants and beneficiaries in ERISA
plans should be able to request copies
of comparative analyses to ensure they
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are informed about their health plans or
group health insurance coverage.
Additionally, the Departments noted
that 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.
The Departments received several
comments on this aspect of the
proposed rules. A few commenters
recommended that the Departments add
language to the end of paragraph (d)(3)
of 26 CFR 54.9812–1, 29 CFR 2590.712,
and 45 CFR 146.136 making clear that
no part of the comparative analyses or
other applicable information required
by 26 CFR 54.9812–2, 29 CFR 2590.712–
1, or 45 CFR 146.137 may be withheld
when requested, including because the
information is proprietary, has
commercial value, or is commercially
protected. One of these commenters also
urged the Departments to conform this
provision with the standard proposed in
26 CFR 54.9812–2(e), 29 CFR 2590.712–
1(e), and 45 CFR 146.137(e), so that
individuals can have information at the
time of the denial, which is needed to
assess whether to raise a parity
compliance claim in an internal
grievance or appeal.
After considering comments, the
Departments are finalizing the
amendments to 26 CFR 54.9812–1(d)(3),
29 CFR 2590.712(d)(3), and 45 CFR
146.136(d)(3) as proposed, with a
correction. The final rules remove the
phrase ‘‘upon appeal of an adverse
benefit determination’’ and replace it
with ‘‘who have received an adverse
benefit determination’’ in the third
sentence of 26 CFR 54.9812–1(d)(3), 29
CFR 2590.712(d)(3), and 45 CFR
146.136(d)(3) to conform with the
requirements under the DOL claims
procedure rule at 29 CFR 2560.503–1
and rules issued by the Departments at
26 CFR 54.9815–2719, 29 CFR
2590.715–2719, and 45 CFR 147.136,
which set forth rules regarding claims
and appeals. The Departments also
decline to exempt plans and issuers
from providing certain types of
information as part of their comparative
analyses, to ensure transparency when
an individual (or their authorized
representative) requests a comparative
analysis. As stated earlier in this
preamble, this information is relevant to
a claimant’s claim for benefits and
should therefore be made available.
d. Other Provisions
The proposed rules included
proposed amendments to 26 CFR
54.9812–1(e)(4), 29 CFR 2590.712(e)(4),
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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). The
preamble to the proposed rules noted
that 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 nongrandfathered 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 EHB. The preamble further
stated that HHS has updated 45 CFR
156.115(a)(3) to state that provision of
EHB 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.’’ 113 The
Departments did not receive comments
on this provision. 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 are finalizing this change
as proposed with minor edits for
precision, and to reflect that the
requirement would only apply to a
health insurance issuer offering nongrandfathered health insurance coverage
in the individual or small group market
that is required to provide mental health
and substance use disorder services,
including behavioral health treatment
services, as part of EHB required under
45 CFR 156.110(a)(5) and 156.115(a).
The proposed rules also included
several technical edits to update
paragraph (c)(3)(i) of the 2013 final
113 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 (Sept. 27, 2021), https://www.federal
register.gov/documents/2021/09/27/2021-20509/
patient-protection-and-affordable-care-actupdating-payment-parameters-section-1332-waiver.
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regulations to add citations, include
additional specificity in citations, and
strike an outdated reference to
limitations on annual deductibles for
non-grandfathered health plans in the
small group market at PHS Act section
2707(b) and ACA section 1302(c). The
Departments did not receive any
comments on these provisions and are
finalizing as proposed.
The Departments are finalizing
proposed technical amendments to 26
CFR 54.9812–1(c)(3)(iii)(A) and (B), 29
CFR 2590.712(c)(3)(iii)(A) and (B), and
45 CFR 146.136(c)(3)(iii)(A) and (B) to
update citations. No comments were
received on these technical
amendments. In finalizing these
provisions, the Departments are also
restoring parenthetical references to
health insurance coverage. Re-insertion
of the phrase ‘‘health insurance
coverage’’ is not intended to be a
substantive change from the proposed
rules, but rather corrects this omission
and is consistent with the text of the
2013 final regulations.
B. New Regulations at 26 CFR 54.9812–
2, 29 CFR 2590.712–1, and 45 CFR
146.137
The CAA, 2021 amended MHPAEA,
in part, to expressly require plans and
issuers that offer coverage that provides
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
comparative analyses of the design and
application of NQTLs, and make their
comparative analyses and certain
information available to the
Departments or applicable State
authorities upon request. The
Departments proposed to codify this
requirement.
Many commenters expressed support
for codification of this requirement with
several of these commenters noting that
such detailed requirements are
necessary to clarify what plans’ or
issuers’ analyses must contain, as well
as to hold plans and issuers accountable
in following such requirements.
Many other commenters criticized the
proposed content elements and
requested specific changes to the rules
as proposed to assist plans and issuers
in complying with the requirement to
perform and document comparative
analyses. Several commenters requested
examples of a compliant comparative
analysis to assist in understanding what
documentation, in the Departments’
view, is required to meet the standards.
Another commenter stated that critical
components of the terms, such as what
a test comprises, the standards for
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meeting that test, and compiling the
proper information are subject to
interpretation, which can lead to
regulators and auditors having different
perspectives on the requirements,
creating substantial uncertainty for
plans and issuers that are attempting to
comply. Several commenters also
expressed a desire for additional
clarification regarding the proposed
content elements with respect to
specific NQTLs. One commenter was
concerned that the proposed rules did
not provide clarity on how to apply the
new comparative analysis requirements
to complex NQTLs, such as those
related to network administration.
After reviewing comments, the
Departments are finalizing the
codification of the new statutory
requirement that plans and issuers that
offer coverage that provides both
medical/surgical benefits and mental
health or substance use disorder
benefits and impose NQTLs on mental
health or substance use disorder
benefits must perform and document a
comparative analysis of the design and
application of each such NQTL, with
modifications in response to comments
as noted. This finalized provision aligns
the regulations with the statutory
requirements under MHPAEA, as
amended by the CAA, 2021. In response
to commenter concerns that the
proposed rules did not clarify how a
plan or issuer should apply the new
comparative analysis requirements to
factors and evidentiary standards used
to design and apply NQTLs that are
especially complex (including those
related to network composition), the
Departments disagree that the proposed
rules and these final rules do not
rationally relate to factors and
evidentiary standards used to design
and apply NQTLs like standards related
to network composition or methods for
determining out-of-network rates. Using
the definitions of the terms ‘‘processes,’’
‘‘strategies,’’ ‘‘evidentiary standards,’’
and ‘‘factors’’ under these final rules to
inform the content elements required in
a comparative analysis, these final rules
provide sufficient guidance for plans
and issuers to perform and document
their comparative analyses of all
NQTLs.
Additionally, these final rules also
provide additional guidance on how a
plan or issuer with a typical plan or
coverage design should collect and
evaluate data for NQTLs related to
network composition (which must be
included in the comparative analysis)
under the relevant data evaluation
requirements, and provides examples of
reasonable actions that plans and
issuers may take (and document in the
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comparative analysis) if such data
suggest that NQTLs related to network
composition contribute to material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits
in a classification. The Departments
acknowledge that a plan or issuer
imposing a complex NQTL with respect
to mental health and substance use
disorder benefits by relying on a large
number of complicated factors and
evidentiary standards will likely require
more resources to perform and
document their comparative analysis in
a manner that is compliant with these
final rules. The Departments also
appreciate that some of the required
content for comparative analyses are
described broadly and therefore could
lead to the Departments and applicable
State authorities taking different
approaches in determining what
constitutes a sufficient comparative
analysis. However, these broad
descriptions are necessary to ensure that
these final rules set forth a single set of
content elements that are flexible
enough to apply to the wide variety of
different NQTLs imposed by plans and
issuers with respect to mental health
and substance use disorder benefits.
The Departments are not providing an
example of a comparative analysis that
complies with these final rules, but
continue to consider what additional
resources and guidance are necessary to
assist the regulated community in
complying with MHPAEA and these
final rules. A plan or issuer that
analyzes the design and application of
an NQTL along with the relevant data
and considers it in the manner
described earlier in this preamble will
be well positioned to perform and
document a comparative analysis in a
manner consistent with these final
rules. The Departments also note, as
stated earlier in this preamble, that they
intend to update the MHPAEA SelfCompliance Tool for plans and issuers
to determine which data to collect and
evaluate. The Departments note that
what constitutes a compliant
comparative analysis will depend on all
the relevant facts and circumstances,
including the provisions of the plan or
coverage and the relevant NQTL. The
Departments remain committed to
providing additional guidance to assist
with the implementation of these final
rules.
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 proposed
requirements at 26 CFR 54.9812–2(c), 29
CFR 2590.712–1(c), and 45 CFR
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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). Specifically, the
Departments proposed that each
comparative analysis would include, at
a minimum, with respect to each NQTL
imposed under the plan or coverage on
mental health and substance use
disorder benefits, six 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.
In addition to proposing to require the
inclusion of specific elements in each
comparative analysis, the proposed
rules would require each plan or issuer
to prepare and make available to the
Departments, 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.
Several commenters expressed
general support for the proposed
elements that plans and issuers would
be required to include in their
comparative analyses under the
proposed rules. Some commenters
highlighted that the clarity the proposed
rules provided would help to reduce
confusion as to how plans and issuers
should perform and document their
comparative analyses, and others
reasoned that, by clarifying the
comparative analysis content
requirements under the proposed rules,
regulators will be able to better
determine compliance with MHPAEA.
Some commenters, however, stated
that the proposed rules did not provide
enough clarity, which they stated may
make complying with the requirements
more challenging. These commenters
stated that providing a list of all NQTLs
imposed under a plan or coverage
would be challenging without either a
definitive list of all NQTLs or requiring
that plans and issuers perform and
document comparative analyses only for
NQTL types that the Departments define
through regulations or guidance. As
discussed earlier in the preamble,
several commenters requested that the
Departments provide an exhaustive list
of NQTLs for which a comparative
analysis would be required.
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Commenters also expressed concerns
about whether plans and issuers would
be able to access the information and
data necessary to perform and document
a sufficient comparative analysis that
includes all of the proposed content
requirements. Several of these
commenters mentioned difficulty
acquiring the necessary information and
data from their service providers and
business partners, while other
commenters stated that the proposed
content requirements for comparative
analyses are superfluous, unhelpful, or
unreasonably burdensome. Some
commenters described concerns related
to cost and feasibility of preparing
comparative analyses that would
comply with the proposed content
requirements.
After reviewing comments, the
Departments are finalizing the
requirement that a comparative analysis
include, at a minimum, the six content
elements listed in the proposed rules,
consistent with the statute, with several
modifications. This section of the
preamble to these final rules discusses
the comments received with respect to
each content element in the proposed
rules and the modifications made to
each content element in these final
rules.
With respect to the requirement to
prepare and make available, upon
request, a written list of all NQTLs
imposed under the plan or coverage and
commenters who noted that this
requirement would be challenging to
meet without a definitive list of all
NQTLs, as stated earlier in this
preamble, the Departments decline to
provide an exhaustive list of NQTLs in
these final rules or separate guidance.
The Departments also note that, like the
substantive requirements for NQTLs, the
comparative analysis requirements of
MHPAEA are not limited to a list of
specific NQTLs, but apply to all NQTLs
that limit the scope or duration of
treatment under a plan or coverage. As
a result, these final rules require that, in
addition to the comparative analysis for
each NQTL, each plan or issuer must
prepare and make available to the
Secretary, upon request, a written list of
all NQTLs imposed under the plan or
coverage.
Additionally, for ERISA-covered
plans, the written list must be provided
to the named fiduciaries of the plan who
are required to include a certification as
part of each comparative analysis, as
discussed later in this preamble.
However, because the Departments
recognize that a sufficient comparative
analysis will include descriptions of the
information, evidence, sources, and
standards, as well as factors and
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evidentiary standards, that the plan or
issuer considered or relied upon as part
of the content elements, these final rules
eliminate the separate requirement that
proposed to require plans and issuers to
provide a general description of any
information considered or relied upon
by the plan or issuer in preparing a
comparative analysis for an NQTL.
The Departments are aware of reports
that some self-insured plans have been
unsuccessful in receiving comparative
analyses (or the information required to
perform and document comparative
analyses) requested from their TPAs or
other service providers. The
Departments emphasize that, as of the
date of the publication of these final
rules, the statutory requirement to
perform and document comparative
analyses has been applicable to plans
and issuers for over 3 years. The
Departments have previously stated that
TPAs and other service providers are
expected to work closely with plans and
issuers to support their needs by
providing data and other information
about the design and application of
NQTLs applicable to mental health and
substance use disorder benefits and to
medical/surgical benefits so that
comparative analyses can be performed
and documented (regardless of whether
the Departments or an applicable State
authority have requested them). Because
plans and issuers are the entities
required by statute to perform and
document comparative analyses and
there is no exception to the requirement
when necessary information cannot be
obtained from another entity, plans and
issuers must work with their TPAs and
service providers to obtain the
information they need for their
comparative analyses. Any ERISAgoverned group health plans that
contract with service providers refusing
or otherwise failing to provide the
requisite information should notify
DOL.
Additionally, as noted earlier in this
preamble, the Departments acknowledge
the challenges, cost, and complexity of
collecting and evaluating data, but are of
the view that it is important to include
specific content requirements in these
final rules, including those related to
relevant data to measure the impact of
an NQTL on access to mental health and
substance use disorder benefits.
However, in recognition of these
challenges and to align with other
changes made in these final rules the
Departments have modified certain
specific provisions within some of the
listed content elements as described in
the following paragraphs.
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a. Description of the NQTL
For each comparative analysis, the
proposed rules would require a plan or
issuer 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 the statute. This
would include the documents that
contain the specific language of the
NQTL that the plan or issuer imposes.
The plan or issuer would also be
required to identify all mental health or
substance use disorder benefits and
medical/surgical benefits to which the
NQTL applies, including a list
identifying which of those 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. Finally, under
the proposed rules, 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 and how the plan
identified the variations of the NQTL.
The Departments received few
comments on this proposed first content
element. One commenter suggested an
alternative approach, arguing that,
instead of requiring that plans and
issuers provide all policies, guidelines,
provider contracts, and any other
documents where the NQTL ‘‘appears or
is described,’’ plans and issuers should
be required under these final rules to
provide only the documents, policies, or
procedures that govern the NQTL.
After reviewing comments, the
Departments are finalizing the
requirement that a comparative analysis
include a description that identifies the
NQTL, identifies all mental health or
substance use disorder benefits and
medical/surgical benefits to which the
NQTL applies, and describes which
benefits are included in each
classification. The Departments
emphasize that these final rules still
require a plan or issuer to identify the
specific terms of the plan or coverage or
other relevant terms regarding the
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NQTL, including 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.
Under these final rules, the entire
policy, guideline, or document is not
required to be included in a
comparative analysis, but could be
requested by the Departments in the
course of reviewing a comparative
analysis. The Departments decline to
require the inclusion of only the
documents that govern the NQTL,
because that might not include all the
policies or guidelines that determine
how the NQTL is designed or applied
with respect to mental health or
substance use disorder benefits.
Additionally, as noted earlier in these
final rules, the Departments are not
finalizing the proposed mathematical
substantially all and predominant tests.
Therefore, these final rules do not
finalize the proposed content
requirement that the description of the
NQTL in a comparative analysis 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 and how the plan or
issuer identified the variations of the
NQTL.114
b. Identification and Definition of the
Factors and Evidentiary Standards Used
To Design or Apply the NQTL
Under the second proposed content
element, 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 also be required to
define each factor, by including a
detailed description of the factor, and
providing a description of each
evidentiary standard (and the source of
each evidentiary standard) identified.
The Departments stressed in the
preamble to the proposed rules that
114 However, as discussed earlier in this
preamble, the Departments are of the view that the
concept of material differences in access helps to
give meaning to the concepts of ‘‘substantially all’’
and ‘‘predominant’’ from the statutory language in
the context of NQTLs.
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when identifying the evidence or
sources from which an evidentiary
standard is derived, a 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 Departments received few
comments on this content element. One
commenter noted that the requirement
to provide detailed descriptions of each
factor, including evidence and sources
relied upon with data and relevant
citations, may be challenging for plans
and issuers to operationalize. One
commenter highlighted that it may be
difficult to identify evidence and
sources for factors that are processes,
such as provider referral requirements,
requirements to submit information for
clinical review, or the development and
approval of a treatment plan, and that
processes used to apply the NQTL ‘‘in
operation’’ should be analyzed under a
separate step of the comparative
analysis. Another commenter stated that
the requirement to do a historical
analysis of the factors utilized by plans
and issuers, including dating and
providing citations for sources (from the
time they decided to impose the NQTL),
would be burdensome, and
recommended such a requirement be
eliminated or that the Departments
accept references to factors that are
generally accepted business standards
without the need for specific dates and
citations.
After reviewing comments, the
Departments are finalizing the
requirement that the comparative
analysis identify and define all of the
factors considered or relied upon to
design or apply the NQTL to mental
health or substance use disorder
benefits and medical/surgical benefits as
proposed, with minor non-substantive
changes and a modification to align
with changes made in these final rules
to the prohibition on discriminatory
factors and evidentiary standards.
Specifically, these final rules clarify that
a plan or issuer must identify every
factor and the evidentiary standards
considered or relied upon to design or
apply each factor, instead of all of the
factors considered, consistent with other
provisions of these final rules. These
final rules also add new 26 CFR
54.9812–2(c)(2)(ii)(C), 29 CFR 2590.712–
1(c)(2)(ii)(C), and 45 CFR
146.137(c)(2)(ii)(C) to make clear that
plans and issuers must describe any
steps taken to correct, cure, or
supplement any information, evidence,
sources, or standards that are the basis
for a factor or evidentiary standard and
that would otherwise have been
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considered biased or not objective in the
absence of such steps. Additionally, as
discussed earlier in this preamble, these
final rules also make minor
modifications to better distinguish
evidentiary standards from factors
within the definitions of those terms,
and clarify that, while this content
element requires a plan or issuer to
include a description of each
evidentiary standard used to design or
apply each factor, this information is
part of the required detailed description
of each factor.
While the Departments acknowledge
that identifying and defining all factors
takes time for a plan or issuer to
complete (for newly applied and
existing NQTLs), the Departments note
that this requirement was not new when
it was included in the proposed rules.
The CAA, 2021 specifically requires the
identification and definition of factors
relied upon to design and apply the
NQTL,115 and has been applicable to
plans and issuers since February 10,
2021. Identification and definition of
the factors considered in the design and
application of an NQTL was also
previously addressed in FAQs Part
45.116 It is important for comparative
analyses to include detailed information
about factors, evidentiary standards, and
their sources when a plan or issuer
starts to perform and document its
comparative analysis, to support the
plan’s or issuer’s analysis of how factors
and evidentiary standards are used to
design and apply NQTLs. Such analysis
should include support for the factors
utilized from the time a plan or issuer
decided to impose, or continues to
impose, an NQTL on the relevant
mental health and substance use
disorder benefits, as well as medical/
surgical benefits. To the extent a plan or
issuer cannot support its use of factors
and evidentiary standards, including by
providing information on the sources of
the factors and evidentiary standards
considered and relied on by plans and
issuers (from the time they decided to
impose the NQTL), it is unclear how
115 Code section 9812(a)(8)(A)(iii), ERISA section
712(a)(8)(A)(iii), and PHS Act section
2726(a)(8)(A)(iii).
116 https://www.dol.gov/sites/dolgov/files/EBSA/
about-ebsa/our-activities/resource-center/faqs/acapart-45.pdf and https://www.cms.gov/cciio/
resources/fact-sheets-and-faqs/downloads/mhpaeafaqs-part-45.pdf. Additionally, the 2020 MHPAEA
Self-Compliance Tool includes robust guidance
related to requirements for NQTLs. Step two of the
analysis outlined in the 2020 MHPAEA SelfCompliance Tool for NQTLs suggests identifying
the factors considered in the design of the NQTL.
See EBSA, Self-Compliance Tool for the Mental
Health Parity and Addiction Equity Act (MHPAEA)
(2020), https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/laws/mental-healthparity/self-compliance-tool.pdf.
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such plan or issuer can ensure that the
factors and evidentiary standards are
comparable and no more stringently
designed and applied for mental health
and substance use disorder benefits,
than for medical/surgical benefits, as
required under the statute (and the
fourth and fifth content elements of a
comparative analysis under these final
rules).
Without such information, a
comparative analysis likely would not
accurately describe factors and their
sources and would not demonstrate
that, when factors are used to design or
apply an NQTL to mental health or
substance use disorder benefits, they are
comparable to, and not more stringently
applied, than they are when used to
design or apply an NQTL to medical/
surgical benefits. The absence of this
information would also make it difficult
for the Departments and applicable
State authorities to confirm compliance
with MHPAEA. The Departments stress
that to the extent a plan or issuer
applies factors that are processes, such
as provider referral requirements,
requirements to submit information for
clinical review, or the development and
approval of a treatment plan, such
processes include both as written and in
operation components. In addition, for
these processes, a plan or issuer should
be prepared to identify any sources
utilized in determining the
appropriateness of such requirements.
To properly evaluate the comparability
and stringency of such factors, it is
important that any sources utilized be
specifically identified in a comparative
analysis. As stated earlier in this
preamble, if a plan’s or issuer’s
comparative analysis is requested by the
Departments, the plan or issuer
generally has multiple opportunities to
engage with the Departments on these
requirements.
c. Description of How Factors Are Used
in the Design and Application of the
NQTL
Under the third proposed content
element, a plan or issuer would be
required to provide a description of how
each factor identified and defined in the
second content element of the
comparative analysis is used in the
design or application of an NQTL to
mental health and substance use
disorder benefits and medical/surgical
benefits in a classification. This would
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
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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. The proposed rules
further provided 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. The Departments noted that
the terms ‘‘deviations’’ or ‘‘variations’’
in this context referred to any
differences in how a factor is applied
with respect to an NQTL.
The Departments received few
comments on this content element. One
commenter requested that the
Departments clarify the requirement to
document the qualifications of staff as
well as for the professional designations
and qualifications of each decision
maker involved in the application of a
given NQTL factor, requesting that the
Departments describe how the
requirement to document the
professional designations and
qualifications of each decision maker
should be appropriately applied to
health plan operations, and specifically
Pharmacy and Therapeutics (P&T)
committees.
After reviewing comments, the
Departments are finalizing, with minor
non-substantive changes, the
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requirement that plans and issuers
provide a description of how each factor
identified and defined in the second
content element of the comparative
analysis is used in the design or
application of an NQTL to mental health
and substance use disorder benefits and
medical/surgical benefits in a
classification. This includes the
requirement to include a detailed
explanation of how each identified and
defined factor is used to determine
which benefits are subject to the NQTL,
and 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
benefits are subject to the NQTL. If the
application of a factor depends on
specific decisions made in the
administration of benefits, the
comparative analysis must also provide
information on the nature and timing of
the decisions, and the professional
designations and qualifications of each
decision maker. Additionally, if there is
more than one factor, the comparative
analysis must explain how all of the
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. Finally, the comparative
analysis must address any deviations or
variations 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 or substance use
disorder benefits as compared to
medical/surgical benefits, and a
description of how the plan or issuer
establishes such deviations or
variations. As used in this context, the
terms ‘‘deviations’’ or ‘‘variations’’ in
these final rules refer to any differences
in how a factor is applied with respect
to an NQTL.
In response to the request for how the
requirement to document professional
designations and qualifications applies
to health plan operations, including
P&T committees, the Departments
emphasize that these committees must
have members with similar expertise for
mental health conditions and substance
use disorders as for medical conditions
and surgical procedures. This may not
necessarily require the same number of
members with expertise relevant to
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mental health conditions and substance
use disorders as it does for medical
conditions and surgical procedures, but
plans and issuers should ensure that
members of a P&T committee include
individuals with similar expertise with
respect to these conditions and
disorders.
d. Demonstration of Comparability and
Stringency, as Written
Under the fourth proposed content
element, plans and issuers would be
required to 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
NQTL 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 NQTL with
respect to medical/surgical benefits. The
proposed rules would require plans and
issuers to include in their comparative
analyses, with respect to the NQTL and
the factors used in designing and
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 to
determine that the NQTL would or
would not apply. In addition, such
documentation would be required to
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
analyses, in each classification in which
the NQTL applies, a comparison of how
the NQTL, 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 NQTL or that address the
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application of the NQTL. Additionally,
the plan or issuer would be required to
include documentation in its
comparative analysis 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. If there is any deviation(s)
or variation(s) in the application of a
factor, the plan or issuer would be
required to include in its comparative
analysis an explanation of the reason(s)
for such 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 in the same
classification, 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. In the preamble to the proposed
rules, the Departments noted that the
terms ‘‘deviations’’ or ‘‘variations’’ in
this context refer to any differences in
how a factor is applied with respect to
an NQTL.
Multiple commenters expressed
support for the requirement to
demonstrate comparability and
stringency as written through the
proposed requirements for the fourth
content element. However, other
commenters raised concerns about the
proposal, with some requesting
additional clarification or guidance to
assist with achieving compliance. For
example, one commenter requested that
the Departments clarify the difference
between the proposed requirement that
plans and issuers provide
documentation that demonstrates how
factors are comparably applied in step 4
of the comparative analysis content
requirements, and the service-by-service
documentation requirement for each
factor under step 3 of the analysis,
which requires a description of how
factors are used in the design and
application of the NQTL.
Another commenter expressed
concerns about how this content
element may create operational
challenges due to its breadth and how
it would require plans to also consider
other factors that were considered and
not applied. Other commenters
suggested ways that the Departments
might ease the burden of the proposed
fourth content element requirements on
plans and issuers. One comment
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included a recommendation that the
Departments clarify that plans and
issuers can document each factor that
was applied, including quantitative
data, at the issuer level, rather than at
the plan or coverage level. Another
commenter encouraged the Departments
to limit documentation requirements
and enforcement to apply only to the
comparability of the NQTL, as written
and in operation; to acknowledge that
subject matter experts may rely on
professional knowledge, experience,
and judgment to evaluate the
evidentiary standard for identified
factors; and to not require the use of
quantitative data, calculations, or other
analyses. Another commenter stated
that the requirement to provide records
documenting the consideration and
application of all factors and evidentiary
standards, as well as the results of their
application, was inconsistent with the
descriptions elsewhere of requiring a
‘‘general description’’ of the factors
relied upon, and therefore urged the
Departments to eliminate the
requirement to include the actual
evidence and related records in the
comparative analysis itself.
The Departments note that, while the
third content element requires a plan or
issuer to provide details on how each
factor (and evidentiary standards or
other information or sources) is used in
the design and application of an NQTL,
that content element does not require an
evaluation of whether the use of those
factors complies with MHPAEA.
Instead, these final rules require a
demonstration of comparability and
stringency, both as written and in
operation, in the fourth and fifth content
requirements for a comparative analysis,
respectively. Additionally, the
Departments are of the view that a plan
or issuer cannot effectively demonstrate
comparability and stringency, as written
and in operation, without sufficiently
identifying and defining each factor (in
the second content element), and
explaining how each factor is used to
design and apply an NQTL (in the third
content element).
After reviewing comments, these final
rules retain all of the proposed
substantive features of the fourth
content element requirements, which
require that plans and issuers 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 NQTL to mental health or
substance use disorder benefits are
comparable to, and are applied no more
stringently than, the processes,
strategies, evidentiary standards, or
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other factors used in designing and
applying the NQTL with respect to
medical/surgical benefits. As finalized,
this provision includes a technical
modification to a citation that accounts
for the reorganization of language in 26
CFR 54.9812–1(c)(4)(iii), 29 CFR
2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii) and also now specifies
that the comparative analysis must
include 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, instead of only as applied.117
The requirements related to
demonstrating comparability and
stringency as written under the fourth
content element are otherwise being
finalized as proposed.
The Departments note that this
content requirement does not require
the use of quantitative data,
calculations, or other analyses, nor does
it prohibit plans from relying on
professional knowledge, experience,
and judgment to evaluate the
evidentiary standard for the identified
factors. Instead, this content element is
meant to show how the factors
described in the third content element
used in designing and applying an
NQTL to mental health and substance
use disorder benefits are comparable to,
and applied no more stringently than,
the factors used in designing and
applying the NQTL to medical/surgical
benefits in the same classification, as
written. Despite the potential
operational challenges associated with
the breadth of this content element, the
Departments are of the view that it is a
vital component of comparative
analyses and is necessary to
demonstrate compliance with MHPAEA
as written, consistent with the
statute.118 The Departments note that, as
discussed earlier in this preamble, these
final rules eliminate the duplicative
requirement from the proposed rules
that plans and issuers include a general
description of any information
considered or relied upon in preparing
117 As explained earlier in this preamble, these
final rules amend the general rule in the design and
application requirements, to align the language of
the 2013 final regulations with the Departments’
interpretation that a plan or issuer must consider
the comparability and relative stringency of any
processes, strategies, evidentiary standards, or other
factors, used in both designing and applying NQTLs
to mental health or substance use disorder benefits
as compared to medical/surgical benefits in a
classification. These final rules revise the regulatory
text to make this requirement with respect to
designing the NQTL explicit and for consistency
with the statutory language added by the CAA,
2021.
118 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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the comparative analysis for each
NQTL. The final rules also eliminate a
duplicative reference to the evaluation
of relevant data in the fourth content
element for comparative analyses,
which is addressed as part of the fifth
content element.
The Departments recognize that a
factor may be considered, but not used,
to apply an NQTL to a specific benefit;
however, to the extent such factor is
used to design or apply the NQTL to
mental health and substance use
disorder benefits, it must be addressed
in the plan’s or issuer’s comparative
analysis, including in this fourth
content element. The Departments are of
the view that, to the extent an issuer or
TPA uses factors or evidentiary
standards to design and apply an NQTL
consistently for multiple plans and
coverage they administer, nothing in
these final rules specifically prohibits
the issuer or TPA from performing and
documenting a comparative analysis at
the level of the issuer (or TPA).
However, to the extent relevant data
exists at the level of the plan or coverage
that measures access to mental health or
substance use disorder benefits in a
manner that is different than data at the
level of the issuer or TPA, the
Departments of are the view that a
plan’s or issuer’s comparative analysis
must account for that data, as described
later in this preamble.
The Departments note that it is
possible that the reasons for any
deviations or variations in the
application of a factor used to apply the
NQTL, or the application of the NQTL,
might include steps to correct, cure, or
supplement information, evidence,
sources, or standards that would
otherwise be considered biased or not
objective in a manner that discriminates
against mental health or substance use
disorder benefits as compared to
medical/surgical benefits. To the extent
a plan or issuer has adequately
documented such steps as part of its
comparative analysis, as required in the
second content element of these final
rules requiring the identification and
definition of the factors used to design
or apply the NQTL, the plan or issuer
is not required to address such steps
again in the fourth content element if
otherwise applicable, and instead may
include references to the description of
such steps in the second content
element, as appropriate.
e. Demonstration of Comparability and
Stringency, in Operation
The Departments proposed that plans
and issuers be required to evaluate in a
comparative analysis whether, in any
classification, under the terms of the
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plan (or health insurance coverage) 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 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. A 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.
To comply with the proposed fifth
content element, plans and issuers
would also be required to identify the
relevant data collected and evaluated in
their comparative analyses and provide
an evaluation of the outcomes that
resulted from the application of the
NQTL to mental health or substance use
disorder benefits and medical/surgical
benefits to demonstrate compliance
with the design and application
requirements. Additionally, 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. Finally, under this content
element, 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 material
differences in access with respect to
mental health or substance use disorder
benefits as compared to medical/
surgical benefits.
Many commenters expressed support
for the proposed requirement and
standards for the demonstration of
comparability and stringency in
operation captured in the proposed fifth
content element, especially with respect
to NQTLs related to network
composition and the use and
application of clinical guidelines.
Commenters supported the proposed
requirements for detailed comparative
analyses because they reasoned that
these requirements would help
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regulators understand participant and
beneficiary access to mental health and
substance use disorder services under
real conditions as opposed to only
looking to written plan terms and
policies. Some commenters also
included recommendations for
additional data transparency
requirements to ensure compliance and
ease the burden on the Departments in
enforcing MHPAEA’s requirements.
Several commenters also indicated a
desire for additional clarification
regarding this proposed content
element. For example, one commenter
noted that the fifth content element
requires the demonstration of
comparability and stringency in
operation to be comprehensive, without
discussion of what that term means.
After reviewing comments, the
Departments are finalizing the proposed
requirements for the fifth content
element with several clarifications and
modifications. The Departments are
finalizing the requirement that the
comparative analysis must evaluate
whether, in any classification, 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 are comparable to, and
are applied no more stringently than
those used with respect to medical/
surgical benefits. However, the
Departments have removed the
references to the terms of the plan (or
health insurance coverage) from this
requirement, in recognition of the fact
that the operations of the plan (or health
insurance coverage) may not necessarily
be reflected in its terms.
The Departments are also finalizing
the requirement that the comparative
analysis must include a comprehensive
explanation addressing the
comparability and stringency of these
processes, strategies, evidentiary
standards, and other factors. These final
rules require that this explanation
address how the plan or issuer
‘‘evaluates whether’’ (instead of
‘‘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, those used in designing
and applying the NQTL with respect to
medical/surgical benefits.
In these final rules, the Departments
finalize with additional clarifications
the proposal that, as part of the
proposed fifth content element, a
comprehensive explanation of how the
plan or issuer evaluates in-operation
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compliance with the design and
application requirements of MHPAEA
would include an explanation of the
methodology and underlying data used
to demonstrate the application of the
NQTL, as well as 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. These final rules
also include language to align with
changes made to address a lag between
when an NQTL is newly designed and
applied and when relevant data are
available, as well as some limited
circumstances in which no data exist
that can reasonably assess any relevant
impact of an NQTL on access to
benefits. Specifically, with respect to an
NQTL for which relevant data are
temporarily unavailable, the
Departments clarify that the
comparative analysis must include a
detailed explanation of the lack of
relevant data, the basis for the plan’s or
issuer’s conclusion that there is a lack
of relevant data, and when and how the
data will become available and be
collected and analyzed.
With respect to an NQTL for which no
data exist that can reasonably assess any
relevant impact of the NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits,
the fifth content element requires the
plan or issuer to include as part of the
comparative analysis a reasoned
justification as to the basis for the
conclusion that there are no data that
can reasonably measure the NQTL’s
impact, an explanation of why the
nature of the NQTL prevents the plan or
issuer from reasonably measuring its
impact, an explanation of what data was
considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
that the NQTL complies with all
applicable requirements. As noted
earlier in this preamble, the
Departments recognize that plans and
issuers may encounter difficulties when
attempting to collect and evaluate
relevant data in certain circumstances,
and, accordingly, intend to review the
explanation provided in a plan’s or
issuer’s comparative analysis to
understand those difficulties in
determining whether the plan or issuer
is in compliance with these final rules.
However, the Departments reiterate
their intention that the provisions of
these final rules regarding the
unavailability of data shall only apply
in very limited circumstances and,
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where applicable, shall be construed
narrowly.
The Departments are finalizing the
proposed requirements for the fifth
content element that a comparative
analysis must include identification of
the relevant data collected and
evaluated, as well as documentation of
the outcomes that resulted from the
application of the NQTL to mental
health or substance use disorder
benefits and medical/surgical benefits,
including the evaluation of relevant data
as described earlier in this preamble.
This also includes a reasoned
justification and analysis that explains
whether, and if so, why the plan or
issuer concluded that differences in
relevant data do or do not suggest the
NQTL contributes to material
differences in access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
The Departments recognize that, for
NQTLs related to network composition,
under these final rules, a plan or issuer
must collect and evaluate relevant data
in a manner reasonably designed to
assess the aggregate impact of all such
NQTLs on access to mental health and
substance use disorder benefits and
medical/surgical benefits. Therefore, for
NQTLs related to network composition,
comparative analyses should analyze
their impact as a whole. Plans and
issuers may also, however, indicate in
these comparative analyses where one
particular NQTL may affect differences
in access.
Furthermore, in response to
comments, these final rules provide
more specifics on the requirement for
the fifth content element to provide a
detailed explanation of any material
differences in access demonstrated by
the outcomes evaluated, by requiring a
reasoned explanation of any material
differences in access that are not
attributable to differences in the
comparability or relative stringency of
an NQTL as applied to mental health or
substance use disorder benefits and
medical/surgical benefits. This
explanation should include a detailed
discussion of any considerations beyond
a plan’s or issuer’s control that
contribute to the existence of material
differences, as well as a detailed
explanation of the bases for concluding
that material differences are not
attributable to differences in the
comparability or relative stringency of
the NQTL. The Departments note that
such an explanation should be
comprehensive and include evidence to
support the conclusion that
considerations beyond a plan’s or
issuer’s control contribute to the
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existence of material differences in
access.
Additionally, these final rules add
that, to the extent differences in access
to mental health or substance use
disorder benefits are attributable to
independent professional medical or
clinical standards or fraud and abuse
measures, and such standards or
measures are used as the basis for a
factor or evidentiary standard used to
design or apply an NQTL, comparative
analyses must include documentation
explaining how any such differences in
access are attributable to those
standards or measures. By requiring
plans and issuers to analyze and explain
material differences in access as
demonstrated by outcomes, the
Departments aim to encourage plans
and issuers to examine closely and
critically the extent to which access to
benefits is shaped by particular NQTLs
so that they can take effective,
reasonable actions as necessary to
mitigate material differences.
Finally, these final rules specify that,
in demonstrating comparability and
stringency in operation under the fifth
content element in these final rules,
plans and issuers must discuss in their
comparative analyses the actions that
have been or are being taken by the plan
or issuer, as necessary, to address any
material differences in access. Under
these final rules, this discussion must
include, as applicable, a reasoned
explanation of any material differences
in access to mental health or substance
use disorder benefits as compared to
medical/surgical benefits that persist
despite reasonable actions that have
been or are being taken. Additionally,
for a plan or issuer designing and
applying one or more NQTLs related to
network composition, to comply with
this aspect of the fifth content element,
the comparative analysis must include a
discussion of the actions that have been
or are being taken, as necessary, to
address material differences in access to
in-network mental health and substance
use disorder benefits as compared to innetwork medical/surgical benefits,
including those listed in these final
rules as examples of possible actions
that a plan or issuer could take to
comply,119 if any such material
differences exist. The Departments
recognize that plans and issuers may
already be aware of material differences
in access to mental health or substance
use disorder benefits and, as a result,
may have taken actions to comply with
MHPAEA’s requirements. The
119 See 26 CFR 54.9812–1(c)(4)(iii)(C), 29 CFR
2590.712(c)(4)(iii)(C), and 45 CFR
146.136(c)(4)(iii)(C).
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Departments are of the view that
comparative analyses should address
any such actions taken to address
material differences in access and their
effectiveness, to improve access to
mental health and substance use
disorder care for participants and
beneficiaries and demonstrate
compliance with MHPAEA.
f. Findings and Conclusions
Under the sixth and final proposed
content element, a plan or issuer would
be required to include in its
comparative analysis its 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. For
this purpose, 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
the 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, the 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. 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 the proposed rules.
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With respect to the requirements
regarding reliance on an evaluation by
an expert, one commenter was
supportive of the rule as proposed, and
another recommended that the
Departments not require that the
comparative analyses include the name
of the expert so that experts would not
be dissuaded from providing their
expertise to avoid public identification.
Some commenters were supportive of
the fiduciary certification requirement
for plans subject to ERISA, with one
stating that this would help to ensure
that plan fiduciaries meet their
obligations to review comparative
analyses and monitor their plans for
compliance. Many other commenters
expressed concern, with some reasoning
that requiring a named fiduciary to
review and certify that a comparative
analysis complies with the content
requirements of the proposed rules
would put an unrealistic expectation on
that fiduciary to understand the
required nuance and complexity of the
proposed rules. Other commenters
opined that the requirement would
create an unnecessary burden. These
commenters stressed that the
requirement would increase compliance
costs (as fiduciaries would have to
contract with additional service
providers to assess compliance) without
increasing access to benefits. Other
commenters highlighted that Congress
knew how to provide for a certification
or attestation requirement but refrained
from doing so for the MHPAEA
comparative analysis. These comments
urged against including the fiduciary
certification requirement.
The Departments are of the view that
requiring plans and issuers to address
the findings and conclusions of both
comparability and stringency of
processes, strategies, evidentiary
standards and other factors in their
comparative analysis is necessary and
appropriate to increase and ensure
compliance with MHPAEA. The
Departments’ experience enforcing the
current regulatory framework has shown
that, too often, plans and issuers design
and apply NQTLs without considering
the impact those NQTLs have on access
to mental health and substance use
disorder benefits as compared to
medical/surgical benefits for
participants and beneficiaries. In
practice, the Departments have
encountered many NQTLs that often
impose a greater burden on access to
mental health and substance use
disorder benefits than medical/surgical
benefits. Therefore, the Departments are
finalizing, with modifications, the
requirements for the sixth content
element that requires plans and issuers
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to address the findings and conclusions
as to the comparability and relative
stringency of the processes, strategies,
evidentiary standards, and other factors
used in designing and applying NQTLs
in their comparative analyses. The
requirement under these final rules that
plans and issuers must include any
findings and conclusions is consistent
with the statutory text, and these final
rules also specify that these findings
and conclusions must be included
whether or not the plan or coverage is
or is not (or might or might not be) in
compliance. The Departments stress
that, while these final rules require an
assessment of each expert’s
qualifications and the extent to which
the plan or issuer ultimately relied on
their evaluation (if at all), these final
rules do not require the name of the
expert in the comparative analysis.
These final rules also make additional
minor technical edits to the sixth
content requirement, for clarity.
In response to comments expressing
concern with the named fiduciary
certification requirement for plans
subject to ERISA in the proposed rules,
DOL is modifying this requirement.
These final rules continue to require, for
plans subject to ERISA, the comparative
analysis to include a certification by one
or more named fiduciaries. However,
instead of requiring noted fiduciaries to
state whether they found the
comparative analysis to be in
compliance with the content
requirements, these final rules require
certification confirming the fiduciary’s
engagement in a prudent process to
select one or more qualified service
providers to perform and document a
comparative analysis in connection with
the imposition of any NQTLs that apply
to mental health and substance use
disorder benefits under the plan in
accordance with MHPAEA and its
implementing regulations, as well as
satisfaction of the duty to monitor those
service providers. For this purpose, DOL
expects that a plan fiduciary making
such a certification will, at a minimum,
review the comparative analysis
prepared by or on behalf of the plan
with respect to an NQTL applicable to
mental health and substance use
disorder benefits and medical/surgical
benefits; ask questions about the
analysis and discuss it with service
providers, as necessary, to understand
the findings and conclusions
documented in the analysis; and ensure
that a service provider responsible (in
whole or in part) for performing and
documenting a comparative analysis
provides assurance that, to the best of its
ability, the NQTL and associated
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comparative analysis complies with the
requirements of MHPAEA and its
implementing regulations. While not
required, a plan fiduciary may
alternatively provide a certification that
each comparative analysis is in
compliance with the content
requirements, consistent with the
proposed certification requirement in
the proposed rules.120 Because the
statute expressly places the obligation
on the plan (or issuer) to ensure
compliance with MHPAEA, these final
rules align with the duties ERISA
imposes on plan fiduciaries under part
4 of ERISA.
2. Requirement To Provide Comparative
Analyses and Notices to the Department
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)
Effective February 10, 2021, plans and
issuers have been required, consistent
with the statute, to perform and
document comparative analyses and
make them available to the Departments
or applicable State authorities upon
request.121 The proposed rules would
require that plans and issuers make a
comparative analysis available and
submit it upon request to the relevant
Secretary (as well as applicable State
authorities and participants and
beneficiaries in certain circumstances),
explain that additional information may
be required to be provided after a
comparative analysis is deemed
insufficient, and outline requirements
for plans and issuers after an initial
determination of noncompliance and a
final determination of noncompliance.
Some commenters were supportive of
the proposed requirements, though
others offered suggestions for improving
the various elements, as described later
in this preamble.
Once a comparative analysis is
requested, plans and issuers would be
required 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). Some commenters remarked
120 See 88 FR 51552, 51651 (Aug. 3, 2023), setting
forth the proposed requirement that one or more
named fiduciaries who have reviewed a
comparative analysis provide a certification stating
whether they found the comparative analysis to be
in compliance with the content requirements of the
regulations.
121 Code section 9812(a)(8), ERISA section
712(a)(8), and PHS Act section 2726(a)(8). This
requirement was reiterated in FAQs Part 45, 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/FactSheets-and-FAQs/Downloads/MHPAEA-FAQs-Part45.pdf.
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that 10 business days is not sufficient to
provide a comparative analysis upon
request. While a few commenters
requested that the Departments allow
plans and issuers at least 30 days to
provide the requested information,
others requested a 60-day period to
provide an updated comparative
analysis. Several commenters
highlighted that plans and issuers might
not anticipate what is regarded as an
NQTL by the Departments and
requested that the Departments provide
additional time to respond to a request
for a comparative analysis for an NQTL
that was not on an illustrative list of
NQTLs provided by the Departments.
After reviewing comments, the
Departments are finalizing, as proposed,
the requirement that plans and issuers
make available a comparative analysis
and submit it to the relevant Secretary
within 10 business days of receipt of a
request from the relevant Secretary (or
an additional period of time specified
by the relevant Secretary). Plans and
issuers are statutorily obligated to
perform and document their NQTL
comparative analyses, and to be ready to
make them available in response to a
request, regardless of whether the plan
or issuer has actually received a request
from the Departments or an applicable
State authority, and have been since
February 10, 2021. While these final
rules specify content elements that
comparative analyses must contain, the
Departments have expected, and will
continue to expect, that plans and
issuers perform and document their
NQTL comparative analyses without
waiting for a request from the
Departments or an applicable State
authority. Where plans and issuers have
performed and documented their NQTL
comparative analyses, additional time
will not generally be required to
respond to an initial request. The
language allowing an additional period
of time specified by the Secretary for a
plan or issuer to submit a comparative
analysis to the Secretary provides
sufficient flexibility to plans and issuers
where the Departments determine it to
be appropriate.
Under the proposed rules, in
instances in which the Secretary
determines that the plan or issuer has
not submitted sufficient information for
the Secretary to review the requested
comparative analysis, 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. 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
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additional information to be submitted
(or an additional period of time
specified by the relevant Secretary). The
Departments noted in the preamble to
the proposed rules that 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
data required by the Departments to be
collected and evaluated under the
relevant data evaluation requirements.
A few commenters stated that 10
business days was not enough time to
respond with supplemental information,
calling the timeframe overly restrictive
and unrealistically short. One requested
60 days to respond to such a request
instead of 10 business days as proposed.
After reviewing comments, the
Departments are finalizing with minor
technical edits the requirement that
plans and issuers furnish the additional
requested 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). The
Departments acknowledge that in some,
but not all, cases, 10 business days may
not be enough time to respond with
supplemental information and recognize
that not all requests for supplemental
information are equal in terms of the
volume and complexity of the
information requested, which is why
these final rules allow for additional
time to be specified by the relevant
Secretary (for example, where the
volume or complexity of the additional
information requested would take more
time to collect and provide). The
Departments emphasize that additional
information must be provided within 10
business days, rather than calendar
days, and are of the view that, in the
majority of cases, 10 business days
should be sufficient. However, unless
otherwise specified, the other timelines
associated with the comparative
analysis requirements generally refer to
calendar days.
In instances where the relevant
Secretary 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, the
Departments proposed to require the
plan or issuer to respond to the relevant
Secretary, specifying the actions it will
take to come into compliance. The plan
or issuer would also be required to
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provide to the relevant Secretary
additional comparative analyses
meeting the requirements of the
proposed rules that demonstrate
compliance with MHPAEA. The plan or
issuer would be required to submit
these responses to the relevant Secretary
not later than 45 calendar days after the
relevant Secretary’s initial
determination that the plan or issuer is
not in compliance.
One commenter stated that the
proposed penalties for noncompliance
are not strict enough to discourage
noncompliant issuer behavior and
stated that, without strict enforcement
penalties, issuers will continue to
attempt to skirt the law. Additionally, as
discussed earlier in the preamble, other
commenters urged the Departments to
provide procedural guardrails and due
process protections for plans and issuers
prior to the final determination of
noncompliance, suggesting that the plan
or issuer should have an opportunity to
meet with the DOL or HHS national
office, review the determination, and
work together to achieve compliance.
After reviewing comments, the
Departments are finalizing this
requirement with minor edits. These
final rules clarify, however, that the
plan or issuer must respond to the
initial determination by the Secretary,
instead of more generally requiring the
plan or issuer to respond to the
Secretary, as proposed, to better match
the statutory text. In response to the
commenter who criticized the penalties
for noncompliance, the Departments
note that they do not have the statutory
authority to increase penalties for
violations of MHPAEA, but, as
discussed earlier in this preamble, have
stepped up enforcement efforts and
anticipate continuing to prioritize
enforcement of these requirements.
As discussed earlier in the preamble,
the statute establishes the comparative
analysis request process, as well as the
penalties for failing to comply, and,
working within this process, the
Departments have worked with many
plans and issuers to achieve
compliance, often without issuing a
final determination of noncompliance,
as described at length in our MHPAEA
Reports to Congress.122 The
Departments expect that this approach
will continue to work after the issuance
of these final rules. To the extent
122 See, e.g., 2023 MHPAEA Comparative
Analysis Report to Congress (July 2023), https://
www.dol.gov/sites/dolgov/files/ebsa/laws-andregulations/laws/mental-health-parity/report-tocongress-2023-mhpaea-comparative-analysis.pdf.
Other reports are available at https://www.dol.gov/
agencies/ebsa/about-ebsa/our-activities/resourcecenter/reports.
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possible, the Departments expect to
continue to work with plans and issuers
to ensure compliance, without need of
issuance of a final determination of
noncompliance.
If the relevant Department makes a
final determination that the plan or
issuer is not in compliance with
MHPAEA (after issuance of an initial
determination of noncompliance, a
failure by the plan or issuer to
sufficiently respond to the initial
determination and specify the actions
the plan or issuer will take to bring the
plan or coverage into compliance, and a
failure to provide additional sufficient
comparative analyses within the 45calendar-day corrective action period),
the plan or issuer must, within 7
calendar days of the receipt of the final
determination of noncompliance,
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 the
proposed rules. The plan or issuer
would also be required to provide a
copy of the notice to the relevant
Secretary, any service provider involved
in the claims process, and any fiduciary
responsible for deciding benefit claims
within the same timeframe. The
Departments noted in the preamble to
the proposed rules that this notice gives
participants and beneficiaries (or their
authorized representatives) 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.
The proposed rules set forth
requirements for the content of this
notice and the manner in which it
would be required to be provided,
including that the notice be written in
plain language and in a manner
calculated to be understood by the
average plan participant. The notice
would also 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 proposed rules would also
require the notice contain a summary of
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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, 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 concurred with those
actions. Finally, the proposed rules
would require that 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 the proposed rules, a plan or
issuer would be required to make the
notice available in paper form. The plan
or issuer may alternatively 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 participants and beneficiaries in
paper form (such as a postcard) or email
that the documents are available on the
internet, provides the internet address,
and notifies participants and
beneficiaries that the documents are
available in paper form upon request.
The Departments noted that this
approach is similar to standards for
when a plan or issuer is permitted to
provide a copy of its plan’s or coverage’s
summary of benefits and coverage with
respect to participants and beneficiaries
who are eligible but not enrolled for
coverage.123 For ERISA plans, the plan
or issuer would also be required to
123 See 26 CFR 54.9815–2715(a)(4)(ii)(B), 29 CFR
2590.715–2715(a)(4)(ii)(B), and 45 CFR
147.200(a)(4)(ii)(B).
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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.
Multiple commenters recommended
that the requirement for plans and
issuers to include information in the
notice about any opportunity for a
participant or beneficiary to have claims
reprocessed be revised to instead place
affirmative obligations on plans and
issuers who receive a final
determination of noncompliance to
identify affected participants or
beneficiaries, reprocess claims, and take
other necessary steps to rectify harms.
One commenter further suggested that
plans or issuers be required to describe
the process they will follow and the
time frames for reprocessing claims in
the notice of noncompliance. Another
commenter opposed the requirement
that a plan deemed noncompliant send
a notice to all beneficiaries, arguing that
it amounted to public shaming and that
it was beyond the scope of the
authorizing statute.
Several commenters suggested that
the notice should be provided to
participating providers, as such
providers may have experienced issues
submitting claims to plans and issuers
for reimbursement, including improper
denials, and stopped submitting further
claims. One commenter requested that
these final rules be accompanied by
guidance and online compliance
resources developed by the Departments
to help the affected plans and issuers
draft their notices of noncompliance.
Several commenters expressed
concern that providing notice within 7
calendar days would not be feasible,
particularly with the level of
information that a plan or issuer is
required to compile and provide. Some
commenters requested a 30-day period
to provide this notice and others
requested a 45-day period.
After reviewing comments, the
Departments are finalizing with minor
clarifications the provision that a 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 MHPAEA if
the Secretary makes a final
determination of noncompliance, as
required by the statute. The
Departments highlight that the statute
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specifies the notice be provided within
7 days, and the Departments lack the
statutory authority to extend this
timeframe, such as to 30 or 45 days, as
suggested by commenters. However, in
response to comments, these final rules
provide that plans and issuers have 7
business days instead of 7 calendar days
to notify participants and beneficiaries
of a final determination of
noncompliance, to provide plans and
issuers additional time to prepare the
notice of final determination as required
under these final rules.
The Departments also note that the
relevant statutory language requires
notice to be sent to ‘‘all individuals
enrolled in the plan or applicable health
insurance coverage offered by the
issuer,’’ which includes participants
and beneficiaries, rather than attending
providers. However, if a single notice is
provided to a participant and any
beneficiaries at the participant’s last
known address, the requirement to
provide notice to participants and
beneficiaries is considered satisfied,
unless the plan or issuer knows (or
reasonably should have known) that the
beneficiary’s last known address is
different, in which case a notice is
required to be provided to the
beneficiary at the beneficiary’s last
known address.
The Departments are also finalizing
the requirement for ERISA-covered
plans that the plan or issuer must
provide a copy of the notice to any
service provider involved in the claims
process, and any fiduciary responsible
for deciding benefit claims within 7
business days of receipt of the final
determination of noncompliance. DOL
recognizes that, depending on the
nature of the NQTL and the final
determination of noncompliance, not all
such determinations will impact
adjudicated claims, but is of the view
that it is important for such information
to be disclosed to relevant service
providers and fiduciaries, so they can
properly consider whether such changes
are required.
The Departments are finalizing the
proposed notice content requirements
and stress that the notice must describe
any other actions the plan or issuer is
taking to come into compliance with
MHPAEA. Generally, when
noncompliance has been identified, the
Departments will require plans and
issuers to take steps to identify affected
participants, reprocess claims, and take
other necessary steps to rectify harms;
however, the specific steps a plan or
issuer will be required to take in
response to a final determination of
noncompliance will depend on the facts
and circumstances of the violations.
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While these final rules generally require
a plan or issuer to include an
explanation of any opportunity for a
participant or beneficiary to have a
claim for benefits reprocessed (or, as
explained below, submitted) in a notice
describing a final determination of
noncompliance, the Departments do not
intend that provision to imply that
plans and issuers will not be obligated
to take any other particular actions
intended to provide appropriate
corrections to affected individuals or
otherwise remediate potential harms.
As noted throughout this preamble to
these final rules, the Departments are
committed to ensuring that participants
and beneficiaries have access to the
mental health and substance use
disorder benefits covered under their
plan or coverage and are not adversely
affected by violations of MHPAEA. The
Departments are, however, modifying
the requirement that plans and issuers
must include a clear and accurate
statement as to whether the Secretary
has indicated that those actions, if
completed, will result in compliance, to
reflect that the Secretary may not be
able to know whether the actions taken
or being taken will bring the plan into
compliance. Instead, under these final
rules, plans and issuers must indicate
whether the relevant Secretary has
concurred with those actions. The
Departments are also modifying the
requirement that the notice include a
description of any opportunity for a
participant or beneficiary to have a
claim for benefits reprocessed to include
any opportunity to submit a new claim,
to account for participants and
beneficiaries who did not initially file a
claim for a mental health or substance
use disorder benefit that could have
been covered.
In the proposed rules, the
Departments solicited 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. One commenter suggested
that to improve transparency, all
informational materials published to the
public following final agency
determinations of noncompliance
should clearly state the name of the
insurer who holds contracts with the
TPA or MBHO if a TPA or MBHO is
found to be in violation of MHPAEA.
The commenter also recommended that
the Departments require all States to
make notices of MHPAEA violations
publicly available via State agency
websites and other avenues easily
accessible by beneficiaries within a
reasonable timeframe after
determinations of noncompliance with
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MHPAEA are made. The Departments
acknowledge these comments and will
continue to consider them.
In addition to making the comparative
analyses available upon request to the
relevant Secretary, the Departments
proposed to codify a requirement that
plans and issuers make available the
comparative analyses when requested
by any applicable State authority, as
well as participants and beneficiaries
(including 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,
for ERISA-covered plans, participants
and beneficiaries at any time, under
authority under ERISA section 104. The
Departments noted that, while the
proposed rules would codify the
statutory requirement to make
comparative analyses available to the
applicable State authority upon request,
the proposed rules would not otherwise
apply the timeframes and processes
regarding the Secretarial request process
to requests for comparative analyses
made by applicable State authorities.
The Departments requested comments
on these proposals, including whether
the proposed requirements should apply
to plans and issuers with respect to a
request made by the applicable State
authority for an NQTL comparative
analysis, including the proposed notice
requirement following a final
determination of noncompliance.
Some commenters recommended that
the Departments emphasize that health
insurance issuers have an unambiguous
duty to share their MHPAEA
comparative analyses with applicable
State authorities upon request even if
the relevant Secretary has not also made
the same request. Commenters also
recommended that the Departments
work closely with State insurance
authorities to incentivize and facilitate
the implementation of comparable
review and notice standards. Several
other commenters requested the
Departments include applicable State
authorities in proposed 26 CFR
54.9812–2(b), 29 CFR 2590.712–1(b),
and 45 CFR 146.137(b), to make clear
that States have the authority to request
comparative analyses. Some
commenters noted that some issuers
refuse to provide comparative analyses
to the applicable State authority upon
request. Commenters requested
guidance concerning requests from
participants, beneficiaries, and
authorized representatives who have
received an adverse benefit
determination related to mental health
and substance use disorder benefits,
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77651
including one commenter requesting
guidance on how participants,
beneficiaries, and their authorized
representatives may report potential
violations of MHPAEA, and another
commenter that requested clear
guidelines regarding when the issuance
of an adverse benefit determination
triggers a requirement by the plan to
disclose its comparative analyses, upon
request.
After reviewing comments, the
Departments are finalizing as proposed
the requirement that plans and issuers
must make available a copy of the
comparative analysis when requested by
any applicable State authority, 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, for ERISA-covered plans,
participants and beneficiaries generally,
who may request the comparative
analysis at any time under ERISA
section 104. The Departments are of the
view that it is important that
participants and beneficiaries are able to
access comparative analyses of NQTLs
imposed on mental health and
substance use disorder benefits under
their plan or coverage. In implementing
MHPAEA, the Departments have heard
repeated complaints that plans and
issuers fail to disclose information on
the processes, strategies, evidentiary
standards, and other factors used to
design and apply an NQTL, including
the relevant comparative analyses to
participants and beneficiaries, despite
clear statements by the Departments
regarding this requirement.124 The
Departments are concerned that limiting
the ability of participants and
beneficiaries (or their authorized
representatives) to request the
124 See, e.g., 26 CFR 54.9812–1(d)(3), 29 CFR
2590.712(d)(3), and 45 CFR 146.136(d)(3); FAQs
About Affordable Care Act Implementation Part V
and Mental Health Parity Implementation (Dec. 22,
2010), https://www.dol.gov/sites/dolgov/files/EBSA/
about-ebsa/our-activities/resource-center/faqs/acapart-v.pdf and https://www.hhs.gov/guidance/
document/affordable-care-act-implementation-faqsset-5; FAQs About Affordable Care Act
Implementation Part 31, Mental Health Parity
Implementation and Women’s Health and Cancer
Rights Action Implementation (Apr. 20, 2016),
https://www.dol.gov/sites/dolgov/files/EBSA/aboutebsa/our-activities/resource-center/faqs/aca-part31.pdf and https://www.hhs.gov/guidance/
document/affordable-care-act-implementation-faqsset-31; FAQs About Mental Health Parity
Implementation and the Consolidated
Appropriations Act, 2021 Part 45 (Apr. 2, 2021),
https://www.dol.gov/sites/dolgov/files/ebsa/aboutebsa/our-activities/resource-center/faqs/aca-part45.pdf and https://www.cms.gov/CCIIO/Resources/
Fact-Sheets-and-FAQs/Downloads/MHPAEA-FAQsPart-45.pdf.
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comparative analyses to only those
situations where there is an adverse
benefit determination related to mental
health or substance use disorder
benefits, would frustrate participants’
and beneficiaries’ ability to get the
information they need about their
mental health and substance use
disorder benefits to effectuate their
rights, including in situations where
they forgo submitting a claim for
benefits. The Departments remain
committed to responding to inquiries
and complaints about compliance with
MHPAEA, and participants,
beneficiaries, and enrollees, as well as
their authorized representatives, may
contact EBSA at 1–866–444–3272 or
https://www.dol.gov/agencies/ebsa/
about-ebsa/ask-a-question/ask-ebsa or
HHS at 1–800–985–3059 or https://
www.cms.gov/medical-bill-rights/help/
submit-a-complaint.
As specified earlier in the preamble,
the statute requires that plans and
issuers must provide a copy of the
comparative analysis to any applicable
State authority upon request. The
statute does not require applicable State
authorities to follow the same procedure
to review and request comparative
analyses as that applicable to the
Departments, and, therefore, these final
rules do not include ‘‘applicable State
authorities’’ in the regulatory text that
describes this procedure. However,
these final rules at 26 CFR 54.9812–2(e),
29 CFR 2590.712–1(e), and 45 CFR
146.137(e) provide that a health
insurance issuer in a State must provide
the comparative analysis to the
applicable State authority (that is, the
State insurance commissioner or official
or officials designated by the State to
enforce the requirements of title XXVII
of the PHS Act for the State involved
with respect to such issuer) upon
request. Additionally, compliance with
MHPAEA is not determinative of
compliance with other State or Federal
laws. Applicable State authorities retain
independent authority over issuers of
group and individual health insurance
coverage and may request or require
additional information under their own
authorities. Issuers of group and
individual health insurance coverage
must also comply with State insurance
laws, to the extent they do not prevent
the application of the requirements 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)
The Departments proposed to amend
26 CFR 54.9812–1(i)(1), 29 CFR
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2590.712(i)(1), and 45 CFR 146.136(i)(1)
to specify that, except as provided in
paragraph (i)(2), the proposed rules
applicable to group health plans (and
health insurance coverage offered by an
issuer in connection with such
plans) 125 would apply on the first day
of the first plan year beginning on or
after January 1, 2025. The Departments
acknowledged in the preamble of the
proposed rules that the proposed
requirements would take time for plans
and issuers to implement. Therefore, the
Departments sought to strike an
appropriate balance for the date by
which plans and issuers must comply
with final rules. The Departments noted
that until the proposed applicability
date, plans and issuers would be
required to continue to comply with the
most recent MHPAEA regulations
codified in the CFR,126 as applicable.
The Departments similarly proposed
that the requirements in 26 CFR
54.9812–2, 29 CFR 2590.712–1, and 45
CFR 146.137 of the proposed rules,
governing the requirements for
comparative analyses under MHPAEA,
would apply for plan years beginning on
or after January 1, 2025. However, the
Departments reminded plans and
issuers that the statutory provisions
added to MHPAEA by the CAA, 2021
are self-implementing and took effect on
February 10, 2021. As such, the
proposed delayed applicability date for
the comparative analysis requirements
in the proposed rules would not alter a
plan’s or issuer’s obligations under the
statute. The Departments solicited
comments on the proposed applicability
dates.
Several commenters stated that the
proposals put forward sweeping
changes to the existing rules. To allow
time for implementation, commenters
requested that the applicability date of
the final rules for plans and issuers be
for plan years beginning on or after
January 1, 2026, or 2 years following
publication of the final rules. Several
commenters requested an
125 Coverage offered by Medicaid managed care
organizations, CHIP, and Medicaid Alternative
Benefit Programs are subject to separate mental
health parity regulations at codified at 42 CFR parts
438, 440, 456, and 457. See Medicaid and
Children’s Health Insurance Programs; Mental
Health Parity and Addiction Equity Act of 2008;
Application of Mental Health Parity Requirements
to Coverage Offered by Medicaid Managed Care
Organizations, the Children’s Health Insurance
Program (CHIP), and Alternative Benefit Plans;
Final Rule. 81 FR 18390 (Mar. 30, 2016), https://
www.federalregister.gov/documents/2016/03/30/
2016-06876/medicaid-and-childrens-healthinsurance-programs-mental-health-parity-andaddiction-equity-act-of.
126 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.
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implementation period ranging from 1
to 2 years. Some of these commenters
additionally requested a 1-year good
faith enforcement safe harbor to allow
plans and issuers additional time to
comply with the new requirements.
Another commenter requested that the
proposed rules be effective in 2024, in
order to not delay access to vital mental
health and substance use disorder
benefits.
In order to effectuate these final rules
in a timely manner and to ensure that
participants and beneficiaries seeking
benefits to treat mental health
conditions or substance use disorders
do not face a greater burden on access
to mental health and substance use
disorder benefits than medical/surgical
benefits, while acknowledging the
challenges to plans and issuers of
implementing some of the requirements
in these final rules, the Departments are
finalizing the applicability provision,
with some modifications. Accordingly,
these final rules apply to group health
plans (and health insurance coverage
offered by an issuer in connection with
a group health plan) on the first day of
the first plan year beginning on or after
January 1, 2025, except for the
meaningful benefits standard, the
prohibition on discriminatory factors
and evidentiary standards, the relevant
data evaluation requirements, and the
related requirements in the provisions
for comparative analyses, which apply
on the first day of the first plan year
beginning on or after January 1, 2026.
Until these rules are applicable, plans
and issuers must continue to comply
with the regulations implementing
MHPAEA as in effect prior to the
effective date of these final rules, and
must comply with the statutory
provisions of MHPAEA, as amended by
the CAA, 2021, both before and after
these final rules become applicable. The
Departments remind plans and issuers
that guidance provided in FAQs Part 45
addresses what information plans and
issuers should make available under
MHPAEA, as amended by the CAA,
2021, in response to the Departments’
request for comparative analyses and
can be relied on pending the
applicability dates of these final rules.
In response to the comments raising
concerns about the magnitude of the
changes of the proposed requirements in
the proposed rules, particularly in
relation to the amount of data collection
and analysis that would be required and
the time needed by plans and issuers to
implement these changes, the
Departments are delaying the
applicability date with respect to certain
provisions in these final rules, as
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discussed in this section of the
preamble.
As part of the request to the
Departments to extend the applicability
date of these final rules, several
commenters raised concerns regarding
the amount of new documentation and
the time necessary to implement the
relevant data evaluation requirements,
which, as noted earlier in this preamble,
require plans and issuers to collect and
evaluate data in a manner that is not
currently required. The Departments
acknowledge that the relevant data
evaluation requirements and the related
requirements in the provisions requiring
the comparative analyses to demonstrate
comparability and stringency, in
operation, impose specific new
obligations that plans and issuers must
comply with in order to demonstrate
that an NQTL with respect to mental
health or substance use disorder
benefits in any classification is no more
restrictive in operation than the
predominant NQTL that applies to
substantially all medical/surgical
benefits in the same classification.
These final rules identify examples of
relevant data that a plan or issuer may
be required to collect, but ultimately the
plan or issuer will need to determine
which data must be collected and
analyzed to comply with these final
rules, whether any differences reflected
in the data are material, and what
reasonable actions to take, as necessary,
when there are material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits in the same
classification. Similarly, the
Departments recognize that the
meaningful benefits standard under
these final rules could impose new
obligations for plans and issuers, which
may require changes to benefit design
that may be difficult to implement
within a short period of time after the
issuance of these final rules.
Additionally, the Departments
acknowledge that the prohibition on
discriminatory factors may require plans
and issuers to evaluate their NQTLs to
determine whether such limitations are
based on prohibited factors or
evidentiary standards and whether
changes need to be made to such factors
or evidentiary standards in order to
comply with these final rules.
The Departments agree with
commenters that this process will take
time and that plans and issuers will face
difficulty complying with these
requirements by the start of a plan year
beginning on or after January 1, 2025.
Therefore, the Departments are delaying
the applicability date for the meaningful
benefits standard under 26 CFR
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54.9812–1(c)(2)(ii)(A), 29 CFR
2590.712(c)(2)(ii)(A), and 45 CFR
146.136(c)(2)(ii)(A); the prohibition on
discriminatory factors and evidentiary
standards under 26 CFR 54.9812–
1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B),
and 45 CFR 146.136(c)(4)(i)(B); the
relevant data evaluation requirements
under 26 CFR 54.9812–1(c)(4)(iii), 29
CFR 2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii); and the related
requirements in the provisions for
comparative analyses; 127 to apply on
the first day of the first plan year
beginning on or after January 1, 2026.
The Departments emphasize that plans
and issuers must continue to comply
with the 2013 final regulations until the
respective applicability dates in these
final rules. For example, even though
the prohibition on discriminatory
factors does not apply to plans and
issuers until plan years beginning on or
after January 1, 2026, plans and issuers
should still be prepared to demonstrate
that the factors used to design or apply
an NQTL to mental health and
substance use disorder benefits are
comparable to and applied no more
stringently than the factors used to
design and apply an NQTL to medical/
surgical benefits in the same
classification in accordance with the
2013 final regulations. The Departments
expect that plans and issuers will utilize
the delayed applicability period to work
in good faith to update systems and
processes to comply with the new
requirements of these final rules.
Accordingly, the Departments
encourage plans and issuers to start
working to ensure that they are in a
position to comply with all aspects of
these final rules in a timely manner,
including by working to comply with
the meaningful benefits standard, the
prohibition on discriminatory factors
and evidentiary standards, and the
relevant data evaluation requirements,
as well as the associated comparative
analysis requirements, no later than for
plan years beginning on or after January
1, 2026.
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 proposed
severability clauses in the proposed
rules to capture the Departments’ intent
that, to the extent a reviewing court
holds that any provision of the final
rules is unlawful by its terms or as
127 26 CFR 54.9812–2(c)(2)(ii)(C), (c)(5)(i)(C) and
(D), and (c)(5)(ii) through (v); 29 CFR 2590.712–
1(c)(2)(ii)(C), (c)(5)(i)(C) and (D), and (c)(5)(ii)
through (v); and 45 CFR 137(c)(2)(ii)(C), (c)(5)(i)(C)
and (D), and (c)(5)(ii) through (v).
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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 expressed their view that if
the proposed rules were finalized as
proposed or as a substantially similar
version, such rules would provide
comprehensive protections that
implement MHPAEA’s requirements.
The Departments noted that the aim of
the 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 the proposed
rules would individually contribute to
furthering that aim. Therefore, the
Departments proposed that if a court
were to hold that any provisions were
invalid or unenforceable, any affected
provisions would be severable from the
rest of the proposed rules, if finalized,
and would not affect any other
provisions or their application to
persons not similarly situated or to
dissimilar circumstances.
The Departments did not receive any
comments relating to the proposed
severability provisions and are
finalizing these provisions without
change. The Departments note that,
while the requirements under 26 CFR
54.9812–1(c)(4)(i) and (iii), 29 CFR
2590.712(c)(4)(i) and (iii), and 45 CFR
146.136(c)(4)(i) and (iii) are part of a
comprehensive regulatory scheme, the
provisions are separate aspects of the
parity analysis and can continue to
apply independently if other provisions
of these final rules are invalidated.
While the Departments have made some
changes from the proposed rules in
these final rules, as discussed earlier in
this preamble, the Departments are not
of the view that these changes affect the
severability of the provisions of these
final rules.
E. Request for Information
In the preamble to the proposed rules,
the Departments requested information
on ways to improve the coverage of
mental health and substance use
disorder benefits through other
consumer protection laws, including the
ACA. The Departments requested
comments on ways to incentivize TPAs
to facilitate compliance with MHPAEA
on behalf of the plans that they design
and administer and methods to enhance
access to mental health and substance
use disorder benefits through the
Departments’ implementation of PHS
Act section 2706(a), the provider
nondiscrimination requirements. The
Departments also requested comments
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on ways that they could improve the
coverage of and enhance access to
mental health and substance use
disorder benefits through their
implementation of the provider
directory requirements under Code
section 9820(a) and (b), ERISA section
720(a) and (b), and PHS Act section
2799A–5(a) and (b), the requirements for
telehealth, and the ways in which the
Departments could leverage ERISA’s
and the ACA’s existing claims
procedure requirements to help
facilitate access to mental health and
substance use disorder benefits. Finally,
the Departments requested information
on whether HHS and the Treasury
should consider potential amendments
to the minimum value rule and on how
behavioral health crisis services fit
within the existing MHPAEA
classifications or the EHB categories.
The Departments appreciate the many
comments received in response to the
request for information and will use the
comments to inform potential future
rulemaking and guidance.
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III. Overview of the Final Rules—
Department of HHS
A. Sunset of MHPAEA Opt-Out for SelfFunded Non-Federal Governmental
Plans
Prior to the enactment of the CAA,
2023 on December 29, 2022, sponsors of
self-funded non-Federal governmental
plans were permitted to elect to exempt
those plans from (opt out of) compliance
with the MHPAEA requirements, among
other specified requirement categories,
in title XXVII of the PHS Act.128
The CAA, 2023 included a provision
that sunsets the election option with
respect to MHPAEA.129 Specifically,
that provision amended PHS Act section
2722(a)(2) to specify that no MHPAEA
opt-out election may be made on or after
the date of the enactment of the CAA,
2023, and that, subject to certain
exceptions, no MHPAEA opt-out
election expiring on or after the date
that is 180 days after the date of such
enactment may be renewed.130
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 self-funded
non-Federal governmental plan that is
subject to multiple collective bargaining
Act section 2722(a)(2); 45 CFR 146.180.
FF, Title I, Subtitle C, Chapter 3,
section 1321, Public Law 117–328, 136 Stat. 4459
(Dec. 29, 2022).
130 PHS Act section 2722(a)(2)(F)(i).
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.131
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 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).
In the proposed rules, HHS proposed
to amend 45 CFR 146.180 to align with
the CAA, 2023 amendments to PHS Act
section 2722(a)(2). Specifically, HHS
proposed 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 plans 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 proposed to add new
paragraph (f)(4)(iii) specifying 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 proposed
to make conforming edits to paragraph
(a)(2), paragraphs (a)(5)(i) and (ii) and
(a)(6)(ii), as proposed to be redesignated,
and paragraph (f)(1). HHS proposed that
the amendments to 45 CFR 146.180
would apply on the effective date of the
final rule.132 HHS sought comments on
these proposed amendments, including
whether additional guidance or
clarifications were necessary to
128 PHS
129 Division
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131 PHS
Act section 2722(a)(2)(F)(ii).
statutory provisions implemented by 45
CFR 146.180 became effective December 29, 2022
(the date of enactment of the CAA, 2023).
132 The
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implement the sunset of the MHPAEA
opt-out election provision.
Several commenters expressed
support for the proposal to codify the
sunset for sponsors of self-funded nonFederal governmental plans to opt out of
compliance with the MHPAEA
requirements. Many of these
commenters recommended prioritizing
MHPAEA compliance reviews of these
plans as soon as their respective optouts are no longer valid. Furthermore,
some commenters suggested these plans
should immediately be requested to
submit the NQTL comparative analyses
required under PHS Act section
2726(a)(8)(A) to ensure compliance with
MHPAEA. One commenter encouraged
HHS to oversee self-funded non-Federal
governmental plans to ensure full
MHPAEA compliance by such plans
that previously opted out of compliance
with the MHPAEA requirements.
HHS appreciates the support for the
proposed amendments to codify the
sunset of the option for self-funded nonFederal governmental plans to elect to
opt out of compliance with the
MHPAEA requirements. HHS did not
receive any comments objecting to the
proposed amendments to 45 CFR
146.180 and is finalizing those
amendments as proposed in these final
rules. HHS is committed to ensuring
that self-funded non-Federal
governmental plans that previously
opted out of compliance with MHPAEA
come into compliance with MHPAEA
requirements. In determining the degree
to which HHS will prioritize
compliance reviews, NQTL comparative
analysis reviews, and enforcement of
MHPAEA with respect to self-funded
non-Federal governmental plans once
the plans’ respective opt-outs sunset,
HHS will weigh all relevant
considerations, such as the number of
complaints of MHPAEA noncompliance
with respect to such plans.
One commenter suggested HHS
implement a tiered approach to penalty
assessment for compliance with
MHPAEA that employs varying levels of
penalties which consider the severity of
and frequency of violations. This
approach, according to the commenter,
would encourage greater compliance as
non-Federal governmental entities
diligently work to modify their health
plans, and would mitigate detrimental
fiscal impacts that would reduce the
ability of non-Federal governmental
entities to both recruit and retain a
strong workforce and continue to
provide necessary services to residents.
With respect to penalties for
violations of MHPAEA and other PHS
Act requirements, HHS has determined
that the enforcement processes and
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procedures set forth in existing
regulations are sufficient to address the
tiered approach to penalty assessment
recommended by the commenter. The
HHS enforcement processes and
procedures applicable to self-funded
non-Federal governmental plans are set
forth at 45 CFR 150.301 through
150.347. Rather than specifying a
specific set penalty amount for any and
all violations, the regulations at 45 CFR
150.317, 150.319, 150.321, and 150.323
specify the factors HHS uses in
determining the amount of any penalty,
including the entity’s previous record of
compliance and the gravity of the
violation; mitigating circumstances;
aggravating circumstances; and other
matters as justice may require.133 These
factors allow HHS to structure penalties
in a manner that encourages compliance
while taking into account the relevant
facts and circumstances.
One commenter requested that HHS
provide guidance on how self-funded
non-Federal governmental plans can
leverage the expertise of TPAs to
comply with MHPAEA.
HHS acknowledges that most selffunded group health plans contract with
one or more TPAs to administer, and in
some cases, to design plan benefits. To
the extent a self-funded non-Federal
governmental plan that contracts with a
TPA has previously elected to opt out of
MHPAEA compliance, HHS urges the
sponsors of such plans to work with
their TPAs to ensure that, under the
plan’s contract with the administrator, if
the TPA is required to administer
benefits, it collects and analyzes data,
and provides data to the sponsor in such
a way that will enable the sponsor to
comply with all the requirements of
MHPAEA. HHS also notes that Federal
regulations at 45 CFR 150.305 identify
the entity liable for civil money
penalties for noncompliance with
applicable PHS Act requirements,
including MHPAEA. Under the
regulations, if a non-Federal
governmental plan is sponsored by two
or more employers and fails to comply
with an applicable PHS Act
requirement, the plan is subject to a
civil money penalty, irrespective of
whether the plan is administered by a
health insurance issuer, an employer
sponsoring the plan, or a TPA.134 If a
non-Federal governmental plan is
sponsored by a single employer and
fails to comply with an applicable PHS
Act requirement, the employer is subject
133 HHS proposed amendments to the provisions
in 45 CFR part 150 related to enforcement processes
and procedures and penalties for noncompliance.
86 FR 51730 (Sept. 16, 2021).
134 45 CFR 150.305(b).
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to a civil money penalty, irrespective of
whether the plan is administered by a
health insurance issuer, the employer,
or a TPA.135
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 would
apply in the same manner to health
insurance issuers offering individual
health insurance coverage. Further, HHS
proposed to include a cross reference in
45 CFR 147.160 to the comparative
analysis requirements that were
proposed in 45 CFR 146.137. 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. HHS proposed that
these provisions would apply to health
insurance issuers offering individual
health insurance coverage for policy
years beginning on or after January 1,
2026. Finally, for greater clarity and
precision and to align with the statutory
terminology, HHS proposed 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.’’
Commenters expressed support for
HHS’ proposal to apply the proposed
amendments to 45 CFR 146.136 in the
same manner to individual health
insurance coverage. HHS is finalizing
this proposal as proposed.
HHS received one comment
supporting its proposal to include a
cross reference in 45 CFR 147.160 to the
comparative analysis requirements that
were proposed in 45 CFR 146.137 to
make clear that the comparative analysis
requirements apply to health insurance
135 45
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77655
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, and did not receive
any comments opposing that proposal.
HHS did not receive any comments on
its proposal 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.’’ HHS is finalizing
these proposals as proposed.
With respect to HHS’ proposal that
these provisions would apply to
individual health insurance coverage for
policy years beginning on or after
January 1, 2026, one commenter stated
that this applicability date should align
with the applicability date for selffunded non-Federal governmental plans
to come into compliance with
MHPAEA’s requirements under PHS
Act section 2726 and its implementing
regulations, while other commenters
requested that the applicability date for
individual health insurance coverage be
delayed until January 1, 2027. As stated
in the proposed rules, nongrandfathered 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,
which precludes alignment with the
applicability date for self-funded nonFederal governmental plans, and prior
to when rates and benefits must be
finalized and approved for the following
calendar year. In addition, HHS declines
to delay the applicability date until
January 1, 2027, in order to ensure the
protections of these final rules apply in
a timely manner. Therefore, with
respect to its proposal that these
provisions would apply to individual
health insurance coverage, HHS is
finalizing the applicability date of
January 1, 2026, as proposed.
Until the applicability date, issuers
are required to continue to comply with
the most recent MHPAEA regulations
codified in the CFR 136 and must comply
with the statutory provisions of
MHPAEA, as amended by the CAA,
2021, both before and after these final
136 Specifically, issuers must continue to comply
with 45 CFR 147.160, incorporating 45 CFR
146.136, each revised as of October 1, 2023.
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rules become applicable. HHS reminds
issuers that the guidance in FAQs Part
45 addresses what information plans
and issuers should make available
under MHPAEA, as amended by the
CAA, 2021, in response to the
Departments’ request for comparative
analyses and can be relied on pending
the applicability date of these final
rules.
IV. Regulatory Impact Analysis
Summary—Departments of Health and
Human Services and Labor
The Departments 137 have examined
the impacts of these final rules as
required by Executive Order 12866,138
Executive Order 13563,139 Executive
Order 14094,140 the Paperwork
Reduction Act of 1995,141 the
Regulatory Flexibility Act,142 section
202 of the Unfunded Mandates Reform
Act of 1995,143 Executive Order
13132,144 and the Congressional Review
Act.145
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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 14094,146
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
137 The Department of the Treasury is not
included as part of the Departments in the
regulatory impact analysis.
138 Regulatory Planning and Review, 58 FR 51735
(Oct. 4, 1993).
139 Improving Regulation and Regulatory Review,
76 FR 3821 (Jan. 18, 2011).
140 Modernizing Regulatory Review, 88 FR 21879
(Apr. 6, 2023).
141 44 U.S.C. 3506(c)(2)(A) (1995).
142 5 U.S.C. 601 et seq. (1980).
143 2 U.S.C. 1501 et seq. (1995).
144 Federalism, 64 FR 153 (Aug. 4, 1999).
145 5 U.S.C. 801 et seq. (1996).
146 Modernizing Regulatory Review, 88 FR 21879
(Apr. 6, 2023).
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(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.
Based on the Departments’ estimates,
OMB’s OIRA has determined this
rulemaking is significant per section
3(f)(1) as measured by the $200 million
or more in any one year. Therefore, the
Departments have provided an
assessment of the potential costs,
benefits, transfers, and alternatives
associated with these final rules, and
OMB has reviewed these final rules.
2. Introduction and Need for
Regulations
Mental health is crucial to a person’s
overall well-being, and access to quality
mental health and substance use
disorder treatment is as essential for
health as access to medical/surgical
treatment.147 According to the NSDUH,
in 2022, 50.6 percent of adults in the
United States with any mental illness
had received treatment within the past
year; 66.7 percent of adults with a
serious mental illness had received
treatment.148
Failure to treat mental health
conditions or substance use disorders
can be costly. For example, depression
is associated with increased risk of
cardiovascular disease, diabetes, stroke,
Alzheimer’s disease, suicidality, and
osteoporosis, and an untreated
substance use disorder may result in
147 Commonwealth Fund, Behavioral Health Care
in the United States: How It Works and Where It
Falls Short (Sept. 7, 2022), https://www.common
wealthfund.org/publications/explainer/2022/sep/
behavioral-health-care-us-how-it-works-where-itfalls-short.
148 SAMHSA, Center for Behavioral Health
Statistics and Quality, National Survey on Drug Use
and Health, Table 6.21B (2022), https://
www.samhsa.gov/data/sites/default/files/reports/
rpt42728/NSDUHDetailedTabs2022/
NSDUHDetailedTabs2022/NSDUHDet
TabsSect6pe2022.htm.
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hospital emergency room care for a drug
overdose.149 One study examined the
costs and benefits of 58 grants provided
through the Garrett Lee Smith Memorial
Suicide Prevention Program (GPP)
between 2005 and 2009, which provides
Federal funding to States, Tribes, and
colleges for community-based suicide
prevention programs. The study
estimated that the programs resulting
from GPP funding prevented 79,379
suicide attempts and resulted in $4.50
in medical cost savings for each dollar
invested.150
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 2022,
approximately 27 percent of adults 18
and older with any mental illness in the
past year who did not receive mental
health treatment reported a perceived
unmet need for treatment.151
Individuals reported a variety of reasons
for not receiving treatment: 59 percent
thought it would cost too much; 26
percent were concerned their
information would not be kept private;
20 percent were unable to get an
opening in the treatment program or
with the health care professional they
wanted to see; 16 percent thought it may
cause their community to have a
negative opinion about them; and 15
percent thought it might impact their
job, parental rights or housing.152
The Departments are particularly
concerned with access barriers 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
149 Government Accountability Office (GAO),
Behavioral Health: Research on Health Care Costs
of Untreated Conditions is Limited, GAO–19–274
(Feb. 2019), https://www.gao.gov/assets/gao-19274.pdf.
150 Lucas Godoy Garraza, Christine Walrath,
Simone Peart Boyce, & David Goldston, An
Economic Evaluation of the Garrett Lee Smith
Memorial Suicide Prevention Programs, 48(1)
Suicide and Life-Threatening Behavior (2018),
https://onlinelibrary.wiley.com/doi/10.1111/
sltb.12321.
151 SAMHSA, Center for Behavioral Health
Statistics and Quality, National Survey on Drug Use
and Health, Figure 64 (2022), https://
www.samhsa.gov/data/sites/default/files/reports/
rpt42731/2022-nsduh-nnr.pdf.
152 SAMHSA, Center for Behavioral Health
Statistics and Quality, National Survey on Drug Use
and Health, Table A.47B (2022), https://
www.samhsa.gov/data/sites/default/files/reports/
rpt42731/2022-nsduh-nnr.pdf. Respondents could
indicate multiple reasons for not receiving
treatment and so response categories are not
mutually exclusive.
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past year and 28 percent of those with
unmet substance use disorder care
needs in the past year reported that their
inability to get an immediate
appointment had prevented them from
getting needed care.153
Obtaining appointments with primary
care physicians instead of behavioral
health specialists can be significantly
easier. According to the 2023 KFF
Employer Health Benefits Survey, 91
percent of firms that offer physical
health benefits believe there is a
sufficient number of primary care
providers in the plans’ network,
whereas only 67 percent and 59 percent,
respectively, believe there is a sufficient
number of mental health providers and
substance use disorder providers.154
However, while up to 70 percent of all
primary care visits include a behavioral
health component,155 research suggests
that primary care providers face
significant barriers to delivering these
services, including insufficient
resources, inadequate related
knowledge, and limited time with
patients.156
In seeking out specialists, individuals
tend to face less adequate mental health
provider networks than medical/
surgical provider networks through their
plan or coverage. A 2024 study of 2019–
2021 claims and enrollment data for
employer-sponsored health plans
reported that office visits with
psychiatrists and psychologists occurred
out-of-network 8.9 and 10.6 times more,
respectively, than those with medical/
surgical specialist physicians.157
153 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.
154 KFF, 2023 Employer Health Benefits Survey
(Oct. 18, 2023), https://www.kff.org/report-section/
ehbs-2023-section-13-employer-practicestelehealth-provider-networks-coverage-limits-andcoverage-for-abortion/.
155 Health Affairs, Combating a Crisis by
Integrating Mental Health Services and Primary
Care, Health Affairs Forefront (July 8, 2022), https://
www.healthaffairs.org/do/10.1377/
forefront.20220706.603540.
156 Danielle F. Loeb, Elizabeth A. Bayliss, Ingrid
A. Binswanger, Carey Candrian, & Frank V. Degruy,
Primary Care Physician Perceptions on Caring for
Complex Patients with Medical and Mental Illness,
27(8) Journal of General Internal Medicine pp. 945–
952 (2012), https://www.ncbi.nlm.nih.gov/pmc/
articles/PMC3403152/; Lusine Poghosyan, Allison
A. Norful, Affan Ghaffari, Maureen George, Shruti
Chhabra, Mark Olfson, Mental Health Delivery in
Primary Care: The Perspectives of Primary Care
Providers, 33(5) Archives of Psychiatric Nursing pp.
63–67 (Oct. 2019), https://www.ncbi.nlm.nih.gov/
pmc/articles/PMC7077950.
157 Tami L. Mark & William Parish, Behavioral
Health Parity—Pervasive Disparities in Access to InNetwork Care Continue, RTI International (2024),
https://dpjh8al9zd3a4.cloudfront.net/publication/
behavioral-health-parity-pervasive-disparitiesaccess-network-care-continue/fulltext.pdf.
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According to a 2021 study, which
compared the experiences of patients
receiving both specialty mental health
and medical/surgical care, patients who
were receiving mental health treatment
from only a mental health practitioner
were more likely to rate their plan’s
mental health network as inadequate
compared with their plan’s medical/
surgical provider network.158 The study
referenced research that found specialty
mental health networks tend to be
narrower due to a growing workforce
shortage of mental health providers, a
high demand for mental health services,
and specialty mental health
practitioners opting out of participating
in provider networks due to low
reimbursements for mental health
services compared with other
specialties. These factors have
consequentially resulted in higher outof-network utilization rates for mental
health care services.159 160 161
Use of out-of-network providers can
place additional burdens on families
seeking mental health and substance use
disorder treatments. A 2022 study of
families experiencing out-of-network
behavioral health expenditures in their
employer-sponsored insurance claims
found that roughly half of the families
were subject to ‘‘balance billing,’’ with
the yearly mean total for those families
being $861. This study, however,
focused on out-of-network claims
submitted by providers to insurers,
which suggests that, for individuals
seeking treatment from behavioral
health care from providers not accepting
insurance, the out-of-pocket costs could
be even greater.162
Despite access barriers to seeking
mental health and substance use
disorder treatment, the need for these
services has only increased. An
158 Susan H. Busch & Kelly Kyanko, Assessment
of Perceptions of Mental Health vs Medical Health
Plan Networks Among US Adults with Private
Insurance, 4(10) JAMA Network Open (2021).
159 Davenport, Stoddard, Travis Gray, & Stephen
P. Melek, Addiction and Mental Health vs. Physical
Health: Widening Disparities in Network Use and
Provider Reimbursement, Milliman (Nov. 20, 2019),
https://www.milliman.com/en/insight/addictionand-mental-health-vs-physical-health-wideningdisparities-in-network-use-and-p/.
160 Tara F. Bishop, Joanna K. Seirup, Harold Alan
Pincus, & Joseph S. Ross, Population of US
Practicing Psychiatrists Declined, 2003–13, Which
May Help Explain Poor Access to Mental Health
Care, 35(7) Health Affairs (Millwood) (2016) pp.
1271–1277.
161 Daria Pelech & Tamara Hayford. Medicare
Advantage and Commercial Prices for Mental
Health Services, 38(2) Health Affairs (Millwood)
(2019) pp. 262–267.
162 Sarah A. Friedman, Haiyong Xu, Francisca
Azocar, & Susan L. Ettner, Quantifying Balance
Billing for Out-of-Network Behavioral Health Care
in Employer-Sponsored Insurance, 73(9) Psychiatric
Services pp. 1019–1026 (2022).
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estimated 37 percent of U.S. adults
reported being diagnosed with a mental
health condition in 2023, a
5-percentage-point increase from prepandemic levels in 2019.163 Research
suggests that the need for mental health
services has also increased among
children and adolescents. For instance,
a 2022 study using 2009 to 2019 data
from the NSDUH found that the
prevalence of a major depressive
episode among adolescents aged 12 to
17 increased by 7.7 percentage points,
from approximately 8.1 percent in 2009
to 15.8 percent in 2019. The study
found that the increase in prevalence of
major depressive episodes was even
higher among female adolescents,
finding a 12.0-percentage-point
increase.164
The enactment of MHPAEA, as well
as the CAA, 2021 165 and associated
regulations and guidance issued by the
Departments, were intended to assist
plans and issuers in improving their
policies and procedures to ensure parity
between mental health and substance
use disorder benefits and medical/
surgical benefits, particularly with
regards to applying NQTLs.166 However,
as documented in the past two Reports
to Congress 167 168 and discussed later in
this regulatory impact analysis, the
Departments have found from their
initial reviews that plans and issuers
failed to comply with these
requirements.
In order to address these issues and
improve the health and well-being of
both individuals and their communities,
the Departments are committed to
promoting equal access to treatment for
163 American Psychological Association, Stress in
America 2023: A Nation Recovering from Collective
Trauma (Nov. 2023), https://www.apa.org/news/
press/releases/stress/2023/collective-traumarecovery.
164 Michael Daly, Prevalence of Depression
Among Adolescents in the US from 2009 to 2019:
Analysis of Trends by Sex, Race/Ethnicity, and
Income, 70 Journal of Adolescent Health 3 pp. 496–
499 (2022). Additional information regarding these
trends in mental health services among children
and adolescents is addressed earlier in this
preamble.
165 Public Law 116–260 (Dec. 27, 2020).
166 NQTLs consist of any limitations on the scope
and duration of benefits that are not expressed
numerically. Because they are non-quantitative, it
can be difficult to measure their impact on
restricting access and whether they are applied in
parity across mental health and substance use
disorder benefits and medical/surgical benefits.
167 2022 MHPAEA Report to Congress, https://
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2022-realizing-parity-reducing-stigmaand-raising-awareness.pdf.
168 2023 MHPAEA Comparative Analysis Report
to Congress, www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
report-to-congress-2023-mhpaea-comparativeanalysis.pdf.
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mental health conditions and substance
use disorders. These final rules, by
clarifying requirements for comparative
analyses and setting forth additional
requirements for how NQTLs must be
designed and applied for group health
plans and health insurance coverage,
will serve to improve compliance with
MHPAEA by plans and issuers. This
will in turn promote more equitable
access to affordable and comprehensive
care for individuals with mental health
conditions and substance use disorders
and reduce barriers to mental health and
substance use disorder treatments,
resulting in greater access and
utilization of these services as well as
better patient outcomes.
2.1. History of MHPAEA Related
Government Actions
To implement the requirements of
MHPAEA, the Departments published a
request for information soliciting
comments on issues under MHPAEA in
2009 169 and interim final regulations in
2010.170 After considering the
comments and other feedback received
from interested parties, the Departments
published the 2013 final regulations.171
In subsequent years, the Departments
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, including the 2020 MHPAEA
Self-Compliance Tool, which provided a
basic framework for plans and issuers to
assess whether their NQTLs satisfy
MHPAEA’s parity requirements. The
Departments also have provided
materials to educate consumers, their
family members, and policymakers
about parity for mental health and
substance use disorder benefits,172 and
may develop new materials and
undertake additional educational efforts
as necessary after the publication of
these final rules.
The CAA, 2021 amended MHPAEA,
in part, by expressly requiring group
health plans and health insurance
issuers that provide both medical and
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169 74
FR 19155 (Apr. 28, 2009).
170 75 FR 5410 (Feb. 2, 2010).
171 78 FR 68240 (Nov. 13, 2013).
172 SAMHSA, Know Your Rights: Parity for
Mental Health and Substance Use Disorder Benefits
(2022), https://store.samhsa.gov/product/knowyour-rights-parity-mental-health-and-substanceuse-disorder-benefits/pep21-05-00-003; SAMHSA,
The Essential Aspects of Parity: A Training Tool for
Policymakers (2022), https://store.samhsa.gov/
product/essential-aspects-parity-training-toolpolicymakers/pep21-05-00-001; DOL,
Understanding Your Mental Health and Substance
Use Disorder Benefits, https://www.dol.gov/
agencies/ebsa/about-ebsa/our-activities/resourcecenter/publications/understanding-your-mentalhealth-and-substance-use-disorder-benefits.
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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. Plans and issuers
must provide those analyses to the
Departments or applicable State
authorities, upon request. Moreover, the
CAA, 2021 compels the Departments to
request and evaluate no fewer than 20
NQTL comparative analyses per year
and submit to Congress and make
available to the public an annual report
summarizing the Departments’ review
process and findings. Shortly after the
enactment of the amendments to
MHPAEA made by the CAA, 2021, the
Departments issued FAQs Part 45 to
help plans and issuers comply with the
comparative analysis requirements.173
As documented in the 2022 MHPAEA
Report to Congress,174 the Departments
found that under the first year of the
CAA, 2021, none of the NQTL
comparative analyses they reviewed
contained sufficient information and
documentation from plans and issuers
upon initial receipt. Similarly, the 2023
MHPAEA Comparative Analysis Report
to Congress 175 notes that nearly all the
comparative analyses reviewed by the
Departments contained insufficient
information upon initial receipt and
identified common deficiencies in the
comparative analyses prepared by plans
and issuers. Moreover, despite plans’
and issuers’ longstanding obligations
under MHPAEA to ensure that the
processes, strategies, evidentiary
standards, and other factors used to
apply NQTLs are equitable, it was
apparent upon review of the analyses,
that plans and issuers had not carefully
designed and implemented their NQTLs
to be compliant with MHPAEA prior to
the enactment of the CAA, 2021. Many
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
173 FAQs about Mental Health and Substance Use
Disorder Parity Implementation and the
Consolidated Appropriations Act, 2021 Part 45
(Apr. 2, 2021), https://www.dol.gov/sites/dolgov/
files/EBSA/about-ebsa/our-activities/resourcecenter/faqs/aca-part-45.pdf and https://
www.cms.gov/cciio/resources/fact-sheets-and-faqs/
downloads/mhpaea-faqs-part-45.pdf.
174 2022 MHPAEA Report to Congress, https://
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2022-realizing-parity-reducing-stigmaand-raising-awareness.pdf.
175 2023 MHPAEA Comparative Analysis Report
to Congress, www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
report-to-congress-2023-mhpaea-comparativeanalysis.pdf.
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and application of a MHPAEAcompliant NQTL. Consequently, the
comparative analyses appeared to focus
on finding after-the-fact rationales for
decisions and designs involving NQTLs,
rather than reflecting proper attention to
MHPAEA compliance in the first place.
The Departments are committed to
ensuring parity in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits. By issuing these final
rules, the Departments will provide
additional guidance to affected parties
to facilitate compliance with MHPAEA
and to help ensure that individuals with
mental health conditions and substance
use disorders benefit from the full
protections required by law consistent
with the fundamental purpose of
MHPAEA.
2.2. Current Regulatory Actions
These final rules amend existing
regulatory definitions and add new
definitions of key terms, including
‘‘factors,’’ ‘‘processes,’’ ‘‘strategies,’’ and
‘‘evidentiary standards.’’ They also add
more specificity as to what conditions
or disorders plans and issuers must treat
as mental health conditions and
substance use disorders for purposes of
MHPAEA to be consistent with
generally recognized independent
standards of current medical practice.
These final rules also clarify the way the
parity requirements apply to NQTLs,
including by prohibiting discriminatory
factors and evidentiary standards, and
provide additional examples of the
application of MHPAEA to NQTLs to
improve the understanding and ability
of the regulated community to comply
with the law. Additionally, these final
rules require that plans and issuers
provide meaningful benefits for covered
mental health conditions and substance
use disorders in each classification in
which meaningful medical/surgical
benefits are provided.
Under these final rules, plans and
issuers are required to collect and
evaluate relevant data in a manner
reasonably designed to assess the
impact of the NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits.
These final rules provide guidance for
how to comply with the relevant data
evaluation requirements in limited
circumstances where data is initially
and temporarily unavailable for new
and newly imposed NQTLs and where
no data exists that can reasonably
measure any relevant impact of the
NQTL on relevant outcomes related to
access to mental health and substance
use disorder benefits and medical/
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surgical benefits. In those instances, the
plan or issuer must include specific
information in their comparative
analyses, as explained earlier in this
preamble.
These final rules also set forth 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.
Additionally, in these final rules, HHS
finalizes regulatory amendments to
implement a provision in the CAA, 2023
that sunsets the election option for
sponsors of self-funded non-Federal
governmental plans to opt out of
requirements under MHPAEA.
In their reviews of plans’ and issuers’
comparative analyses under the
requirements of the CAA, 2021, the
Departments identified exclusions
related to treatment for ASD with ABA
therapy and OUD with medication
assisted treatment, as well as
gatekeeping provisions for treatment
applied with respect to mental health or
substance use disorder benefits but not
to medical/surgical benefits, such as
requiring referrals for appointments and
prior authorization for mental health
and substance use disorder outpatient
services, resulting in corrections by the
plans and issuers.176 However, the
comparative analyses alone are often
less effective in identifying substantive
parity violations for more complex
NQTLs, such as those related to network
composition. The Departments expect
that these additional requirements will
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. As such,
these final rules will help plans and
issuers comply with these requirements,
increase the ability of plans and issuers
to provide compliant comparative
analyses during future reviews or
investigations, and result in improved
access to treatment and coverage of
mental health conditions and substance
use disorders, as intended by MHPAEA.
3. Baseline
The baseline for this analysis includes
the MHPAEA statute, as amended,
implementing regulations, and
subsequent guidance. Benefits, costs,
176 2023 MHPAEA Comparative Analysis Report
to Congress, 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.
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and transfers are measured as changes
from the baseline under these final
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 were required to make their
comparative analyses available to the
Departments or an applicable State
authority upon request. Plans and
issuers are further required to make
these comparative analyses and other
applicable information required by the
CAA, 2021 available upon request to
participants, beneficiaries, and enrollees
in all non-grandfathered group health
plans and non-grandfathered group or
individual health insurance coverage
(including a provider or other person
acting as a participant’s, beneficiary’s,
or enrollee’s authorized representative)
in connection with an adverse benefit
determination, as well as to participants
and beneficiaries in plans subject to
ERISA.177
The 2022 and 2023 MHPAEA Reports
to Congress documented that many
comparative analyses prepared by plans
and issuers prior to these final rules
were deficient even after multiple
requests for correction by the
Departments.178 179 In addition, at least
some plans and issuers failed to conduct
the required comparative analyses until
after the Departments requested them,
rather than performing and
documenting them prospectively within
45 days following the enactment of the
CAA, 2021.
The Departments’ view is that plans
and issuers that were already timely
fulfilling the comparative analysis
requirements outlined in CAA, 2021
will incur only incremental costs to
comply with these final rules. Plans and
issuers not already meeting those
requirements may, on the other hand,
face significant costs to come into
compliance with the CAA, 2021
comparative analysis requirements and
these final rules. However, because
those actions to comply with the CAA,
2021 comparative analysis requirements
would need to occur absent these final
rules, those costs are included in the
baseline.
Therefore, this regulatory impact
analysis does not include benefits or
177 FAQs
Part 45, Q6.
MHPAEA Report to Congress, https://
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2022-realizing-parity-reducing-stigmaand-raising-awareness.pdf.
179 2023 MHPAEA Comparative Analysis Report
to Congress, www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
report-to-congress-2023-mhpaea-comparativeanalysis.pdf.
178 2022
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costs for performing and documenting
comparative analyses for NQTLs
applicable to mental health and
substance use disorder benefits and
medical/surgical benefits, or making
them available upon request, as these
are already required by the provisions of
the CAA, 2021 and are in the baseline.
However, this regulatory impact
analysis does take into account the
expected impacts of these final rules on
the preparation of plans’ and issuers’
comparative analyses, how these final
rules will impact plans’ and issuers’
compliance and, in turn, access for
participants, beneficiaries, and enrollees
needing mental health and substance
use disorder treatments, and whether
plans and issuers need to change their
policies and procedures to provide
benefits in parity.
Some commenters stated that the
proposal would require plans and
issuers to substantially revise their
comparative analyses, arguing the
significance of those revisions makes
the Departments’ approach of
conducting an incremental analysis of
the additional requirements of this
rulemaking inappropriate. In particular,
one commenter stated that the
imposition of the new ‘‘substantially
all’’ test would require all comparative
analyses to be redone, thereby imposing
the full cost of performing these
analyses under the proposed rules. In
response, the Departments note that, as
discussed earlier in this preamble, they
are not finalizing the proposed
mathematical tests for applying the
substantially all and predominant tests,
which would have based these
determinations on the dollar amount of
all plan payments for medical/surgical
benefits expected to be paid. Instead,
these final rules provide that an NQTL
with respect to mental health or
substance use disorder benefits is more
restrictive, as written or in operation,
than the predominant NQTL that
applies to substantially all medical/
surgical benefits in the same
classification if the plan or issuer fails
to satisfy the design and application
requirements or the relevant data
evaluation requirements. Additionally,
the material differences standard in the
relevant data evaluation requirements
reflects an interpretation of the statutory
terms ‘‘substantially all’’ and
‘‘predominant’’ in a manner that takes
into account the multi-faceted nature of
NQTLs, as well as the complexity of
analyzing such NQTLs.
Because the CAA, 2021 requires that
comparative analyses be performed and
documented, the fact that plans and
issuers were not adequately conducting
the required analyses and documenting
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how they determined NQTLs were being
applied in parity, is not a justification
for why these final rules should account
for the full cost of those actions. Rather,
these final rules consider as the baseline
what plans and issuers should have
done given the relevant statute and
guidance irrespective of these final
rules. Therefore, for this category of
cost, the effect of these final rules is
limited to those additional requirements
included by the Departments in the final
rules. Estimates are made based on the
impact from the baseline on plans and
issuers affected by these final rules, and
assuming full compliance with the new
requirements.
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4. Summary of Impacts
These final rules define certain terms
associated with MHPAEA’s
requirements for NQTLs and require
that plans and issuers provide
meaningful benefits for covered mental
health conditions and substance use
disorders in each classification in which
meaningful medical/surgical benefits
are provided. These final rules also
provide that a group health plan (or
health insurance coverage offered by an
issuer in connection with a group health
plan) may not impose any NQTL with
respect to mental health or substance
use disorder benefits in any
classification that is more restrictive, as
written and in operation, than the
predominant NQTL that applies to
substantially all medical/surgical
benefits in the same classification. For
this purpose, the plan and issuer must
ensure that the NQTL satisfies both the
design and application requirements
and the relevant data evaluation
requirements. Specifically, under these
final rules, plans and issuers must
continue to satisfy the design and
application requirements from the 2013
final regulations, which require an
analysis of the processes, strategies,
evidentiary standards, and other factors
used to design and apply NQTLs to
mental health and substance use
disorder benefits as compared to
medical/surgical benefits. Plans and
issuers have struggled with these
requirements, as detailed in the
Departments’ 2022 MHPAEA Report to
Congress 180 and the 2023 MHPAEA
Comparative Analysis Report to
Congress.181 Additionally, plans and
180 2022 MHPAEA Report to Congress, https://
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2022-realizing-parity-reducing-stigmaand-raising-awareness.pdf.
181 2023 MHPAEA Comparative Analysis Report
to Congress, www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
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issuers are not permitted to use any
discriminatory factors or evidentiary
standards to design or apply an NQTL,
and they must satisfy new relevant data
evaluation requirements as well as new
requirements related to the elements
and documentation of their comparative
analyses.
In particular, to comply with the
required content elements for a
comparative analysis, plans and issuers
must describe each NQTL and identify
and define all the factors and
evidentiary standards used to design or
apply the NQTL. The plan or issuer
must also describe how the factors
identified are used in the design and
application of the NQTL, and evaluate
whether 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 with respect to medical/surgical
benefits, both as written and in
operation. Finally, plans and issuers
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 NQTLs
within each classification, and the
relative stringency of their application,
both as written and in operation.
Accordingly, these final rules will
increase plan and issuer compliance
with the requirements for imposing
NQTLs under MHPAEA and help
ensure that NQTLs applicable to mental
health and substance use disorder
benefits are no more restrictive than the
predominant NQTLs applicable to
substantially all medical/surgical
benefits in the same classification. The
Departments acknowledge that past
parity implementation has lacked
consistency and thus had varied results,
particularly for laws limiting
management of behavioral health
benefits or NQTLs. A 2012 study on the
implementation of Oregon’s 2007
comprehensive parity law, which
mandated benefits for substance use
disorders and restricted the use of
behavioral health management for fully
insured commercial group plans,
compared their expenditures for
treatments to those of self-funded plans
not covered by Oregon’s law. The study
found that while plan expenditures for
alcohol treatment services increased,
other substance use treatments were not
associated with a statistically significant
increase in expenditures and that
overall, the impact of parity on
report-to-congress-2023-mhpaea-comparativeanalysis.pdf.
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spending was not significantly different
from zero.182 However, a broader study
conducted in 2013 looked at treatment
counts at specialty substance use
disorder facilities between 2000 and
2008 across the United States to assess
the impact of State-level substance use
disorder parity laws on State aggregate
treatment rates. While the study was not
able to control for the source of
insurance and employment status of
those receiving treatment, the study did
find that the implementation of any
State substance use disorder parity laws
was associated with increased access to
specialty substance use disorder
treatments—by 9 percent in all specialty
substance use disorder treatment
facilities and 15 percent in facilities
accepting private insurance.183
The Departments are of the view that,
by finalizing these rules and requiring
better documentation related to how
plans and issuers design and apply
NQTLs, the Departments and applicable
State authorities will be better able to
enforce existing parity requirements. In
doing so, access to in-network,
medically necessary treatments will
increase for a significant segment of
individuals whose health coverage will
be affected by these final rules, resulting
in better health outcomes and lower outof-pocket costs related to mental health
and substance use disorder benefits for
participants, beneficiaries, and
enrollees.
Plans and issuers will incur costs to
comply with the requirements in these
final rules. However, the Departments
have determined that the benefits of
these final 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 final rules, but
have sought, where possible, to describe
these non-quantified impacts.
The effects in Table 1 reflect nonquantified impacts and estimated direct
monetary costs resulting from the
provisions of these final rules.
182 K. John McConnell, M. Susan Ridgely, &
Dennis McCarty, What Oregon’s Parity Law Can
Tell Us About the Federal Mental Health Parity and
Addiction Equity Act and Spending on Substance
Abuse Treatment Services, 124(3) Drug and Alcohol
Dependence pp. 340–346 (2012).
183 Hefei Wen, Janet R. Cummings, Jason M.
Hockenberry, Laura M. Gaydos, & Benjamin G.
Druss, State Parity Laws and Access to Treatment
for Substance Use Disorder in the United States:
Implications for Federal Parity Legislation, 70 (12)
JAMA Psychiatry pp. 1355–1362 (2013).
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TABLE 1—ACCOUNTING STATEMENT
Benefits:
• Improved understanding of and compliance with MHPAEA by plans and issuers, resulting in better frameworks for determining whether
plans and issuers are complying with MHPAEA with respect to NQTLs applicable to mental health and substance use disorder benefits
and medical/surgical benefits.
• Greater access and utilization of mental health and substance use disorder services by reducing barriers to coverage of mental health
and substance use disorder treatment, which will result in better health outcomes for those with mental health conditions or substance
use disorders.
• Reduction in the negative impacts on families, friends, caregivers, and coworkers of those with untreated or poorly managed mental
health conditions or substance use disorders based on their improved access to treatment.
Costs:
• Increased costs to plans and issuers to implement changes associated with the revision of plan provisions, which would result in increased costs from expanded coverage of mental health and substance use disorder services.
• Costs to plans and issuers from collecting and evaluating outcomes data and documenting NQTL comparative analyses consistent with
the requirements of these final rules of approximately $656.2 million in the first year and approximately $131.2 million in subsequent
years or between 0.07 percent and 0.01 percent of total health insurance premiums in the group and individual markets.
• Costs to plans and issuers for preparing and mailing the comparative analyses upon request to participants, beneficiaries, and enrollees
of approximately $14.8 million annually.
• Cost to plan and issuers for providing comparative analyses for audits is approximately $23,800.
• First-year regulatory review costs to plans and issuers for familiarizing themselves with these final rules of approximately $10.8 million.
• Cost to plan and issuers to maintain recordkeeping is approximately $12.2 million.
• Potential increase in cost-sharing requirements and/or treatment limitations for medical/surgical benefits for participants, beneficiaries,
and enrollees, if plans and issuers try to achieve parity by imposing new restrictions on medical/surgical benefits, 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 opted out of MHPAEA to come into compliance with requirements
under MHPAEA.
• Cost savings to self-funded non-Federal governmental plans of approximately $11,783 annually in total from no longer sending opt-out
notices regarding a plan’s MHPAEA opt-out election.
• Cost savings for the Federal Government of approximately $5,200 annually from fewer opt-out notices being submitted by self-funded
non-Federal governmental plans.
Costs
Year
dollar
Estimate
Annualized Monetized ($million/Year) .......................................................................
$217.35
207.04
2024
2024
Discount
rate
(percent)
Period
covered
7
3
2024–2033
2024–2033
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 or contributions associated with 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 conditions and substance
use disorders as a result of an increased number of in-network mental health and substance use disorder providers and decisions by
participants, beneficiaries, and enrollees to obtain treatment from those providers instead of a primary care provider.
5. Affected Entities
The following table summarizes the
number of plans, issuers,184 TPAs, and
multiple employer welfare arrangement
(MEWAs) that would be affected by the
final rules.185 These estimates are
discussed in greater detail later in this
regulatory impact analysis.
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TABLE 2—AFFECTED ENTITIES
Issuers (health insurance company/State combinations) ........................................................................
TPAs ........................................................................................................................................................
Plan MEWAs that are not fully insured ...................................................................................................
Non-plan MEWAs that are not fully insured ............................................................................................
Plans (total) 186 187 ...................................................................................................................................
Under 100 participants .....................................................................................................................
100 to 199 participants .....................................................................................................................
200 to 499 participants .....................................................................................................................
184 For purposes of this regulatory impact
analysis, health insurance company refers to a
single entity that offers health insurance coverage
in one or multiple States, which might own or be
affiliated with one or multiple entities that are
separately required to be licensed to engage in the
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business of insurance in each such State. Health
insurance issuer or issuer means an insurance
company, insurance service, or insurance
organization (including an HMO) that is required to
be licensed to engage in the business of insurance
in a State and that is subject to State law that
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Self-funded
plan count
Mixed insured
plan count
Total
......................
......................
......................
......................
46,080
25,150
5,209
6,861
..........................
..........................
..........................
..........................
4,501
176
402
755
1,467
205
132
21
50,581
25,326
5,611
7,616
regulates insurance. PHS Act section 2791(b)(2) and
45 CFR 144.103.
185 The Departments note that the number of
issuers may be underestimated, since some
managed behavioral health organizations may not
be included in the issuer count.
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TABLE 2—AFFECTED ENTITIES—Continued
Self-funded
plan count
500 to 999 participants .....................................................................................................................
1,000 to 2,499 participants ...............................................................................................................
2,500 to 4,999 participants ...............................................................................................................
5,000 and above participants ...........................................................................................................
Plans with less than 500 participants that will seek assistance with the comparative analyses from
TPAs, MEWAs, or service providers ...................................................................................................
Plans with more than 500 participants that will conduct the comparative analysis themselves ............
Plans with more than 500 participants that will receive generic comparative analyses from TPAs or
service providers and will then customize it ........................................................................................
Non-Federal governmental plans with less than 500 participants that will seek assistance with the
comparative analyses from TPAs or service providers .......................................................................
Non-Federal governmental plans with more than 500 participants that will conduct the comparative
analysis themselves .............................................................................................................................
Non-Federal governmental plans with more than 500 participants that will initially receive generic
comparative analyses from TPAs or service providers and will then customize it .............................
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5.1. Issuers, TPAs, and MEWAs
Under the Departments’ final rules,
issuers are responsible for providing
data and comparatives analyses for
individual market plans. For small and
large group market fully insured,
employer-sponsored plans, including
non-Federal governmental plans, both
employer-sponsored health plans and
health insurance issuers are responsible
for providing data and comparative
analyses, though for those plans,
underlying data and analyses will likely
186 The Departments note that the final rules will
affect approximately 106,000 fully insured plans
with 50 to 100 participants. (Note: The Departments
estimate that there are 140,998 ERISA-covered
group health plans with 50 to 100 participants
based on the Medical Expenditure Panel Survey
Insurance Component (MEPS–IC) and the 2020
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 these same data. Thus, the Departments
have calculated the number of fully insured plans
with 50 to 100 participants in the following
manner: 140,998 ERISA-covered group health plans
with 50 to 100 participants × 75 percent = 105,749.)
187 The Departments also note that the final rules
will affect approximately 1,719,000 fully insured,
non-grandfathered plans with less than 50
participants. (Note: The Departments estimate that
there are 2,465,483 ERISA-covered group health
plans with less than 50 participants based on data
from the 2022 MEPS–IC and the 2020 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 2022 MEPS–IC. The
2020 KFF 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 nongrandfathered health plan is 84 percent (100
percent ¥ 16 percent). KFF, 2020 Employer Health
Benefits Survey (Oct. 8, 2020), https://files.kff.org/
attachment/Report-Employer-Health-Benefits-2020Annual-Survey.pdf. Thus, the Departments have
calculated the number of fully insured, nongrandfathered plans with less than 50 participants
in the following manner: 2,465,483 small ERISAcovered group health plans × 83 percent × 84
percent = 1,718,935.)
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be provided by issuers that design and
market the plans. Self-funded group
health plans, while responsible for
complying with these rules, will likely
seek assistance from their TPAs, MEWA
administrators, and other service
providers for collecting and analyzing
the data, and generating the comparative
analyses.
The Departments estimate that the
final rules will affect 479 health
insurance companies nationwide that
provide coverage, including mental
health and substance use disorder
benefits, in the group and individual
health insurance markets, with 1,467
issuers (health insurance company/State
combinations).188 In addition, there are
an estimated 205 TPAs that provide
services to group health plans,
particularly for self-funded plans where
TPAs often establish provider networks
and adjudicate claims, which would be
impacted by these final rules.189 The
Departments estimate that the final rules
will affect at least 40 managed
behavioral health organizations
providing mental health and substance
use disorder benefits to group health
plans.190 Additionally, based on the
Form M–1 filings, the Departments
estimate that there are 687 plan
MEWAs, of which 132 are not fully
insured, and 50 non-plan MEWAs, of
188 The Departments’ estimate of the number of
health insurance issuers is based on medical loss
ratio (MLR) reports submitted by issuers for the
2022 reporting year. CMS, Medical Loss Ratio Data
and System Resources (2022), https://www.cms.gov/
CCIIO/Resources/Data-Resources/mlr.
189 Non-issuer TPAs based on data derived from
the 2016 benefit year reinsurance program
contributions.
190 The Departments’ estimate of the number of
managed behavioral health organizations is based
on industry trade association membership,
including the National Behavioral Consortium
(https://www.nbcgroup.org/member-directory/) and
ABHW (https://abhw.org/about/).
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Mixed insured
plan count
Total
3,812
2,880
1,119
1,049
671
948
561
988
4,483
3,828
1,680
2,037
37,220
709
1,333
253
38,553
962
4,076
1,458
5,534
26,584
..........................
26,584
505
..........................
505
2,906
..........................
2,906
which 21 are not fully insured.191 These
MEWAs, similar to issuers, are likely to
provide support to employers or plans.
Issuers, TPAs, and MEWAs provide
key support for plan compliance with
laws and regulations for group health
plans, including MHPAEA. The
Departments’ understanding, based on
discussions with the regulated
community and numerous direct
investigations of plans, including the
review of comparative analyses, is that
issuers of fully insured coverage provide
a menu of benefit combinations from
which interested parties select their
coverage designs. These coverage
designs may include different features,
such as varying deductibles,
copayments, and coverage for specific
items and services, allowing interested
parties to choose the plan that best suits
their health care needs. While issuers of
fully insured health plans are
responsible for overseeing the
compliance framework and ensuring
that plans comply with legal and
regulatory requirements, TPAs play a
crucial role in facilitating compliance
for self-funded plans by providing
administrative support, including
claims adjudication, member
enrollment, and customer service.
TPAs and insurance companies
providing administrative services only
(ASO) to self-funded plans
overwhelmingly design the plans,
administer the networks, manage
claims, provide plan services, maintain
and hold the data relevant for the
comparative analyses, and help ensure
MHPAEA compliance.192 Self-funded
plans rarely build independent provider
networks and instead rely on those built
191 EBSA, 2020 Form M–1 Bulletin, Table 1,
https://www.dol.gov/sites/dolgov/files/ebsa/
researchers/statistics/health-and-welfare-bulletins/
m-1/2020.pdf.
192 85 FR 72158 (Jan 11, 2021).
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Federal Register / Vol. 89, No. 184 / Monday, September 23, 2024 / Rules and Regulations
by TPAs (including those that are also
health insurance companies). According
to the 2019 KFF Employer Health
Benefits Survey, only 8 percent of large,
self-funded plans with 200 or more
employees reported that they directly
contracted with hospitals and health
systems, independent of the plan’s TPA,
to provide health care services separate
from the provider networks included in
the plan network.193
While the requirement to comply with
MHPAEA is directly applicable to group
health plans and health insurance
issuers, the Departments anticipate that
issuers and TPAs are best situated to
conduct comparative analyses as
required under the CAA, 2021 and these
final rules, and to provide the analyses
in an efficient and cost-effective
manner, helping to reduce the
compliance burden. Self-funded plans
may, however, incur some additional
costs to complete the comparative
analysis initially prepared by the issuer
or TPA to address unique plan issues
and include all the information
necessary to perform comparative
analyses.
One commenter stated they are not
aware of any TPA that has assumed
compliance obligations wholesale,
though they acknowledged that TPAs
had cooperated and provided data in
response to a government audit.
Another commenter reported that TPAs
working on behalf of group health plan
sponsors struggle to obtain needed
information to perform and document
comparative analyses, such as when
claims expenditure data collected by
TPAs is not compatible for testing
purposes and, moreover, is not reported
at the plan sponsor level. It should be
noted that these reported challenges are
not unique to TPAs, but are the same
issues facing issuers and self-funded
plans. However, TPAs are more likely
than plan sponsors to have expertise to
navigate the challenges.
Other commenters supported the
Departments’ assumptions that
employer-sponsored plans rely on their
services providers and TPAs to conduct
their comparative analyses. One
commenter noted that only the
insurance carriers, TPAs, and service
providers that play a role in designing
plans, administering networks,
managing claims, providing plan
services, and maintaining and holding
the data relevant for the comparative
analyses have the expertise to comply
with and fulfill all the requirements
193 KFF, 2019 Employer Health Benefits Survey,
Table 14.15 (Sept. 25, 2019), https://www.kff.org/
report-section/ehbs-2019-section-14-employerpractices-and-health-plan-networks/.
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outlined in the proposed rules. Another
commenter noted that self-funded plan
sponsors rely on TPAs and/or the
owners of provider networks to develop
plan designs and develop and impose
NQTLs, arguing that if the TPA or
owner of the provider networks do not
share claims data, then the TPA or
owner of the provider networks should
be required to conduct analyses for the
plans.
While the Departments acknowledge
these concerns, based on their own
observations when reviewing
comparative analyses, the Departments
expect that issuers, TPAs, and service
providers will continue to provide
assistance to evaluate NQTLs and
perform and document comparative
analyses, including data required under
these final rules, for their plan clients.
The Departments emphasize that the
requirement to perform and document
comparative analyses of the design and
application of NQTLs has been effective
under the CAA, 2021 for more than 3
years (since February 10, 2021) and is
an independent statutory obligation that
is not dependent upon a request by the
Secretaries or an applicable State
authority. Issuers and plans, in
conjunction with their TPAs for selffunded group health plans, have had
ample time to develop the internal
structures required for analyzing NQTLs
to ensure that their plans and coverage
comply with MHPAEA. Finally, while
plans could be charged for the services
of issuers, TPAs, and other service
providers, 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 plan
designs, and, in combination with TPAs
and other service providers, provide
support for other requirements.
5.2. Group Health Plans
Group health plans sponsored by
employers with 50 or more employees
that offer mental health and substance
use disorder benefits are generally
required to comply with MHPAEA.
Although MHPAEA includes a small
employer exemption, group health plans
sponsored by employers with less than
50 employees who purchase nongrandfathered small group coverage are
required to comply with MHPAEA
under the EHB requirements of the
ACA. In this analysis, plan size is used
as a proxy for employer size to
determine if a plan is affected. Evidence
suggests that most large group plans
offer mental health and substance use
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77663
disorder benefits and nearly all
participants are covered.194
The Departments estimate that
approximately 1,719,000 fully insured,
non-grandfathered ERISA-covered group
health plans with less than 50
participants and approximately 411,000
ERISA-covered group health plans with
50 or more participants, of which
approximately 246,000 are self-funded
group health plans, will be affected by
these final rules.195 In addition, the
Departments estimate that these final
rules will affect approximately 90,900
non-Federal governmental plans,196 of
which approximately 12,700 are plans
with 50 or more participants.197 The
Departments requested comments on
these estimates in the proposal, but did
not receive any.
The estimated compliance costs
associated with these final rules are
194 DOL, Selected Medical Benefits: A Report from
the Department of Labor to the Department of
Health and Human Services (Apr. 15, 2011),
https://www.bls.gov/ebs/additional-resources/
selected-medical-benefits-a-report-from-dol-tohhs.pdf.
195 The Departments estimate that there are
2,465,483 ERISA-covered group health plans with
less than 50 participants and that 83 percent of
group health plans with less than 50 participants
are fully insured based on data from the 2022
MEPS–IC and the 2020 County Business Patterns
from the Census Bureau. The 2020 KFF Employer
Health Benefits Survey reported that in 2020, 16
percent of firms offering health benefits offered at
least one grandfathered health plan. KFF, 2020
Employer Health Benefits Survey (Oct. 8, 2020),
https://files.kff.org/attachment/Report-EmployerHealth-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: 2,465,483
small ERISA-covered group health plans × 83
percent × (100 percent ¥ 16 percent) = 1,718,935.
Based on the 2022 MEPS–IC and the 2020 County
Business Patterns from the Census Bureau, the
Departments estimate 60 percent of ERISA-covered
group health plans with 50 or more participants are
self-funded. Thus, the Departments calculate the
number of self-funded group health plans in the
following manner: 410,581 ERISA-covered group
health plans with 50 or more participants × 60
percent = 246,349.
196 Based on data from the 2022 Census of
Governments (https://www.census.gov/data/tables/
2022/econ/gus/2022-governments.html), there are
90,887 State and local entities. The Departments
assume there is one plan per entity on average.
Therefore, the Departments estimate that there are
90,887 non-Federal governmental plans.
197 MHPAEA applies to non-Federal
governmental plans. Using data from the 2022
MEPS–IC and the 2020 County Business Patterns
from the Census Bureau, the Departments estimate
that 14 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 12,724 public,
non-Federal governmental plans with 50 or more
participants that offer mental health or substance
use disorder benefits (90,887 non-Federal
governmental plans × 14 percent of plans with 50
or more employees = 12,724).
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impacted by whether a plan is fully
insured or self-funded. The Departments
anticipate that fully insured plans will
receive compliance support in the form
of comparative analyses and data
analyses prepared by the issuer. For
these plans, the burden is estimated as
a cost for the issuer to prepare the
analyses and analyze the data. Selffunded plans may rely on issuers or
TPAs acting as service providers,
receive some support from their service
providers that they supplement
themselves, or produce the required
information themselves.
Most employer-sponsored health
plans are exempt from filing a Form
5500 due to size and the absence of plan
assets, the majority of which are fully
insured. Large health plans are required
to file a Form 5500, regardless of
funding arrangement. For statistical year
2021, 81,800 health plans filed a Form
5500. Of these plans, 50,600 were selffunded or mixed-insured,198 of which
38,600 had less than 500 participants.199
Additionally, the Departments estimate
that there are 26,600 self-funded nonFederal governmental plans with less
than 500 participants.200 The
Departments assume that self-funded
plans with less than 500 participants
will receive assistance with the
comparative analyses and data
requirements from TPAs or service
providers involved with the plans.
The Departments assume that some of
the largest plans will incur the full cost
of preparing the comparative analysis
and conducting the required data
analyses. Commenters suggested that
some large, self-funded plans would
conduct the comparative analyses
themselves. To account for these plans,
the Departments estimate that 8 percent
of self-funded plans with 500 or more
198 A mixed-insured plan is funded through a
mixture of insurance and self-insurance. EBSA,
Self-Insured Health Benefit Plans 2024: Based on
Filings through 2021 (Sept. 30, 2023), Table 2,
https://www.dol.gov/sites/dolgov/files/EBSA/
researchers/statistics/retirement-bulletins/annualreport-on-self-insured-group-health-plans-2024appendix-b.pdf.
199 Estimates based on the 2021 Form 5500 data.
200 Based on the 2022 Census of Governments,
there are 90,887 non-Federal governmental plans.
Based on the 2022 MEPS–IC, the Departments
estimate that 36.2 percent of non-Federal
governmental plans are self-funded. Thus, 90,887
plans × 36.2 percent = 32,901 self-funded nonFederal governmental plans. Based on the 2021
Form 5500 data, the Departments estimate that 80.8
percent of self-funded health plans with less than
500 participants have filed the Form 5500. The
Departments use the percent of self-funded health
plans with less than 500 participants that have filed
a Form 5500 as a proxy for the percent of selffunded non-Federal governmental plans with less
than 500 participants. Thus, 32,901 self-funded
non-Federal governmental plans × 80.8 percent =
26,584 self-funded non-Federal governmental plans
with less than 500 participants.
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participants, or 962 ERISA covered
plans 201 and 505 non-Federal
governmental plans,202 will prepare the
comparative analysis and conduct the
required data analyses themselves. The
Departments estimate that 50 percent of
the remaining self-funded plans with
500 or more participants, or 5,535 selffunded plans,203 and 2,900 self-funded
non-Federal governmental plans with
500 or more participants will receive a
generic comparative analysis from the
TPA,204 which they will subsequently
customize to suit their specific needs.
These plans will incur costs, but not at
201 Based on the 2021 Form 5500 data, there are
12,028 self-funded plans with 500 or more
participants. According to the 2019 KFF Employer
Health Benefits Survey, only 8 percent of large, selffunded 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. KFF, 2019 Employer Health Benefits
Survey (Sept. 25, 2019), Table 14.15, https://
www.kff.org/report-section/ehbs-2019-section-14employer-practices-and-health-plan-networks/.
Thus, 12,028 self-funded plans with 500 or more
participants × 8 percent = 962 self-funded plans
with more than 500 participants.
202 Based on the 2022 Census of Governments,
there are 90,887 non-Federal governmental plans.
Based on the 2022 MEPS–IC, the Departments
estimate that 36.2 percent of non-Federal
governmental plans are self-funded. Thus, 90,8888
plans × 36.2 percent = 32,901 self-funded nonFederal governmental plans. Based on the 2021
Form 5500 data, the Departments estimate that 19.2
percent of health plans with more than 500
participants have filed the Form 5500. The
Departments use the percent of health plans with
more than 500 participants that have filed a Form
5500 as a proxy for the percent of non-Federal
governmental plans with more than 500
participants. According to the 2019 KFF Employer
Health Benefits Survey, only 8 percent of large, selffunded 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. KFF, 2019 Employer Health Benefits
Survey (Sept. 25, 2019), Table 14.15, https://
www.kff.org/report-section/ehbs-2019-section-14employer-practices-and-health-plan-networks/.
Thus, 32,901 non-Federal governmental plans ×
19.2 percent × 8 percent = 505 non-Federal
governmental plans with more than 500
participants.
203 Based on the 2021 Form 5500 data, there are
a total of 50,581 self-funded plans. Thus, (50,581
self-funded plans ¥ 38,533 self-funded plans with
less than 500 participants ¥ 962 self-funded plans
with more than 500 participants) × 50 percent =
5,535 self-funded plans with more than 500
participants.
204 Based on the 2022 Census of Governments,
there are 90,887 non-Federal governmental plans.
Based on the 2022 MEPS–IC, the Departments
estimate that 36.7 percent of non-Federal
governmental plans are self-funded. Thus, 90,888
plans × 36.2 percent = 32,901 self-funded nonFederal governmental plans. Thus, (32,901 nonFederal governmental plans ¥ 26,584 non-Federal
governmental plans with less than 500 participants
¥ 505 self-funded plans with more than 500
participants) × 50 percent = 2,906 non-Federal
governmental plans with more than 500
participants.
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the same level other entities preparing
the comparative analysis and data for
themselves.
Finally, HHS estimates that 230 selffunded non-Federal governmental plans
will be affected by the implementation
of the CAA, 2023 provision that sunsets
the MHPAEA opt-out election.205 HHS
is aware of at least 14 plans with
collective bargaining agreements whose
sponsors’ MHPAEA opt-out elections
could be in effect beyond 2024. The
MHPAEA opt-out election of these plans
with collective bargaining agreements
will remain in effect until the last of
these plans’ respective collective
bargaining agreements expires, all of
which are anticipated to expire by 2028.
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 261
participants, on average, in each selffunded non-Federal governmental
plan.206 HHS also estimates that there is
one beneficiary for each plan participant
on average. Therefore, approximately
120,000 participants and beneficiaries
will be affected by this final
provision.207
HHS solicited comments on the
estimated number of self-funded nonFederal 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. Although HHS did not
receive comments on the estimated
205 CMS, HIPAA Opt-Out Elections for SelfFunded Non-Federal Governmental Plans, as of
January 6, 2023.
206 According to data from the 2022 MEPS–IC
(https://meps.ahrq.gov/mepsweb/), there are
19,231,948 State and local government employees,
and 67.1 percent of these employees (12,904,637)
are enrolled in health coverage through their jobs.
Of these employees, 66.5 percent (8,581,584
employees) are participants in self-funded plans.
Based on data from the 2022 Census of
Governments (https://www.census.gov/data/tables/
2022/econ/gus/2022-governments.html), there are
90,887 State and local government entities, and
according to the 2022 MEPS–IC, 36.2 percent, or
32,901, 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 (8,581,584 ÷ 32,901) = 260.8.
Since HHS also estimates that there is one
beneficiary for each plan participant on average, the
average number of participants and beneficiaries
per self-funded non-Federal governmental plan is
(260.8 × 2) = 521.7.
207 This estimate is calculated as follows: 230 selffunded non-Federal governmental plans that have
elected to opt out of the requirements under
MHPAEA × approximately 521.7 participants and
beneficiaries for each self-funded non-Federal
governmental plan on average = 119,991.
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number of self-funded non-Federal
governmental plans or the estimated
number of plan participants and
beneficiaries that would be affected by
the implementation of this provision,
many commenters indicated that
hundreds of thousands of public
employees and their family members
have been denied the critical MHPAEA
protections due to the election option
for self-funded non-Federal
governmental plans to opt out of
requirements under MHPAEA. Another
commenter indicated that the ability to
opt out of requirements under MHPAEA
has compromised the health and wellbeing of State and local government
employees, such as teachers,
firefighters, and civil servants across the
country. HHS agrees that a significant
number of individuals will be impacted
by the CAA, 2023 provision that sunsets
the MHPAEA opt-out election and that
these regulatory amendments will
ultimately increase access to mental
health and substance use disorder
services by requiring self-funded nonFederal governmental plans that had
previously opted out to come into
compliance with the requirements
under MHPAEA.
5.3. Participants, Beneficiaries, and
Enrollees Receiving Mental Health and
Substance Use Disorder Treatment
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There are approximately 56,984,000
participants and 50,407,000
beneficiaries in ERISA-covered group
health plans with 50 or more
participants,208 approximately
17,483,000 participants and
approximately 14,854,000 beneficiaries
in non-Federal governmental plans with
50 or more participants,209
approximately 10,258,000 participants
and 8,629,000 beneficiaries in ERISA
covered, non-grandfathered, fully
insured health plans with less than 50
208 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
56,983,874 participants and 50,407,439
beneficiaries in ERISA-covered group health plans
with 50 or more participants. Estimates are based
on the Departments’ tabulations of the March 2022
Current Population Survey (CPS) Auxiliary Data
(https://www.dol.gov/agencies/ebsa/researchers/
data/auxiliary-data).
209 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
17,482,879 participants in non-Federal
governmental plans with 50 or more participants.
Estimates are based on the Departments’ tabulations
of the March 2022 CPS Auxiliary Data (https://
www.dol.gov/agencies/ebsa/researchers/data/
auxiliary-data).
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participants,210 and approximately
12,000,000 individual health insurance
coverage policyholders (with
approximately 16,000,000 total
enrollees).211
Since the enactment of MHPAEA,
participants have increasingly utilized
behavioral health services through their
health coverage. Between 2007 and
2017, private insurance claim lines for
behavioral health diagnoses increased
by 320 percent.212 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.213 In 2020, 41 million
Americans who were 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.214 A 2022 survey by
SAMHSA indicated that among adults
aged 18 or older, 23.1 percent (or 59.3
million people) had any mental illness
and 6.0 percent (or 15.4 million people)
had serious mental illness in the past
year. The same survey also indicated
that among individuals aged 12 or older,
210 The Departments estimate that there are
12,212,484 participants and 10,272,985
beneficiaries in fully insured, private-sector health
plans with less than 50 participants based on the
Departments’ tabulations of the March 2022 CPS
Auxiliary Data (https://www.dol.gov/agencies/ebsa/
researchers/data/auxiliary-data). Assuming, based
on KFF assumptions that 84 percent of participant
and beneficiaries are in non-grandfathered plans
(KFF, 2020 Employer Health Benefits Survey (Oct.
8, 2020), https://files.kff.org/attachment/ReportEmployer-Health-Benefits-2020-AnnualSurvey.pdf), this will translate into an estimated
10,258,487 participants and 8,629,307 beneficiaries
in fully insured, private-sector, non-grandfathered
plans with less than 50 participants.
211 Based on MLR reports submitted by issuers for
the 2022 reporting year, the number of
policyholders in individual health insurance
coverage offered in the individual market is
approximately 12 million and the number of
enrollees was approximately 16,000,000. CMS,
Medical Loss Ratio Data and System Resources
(2022), https://www.cms.gov/CCIIO/Resources/
Data-Resources/mlr.
212 Robin Gelburd, The Mental Health Parity Act:
10 Years Later, American Journal of Managed Care
(Nov. 22, 2018), https://www.ajmc.com/view/themental-health-parity-act-10-years-later.
213 Paul Fronstin & 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 (Mar. 10, 2022), https://www.ebri.org/docs/
default-source/ebri-issue-brief/ebri_ib_555_
mentalhealth-10mar22.pdf?sfvrsn=aec3b2f_2.
214 AHIP, How Employer-Provided Coverage
Improves Access to Mental Health Support (May
2022), https://www.ahip.org/documents/202205CaW_MentalHealth-v03.pdf.
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77665
17.3 percent (or 48.7 million people)
had a substance use disorder in the past
year, and of those only 14.9 percent (7.3
million people) received treatment for
substance use disorder in the past
year.215
The COVID–19 public health
emergency (PHE) exacerbated the need
for mental health and substance use
disorder treatments. 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 in 2023, even as the
pandemic receded from its peak,
approximately 3 in 10 adults were still
reporting symptoms of anxiety and
depression.216 The pandemic likewise
negatively impacted the mental health
of children and adolescents, worsening
reported rates of anxiety or depression
which, in the 5 years preceding the
pandemic, had already increased by 29
percent and 27 percent, respectively.217
The pandemic may have long-term
effects on mental health and substance
use disorders, suggesting that the
number of individuals affected by
expanding access through their health
plans will only continue to grow. 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–
19.218 Another 2022 study examined the
mental health outcomes of COVID–19
survivors during the 12 months
following their infection and found that
COVID–19 survivors reported a high
prevalence of depression, anxiety, and
post-traumatic stress disorder at both
the 6- and 12-months follow-up,
indicating that the pandemic has longterm adverse mental health impacts on
215 SAMHSA, Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2022 National Survey on Drug Use and Health,
pp. 33, 51–52 (Nov. 2023), https://
www.samhsa.gov/data/sites/default/files/reports/
rpt42731/2022-nsduh-nnr.pdf.
216 Nirmita Panchal, Heather Saunders, Robin
Rudowitz, & Cynthia Cox, The Implications of
COVID–19 for Mental Health and Substance Use,
KFF Issue Brief (Mar. 20, 2023), https://
www.kff.org/coronavirus-covid-19/issue-brief/theimplications-of-covid-19-for-mental-health-andsubstance-use/.
217 Kristen Figas, Theodoros V. Giannouchos, &
Elizabeth Crouch, Child and Adolescent Anxiety
and Depression Prior to and During the COVID–19
Pandemic in the United States, 24 Child Psychiatry
& Human Development pp. 1–11 (2023).
218 Yan Xie, Evan Xu, & Ziyad Al-Aly, Risks of
Mental Health Outcomes in People with Covid-19:
Cohort Study, 376 The BMJ (2022), https://
www.bmj.com/content/376/bmj-2021-068993.
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COVID–19 survivors.219 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.220
6. Studies Examining the Impact of
MHPAEA and State Parity Laws
6.1. Research Examining the Impact of
State Parity Laws
6.1.1. Research Finding State Parity
Laws Increase the Utilization of Mental
Health and Substance Use Disorder Care
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Research has found mixed evidence
on the impact of State parity laws prior
to the implementation of MHPAEA.
While the specifics of the State-level
programs might be different from
MHPAEA, this research can nonetheless
provide important context and
suggestive evidence for how
modifications to parity policies such as
the MHPAEA program 221 might impact
healthcare demand and quality. While
some studies did not identify a
significant change in costs or usage of
behavioral health treatments following
the passage of State parity laws, others
found that State parity laws increased
the utilization of mental health care and
substance use disorder care among
populations at risk.
For example, a 2006 study evaluated
changes in mental health care
utilization before and after States
implemented parity laws, comparing
them with States that did not enact such
laws in the same year controlling for
State and year fixed effects. Using data
from the 2001, 2002, and 2003 NSDUH,
the study categorized individuals with
individual or employer-sponsored
health insurance by their level of mental
and emotional distress during their most
challenging month in the past year and
found that State parity laws increased
the likelihood of using any mental
health care in the past year by up to 1.2
percentage points for individuals with
lower distress levels and up to 1.8
219 Mario G. Mazza, Mariagrazia Palladini,
Rebecca De Lorenzo, Beatrice Bravi, Sara Poletti,
Roberto Furlan, Fabio Ciceri, Patrizia RovereQuerini, & Francesco Benedetti, One-Year Mental
Health Outcomes in a Cohort of COVID–19
Survivors, 145 Journal of Psychiatric Research pp.
118–124 (2022).
220 Sean Warwicker, Denise Sant, Adrian Richard,
Jake Cutajar, Annalise Bellizzi, Gertrude Micallef,
Daniel Refalo, Liberato Camilleri, & Anton Grech,
A Retrospective Longitudinal Analysis of Mental
Health Admissions: Measuring the Fallout of the
Pandemic, 20(2) International Journal of
Environmental Research and Public Health p. 1194
(2023).
221 The ‘‘MHPAEA program’’ refers to the
MHPAEA statute, as amended, implementing
regulations, and subsequent guidance, as discussed
in section IV.3.
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percentage points for those with
moderate distress levels. However, it is
important to note that the study did not
find a statistically significant effect on
the mental health care utilization for
individuals with severe distress levels.
The authors noted that this group had
already been more likely to use mental
health care even before the State parity
laws were implemented, suggesting they
may have sought such care regardless of
these laws.222
Similarly, a 2008 study examined
whether State parity laws affect mental
health care utilization differently among
low-income individuals and those with
poor mental health conditions. To
examine these effects, the study used
pooled cross-sectional data from the
National Survey of America’s Families
conducted in 1997, 1999, and 2001 and
found that employees of small firms
were more likely to use mental health
and substance use disorder care after the
implementation of State parity laws.
While the study found no effect of
parity for low-income adults for all
employers, when limiting the sample to
small employers, the study found that
parity was associated with a 5percentage-point increase in the
probability of low-income individuals
using mental health services. The study
also found a large increase among those
with poor mental health conditions
employed by small employers, although
this finding is only significant at a 10percent significance level. The study
did not find an effect for individuals
with poor mental health for medium or
large employers. The authors attributed
these inconclusive results to the small
sample size; therefore, the findings in
this study should be interpreted with
caution.223
Additionally, a 2013 study examined
the effect of State parity laws on
substance use disorder treatment using
national survey data from 2000 to 2008
using State and year fixed effects to
compare non-parity States to parity
States prior to the implementation of
MHPAEA. The authors reported that the
baseline substance use disorder
treatment rate before State parity laws
were enacted was 1.40 percentage
points in all specialty substance use
disorder treatment facilities and 1.10
percentage points in facilities accepting
private insurance. Relative to these
222 Katherine M. Harris, Christopher Carpenter, &
Yuhua Bao, The Effects of State Parity Laws on the
Use of Mental Health Care, 44(6) Medical Care pp.
499–505 (2006).
223 Susan H. Busch & Colleen L. Barry, New
Evidence on the Effects of State Mental Health
Mandates, INQUIRY: The Journal of Health Care
Organization, 45(3) Provision, and Financing pp.
308–322 (2008).
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baseline rates, this study found that the
implementation of any parity law
increased the treatment rate by 9
percent in all specialty substance use
disorder treatment facilities and by 15
percent in all treatment facilities
accepting private insurance. When
controlling for the comprehensiveness
of the State parity law, the study found
that full parity 224 and parity-ifoffered 225 increased the substance use
disorder treatment rate in all facilities
by 13 percent and 8 percent, and by 21
percent and 10 percent in those
accepting private insurance,
respectively; States with partial
parity 226 did not have a significant
effect on the substance use disorder
treatment rates. The study conducted
sensitivity analyses for facilities not
accepting private insurance and found
no difference in the treatment rates
attributable to parity, suggesting that the
effect of parity on the treatment rate is
primarily driven by the increased
treatment rate among the target
population.227
6.1.2. Research Finding State Parity
Laws Have Other Positive Effects
Other studies have found that State
parity laws have positive effects that
extend beyond the use of mental health
care. For example, a 2013 study
comparing suicide rates in States with
and without parity laws during two
distinct periods: 1990 to 1997 and 1998
to 2004, the period when the majority of
States (22 out of 29) had implemented
parity laws. The study found that State
parity laws were associated with a 5percent decrease in suicide rates, even
after subjecting the analysis to several
robustness checks.228
Similarly, a 2022 study examined
how State parity laws affected suicide
rates and educational outcomes among
college-level students. Utilizing survey
224 The study defined ‘‘full parity’’ as ‘‘requiring
SUD [substance use disorder] coverage to be offered
and offered on par with the comparable medical/
surgical coverage in all aspects of cost sharing and
treatment limitations.’’
225 The study defined ‘‘parity-if-offered’’ as ‘‘not
requiring SUD coverage to be offered, but if offered,
it should be on par with the comparable medical/
surgical coverage in all aspects of cost sharing and
treatment limitations.’’
226 The study defined ‘‘partial parity’’ as
‘‘requiring SUD coverage to be offered, allows for
discrepancies between SUD coverage and
comparable medical/surgical coverage in some
aspects of cost sharing and treatment limitations.’’
227 Hefei Wen, Janet R. Cummings, Jason M.
Hockenberry, Laura M. Gaydos, & Benjamin G.
Druss, State Parity Laws and Access to Treatment
for Substance Use Disorder in the United States:
Implications for Federal Parity Legislation, 70(12)
JAMA Psychiatry pp. 1355–1362 (2013).
228 Matthew Lang, The Impact of Mental Health
Insurance Laws on State Suicide Rates, 22(1) Health
Economics pp. 73–88 (2013).
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and administrative data spanning from
1998 to 2008, the study employed a
difference-in-differences model and
found that State parity laws reduced the
suicide rates, increased college grade
point averages, and reduced the
likelihood of college-level students
reporting any poor mental health days.
However, the study did not find
evidence that State parity laws affect the
likelihood of disenrolling from college.
These findings remain consistent even
after subjecting the analysis to several
robustness checks. The authors
acknowledged some limitations in the
study. Specifically, the reported number
of poor mental health days reported is
based on self-assessment, rather than on
clinical measures. There is also a
possibility of underreporting due to the
stigma associated with mental health.229
Finally, a 2015 study examined the
effect of State parity laws on individuals
aged 25 to 64 with moderate levels of
distress.230 Using individual-level data
from the National Health Interview
Survey (1997 to 2001) and the Medical
Expenditure Panel Survey (1998 to
2003), the study employed a tripledifference model and found a
statistically significant increase in
employment, weekly wages, and the
number of hours worked following the
passage of parity. The authors noted that
the results do not indicate a shift in the
labor demand curve, but rather an
increase in the productivity of workers
with moderate levels of distress.231
Although the previous three studies
suggest mental health outcomes may
improve following the initiation of State
parity policies, it is not clear from this
research the mechanism driving any
outcome improvements. Given a lack of
data in both studies, the authors cannot
directly show that State parity laws
increase mental healthcare utilization.
The causal impact of these policies,
including whether parity would
increase mental healthcare utilization,
which would in turn improve health
outcomes such as the suicide rate, can
therefore not be directly ascertained.
Absent any utilization increases, it is
possible that parity policies could
improve the quality of care itself
229 Keisha T. Solomon & Kabir Dasgupta, State
Mental Health Insurance Parity Laws and College
Educational Outcomes, 86 Journal of Health
Economics (2022).
230 The author defines ‘‘moderately distressed
individuals’’ based on their reported levels of
distress in the National Health Interview Survey.
The authors categorized ‘‘distress’’ as follows:
scores below 1 indicate no distress, 1 to 5 indicate
low distress, 6 to 11 indicate moderate distress, and
12 or above indicate severe distress.
231 Martin Andersen, Heterogeneity and the Effect
of Mental Health Parity Mandates on the Labor
Market, 43 Journal of Health Economics (2015).
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without additional demand, but further
research is needed to answer how
specifically parity laws affect
downstream health outcomes.
6.1.3. Research Finding State Parity
Laws Have Statistically Insignificant
Effects
In contrast, some studies have found
that State parity laws did not
significantly improve access to mental
health and substance use disorder care.
For instance, a 2000 study focused on
patients with mental health needs
examined the impact of State parity
laws on their insurance coverage, with
varying specifications which defined
this as insurance status, insurance
generosity, and perceived access to care.
Using national survey data from 1996 to
1998, the study found no statistically
significant impact on insurance
coverage or access to care for patients
with mental health needs following the
passage of State parity laws. The authors
attributed this finding to several
limitations of the study, including a
relatively small sample size which
limited the narrowness of State parity
laws in terms of impact types of
insurance coverage, and the significant
number of individuals with mental
health or substance use disorders who
do not have health insurance coverage.
Most significantly, while the study
examined the impact of parity laws on
access to insurance and care, it was not
limited to behavioral health care and so
the impact on those interventions may
not have been statistically significantly
captured.232
Furthermore, a 2013 study examined
how State parity laws affected access to
mental health care services for privately
insured children and youths aged three
to 17 with ASD. Using national survey
data from 2005 to 2006 and adjusting for
potential selection bias of States that
enacted parity legislation, the study did
not find evidence that State parity laws
increased the utilization of mental
health services for children with ASD.
The authors suggested that differences
in the availability of services, therapies,
and treatments across States could
explain this lack of impact, as these
children may not benefit from the same
protections and service access afforded
to children with other mental health
conditions under State parity laws.
Additionally, the authors acknowledged
limitations in their analysis, noting that
the study did not provide information
on the implementation of State parity
232 Roland Sturm, State Parity Legislation and
Changes in Health Insurance and Perceived Access
to Care Among Individuals with Mental Illness:
1996–1998, 3(4) The Journal of Mental Health
Policy and Economics pp. 209–213 (2000).
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laws. They cautioned that measurement
errors could arise due to the potential
delayed effects associated with varying
implementation timelines of the State
parity laws.233
6.2. Research Examining the Impact of
MHPAEA on Utilization
Several studies have investigated the
effect MHPAEA had on utilization of
treatment for mental health conditions
or substance use disorders. In general,
the studies have found either a small or
no effect on utilization after the
implementation of MHPAEA.
For instance, a 2014 study analyzed
pooled data from seven Federal
Employees Health Benefits (FEHB)
plans, four of which contracted with
carve-out plans 234 before and after
parity implementation, two
implemented carve-out plans when
parity took effect, and one was not a
carve-out plan. The authors looked at
annual utilization, including
psychotherapy visits, medication
management visits, inpatient mental
health or substance use disorder days,
and mental health of substance use
disorder prescription fills, for three
target diagnoses: bipolar disorder, major
depression, and adjustment disorder.
Using a difference in differences model,
the authors found a 12-percent
statistically significant decrease in
annual psychotherapy utilization for
individuals diagnosed with adjustment
disorders, and a statistically significant
decrease in out-of-pocket spending for
enrollees across all three diagnostic
categories (ranging from $78 to $86)
following parity implementation, and
found no significant change for all other
metrics. The authors opine that the
observed decline in psychotherapy
utilization may be related to the Office
of Personnel Management’s
encouragement that FEHB plans utilize
benefit management techniques to
control spending increases following
parity implementation.235
233 Lucy A. Bilaver & Neil Jordan, Impact of State
Mental Health Parity Laws on Access to Autism
Services, 64(10) Psychiatric Services pp. 967–973
(2013).
234 Carve-out plans are defined as plans that only
administer behavioral health benefits. (See Sarah A.
Friedman, Francisca Azocar, Haiyong Xu, & Susan
L. Ettner, The Mental Health Parity and Addiction
Equity Act (MHPAEA) Evaluation Study: Did Parity
Differentially Affect Substance Use Disorder and
Mental Health Benefits Offered by Behavioral
Healthcare Carve-Out and Carve-In Plans, 190 Drug
and Alcohol Dependence pp. 151–158 (2018).)
235 Alisa Busch, Frank Yoon, Colleen Barry,
Banessa Azzone, Sharone-Lisa Normand, Howard
Goldman, & Haiden Huskamp, The Effects of Parity
on Mental Health and Substance Use Disorder
Spending and Utilization: Does Diagnosis Matter?
172(2) American Journal of Psychiatry pp. 180–187
(Feb. 2013).
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Along the same lines, a 2016 study
used an interrupted time series model to
investigate the effect of MHPAEA on the
probability of specialty behavioral
health treatment, levels of utilization,
and expenditures for enrollees aged 27
to 64 in group health plans between
2008 and 2013, with Optum carve-outs.
The authors focused on the following
outcomes: expenditures (insurer and
patient), number of outpatient visits
(assessment/diagnostic evaluation,
individual psychotherapy, family
psychotherapy, and medication
management), and number of days of
care (structure outpatient, day
treatment, residential care, and acute
inpatient care). In the post-parity
period, 2011 to 2013, the effect of parity
differed by type of care: the probability
of using any assessment/diagnostic
evaluation, medication management, of
family psychotherapy visits decreased,
while the probability of using structure
outpatient care and inpatient care
increased. Under multiple specifications
and sensitivity tests, the authors found
that parity had ‘‘modest to no effect on
service use.’’ Though they did find
modest evidence that costs shifted from
patient to health plans.236
Similarly, a 2019 study looked at
insurance claims of enrollees under age
65 with continuous enrollment in a
large group, employer-sponsored fully
insured health plan between January
2005 and September 2015 to analyze
whether parity implementation was
associated with utilization and spending
changes in behavioral health services
compared to medical/surgical services.
Parity had a positive but small,
statistically significant impact on the
share of enrollees that used any
outpatient substance use disorder
services. Specifically, parity increased
the percentage of enrollees that used
any outpatient substance use disorder
services by 0.023 percentage points in
the first year following the
implementation of MHPAEA and 0.068
percentage points by the end of 2015
relative to pre-MHPAEA levels. The
authors also found that parity led to an
increase in the average frequency of
monthly services per user for both
mental health and substance use
disorder services, at a rate of 0.05
services per user for mental health
services and 0.054 services per user for
substance use disorder services. This
236 Susan Ettner, Jessica Harwood, Amber
Thalmayer, Michael Ong, Haiyong Xu, Michael
Bresolin, Kenneth Wells, Chi-Hong Tseng, &
Francisca Azocar, The Mental Health Parity and
Addiction Equity Act Evaluation Study: Impact on
Specialty Behavioral Health Utilization and
Expenditures Among ‘‘Carve-Out’’ Enrollees, 50
Journal of Health Economics pp. 131–143 (2016).
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implies that people receiving services
received more services, on average.237
6.3. Research Examining the Impact of
MHPAEA on Spending
Research has found mixed evidence
on the impact of MHPAEA on spending.
Some studies did not identify a change
in out-of-pocket spending following the
passage of MHPAEA, whereas others
found that MHPAEA increased out-ofpocket spending on substance use
disorder care.
For instance, a 2017 study examined
whether MHPAEA increased behavioral
health expenditures and utilization
among a population with substance use
disorders. Using Optum’s claims and
eligibility data from 2008 to 2013, the
authors compared the utilization and
expenditures for adults with alcohol or
drug use disorders across several
periods: pre-parity (2008 to 2009),
transition period (2010),238 and postparity period (2011 to 2013). They
found that for carve-out plans managed
by Optum, MHPAEA was associated
with modest increases in total spending,
plan spending, and patient out-ofpocket spending, as well as outpatient
and inpatient utilization. Although the
increases were mostly small in
magnitude, they were evident across
different types of care, potentially
indicating small improvements in the
accessibility to various substance use
disorder treatments.239 The authors note
that these results are similar to other
studies, which used the same data when
examining adults in carve-in plans and
carve-out plans.240
237 Noah Mulvaney-Day, Brent Gibbons, Shums
Alikhan, & Mustafa Karakus, Mental Health Parity
and Addiction Equity Act and the Use of Outpatient
Behavioral Health Services in the United States,
2005–2016, 109(3) American Journal of Public
Health pp. 190–196 (2019).
238 The study defined the ‘‘transition’’ period as
‘‘when good-faith efforts at compliance with respect
to coinsurance, copayments, combined medicalbehavioral health deductibles, and quantitative
treatment limits went into effect for plans renewing
on a calendar-year basis.’’
239 Sarah Friedman, Haiyong Xu, Jessica M.
Harwood, Francisca Azocar, Brian Hurley & Susan
L. Ettner, The Mental Health Parity and Addiction
Equity Act Evaluation Study: Impact on Specialty
Behavioral Healthcare Utilization and Spending
Among Enrollees with Substance Use Disorders, 80
Journal of Substance Abuse Treatment pp. 67–78
(2017).
240 Harwood, Jessica M., Francisca Azocar, Amber
Thalmayer, Haiyong Xu, Michael K. Ong, Chi-Hong
Tseng, Kenneth B. Wells, Sarah Friedman, & Susan
L. Ettner, The Mental Health Parity and Addiction
Equity Act Evaluation Study: Impact on Specialty
Behavioral Health Care Utilization And Spending
Among Carve-In Enrollees, 55(2) Medical Care pp.
164–172 (2017); and Susan L. Ettner, Jessica M.
Harwood, Amber Thalmayer, Michael K. Ong,
Haiyong Xu, Michael J. Bresolin, Kenneth B. Wells,
Chi-Hong Tseng, & Francisca Azocar, The Mental
Health Parity and Addiction Equity Act Evaluation
Study: Impact on Specialty Behavioral Health
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Additionally, a 2015 study examined
whether MHPAEA was associated with
changes in the out-of-network services
for substance use disorder services.
Using a 2007 to 2012 longitudinal,
commercial claims database and
employing an interrupted time-series
design to analyze these effects, the study
found that MHPAEA was associated
with an increased probability of using
out-of-network services at a rate of
0.0024 service users per month, an
increased number of out-of-network outpatient visits at a rate of 0.0016 service
users per month, and an increased
average total spending on out-ofnetwork services by $49.81 per user per
month, though it was found to have no
effect on out-of-pocket spending. This
result would represent a shift in
expenses borne by the insurer, which
might or might not be passed through to
the insured through higher premiums,
but the study lacked the data to assess
this possibility. The authors
acknowledged that the study was not
able to examine the adequacy of
substance use disorder provider
networks, which may have influenced
enrollees pursuit of out-of-network
care.241
Finally, a 2014 study examined the
impact of MHPAEA on the utilization
and spending of substance use disorder
treatments. Using 2009 to 2010
administrative claims data from Aetna
insurance, the study compared changes
in outcomes among health plan
enrollees one year before (2009) and one
year after (2010) the implementation of
MHPAEA, compared to enrollees
covered by State parity laws in place
prior to MHPAEA. The study found the
MHPAEA was associated with a modest
increase in spending on substance use
disorder treatments ($9.99 per health
plan enrollee), but did not find
significant changes in treatment
initiation,242 treatment engagement,243
or out-of-pocket spending. The authors
acknowledged that these findings may
not be generalizable to other insurance
or population contexts, since the study
Utilization and Expenditures Among Carve-Out
Enrollees, 50 Journal of Health Economics pp. 131–
143 (2016).
241 Emma E. McGinty, Susan H. Busch, Elizabeth
A. Stuart, Haiden A. Huskamp, Teresa B. Gibson,
Howard H. Goldman, & Colleen L. Barry, Federal
Parity Law Associated with Increased Probability of
Using Out-Of-Network Substance Use Disorder
Treatment Services, 34(8) Health Affairs pp. 1331–
1339 (2015).
242 The study defined ‘‘treatment initiation’’ as
the ‘‘share of enrollees with a new episode of SUD
treatment who initiated treatment within 14 days of
their initial diagnosis.’’
243 The study defined ‘‘treatment engagement’’ as
the ‘‘share of enrollees with a new episode of SUD
treatment who receive at least two SUD services
within 30 days of their initial diagnosis.’’
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evaluated the effects of parity on
individuals insured by a single health
insurer in 10 States with pre-existing
State parity laws. Moreover, the study
examined only the first year following
MHPAEA’s effective date, which may
not have fully captured its
implementation.244 As discussed in
section IV.2.2, the Departments have
published regulations and extensive
guidance to facilitate the
implementation and enforcement of
MHPAEA.
7. Benefits
The Departments expect that these
final rules will improve the quality of
the comparative analyses performed and
documented by plans and issuers
required by MHPAEA, as amended by
the CAA, 2021; help plans and issuers
better understand and fulfill their
obligations under MHPAEA; and
promote greater clarity regarding
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
By specifying more details on how to
perform and document NQTL
comparative analyses, the Departments
expect improvements in plan and issuer
compliance with the requirements for
imposing NQTLs under MHPAEA, and
by doing so, increased access for
participants, beneficiaries and enrollees
to mental health and substance use
disorder services.
Thus, these final rules will generate
the following economic and societal
benefits for participants, beneficiaries,
and enrollees:
• improved understanding of and
compliance with MHPAEA by plans and
issuers, resulting in better frameworks
for regulators, plans, and issuers to
determine whether plans and issuers are
complying with MHPAEA with respect
to NQTLs applicable to coverage of
mental health and substance use
disorder benefits,
• greater access and utilization of
mental health and substance use
disorder services in response to a
reduction in barriers to mental health
and substance use disorder coverage
(the greater utilization being a cost of
the rule), resulting in better health
outcomes among those with mental
health conditions or substance use
disorders, and
• reduced adverse impacts on the
families, friends, caregivers, and
coworkers of people who suffer from
untreated or under treated mental health
244 Susan H. Busch, Andrew J. Epstein, Michael
O. Harhay, David A. Fiellin, Hyong Un, Deane
Leader Jr, & Colleen L. Barry, The Effects of Federal
Parity on Substance Use Disorder Treatment, 20(1)
The American Journal of Managed Care (2014).
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conditions or substance use disorders
based on their improved access to
treatment.
This analysis provides a mainly
qualitative discussion of the benefits
associated with these final rules, as the
Departments do not have the data
necessary to quantify the likely benefits
associated with the additional guidance
and its impact on ensuring better
compliance with the rules related to
NQTLs and access to mental health and
substance use disorder benefits. Where
possible, however, the Departments
have provided estimates to illustrate
some of the benefits of these final rules.
The illustrative calculations address
overlapping phenomena and thus are
not summed due to the noteworthy
potential for double-counting
(moreover, for only a subset of the
illustrated benefits have the associated
treatment costs been quantified).
In addition, the Departments have
identified several transfers that will
occur due to this rulemaking, such as
decreases in out-of-pocket spending and
increases in premiums. These transfers
are discussed in section IV.9 of this
regulatory impact analysis.
The Departments requested comments
and data in the proposed rules related
to how the Departments might quantify
these benefits. While one commenter
stated that the Departments had not
quantified the benefits of the proposal,
they did not provide any data or
recommendations on how these benefits
could be quantified. Another
commenter suggested that the
Congressional Budget Office’s (CBO)
cost estimate 245 of the CAA, 2021 may
help the Departments to quantify the
benefits of the proposal. However, the
CBO report primarily focuses on the
program cost of CAA, 2021, rather than
addressing the specific impact of the
additional requirements for
documenting comparative analyses, and
therefore the Departments are not able
to utilize it for quantifying the benefits
of these final rules.
7.1. Improved Understanding of and
Compliance With MHPAEA by Plans
and Issuers
As noted earlier, the 2022 MHPAEA
Report to Congress 246 found that none
of the comparative analyses reviewed by
245 See CBO, Summary Estimate for Divisions M
Through FF, H.R. 133, Consolidated Appropriations
Act, 2021 (Pub. L. 116–260), as Enacted on
December 27, 2020 (Jan. 14, 2021), https://
www.cbo.gov/system/files/2021-01/PL_116-260_
Summary.pdf.
246 2022 MHPAEA Report to Congress, https://
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2022-realizing-parity-reducing-stigmaand-raising-awareness.pdf.
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the Departments under the first year of
the CAA, 2021, contained sufficient
information and documentation from
plans and issuers upon initial receipt
and nearly all were similarly deficient
for the 2023 MHPAEA Comparative
Analysis Report to Congress.247 As a
result, the Departments had to make
numerous requests for additional
information. This process is costly for
plans, issuers, and the Departments, and
undermines the effectiveness of
MHPAEA.
These final rules will clarify and
strengthen the obligations of plans and
issuers under MHPAEA, thus promoting
compliance, by:
• placing renewed focus on the
elimination of more restrictive barriers
to access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits,
• standardizing the definitions
associated with the parity analysis for
NQTLs applicable to 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
evaluation requirements of the NQTL
comparative analyses.
These final rules will help parties
better understand what plans and
issuers need to do to comply with
MHPAEA, reduce uncertainty about
compliance status, and help plans and
issuers better identify areas they need to
improve upon as well as reduce the
need to revise analyses upon the
Departments identifying noncompliance. In the course of
implementing these final rules, the
Departments anticipate that parties will
adjust their policies and procedures in
order to come into compliance and offer
better coverage of mental health and
substance use benefits to participants,
beneficiaries, and enrollees.
Many commenters supported
modifying existing definitions and
adding new ones to the MHPAEA
regulations, particularly for terms such
as ‘‘medical/surgical benefits,’’ ‘‘mental
health benefits,’’ and ‘‘substance use
disorder benefits.’’ Commenters stated
that these definitions would
significantly improve clarity for plans
and issuers. One commenter stated the
proposal would clearly specify how
mental health and substance use
disorder benefits must be defined for
MHPAEA compliance purposes,
minimize situations where
247 2023 MHPAEA Comparative Analysis Report
to Congress, www.dol.gov/sites/dolgov/files/EBSA/
laws-and-regulations/laws/mental-health-parity/
report-to-congress-2023-mhpaea-comparativeanalysis.pdf.
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contradictions with State guidelines
limit protections under MHPAEA, and
ensure that plans appropriately classify
mental health and substance use
disorder benefits and medical/surgical
benefits. The Departments acknowledge
the supportive comments and agree that
modifying and adding definitions,
particularly for key terms like ‘‘medical/
surgical benefits,’’ ‘‘mental health
benefits,’’ and ‘‘substance use disorder
benefits,’’ will enhance clarity and
ensure consistent application of the
MHPAEA requirements across plans
and issuers, and have done so in these
final rules.
Commenters also expressed support
for clarifying the application of
MHPAEA’s requirements to NQTLs.
One commenter stated that the proposal
provides more specificity for plans and
issuers to assess their NQTLs applicable
to mental health or substance use
disorder benefits, and the information
that must be included in a comparative
analysis of NQTLs applicable to mental
health and substance use disorder
benefits and medical/surgical benefits.
The commenter further stated the
proposal reduces uncertainty for all
parties, while providing greater clarity
for consumers and other stakeholders to
assess whether an NQTL is compliant
with MHPAEA. Additionally, the
commenter stated that the proposal
provides greater clarity for insurers and
patients and helps State insurance
regulators better enforce existing
regulations. The Departments
acknowledge the supportive comments
and agree that the final rules provide
clarity to the statutory requirements for
the regulated community and other
interested parties.
However, some commenters
expressed concern regarding whether
certain policies and procedures would
now be prohibited under MHPAEA, as
interpreted through the proposed rules,
if finalized. One commenter, in
objecting to the proposed mathematical
substantially all and predominant tests,
stated that the most significant cost is
not in conducting the comparative
analysis, but rather in the additional
expenses incurred should plans and
issuers no longer be able to utilize
common medical management
techniques that improve cost and
quality outcomes, such as prior
authorization and concurrent review.
As stated earlier in this preamble, the
Departments are not finalizing the
proposed mathematical test for applying
the substantially all and predominant
tests in these final rules. These final
rules also do not eliminate the use of
prior authorization or other medical
management NQTLs applicable to both
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mental health and substance use
disorder benefits and medical/surgical
benefits. However, NQTLs applicable to
mental health and substance use
disorder benefits and medical/surgical
benefits must be designed and applied
in compliance with MHPAEA’s parity
requirements. Moreover, as discussed
earlier in this preamble, the
Departments anticipate that these final
rules will promote changes in network
composition and medical management
techniques that result in more robust
mental health and substance use
disorder provider networks, as well as
fewer and less restrictive prior
authorization requirements for
individuals seeking mental health and
substance use disorder treatment. While
this could increase costs in some cases,
there are potential offsetting benefits in
other cases for the reduction in the use
of medical management techniques.
7.2. Greater Access to Mental Health
and Substance Use Disorder Treatments
By improving plan and issuer
understanding of the requirements
under MHPAEA and clarifying how
comparative analyses must be
performed and documented, these final
rules will improve compliance.
Specifically, this will ensure
compliance with the design and
application requirements and the
relevant data evaluation requirements so
that NQTLs applied to mental health
and substance use disorder benefits are
no more restrictive than the
predominant limitation applicable to
substantially all medical/surgical
benefits. The Departments are of the
view that this will, in turn, expand
access to and utilization of mental
health and substance use disorder
services. These final rules will have the
greatest direct benefits for individuals
who currently forego treatments or
cannot access specialized care for a
mental health condition or substance
use disorder because their plan or
coverage imposes barriers to accessing
benefits for coverage of these services
that are greater than the barriers for
accessing medical/surgical services.
The Departments do not have
sufficient data to estimate how many
participants, beneficiaries, and enrollees
will receive treatment, or more
appropriate treatment, as a result of
these final rules. However, research has
demonstrated that participants,
beneficiaries, and enrollees experienced
increased access to mental health and
substance use disorder treatments
following the implementation of
MHPAEA. Drawing on these studies, the
Departments expect that this
rulemaking, in further improving
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compliance with MHPAEA, will result
in significant improvements in access to
mental health and substance use
disorder care.
For example, a 2018 study examined
how MHPAEA affected the coverage of
commercial health plans in the United
States. The study found that between
2010 248 and 2014, 68 percent of
insurance products had expanded
behavioral health coverage, and among
plans that expanded services, 96 percent
reported it was in part because of parity
requirements.249 Further, a 2017 study
examined the prevalence of behavioral
health quantitative treatment limitations
in large group health plans that utilized
carve-out and carve-in services of a
single service provider. While prior to
implementation of MHPAEA,
quantitative treatment limitations
existed, following its implementation
virtually all of those plans had
eliminated quantitative treatment
limitations.250 A 2019 study of claims
data from both a pre-parity (January
2005 through December 2010) and postparity period (January 2011 through
September 2015), found that while
MHPAEA did not appreciably increase
the share of participants utilizing any
outpatient mental health services, it did
increase the frequency of use and total
utilization of outpatient mental health
and substance use disorder services of
participants already receiving these
services.251 Moreover, a 2020 study of
MHPAEA, using 2007 and 2011 to 2012
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 2.8percentage-point increase in mental
health care utilization.252
248 The effective date for MHPAEA for calendar
year plans is January 1, 2010. See CMS, The Mental
Health Parity and Addiction Equity Act of 2008
(MHPAEA) (2010).
249 Dominic Hodgkin, Constance M. Horgan,
Maureen T. Stewart, Amity E. Quinn, Timothy B.
Creedon, Sharon Reif, & Deborah W. Garnick,
Federal Parity and Access to Behavioral Health
Care in Private Health Plans, 69(4) Psychiatric
Services pp. 396–402 (2018).
250 Thalmayer, Amber Gayle, Sarah A. Friedman,
Francisca Azocar, Jessica M. Harwood, & Susan L.
Ettner, The Mental Health Parity and Addiction
Equity Act (MHPAEA) Evaluation Study: Impact on
Quantitative Treatment Limits, 68(5) Psychiatric
Services pp. 435–442 (2017).
251 Norah Mulvaney-Day, Brent J. Gibbons, Shums
Alikhan, & Mustafa Karakus, Mental Health Parity
and Addiction Equity Act and the Use of Outpatient
Behavioral Health Services in the United States,
2005–2016, 109(S3) American Journal of Public
Health pp. S190–S196 (2019).
252 Xiaoxue Li & Jie Ma, Does Mental Health
Parity Encourage Mental Health Utilization Among
Children and Adolescents? Evidence From the 2008
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These final rules will directly benefit
individuals who are currently enrolled
in a plan with narrower networks, with
regard to mental health and substance
use disorder benefits compared to the
networks for medical/surgical benefits,
which prevent participants,
beneficiaries, and enrollees from being
able to access care from in-network
providers and receive the benefits they
need. A 2017 study of ACA Marketplace
provider networks 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.253 A 2023 secret
shopper study conducted by the Senate
Committee on Finance contacted 10
providers from directories of 12 plans,
making a total of 120 calls. The study
found that more than 80 percent of
mental health providers contacted were
either unreachable, not in-network, or
not accepting new patients.254
Ghost or phantom networks—
collections of providers and facilities
that are listed as being within a plan’s
or issuer’s network but, in fact, are not
available to participants, beneficiaries,
and enrollees for treatment on an innetwork basis—make it difficult for
participants to find in-network
providers.255 One 2020 national survey
of privately insured individuals that
received mental health 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.256
In response to the Departments’
proposal, numerous commenters stated
that they believed the proposed rules
would benefit patients, specifically by
improving access to mental health and
substance use disorder treatments.
Several commenters stated the proposed
Mental Health Parity and Addiction Equity Act
(MHPAEA), 47(1) The Journal of Behavioral Health
Services & Research pp. 38–53 (2020).
253 Jane M. Zhu, Yuehan Zhang, & Daniel Polsky,
Networks in ACA Marketplaces are Narrower for
Mental Health Care than for Primary Care, 36(9)
Health Affairs pp. 1624–1631 (Sept. 2017).
254 Senate Committee on Finance Majority,
Majority Study Findings: Medicare Advantage Plan
Directories Haunted by Ghost Networks (2023),
https://www.finance.senate.gov/imo/media/doc/
050323%20Ghost%20Network%20Hearing%20%20Secret%20Shopper%20Study%20Report.pdf.
255 GAO, Mental Health Care: Access Challenges
for Covered Consumers and Relevant Federal
Efforts, GAO–22–104597 (Mar. 2022), https://
www.gao.gov/assets/gao-22-104597.pdf.
256 Susan H. Busch & Kelly A. Kyanko, Incorrect
Provider Directories Associated with Out-ofNetwork Mental Health Care and Outpatient
Surprise Bills, 39(6) Health Affairs pp. 975–983
(June 2020).
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rules would ensure more equitable
access to care by addressing
burdensome administrative practices,
such as NQTLs and other utilization
management techniques, which
negatively impact patient access to
mental health and substance use
disorder benefits. Additionally, many
other commenters suggested that the
enhanced clarity and transparency
provided by the proposed rules would
alleviate administrative burdens and, as
such, help to streamline access to
behavioral health care. The Departments
acknowledge these supportive
comments and agree that the final rules
will increase access to mental health
and substance use disorder treatments.
Given those concerns highlighted by
commenters regarding challenges
related to accessing mental health
substance use disorder benefits, the
final rules particularly highlight parity
in NQTLs related to network
composition as an area that requires
improvement. By requiring plans and
issuers to collect and evaluate relevant
data on provider networks, including for
network composition NQTLs, the final
rules will help to ensure that
individuals have more equitable access
to in-network providers that are
available to provide care for mental
health conditions and substance use
disorders. Additionally, by ensuring
that plans and issuers collect and
evaluate data related to NQTLs for
network composition for mental health
and substance use disorder benefits and
medical/surgical benefits, and as
necessary address material differences
in access between these benefits, the
Departments expect that the final rules
will improve the ability of participants,
beneficiaries, and enrollees to access
available in-network mental health and
substance use disorder providers. Thus,
the final rules will reduce barriers to
accessing mental health and substance
use disorder care.
This discussion focuses on the
benefits for participants, beneficiaries,
and enrollees who were previously
prevented from receiving mental health
or substance use disorder treatment. For
a discussion of the effects on
participants, beneficiaries, and enrollees
who were previously paying out-ofpocket for treatment, refer to section
IV.9.1 of this regulatory impact analysis
pertaining to transfers.
The implementation of the CAA, 2023
provision that sunsets the MHPAEA
opt-out election is expected to reduce
financial and non-financial barriers to
accessing mental health and substance
use disorder treatment for participants
and beneficiaries of self-funded nonFederal governmental plans that elected
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to opt out of requirements under
MHPAEA. This is expected to result in
increased access to mental health and
substance use disorder care and, as
discussed in more detail in the section
IV.7.3, lead to better health outcomes for
plan participants and beneficiaries who
need mental health or substance use
disorder services.
7.3. Better Health Outcomes Among
Those With Mental Health Conditions
and Substance Use Disorders
The Departments are of the view that
by ensuring parity in medical
management techniques and other
NQTLs imposed by plans and issuers,
the final rules will reduce barriers for
participants, beneficiaries, and enrollees
seeking mental health and substance use
disorder care. As discussed later in this
regulatory impact analysis, the removal
of barriers preventing individuals from
accessing mental health and substance
use disorder treatment on par with
medical/surgical treatment will in turn
produce better patient outcomes,
including potentially lives saved.
Research has demonstrated that
MHPAEA has already had a positive
effect on improving access to treatment.
A 2016 study examining the initial
effects of MHPAEA found that following
implementation, prior authorization
requirements were less common for
behavioral health care services than in
previous years.257 Further, removal of
treatment limitations has had significant
beneficial impacts in the mental health
and substance use disorder space. A
2013 study, which analyzed changes in
suicide rates by age groups before and
after State parity laws were enacted,
found that, controlling for State-specific
time trends, enactment of parity laws
was associated with a 5-percent
decrease in suicides.258 It is worth
noting, however, that State parity laws
do not apply to most self-funded
employer-sponsored health coverage,
which comprise a large portion of the
population in States affected by these
final rules. As such, the impact of the
laws in that study may have been
somewhat dampened. For a more
detailed description of this study, see
section IV.6.1.
If, as the Departments expect, these
final rules similarly increase access to
mental health and substance use
257 Constance M. Horgan, Dominic Hodgkin,
Maureen T. Stewart, Amity Quinn, Elizabeth L.
Merrick, Sharon Reif, Deborah W. Garnick, &
Timothy B. Creedon, Health Plans’ Early Response
to Federal Parity Legislation for Mental Health and
Addiction Services, 67(2) Psychiatric Services pp.
162–168 (2016).
258 Matthew Lang, The Impact of Mental Health
Insurance Laws on State Suicide Rates, 22(1) Health
Economics, pp. 73–88 (2013).
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disorder care, the potential benefits
could be significant. Using the suicide
fatality rate for adults in 2021 from the
Centers for Disease Control and
Prevention (CDC) of approximately 14.1
per 100,000 persons 259 and the 2020
Agency for Healthcare Research and
Quality youth suicide fatality rate of
approximately 6.3 per 100,000,260 and
applying these rates to the numbers of
individuals 12 years old and older with
private health insurance,261 suggests
approximately 22,200 suicide deaths
annually for adults 262 and 979 suicide
deaths annually for children 12–17
years old.263 For illustrative purposes,
the Departments assume that these final
rules would have roughly 40 percent of
the impact of the Lang study, or a 2percent reduction of fatalities.264 As
such, the Departments estimate that the
final rules could help prevent 444
adult 265 and 20 youth 266 fatalities from
suicide annually. Using the 2023
estimate of the value of a statistical life
(VSL) developed by the U.S. Department
of Transportation (DOT), $13.2
million,267 268 this would translate into
259 CDC, National Center for Health Statistics,
Provisional Estimates of Suicide by Demographic
Characteristics: United States, 2022, Report No. 34
(Nov. 2023), https://www.cdc.gov/nchs/data/vsrr/
vsrr034.pdf.
260 Agency for Healthcare Research and Quality,
2022 National Healthcare Quality and Disparities
Report, Child and Adolescent Mental Health (Oct.
2022), https://www.ncbi.nlm.nih.gov/books/
NBK587174/.
261 Based on the Departments’ tabulations of
adults with non-Federal employer-sponsored
insurance (ESI) and/or private health insurance
(157.4 million) and the number of children 12–17
with non-Federal ESI and/or private health
insurance (15.5 million) off the March 2022 CPS
Auxiliary Data (https://www.dol.gov/agencies/ebsa/
researchers/data/auxiliary-data).
262 The estimate is calculated as follows:
157,443,601 participants with commercial health
insurance × 0.014-percent adult suicide fatality =
22,200 adult suicide fatalities.
263 The estimate is calculated as follows:
15,541,261 children aged 12–17 with private health
insurance × 0.0063-percent suicide fatalities = 979
fatalities.
264 This estimate of a 2-percent reduction is based
on the estimate of 5 percent previously cited,
revised downward by 60 percent to account for the
indirect impact of the final rule on access,
compared to the initial introduction of mental
health parity laws. See Matthew Lang, The Impact
of Mental Health Insurance Laws on State Suicide
Rates, 22(1) Health Economics, pp. 73–88 (2013).
265 The estimate is calculated as follows: 22,200
fatalities from suicide × 2-percent reduction in
suicides = 444 fatalities prevented.
266 The estimate is calculated as follows: 979
fatalities from suicide × 2-percent reduction in
suicides = 20 fatalities prevented.
267 DOT, Departmental Guidance on Valuation of
a Statistical Life in Economic Analysis, effective
May 7, 2024, https://www.transportation.gov/officepolicy/transportation-policy/revised-departmentalguidance-on-valuation-of-a-statistical-life-ineconomic-analysis.
268 The VSL utilized by the Departments in this
analysis is one of several VSLs estimated by Federal
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benefits of $6.11 billion annually.269 270
The Departments recognize the
uncertainty in the production of VSL
benefit estimates. This uncertainty
arises from a variety of assumptions that
are key to the VSL estimate, such as the
underlying demographic characteristics
of the affected population or the
differential willingness-to-pay for
statistically equivalent but qualitatively
different risks.271 To account for
potential sensitivity arising from such
uncertainty, the Departments have
conducted a sensitivity analysis of these
benefits and, following guidance on VSL
sensitivity analysis,272 produced a lower
and upper estimate of the VSL of
approximately $5.3 million and $18.5
million, respectively.273 Utilizing this
range of estimates, the Departments
accordingly estimate the value of the
benefits of reduced mortality arising
from increased mental health treatment
utilization at between $2.5 billion and
$8.6 billion annually.274
These benefits further illustrate the
value of receiving treatment earlier and
the harms of delaying treatment. While
75 percent of mental illness onsets
before age 25, individuals between age
18 and 25 have a considerably higher
agencies, all of which vary slightly in their
estimated VSL. The HHS VSL in 2024 is $13.1
million. More information on the HHS VSL can be
found in HHS Standard Values for Regulatory
Analysis, 2024 (Jan. 25, 2024) at https://
aspe.hhs.gov/sites/default/files/documents/
cd2a1348ea0777b1aa918089e4965b8c/standardria-values.pdf.
269 This estimate is calculated as follows: 444
adult fatalities prevented + 20 youth fatalities
prevented × $13,200,000 VSL = $6,124,800,000.
270 Some methodological approaches to the VSL
apply a distinct, and often higher, value to children.
While the Departments do not utilize such an
approach here, they recognize this estimate may
undervalue the true benefits as the final rules’
effects include a risk reduction of fatality to minor
children.
271 Individuals express a different willingness to
pay to reduce the fatality risk of some deaths (those
with a perceived associated morbidity, such as
cancer) more than others (such as car accidents),
though the risks may be equivalent. DOT guidance
on the VSL suggests utilizing a single, nationwide
value that does not adjust the VSL based on the
nature of the risk or the underlying characteristics
of the affected population but encourages a
sensitivity analysis to reflect such uncertainty.
272 For more information on the VSL guidance
utilized, see the DOT’s Revised Departmental
Guidance on Valuation of a Statistical Life in
Economic Analysis, https://
www.transportation.gov/office-policy/
transportation-policy/revised-departmentalguidance-on-valuation-of-a-statistical-life-ineconomic-analysis.
273 The lower and upper bounds are estimated as
40 percent below and above the central estimate of
$13,200,000, per DOT guidance on conducting a
sensitivity analysis for a VSL estimate.
274 These estimates are calculated as: The lower
VSL estimate of $5,280,000 × 464 fatalities
prevented = $2,447,665,113. The lower VSL
estimate of $18,480,000 × 464 fatalities prevented
= $8,566,827,999.
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prevalence of serious mental illness 275
than any other age group but the lowest
rate of mental health treatment.276 277
Moreover, research suggesting that early
symptom onset is associated with
elevated risk for comorbid mental health
disorders, as well as worsening health
outcomes, illustrates the critical need
for early mental health interventions
and treatment access.278 279 However,
the majority of adolescents with a
mental health condition do not receive
treatment.280 One review of recent
changes in mental health treatment
noted that ‘‘young people typically
demonstrate a need for care prior to
reaching the threshold for a traditional
275 Serious mental illness is defined as a ‘‘mental,
behavioral, or emotional disorder resulting in
serious functional impairment, which substantially
interferes with or limits one or more major life
activities.’’ (See National Institute of Health, Mental
Illness, https://www.nimh.nih.gov/health/statistics/
mental-illness)
276 Peter J. Uhlhaas, Christopher G. Davey,
Urvakhsh Meherwan Mehta, Jai Shah, John Torous,
Nicholas B. Allen, Shelli Avenevoli, Tolulope
Bella-Awusah, Andrew Chanen, Eric Y. H. Chen,
Christoph U. Correll, Kim Q. Do, Helen L. Fisher,
Sophia Frangou, Ian B. Hickie, Matcheri S.
Keshavan, Kerstin Konrad, Francis S. Lee, Cindy H.
Liu, Beatriz Luna, Patrick D. McGorry, Andreas
Meyer-Lindenberg, Merete Nordentoft, Dost Öngür,
George C. Patton, Tomáš Paus, Ulrich Reininghaus,
Akira Sawa, Michael Schoenbaum, Gunter
Schumann, Vinod H. Srihari, Ezra Susser, Swapna
K. Verma, T. Wilson Woo, Lawrence H. Yang,
Alison R. Yung & Stephen J. Wood, Towards a
Youth Mental Health Paradigm: A Perspective and
Roadmap, Molecular Psychiatry 28, 3171–3181
(2023).
277 SAMHSA, Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2022 National Survey on Drug Use and Health
(2023), https://www.samhsa.gov/data/sites/default/
files/reports/rpt42731/2022-nsduh-nnr.pdf.
278 Ronald C. Kessler, Patricia Berglund, Olga
Demler, Robert Jin, Kathleen R. Merikangas, & Ellen
E. Walters, Lifetime Prevalence and Age-of-Onset
Distributions of DSM–IV Disorders in the National
Comorbidity Survey Replication, 62(6) Arch Gen
Psychiatry pp. 593–602 (2005).
279 Peter J. Uhlhaas, Christopher G. Davey,
Urvakhsh Meherwan Mehta, Jai Shah, John Torous,
Nicholas B. Allen, Shelli Avenevoli, Tolulope
Bella-Awusah, Andrew Chanen, Eric Y.H. Chen,
Christoph U. Correll, Kim Q. Do, Helen L. Fisher,
Sophia Frangou, Ian B. Hickie, Matcheri S.
Keshavan, Kerstin Konrad, Francis S. Lee, Cindy H.
Liu, Beatriz Luna, Patrick D. McGorry, Andreas
Meyer-Lindenberg, Merete Nordentoft, Dost Öngür,
George C. Patton, Tomáš Paus, Ulrich Reininghaus,
Akira Sawa, Michael Schoenbaum, Gunter
Schumann, Vinod H. Srihari, Ezra Susser, Swapna
K. Verma, T. Wilson Woo, Lawrence H. Yang,
Alison R. Yung & Stephen J. Wood, Towards a
Youth Mental Health Paradigm: A Perspective and
Roadmap, Molecular Psychiatry 28, 3171–3181
(2023).
280 Kathleen Ries Merikangas, Jian-ping He,
Marcy E. Burstein, Joel Swendsen, Shelli
Avenevoli, Brady Case, Katholiki Georgiades,
Leanne Heaton, Sonja Swanson, & Mark Olfson,
Service Utilization for Lifetime Mental Disorders in
U.S. Adolescents: Results of the National
Comorbidity Survey Adolescent Supplement, 50(1)
Journal of the American Academy of Child
Adolescent Psychiatry, pp. 32–45 (2011), https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC4408275.
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major psychiatric diagnosis where
distress, functional impairment and
warning signs . . . of mental illness are
present, making early intervention at
this time point crucial to preventing or
reducing the severity of a full-threshold
disorder.’’ 281 Further, this review noted
that early intervention is key for
reducing ‘‘premature death, social
isolation, poor functioning and reduced
educational and vocational
productivity.’’ In recent years, research
has driven an increased interest in early
intervention services for younger
individuals.282
Mental health research often evaluates
the benefits of mental health care in
terms of a quality-adjusted life year
(QALY), an assessment metric that
evaluates the changes to a person’s
quality of life arising from an
intervention. According to the National
Institute for Health and Care Excellence,
one QALY ‘‘is equal to 1 year of life in
perfect health.’’ 283 In 2015 New York
City launched a program called
ThriveNYC, which included 54
initiatives to improve mental health,
including additional screening and
collaborative care. The study found that,
on average, a 20-year-old who received
these interventions would see an
increase of 0.38 QALYs (representing a
change in quality of life, with no
estimation in this study of changes to
length of life) relative to those who did
not receive these interventions.284
Another study compared the cost
effectiveness of early intervention to
standard care for the treatment of firstepisode psychosis, finding that from a
societal perspective (that is, quality of
life, educational attainment, and gainful
employment), early intervention
resulted in higher discounted QALYs
and lower costs than standard care.
While acknowledging that earlier
interventions result in higher lifetime
costs than the standard care perspective,
the authors still found early
intervention to be cost effective.285
281 Patrick D. McGorry & Christina Mei, Early
Intervention in Youth Mental Health: Progress and
Future Directions, 21(4) Evidence Based Mental
Health pp. 182–184 (2018).
282 Ibid.
283 National Institute of Health and Care
Excellence, Glossary, https://www.nice.org.uk/
glossary.
284 Boshen Jiao, Zohn Rosen, Martine Bellanger,
Gary Belkin, & Peter Muennig, The CostEffectiveness of PHQ Screening and Collaborative
Care for Depression in New York City, PLoS One
12(8):e0184210 (Aug. 31, 2017), https://pubmed.
ncbi.nlm.nih.gov/28859154/.
285 Saadia Sediqzadah, Allison Portnoy, Jane J.
Kim, Matcheri Keshavan, & Ankur Pandya, CostEffectiveness of Early Intervention in Psychosis: A
Modeling Study, 73(9) Psychiatric Services pp. 961–
1080 (2022).
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The Departments do not anticipate the
benefits to be exclusive to prevented
suicides. The final rules are also
expected to increase access to and
utilization of behavioral health services
and substance use disorder services.286
The 2022 NSDUH from SAMHSA
indicates that 1.4 percent of adults with
private health insurance reported
having an OUD in the past year, while
only 29 percent of those individuals
indicated receiving treatment for OUD
in the same year.287 A 2017 study
utilizing claims and eligibility data from
nearly 6 million enrollees found that
parity resulted in a 17 percent increase
in use of OUD treatment services, which
illustrates a strong, positive relationship
between parity and the utilization of
behavioral health services.288 As
discussed in section IV.6.1.3, there have
been findings of positive or no impact
of MHPAEA on the utilization of mental
health and substance use disorder
services. For illustrative purposes, the
Departments assume that these final
rules would have roughly 40 percent of
the impact of the 2017 study, or an
approximately 7 percent increase in
OUD treatment service utilization.289
This would result in approximately
43,000 additional individuals receiving
OUD treatment each year.290
286 Constance M. Horgan, Dominic Hodgkin,
Maureen T. Stewart, Amity Quinn, Elizabeth L.
Merrick, Sharon Reif, Deborah W. Garnick, &
Timothy B. Creedon, Health Plans Early Response
to Federal Parity Legislation for Mental Health and
Addiction Services, 62(2) Psychiatric Services pp.
162–168 (2016).
287 SAMHSA, Center for Behavioral Health
Statistics and Quality, National Survey on Drug Use
and Health, 2021 and 2022, https://
www.samhsa.gov/data/data-we-collect/nsduhnational-survey-drug-use-and-health.
288 Sarah Friedman, Haiyong Xu, Jessica M.
Harwood, Francisca Azocar, Brian Hurley, & Susan
L. Ettner, The Mental Health Parity and Addiction
Equity Act Evaluation Study: Impact on Specialty
Behavioral Healthcare Utilization and Spending
Among Enrollees with Substance Use Disorders, 80
Journal of Substance Abuse Treatment pp. 67–78
(2017).
289 This estimate of a 7 percent reduction is based
on the estimate of 17 percent previously cited,
revised downward by 60 percent to account for the
indirect impact of expanded parity associated with
these final rules. See Sarah Friedman, Haiyong Xu,
Jessica M. Harwood, Francisca Azocar, Brian
Hurley, & Susan L. Ettner, The Mental Health Parity
and Addiction Equity Act Evaluation Study: Impact
on Specialty Behavioral Healthcare Utilization and
Spending Among Enrollees with Substance Use
Disorders, 80 Journal of Substance Abuse Treatment
pp. 67–78 (2017).
290 This estimate is calculated as follows:
157,443,601 adult participants with private health
insurance × 1.4 percent indicate OUD in past year
= 2,125,489 adults with private health insurance
and OUD. Then, 2,125,489 × 29 percent receiving
treatment = 616,817 adults with OUD and private
health insurance receiving treatment annually.
Lastly, 616,817 × 6.98 percent increase in adults
with private health insurance receiving treatment =
43,054 additional adults receiving treatment for
OUD annually.
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Considerable research has demonstrated
the efficacy of treatment for
OUD,291 292 293 294 295 296 297 including
several recent studies that have
observed the reduction of both fatal and
non-fatal overdoses for people
diagnosed with OUD after receiving
treatment. For example, an 18-month
observational study of multiple cohorts
of people receiving OUD treatments
across the United States between 2017
and 2021 found that following
outpatient treatment for OUD, the
number of patient overdoses, arrests,
and drug-related hospitalizations were
all reduced by over 50 percent.298
Similarly, a 2024 retrospective study of
opioid overdose fatalities found that
individuals who recently received
treatment for OUD experienced
approximately 34 percent to 38 percent
fewer overdose deaths compared to
those who did not receive treatment.299
291 SAMHSA, Medications for Opioid Use
Disorder: For Healthcare and Addiction
Professionals, Policymakers, Patients, and Families
(2021), https://store.samhsa.gov/sites/default/files/
pep21-02-01-002.pdf.
292 National Academies of Sciences, Engineering,
and Medicine, Medications for Opioid Use Disorder
Save Lives (2019), Washington, DC: The National
Academies Press.
293 Nisha Nataraj, S. Michaela Rikard, Kun Zhang,
Xinyi Jiang, Gery P. Guy Jr, Ketra Rice, Christine L.
Mattson, R. Matthew Gladden, Desiree M.
Mustaquim, Zachary N. Illg, Puja Seth, Rita K.
Noonan, & Jan L. Losby, Public Health Interventions
and Overdose-Related Outcomes Among Persons
with Opioid Use Disorder, 7(4) JAMA Network
Open (2024).
294 Nora D. Volkow, Thomas R. Frieden, Pamela
S. Hyde, & Stephen S. Cha, Medication-Assisted
Therapies—Tackling the Opioid Overdose
Epidemic, 370(22) New England Journal of
Medicine (2014), https://www.nejm.org/doi/full/
10.1056/NEJMp1402780.
295 Robert P. Schwartz, Jan Gryczynski, Kevin E.
O’Grady, Joshua M. Sharfstein, Gregory Warren,
Yngvild Olsen, Shannon G. Mitchell, & Jerome H.
Jaffe, Opioid Agonist Treatments and Heroin
Overdose Deaths in Baltimore, Maryland, 1995–
2009, 103(5) American Journal of Public Health pp.
917–922 (2013), https://www.ncbi.nlm.nih.gov/
pmc/articles/PMC3670653.
296 SAMHSA, TIPS 63: Medications for Opioid
Use Disorder (2021), https://store.samhsa.gov/sites/
default/files/pep21-02-01-002.pdf.
297 National Academies of Sciences, Engineering,
and Medicine, Medications for Opioid Use Disorder
Save Lives, Washington, DC: The National
Academies Press (2019), https://doi.org/10.17226/
25310.
298 Jill A. Dever, Marci F. Hertz, Laura J. Dunlap,
John S. Richardson, Sara Beth Wolicki, Bradley B.
Biggers, Mark J. Edlund, Michele K. Bohm, Didier
Turcios, Xinyi Jiang, Hong Zhou, Mary E. Evans,
Gery P. Guy, Jr., The Medications for Opioid Use
Disorder Study: Methods and Initial Outcomes from
an 18-Month Study of Patients in Treatment for
Opioid Use Disorder, Public Health Reports pp. 1–
10 (2024), https://pubmed.ncbi.nlm.nih.gov/
38268479/.
299 Robert Heimer, Anne C. Black, Hsiuju Lin,
Lauretta E. Grau, David A. Fiellin, Benjamin A.
Howell, Kathryn Hawk, Gail D’Onofrio, & William
C. Becker, Receipt of Opioid Use Disorder
Treatment Prior to Fatal Overdoses and
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A 2021 study funded by the National
Institute on Drug Abuse (NIDA) found
that, across a nationally representative
cohort of individuals with OUD,
common treatments for OUD were
associated with a reduction in the
number of overdoses by 11 to 21
percent, with an average reduction of 16
percent across all treatment types.300
This study assessed the effects of all
three FDA-approved medications for
OUD in various combinations with and
without the most common treatments
(psychotherapy, contingency
management, and overdose education
and naloxone distribution).301 Utilizing
life tables, clinical data, and relevant
literature on treatment outcomes, the
study produced a dynamic
compartmental model to analyze the
effects of medications and treatments on
overdoses and mortality. While it is
limited by the scope and availability of
relevant secondary data, the model
employs parameters, robustness checks,
and sensitivity analysis that sufficiently
validate the empirical model.
To illustrate the potential impact of
these final rules, the Departments
employ this lower estimate of a 16
percent reduction in overdoses
following treatment, and estimate that
increased treatment for expanded OUD
access and utilization could result in the
prevention of approximately 730 nonfatal overdoses each year.302 303 Utilizing
Comparison to No Treatment in Connecticut, 2016–
2017, Drug and Alcohol Dependence (2024), https://
pubmed.ncbi.nlm.nih.gov/38043226/.
300 The Departments averaged the reduction in
overdoses arising from four treatment outcomes
against the baseline of no treatment: MedicatedAssisted Treatment (MAT) only, MAT in addition
to Contingency Management (CM), MAT in addition
to Psychotherapy (PT), as well as MAT in addition
to both CM and PT. (See Michael Fairley, Keith
Humphreys, Vilija R. Joyce, Mark Bounthavong,
Jodie Trafton, Ann Combs, Elizabeth M. Oliva,
Jeremy D. Goldhaber-Fiebert, Steven M. Asch,
Margaret L. Brandeau, & Douglas K. Owens, CostEffectiveness of Treatments for Opioid Use
Disorder, 78(7) JAMA Psychiatry pp. 767–777
(2021), https://pubmed.ncbi.nlm.nih.gov/33787832/
.)
301 Outcomes related to overdose education and
naloxone distribution were not used in estimating
the impacts of OUD treatment in the final rule, as
naloxone is a common over-the-counter product not
intended to treat OUD, but rather reverse an opioid
overdose. While it may help to reduce overdoses
and OUD-related fatalities, it is not a ‘‘treatment’’
per se and as such, is not considered when
estimating the benefits of treatment.
302 This estimate is calculated as follows: 43,054
additional adults receiving treatment for OUD ×
(10,860 per 100,000 non-fatal overdose rate for
those with OUD) = 4,676 non-fatal overdoses. 4,676
non-fatal overdoses × 15.6 percent reduction = 730
non-fatal overdoses prevented.
303 The Departments utilized the nonfatal
overdose rate calculated for 2023 to produce these
estimates. Specifically, this calculation was derived
from the data supplement, eTable 9, as (1,927,706
non-fatal overdoses in 2023 ÷ (16,072,360
individuals with OUD in 2023 + 1,677,988
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data from the CDC estimating the
average medical and non-medical cost
of non-fatal overdoses,304 the
Departments estimate the benefits of
these reduced non-fatal overdoses at
$16.4 million annually.305 306 307
The benefits of individuals diagnosed
with an OUD receiving treatment may
go beyond the benefit of reduced harms
from overdoses. Mortality data of
individuals diagnosed with an OUD
indicate overdoses comprise
approximately half of fatalities for such
individuals, who are increasingly at risk
of death from infectious disease,
common co-morbid conditions such as
liver or heart disease, accidental deaths,
suicide, and other physical traumas.308
Research indicates that individuals with
an OUD that are receiving treatment,
while still at increased risk from allindividuals receiving medication for OUD)) ×
100,000 = 10,860 per 100,000 non-fatal overdose
rate for those with OUD. (See Nisha S. Nataraj,
Michaela Rikard, Kun Zhang, Xinyi Jiang, Gery P.
Guy, Ketra Rice, Christine L. Mattson, Matthew
Gladden, Desiree M. Mustaquim, Zachary N. Illg,
Puja Seth, Rita K. Noonan, & Jan L. Losby, Public
Health Interventions and Overdose-Related
Outcomes Among Persons with Opioid Use
Disorder, Supplement 1, eTable 9, 7(4) Substance
Use and Addiction (2024).)
304 Non-medical costs of non-fatal overdoses are
derived from work loss costs and monetized
quality-adjusted life loss per injury. Medical costs
of non-fatal overdoses are derived from healthcare
provider payments that include inpatient,
outpatient, and outpatient drug costs.
305 Cora Peterson, Ketra L. Rice, Dionne D.
Williams, & Robert Thomas, WISQARS Cost of
Injury for Public Health Research and Practice,
29(2) Injury Prevention (Nov. 2022).
306 The average cost of non-fatal overdose
requiring hospitalization = $19,256 average
associated QALY non-medical cost per
hospitalization + $33,026 average associated
medical cost per hospitalization = $52,282 per nonfatal overdose hospitalization. The average cost of
non-fatal overdose requiring only treatment and
release = $3,254 average associated QALY nonmedical cost per treatment and release + $9,614
associated medical cost per treatment and release =
$12,868 per non-fatal overdose requiring only
treatment and release. (See Cora Peterson, Ketra L.
Rice, Dionne D. Williams, & Robert Thomas,
WISQARS Cost of Injury for Public Health Research
and Practice, 29(2) Injury Prevention (Nov. 2022).
307 The estimate is calculated as follows: 730 nonfatal overdoses prevented × 24.36 percent overdose
hospitalization rate = 178 non-fatal overdose
hospitalizations prevented. $52,282 per non-fatal
overdose hospitalization × 178 non-fatal overdose
hospitalizations prevented = $9,304,598.
Additionally, 730 non-fatal overdoses × 75.64
percent overdose treatment and release rate = 552
non-fatal overdose treatment and releases
prevented. $12,868 per non-fatal overdose requiring
treatment and release × 552 non-fatal overdoses
requiring treatment and release = $7,109,073. As
such, the total benefit estimate related to non-fatal
overdoses is calculated as: $9,304,598 + $7,109,073
= $16,413,761.
308 Elizabeth Evans, Libo Li, Jeong Min, David
Huang, Darren Urada, Lei Liu, Yih-Ing Hser, &
Bohdan Nosyk, Mortality Among Individuals
Accessing Pharmacological Treatment for Opioid
Dependence in California, 2006–2010, Addiction
110(6): 996–1005 (June 2015).
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cause mortality compared to the general
population, may experience a reduced
risk of mortality after receiving
treatment for their OUD condition.309 310
One study found that mortality rates
were 35 percent lower for individuals
that received treatment for OUD than for
those who did not receive
treatment.311 312 This retrospective
cohort study used expansive, linked
public health, medical, and vital
statistics data from a single State to
establish a robust population cohort of
individuals with OUD for which
mortality was the observed outcome
over approximately 45,000 person-years
following an initial detox episode.
While a potential limitation of
observational studies is the presence of
confounding variables distorting
measured outcomes, the breadth of the
data being utilized, which included data
from insurance claims and extensive
medical histories, limit this concern.
The findings of the study, indicating a
high all-cause and overdose-related
mortality rate for individuals with OUD
and resultant decline following
treatment, are consistent with other
research findings and, as an
observational cohort study, represent a
high level of evidence.313 314
309 Marc Larochelle, Dana Bernson, Thomas Land,
Thomas Stopka, Na Wang, Ziming Xuan, Sarah
Bagley, Jane Liebschutz, Alexander Walley,
Medication for Opioid Use Disorder After Nonfatal
Opioid Overdose and Association with Mortality: A
Cohort Study, Ann Intern Med 169(3): 137–145
(2018), https://pubmed.ncbi.nlm.nih.gov/
29913516/.
310 Yih-Ing Hser, Larissa J. Mooney, Andrew J.
Saxon, Karen Miotto, Douglas S. Bell, Yuhui Zhu,
Di Liang, and David Huang, High Mortality among
Patients with Opioid Use Disorder in a Large
Healthcare System, J Addict Med 11(4): 315–319
(2017), https://www.ncbi.nlm.nih.gov/pmc/articles/
PMC5930020/.
311 The reduction in all-cause mortality was
calculated as the change in the crude mortality rate
per 100 person-years from 1.94 (for those not
receiving any treatment) to 1.27 (for those receiving
either MOUD treatment, inpatient treatment, or
both). Thus, the percentage change in the rates from
1.94 per 100 person-years to 1.27 per 100 personyears is approximately 35 percent.
312 Alexander Walley, Sara Lodi, Yijing Li, Dana
Bernson, Hermik Babakhanlou-Chase, Thomas
Land, & Marc R. Larochelle, Association Between
Mortality Rates and Medication and Residential
Treatment After Inpatient Medically Managed
Opioid Withdrawal: A Cohort Analysis, 115(8)
Addiction pp. 1496–1508 (Aug. 2020).
313 Marc Larochelle, Dana Bernson, Thomas Land,
Thomas Stopka, Na Wang, Ziming Xuan, Sarah
Bagley, Jane Liebschutz, Alexander Walley,
Medication for Opioid Use Disorder After Nonfatal
Opioid Overdose and Association with Mortality: A
Cohort Study, Ann Intern Med 169(3): 137–145
(2018), https://pubmed.ncbi.nlm.nih.gov/
29913516/.
314 Yih-Ing Hser, Larissa J. Mooney, Andrew J.
Saxon, Karen Miotto, Douglas S. Bell, Yuhui Zhu,
Di Liang, and David Huang, High Mortality among
Patients with Opioid Use Disorder in a Large
Healthcare System, J Addict Med 11(4): 315–319
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Employing this estimate of an
approximately 35 percent reduction in
fatalities following treatment to
illustrate the potential impact of these
final rules, the Departments estimate
that increased treatment for expanded
OUD access and utilization could result
in the prevention of approximately 702
fatalities from all causes in persons
receiving treatment for OUD each
year.315 The Departments have utilized
the VSL, as with their estimate of the
value of prevented suicides, to estimate
the benefits of reduced mortality arising
from increased OUD treatment
utilization at $9.3 billion annually.316
As discussed earlier in this section, the
Departments recognize some
uncertainty in the production of VSL
benefit estimates.317 To account for
potential sensitivity arising from such
uncertainty, the Departments have
conducted a sensitivity analysis of these
benefits and, following guidance on VSL
sensitivity analysis,318 produced a lower
and upper estimate of the VSL of
approximately $5.3 million and $18.5
million, respectively.319 Utilizing this
range of estimates, the Departments
accordingly estimate the value of the
benefits of reduced mortality arising
from increased OUD treatment
(2017), https://www.ncbi.nlm.nih.gov/pmc/articles/
PMC5930020/.
315 This estimate is calculated as: 43,054
additional beneficiaries receiving treatment for
OUD × 4.70 crude mortality rate per 100 personyears for OUD = 2,024 expected fatalities in the
absence of treatment. Adjusting the crude mortality
rate downward 34.7 percent to 3.07 following
treatment for this group, the expected fatalities
would be estimated as 43,054 additional
beneficiaries receiving treatment for OUD × 3.07
crude mortality rate per 100 person-years for OUD
= 1,322 expected fatalities following treatment. As
such, the Departments estimate the prevented
fatalities from all causes arising from OUD
treatment to be: 2,024¥1,322 = 702 prevented
fatalities.
316 This estimate is calculated as: the value of a
statistical life of $13,200,000 × 702 prevented
fatalities = $9,269,545,489.
317 Individuals express a different willingness to
pay to reduce the fatality risk of some deaths (those
with a perceived associated morbidity, such as
cancer) more than others (such as car accidents),
though the risks may be equivalent. DOT guidance
on the VSL suggests utilizing a single, nationwide
value that does not adjust the VSL based on the
nature of the risk or the underlying characteristics
of the affected population but encourages a
sensitivity analysis to reflect such uncertainty.
318 For more information on the VSL guidance
utilized, see The DOT’s Revised Departmental
Guidance on Valuation of a Statistical Life in
Economic Analysis, https://
www.transportation.gov/office-policy/
transportation-policy/revised-departmentalguidance-on-valuation-of-a-statistical-life-ineconomic-analysis.
319 The lower and upper bounds are estimated as
40 percent below and above the central estimate of
$13,200,000, per DOT guidance on conducting a
sensitivity analysis for a VSL estimate.
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utilization at between $3.7 billion and
$13.0 billion annually.320
Mental health and substance use
disorders do not always occur in
isolation, but are commonly cooccurring conditions, as individuals
with substance use disorders are more
likely to experience a mental health
condition than the general population
and nearly half of adults with serious
mental illness also have a substance use
disorder.321 Such co-occurring
conditions can significantly exacerbate
the severity of symptoms as well as
negative health outcomes related to
these conditions.322 Additionally,
individuals with mental health
conditions and substance use disorders
are known to commonly experience
physical co-morbidities that can
significantly impact overall health and
quality of life. A 2011 study indicated
that over 68 percent of adults with a
mental health disorder reported a
comorbid medical disorder while 29
percent indicated they had another
comorbid mental health condition.323
Human immunodeficiency virus (HIV),
hepatitis, and diabetes are all more
prevalent among those with substance
use disorders or mental health
conditions than the general population,
while such physical or other mental
comorbid conditions are more likely to
be adversely impacted by poor disease
management and treatment adherence
when co-occurring with a mental health
condition or substance use
disorder.324 325 326 327 328 329 A 2022 study
320 These estimates are calculated as: The lower
VSL estimate of $5,280,000 × 702 fatalities
prevented = $3,707,818,196. The lower VSL
estimate of $18,480,000 × 702 fatalities prevented
= $12,977,363,685.
321 SAMHSA, Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2022 National Survey on Drug Use and Health
(Nov. 2023), https://www.samhsa.gov/data/sites/
default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
322 Beth Han, Wilson Compton, Carlos Blanco, &
Lisa Colpe, Prevalence, Treatment, and Unmet
Treatment Needs of US Adults with Mental Health
and Substance Use Disorders, 36(10) Health Affairs
pp. 1739–1747 (2017), https://www.health
affairs.org/doi/epdf/10.1377/hlthaff.2017.0584.
323 Benjamin Druss & Elizabeth Walker, Mental
Disorders and Medical Comorbidity, Research
Synthesis Report No. 21, Robert Wood Johnson
Foundation (Feb. 2011), https://up2riverside.org/
wp-content/uploads/2024/04/medical
comorbidity.pdf.
324 Elizabeth C. Verna, Aaron Schluger, & Robert
S. Brown Jr., Opioid Epidemic and Liver Disease,
1(3) JHEP Report pp. 240–255 (Sept. 2019), https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC7001546/
pdf/main.pdf.
325 T. Jake Liang & John W. Ward, Hepatitis C in
Injection-Drug Users—A Hidden Danger of the
Opioid Epidemic, 378(13) New England Journal of
Medicine pp. 1169–1171 (Mar. 2018), https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC5993680/
pdf/nihms972424.pdf.
326 Alain K. Koyama, A. Hora, Kai McKeever
Bullard, Stephen R. Benoit, Shichao Tang, & Pyone
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77675
observing the presence of comorbid
conditions for inpatient hospitalizations
found that 81 percent of hospitalizations
for a mental health condition or
substance use disorder had a co-morbid
condition.330 The study also found that
co-morbid conditions were associated
with a longer hospitalization period, a
higher cost per hospitalization, as well
as increased mortality during
hospitalization.331
As mental health conditions and
substance use disorders can make
preventing, managing, and treating
physical comorbidities difficult,
improvements in mental health and
substance use disorder outcomes may
also improve overall physical health
outcomes and lower healthcare costs for
participants.332 333 Data from Evernorth
Health Services, a subsidiary of Cigna,
indicates that accessing mental health
and substance use disorder services can
result in considerable cost savings for
patients diagnosed with a mental health
condition and substance use disorder
concern, producing a reported cost
savings of between $1,134 to $3,321 per
person over the first 27 months
Cho, State-Specific Prevalence of Depression
Among Adults With and Without Diabetes—United
States, 2011–2019, 20(70) Preventing Chronic
Disease (Aug. 2023), https://www.cdc.gov/pcd/
issues/2023/pdf/22_0407.pdf.
327 United Nations Office on Drugs and Crime,
Comorbidities in Drug Use Disorders (Mar. 2022),
https://www.unodc.org/documents/drugprevention-and-treatment/UNODC_Comorbidities_
in_drug_use_disorders.pdf.
328 National Institute on Drug Abuse, Common
Comorbidities with Substance Use Disorders
Research Report (Apr. 2020), https://
www.ncbi.nlm.nih.gov/books/NBK571451/.
329 Stephen Magura, Andrew Rosenblum, &
Chunki Fong, Factors Associated with medication
Adherence among Psychiatric Outpatients at
Substance Abuse Risk, Open Addict J. (4), 58–64
(Nov. 2011), https://www.ncbi.nlm.nih.gov/pmc/
articles/PMC3526017/.
330 Pamela Owens, Lan Liang, Marguerite Barrett,
and Kathryn Fingar, Comorbidities Associated with
Adult Inpatient Stays, 2019. Agency for Healthcare
Research and Quality, Healthcare Cost and
Utilization Project, Statistical Brief #303 (Dec.
2022).
331 Pamela Owens, Lan Liang, Marguerite Barrett,
and Kathryn Fingar, Comorbidities Associated with
Adult Inpatient Stays, 2019. Agency for Healthcare
Research and Quality, Healthcare Cost and
Utilization Project, Statistical Brief #303 (Dec.
2022).
332 United Nations Office on Drugs and Crime,
Comorbidities in Drug Use Disorders (Mar. 2022),
https://www.unodc.org/documents/drugprevention-andtreatment/UNODC_Comorbidities_
in_drug_use_disorders.pdf.
333 Wayne Katon, Joan Russo, Elizabeth H.B. Lin,
Julie Schmittdiel, Paul Ciechanowski, Evette
Ludman, Do Peterson, Bessie Young, & Michael Von
Korff, Cost-Effectiveness of a Multi-Condition
Collaborative Care Intervention: A Randomized
Controlled Trial, 69(5) Archives of General
Psychiatry (May 2012), https://www.ncbi.nlm.
nih.gov/pmc/articles/PMC3840955/pdf/
nihms521136.pdf.
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following diagnosis.334 Similarly, a 2012
study of patients with a mental health
condition and comorbid physical health
condition found that treating the
underlying mental health condition
yielded significant improvements in the
comorbid physical conditions, resulting
in increased positive health outcomes
and lower long-term healthcare costs.335
The Departments, in evaluating the
impacts of these final rules, anticipate
that, by prohibiting inequitable barriers
to coverage, the estimated
improvements in mental health
conditions and substance use disorders
will help reduce the severity of
comorbid conditions, improve related
health outcomes for participants,
beneficiaries, and enrollees, and as
such, represent a substantial, but
potentially unquantified, benefit.
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7.4. Reduced Adverse Impacts on the
Families, Friends, Caregivers, and
Coworkers of People Who Suffer From
Untreated or Poorly Managed Mental
Health Conditions and Substance Use
Disorders
These final rules will help employees,
caregivers and their families meet their
mental health and substance use
disorder care needs, and thus, may
improve the productivity and resulting
earnings of workers dealing with mental
health conditions and substance use
disorder. Among adults with any mental
health condition in 2022, only 50.6
percent received treatment.336
Moreover, while 19.4 percent of NSDUH
respondents 12 and older were
classified as needing substance use
disorder treatment in 2022, only 4.6
percent of respondents 12 and older
indicated that they received treatment
that year.337 One survey found that
more than 85 percent of individuals that
did not receive their needed mental
334 Evernorth Health Services, Behavioral Health
Care Significantly Lowers Medical Care Costs (Jan.
2023), https://www.evernorth.com/behavioralhealth-study.
335 Wayne Katon, Joan Russo, Elizabeth H.B. Lin,
Julie Schmittdiel, Paul Ciechanowski, Evette
Ludman, Do Peterson, Bessie Young, & Michael Von
Korff, Cost-Effectiveness of a Multi-Condition
Collaborative Care Intervention: A Randomized
Controlled Trial, 69(5) Archives of General
Psychiatry (May 2012), https://www.ncbi.nlm.
nih.gov/pmc/articles/PMC3840955/pdf/
nihms521136.pdf.
336 SAMHSA, Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2022 National Survey on Drug Use and Health,
Figure 62, p. 61 (Nov. 2023), https://
www.samhsa.gov/data/sites/default/files/reports/
rpt42731/2022-nsduh-nnr.pdf.
337 SAMHSA, Key Substance Use and Mental
Health Indicators in the United States: Results from
the 2022 National Survey on Drug Use and Health,
Figures 54 and 55, pp. 50–51 (Nov. 2023). https://
www.samhsa.gov/data/sites/default/files/reports/
rpt42731/2022-nsduh-nnr.pdf.
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health or substance use care reported
negative impacts, including personal
relationship issues, job issues and
performing poorly or dropping out of
school.338
The economic impact of untreated
mental health conditions and substance
use disorders can be significant. A 2021
study of claims data for large, selffunded health plans looked at the
economic burden attributable to major
depressive disorder, including the direct
costs associated with treatment, suiciderelated costs, and workplace costs,
between 2010 and 2018. During that
period, overall economic burden of
adults with a major depressive disorder
increased 37.9 percent (from $236.6
billion to $326.2 billion). While part of
the cost increase can be attributed to a
12.9 percent increase in the number of
adults with major depressive disorders,
direct costs became a smaller share of
the total costs, with workplaces costs,
defined as missed work (due to injury/
illness, discretionary time off and
disability) and lower productivity while
at work, constituting 61 percent of the
costs in 2018 and increasing from $48.3
billion in 2010 to $70.8 billion in
2018.339 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.340 A 2023 study critically
reviewed 38 studies on the relationship
between mental health and lost
productivity, and found that poor
mental health was associated with
increased presenteeism 341 and
absenteeism.342
These final rules will also have
significant indirect impacts on families,
friends, caregivers, and coworkers with
untreated or poorly managed mental
338 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.
339 Paul E. Greenberg, Andree-Anne Fournier,
Tammy Sisitsky, Mark Simes, Richard Berman,
Sarah H. Koenigsberg, & Ronald C. Kessler, The
Economic Burden of Adults with Major Depressive
Disorder in the United States (2010 and 2018), 39(6)
Pharmacoeconomics pp. 653–665 (2021).
340 Martin Andersen, Heterogeneity and the Effect
of Mental Health Parity Mandates on the Labor
Market, 43 Journal of Health Economics (2015).
341 The study defined ‘‘presenteeism’’ as
‘‘decreased productivity at work.’’
342 Claire de Oliveira, Makeila Saka, Lauren Bone,
& Rowena Jacobs, The Role of Mental Health on
Workplace Productivity: A Critical Review of the
Literature, 21(2) Applied Health Economics and
Health Policy pp. 167–193 (2023).
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health conditions and substance use
disorders, as well as society at large. By
prohibiting inequitable barriers to
coverage and thereby increasing access
to mental health and substance use
disorder services, these final rules will
lead to more people receiving treatment,
reducing the burden on family members
and other support systems. For example,
this includes untreated maternal mental
health conditions, which can lead to a
reduced ability to work, increased risk
of suicide, increased use of public
services, and worse maternal and child
health. A 2022 study of the cost of
maternal mental health conditions to
Texas women and their children
projected costs for the 2019 birth cohort
from the time of conception through 5
years postpartum to total $2.2 billion.343
Untreated maternal mental health
conditions include untreated perinatal
mood and anxiety disorders, which
have been found to account for
approximately $48 million in societal
costs in Vermont for the average annual
birth cohort from conception through 5
years postpartum, including $12.5
million in productivity loss and $9.4
million in non-obstetric health
expenditures.344
The cost in missed productivity for
workers with fair or poor mental health
due to unplanned absences was
estimated as $47.6 billion annually in
2022.345 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.346
Finally, a 2021 study estimated that the
societal costs of untreated OUD was
approximately $1.02 trillion in 2017,
which includes $35 billion in health
care costs and $92 billion in lost
productivity.347
343 Caroline Margiotta, Jessica Gao, So O’Neil,
Divya Vohra, & Kara Zivin, The Economic Impact
of Untreated Maternal Mental Health Conditions in
Texas, 22(700) BMC Pregnancy Childbirth (2022).
344 Isabel Platt, Emma Pendl-Robinson, Eric
Dehus, So O’Neil, Divya Vohra, Kara Zivin, Michael
Kenny & Laura Pentenrieder, Estimating the Costs
of Untreated Perinatal Mood and Anxiety Disorders
in Vermont, Mathematica (May 2023), https://
www.mathematica.org/publications/societal-costsof-perinatal-mood-and-anxiety-disorders-invermont.
345 Dan Witters & Sangeeta Agrawal, The
Economic Cost of Poor Employee Mental Health,
Gallup Workplace (Dec. 13, 2022), https://
www.gallup.com/workplace/404174/economic-costpoor-employee-mental-health.aspx?version=print.
346 Donghoon Lee, Yeonil Kim, & Beth Devine,
Spillover Effects of Mental Health Disorders on
Family Members’ Health-related Quality of Life:
Evidence from a US Sample, 42(1) Medical
Decision Making pp. 80–93 (2022).
347 Curtis Florence, Feijun Luo, & Ketra Rice, The
Economic Burden of Opioid Use Disorder and Fatal
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These final rules are expected to
improve access to and utilization of
mental health and substance use
disorder services by removing barriers
to access to mental health and substance
use disorder benefits caused by NQTLs.
By enhancing treatment for these
conditions and disorders, these final
rules will likely result in reduced
productivity loss or missed workdays
for individuals suffering from mental
health conditions or substance use
disorders. Furthermore, the improved
management and treatment of these
conditions and disorders will
potentially lead to reduced adverse
impacts on the families, friends, and
coworkers of those affected, as untreated
or poorly managed mental health
conditions and substance use disorders
can have significant spillover effects on
an individual’s personal and
professional lives.
8. Costs
These final rules aim to promote
access to mental health and substance
use disorder benefits by clarifying how
plans and issuers must ensure that their
plans and coverage are designed, as
written and in operation, to comply
with MHPAEA’s parity requirements for
mental health and substance use
disorder benefits and medical/surgical
benefits, and allowing them to more
easily identify changes needed to bring
their plans and coverage into
compliance. The Departments
acknowledge that plans and issuers, in
revising their approach to performing
and documenting their already required
comparative analyses, will incur
additional costs. Moreover, by removing
some of the barriers to access to mental
health and substance use disorder
treatments caused by existing NQTLs,
the Departments expect increased
utilization of mental health and
substance use disorder services, which
will also increase costs. This collection
of costs would appropriately be
included in any comparison with the
benefits described, and in some cases
illustratively quantified, elsewhere in
this regulatory impact analysis.
It is notable that the Departments are
clarifying existing requirements, and
only the cost burden limited to those
additional content elements outlined in
these final rules is a key topic discussed
in the following sections.
8.1. Comment Summary
In response to the proposal, many
commenters expressed concern that the
Departments underestimated the burden
Opioid Overdose in the United States, 2017, 218
Drug and Alcohol Dependence (2021).
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of collecting the required data, the
burden required in conducting the
proposed mathematical substantially all
and predominant tests, the number of
NQTLs that would need to be analyzed
for each plan and issuer, and the
amount of time that it would take to
conduct those analyses. Commenters
stated that in order to comply with the
proposed rules, plans and issuers would
need to purchase new data systems and
hire additional staff or contractors. One
commenter further stated that existing
systems to provide mental health and
substance use disorder benefits, such as
carve out plans, would be eliminated
under the proposed rule, as vendors
would not be able to build networks of
mental health and substance use
disorder providers in alignment with
networks of medical/surgical providers,
as required under the proposed special
rule for network composition.
Several commenters questioned the
Departments’ assumptions related to the
number of NQTLs for which plans and
issuers would need to produce
comparative analyses. While the
Departments assumed that issuers
would impose twice as many NQTLs as
plans, several commenters did not think
the number of NQTLs would vary
between plans and issuers. Commenters
also argued that the number of NQTLs
that plans and issuers would need to
analyze would be roughly twice the
Departments’ proposed assumption for
issuers, 16 NQTLs rather than 8, based
on the Departments’ descriptions of
types of NQTLs listed in the proposed
rule. Consistent with the explanation
earlier in this preamble, the
Departments note that they do not
intend to provide an exhaustive list of
NQTLs. Plans and issuers may be
analyzing a fewer or greater number of
NQTLs than the number of NQTLs
listed in the illustrative, non-exhaustive
list in these final rules.
Commenters also questioned the
amount of time that it would take to
conduct the NQTL comparative analyses
under the proposal. While the
Departments assumed that the plans and
issuers preparing their own comparative
analyses would incur an incremental
burden of 10 hours per NQTL in the first
year and 4 hours per NQTL in
subsequent years, several commenters
thought this was an underestimate. For
instance, one commenter stated that it
currently takes a team of subject matter
experts, compliance officials, a project
manager, and attorneys or consultants
60 hours in the first year and 12 hours
in subsequent years to produce NQTL
comparative analyses as required under
the CAA, 2021 and current guidance.
The commenter suggested that the
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added requirements for the comparative
analysis under these final rules could
require at least an additional 60 hours
per NQTL.
Another commenter estimated that
the cost to issuers of fully insured plans
to conduct the comparative analyses for
all NQTLs is approximately between
$200,000 and $300,000 (200 to 300
external attorney or consultant hours in
addition to several hundred in-house
staff hours). The commenter also
reported that for large, self-funded
plans, while issuers and TPAs prepare
and distribute baseline comparative
analysis, plans would still need to
customize the comparative analysis. The
commenter estimated that the cost for
large self-funded plans to customize the
comparative analysis and request
additional information and data for all
NQTLs is approximately between
$50,000 and $150,000 (100 to 200
external attorney or consultant hours in
addition to in-house staff work). The
Departments are not clear whether these
suggested costs represent current
expenditures or projections of the added
requirements for the comparative
analyses. The commenter further stated
that time and cost estimates for plans
with behavioral carve-out vendors
should be higher.
In preparing these final rules, the
Departments have considered these
comments and have clarified the
requirements and reevaluated their
estimates as appropriate. The specific
adjustments to the estimates are
discussed in section IV.8.4 of this
regulatory impact analysis.
8.2. Commenters’ Cost Estimates
As discussed earlier in this regulatory
impact analysis, commenters questioned
the Departments’ assumptions related to
the number of NQTLs imposed by plans
and issuers on mental health and
substance use disorder benefits and
medical/surgical benefits, and the
amount of time that it would take to
conduct the additional requirements for
producing comparative analyses and
analyzing data, beyond what was
required in CAA, 2021. The
Departments have reviewed these
comments, which include estimates
made by those commenters, on the
expected additional costs to prepare
NQTL comparative analyses under the
proposed rules. While these comments
are helpful to understand the cost
implications of the final rules and how
they differ from the proposal, the
Departments disagree with some of the
inputs and underlying assumptions of
these cost estimates and use different
assumptions in section IV.8.4 of this
regulatory impact analysis. The
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commenters’ cost estimates do,
however, demonstrate a possible upper
bound on the costs associated with
these final rules.
8.2.1. Association for Behavioral Health
and Wellness
The Departments considered
estimates and assumptions regarding the
costs to prepare the NQTL comparative
analyses under the proposed rules made
by the Association for Behavioral Health
and Wellness (ABHW). ABHW reports
that the amendments would require
plans and issuers to analyze 15 NQTLs
on average. They also reported that it
currently takes a team of subject matter
experts, compliance officials, a project
manager, and attorneys or consultants
60 hours to prepare each comparative
analysis for a typical NQTL as required
under the CAA, 2021 and current
guidance. Thus, ABHW estimates that a
comparable burden (60 hours per
NQTL) is needed to review and revise
the analyses under the updated
requirements in the first year. In
addition, they also estimate it would
require 12 hours in each subsequent
year to produce the comparative
analyses. For the purpose of this
calculation, the Departments have
estimated a composite wage rate of
$167.48, which consist of attorneys,
actuaries, and data analysts.348 Based on
these assumptions, and the
Departments’ estimates of affected
entities, this would result in a cost
burden of $984.8 million in the first
year and $197 million in subsequent
years, resulting in a 3-year average cost
burden of $459.6 million. See Table 3
for more details.
ABHW also suggested that issuers and
plans would need to hire at least three
full-time equivalent new staff members
to help with the proposed relevant data
evaluation requirements. This
additional cost was not included in
their cost estimates.
TABLE 3—INCREMENTAL COST TO PREPARE THE COMPARATIVE ANALYSES BASED ON THE ASSOCIATION FOR BEHAVIORAL
HEALTH AND WELLNESS’S ASSUMPTIONS
Number of
entities
Number of
NQTLs per
entity
Number of
hours per
NQTL
Total hour
burden
(A)
(B)
(C)
(A × B × C)
Hourly
wage
I
(D)
Cost
I (A × B × C × D)
First Year
Issuers (health insurance company/State combinations) .............................
TPAs ..............................................................................................................
Self-funded plans with more than 500 participants that will conduct a comparative analysis themselves ....................................................................
Self-funded plans with more than 500 participants that will receive a generic comparative analysis from TPA or service providers, and will then
customize it ................................................................................................
Self-funded non-Federal governmental plans with more than 500 participants that will conduct the comparative analysis themselves ..................
Self-funded non-Federal governmental plans with more than 500 participants that will initially receive generic comparative analyses from TPAs
or service providers, and will then customize it ........................................
Plan MEWAs that are not fully insured .........................................................
Non-plan MEWAs that are not fully insured .................................................
1,467
205
15
15
60
60
1,320,300
184,500
$167.48
167.48
$221,123,844
30,900,060
709
15
60
638,100
167.48
106,868,988
4,076
15
30
1,834,200
167.48
307,191,816
505
15
60
454,500
167.48
76,119,660
2,906
132
21
15
15
15
30
60
60
1,307,700
118,800
18,900
167.48
167.48
167.48
219,013,596
19,896,624
3,165,372
10,021
15
....................
5,877,000
..............
984,279,960
1,467
205
15
15
12
12
264,060
36,900
167.48
167.48
44,224,769
6,180,012
709
15
12
127,620
167.48
21,373,798
4,076
15
6
366,840
167.48
61,438,363
505
15
12
90,900
167.48
15,223,932
2,906
132
21
15
15
15
6
12
12
261,540
23,760
3,780
167.48
167.48
167.48
43,802,719
3,979,325
633,074
Subsequent Years Total ........................................................................
10,021
15
....................
1,175,400
..............
196,855,992
Total (3-year average) ....................................................................
10,021
15
....................
2,742,600
..............
459,330,648
First-year Total .......................................................................................
Subsequent Years
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Issuers (health insurance company/State combinations) .............................
TPAs ..............................................................................................................
Self-funded plans with more than 500 participants that will conduct the
comparative analysis themselves ..............................................................
Self-funded plans with more than 500 participants that will receive a generic comparative analysis from TPAs or service providers, and will
then customize it .......................................................................................
Self-funded non-Federal governmental plans with more than 500 participants that will conduct the comparative analysis themselves ..................
Self-funded non-Federal governmental plans with more than 500 participants that will initially receive generic comparative analyses from TPAs
or service providers, and will then customize it ........................................
Plan MEWAs that are not fully insured .........................................................
Non-plan MEWAs that are not fully insured .................................................
The Departments conducted a
sensitivity analysis of the assumption
that 50 percent of self-funded plans and
another 50 percent of self-funded non-
Federal governmental plans with more
than 500 participants will receive a
generic comparative analysis from TPAs
or service providers, which they will
then need to customize. For every 10percentage-point increase or decrease in
the number of self-funded plans and
self-funded non-Federal governmental
348 The wage rate of an attorney, actuary, and data
analyst is, respectively, $165.71, $177.11, and
$159.61. (Internal DOL calculation based on 2024
labor cost data. For a description of DOL’s
methodology for calculating wage rates, see EBSA,
Labor Cost Inputs Used in the Employee Benefits
Security Administration, Office of Policy and
Research’s Regulatory Impact Analyses and
Paperwork Reduction Act Burden Calculations
(June 2019), https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/rules-and-regulations/
technical-appendices/labor-cost-inputs-used-in-
ebsa-opr-ria-and-pra-burden-calculations-june2019.pdf.) The composite wage rate is estimated in
the following manner: [$165.71 × (1 ÷ 3) + $159.61
× (1 ÷ 3) + $177.61 × (1 ÷ 3) = $167.48].
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plans with more than 500 participants
that need to customize documentation
received from TPAs or service
providers, the cost would increase or
decrease by $24.6 million.349
8.2.2. Blue Cross Blue Shield
Association
The Blue Cross Blue Shield
Association (BCBSA) asked the
Departments to specifically quantify the
costs of preparing additional
comparative analysis beyond the four
priority NQTLs outlined in FAQs Part
45. BCBSA stated that based on the
number of NQTLs identified in the
regulation, and the additional NQTLs
identified in the preamble, the proposed
rules would require plans and issuers to
prepare comparative analyses for at least
17 NQTLs (7 from the preamble, and 10
from the regulation, counting those
related to network composition as 3
separate NQTLs), all with the associated
documentation and outcomes data.
BCBSA estimated that the cost of
issuers of fully insured plans to conduct
the comparative analyses for all NQTLs
would range between $200,000 and
$300,000. BCBSA also estimated the
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cost for large self-funded plans that
receive a generic comparative analysis
from the issuer, which they then need
to customize and request additional
information and data for all NQTLs
referenced in the proposal, is between
$50,000 and $150,000. BCBSA did not
explain if these cost estimates were for
all years or were applicable to just the
first year. Based on BCBSA’s
assumptions, and the Departments’
estimates of affected entities, this will
result in a lower bound cost of $957.4
million and an upper bound cost of $2
billion. See Table 4 for more details.
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TABLE 4—ANNUAL COSTS TO CONDUCT THE COMPARATIVE ANALYSES FOR ALL NQTLS BASED ON BLUE CROSS BLUE
SHIELD ASSOCIATION’S ASSUMPTIONS
Number of
entities
Lower bound
cost per
entity
Total lower
bound cost
Upper bound
cost per
entity
Total
upper bound
cost
(A)
(B)
(A × B)
(C)
(A × C)
Issuers (health insurance company/State combinations) .......................................
TPAs ........................................................................................................................
Self-funded plans with more than 500 participants that will conduct the comparative analysis themselves ......................................................................................
Self-funded plans with more than 500 participants that will receive a generic
comparative analysis from TPAs or service providers, and will then customize
it ...........................................................................................................................
Self-funded non-Federal governmental plans with more than 500 participants
that will conduct the comparative analysis themselves ......................................
Self-funded non-Federal governmental plans with more than 500 participants
that will initially receive generic comparative analyses from TPAs or service
providers, and will then customize it ...................................................................
Plan MEWAs that are not fully insured ...................................................................
Non-plan MEWAs that are not fully insured ...........................................................
1,467
205
$200,000
200,000
$293,400,000
41,000,000
$300,000
300,000
$440,100,000
61,500,000
709
200,000
141,800,000
300,000
212,700,000
4,076
50,000
203,800,000
150,000
611,400,000
505
200,000
101,000,000
300,000
151,500,000
2,906
132
21
50,000
200,000
200,000
145,300,000
26,400,000
4,200,000
150,000
300,000
300,000
435,900,000
39,600,000
6,300,000
Total .................................................................................................................
10,021
........................
956,900,000
........................
1,959,000,000
The Departments conducted a
sensitivity analysis of the assumption
that 50 percent of self-funded plans and
another 50 percent of self-funded nonFederal governmental plans with more
than 500 participants will receive a
generic comparative analysis from the
issuer, and will then customize it. For
every 10-percentage-point increase or
decrease in the number of self-funded
plans and self-funded non-Federal
governmental plans with more than 500
participants that need to customize
documentation received from TPAs or
service providers, the cost would
increase or decrease by $34.9 million in
the total lower bound cost 350 and
$104.7 million in the total upper bound
cost.351
8.3. Final Amendments to the Existing
MHPAEA Regulations (26 CFR 54.9812–
1, 29 CFR 2590.712, and 45 CFR
146.136)
As part of these final rules, the
Departments have added new
definitions, amended existing
definitions, and clarified and added
new requirements for NQTLs imposed
with respect to mental health or
substance use disorder benefits. For
example, as discussed earlier in this
preamble, the final rules clarify that any
condition or disorder defined by the
plan or coverage as being or as not being
a mental health condition or a substance
use disorder must be defined consistent
with generally recognized independent
standards of current medical practice.
To be consistent with those generally
recognized independent standards of
current medical practice, these final
rules state that 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 definition of
‘‘substance use disorder benefits’’ 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
349 The Departments estimate the 10-percentagepoint incremental cost by adding the total cost of
self-funded plans and self-funded non-Federal
governmental plans that will receive a generic
comparative analysis from issuers, TPAs, or service
providers and will then customize it (found in
Table 3) in the first year and subsequent years,
creating a 3-year average cost, and then multiplying
the 3-year average cost by 10 percent.
350 The Departments estimate the 10-percentagepoint incremental cost in the lower bound by
adding the total lower bound cost of self-funded
plans and self-funded non-Federal governmental
plans that will initially receive a generic
comparative analysis from issuers, TPAs, or service
providers and will then customize it (found in
Table 4) and then multiplying the sum by 10
percent.
351 The Departments estimate the 10-percentagepoint incremental cost in the upper bound adding
the total upper bound cost of self-funded plans and
self-funded non-Federal governmental plans that
will initially receive a generic comparative analysis
from issuers, TPAs, or service providers and will
then customize it (found in Table 4) and then
multiplying the sum by 10 percent.
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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.
Under these final rules, plans and
issuers are required to collect and
evaluate relevant data in a manner
reasonably designed to assess the
impact of the NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits.
In addition, these final rules require
plans and issuers to determine whether
the relevant data reflect material
differences in access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits
and take reasonable action, as necessary
to address such differences to ensure
compliance, in operation, with 26 CFR
54.9812–1(c)(4), 29 CFR 2590.712(c)(4),
and 45 CFR 146.136(c)(4). Relevant data
for all NQTLs could include, as
appropriate, but are not limited to, the
number and percentage of claims
denials and any other data relevant to
the NQTL required by State law or
private accreditation standards.
Additionally, for NQTLs related to
network composition, relevant data
could include, as appropriate, but are
not limited to, in-network and out-ofnetwork 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 (for
comparable services and as
benchmarked to a reference standard).
The proposed rules would have
required plans and issuers to apply the
proposed mathematical substantially all
and predominant tests to each NQTL
applicable to mental health or substance
use disorder benefits and medical/
surgical benefits. As discussed earlier in
this preamble, the Departments decline
to finalize the proposed mathematical
tests for applying the substantially all
and predominant tests in these final
rules. However, plans and issuers are
required to collect and evaluate relevant
data for NQTLs applicable to mental
health and substance use disorder
benefits and medical/surgical benefits
under these final rules. For NQTLs
related to network composition, plans
and issuers must collect and evaluate
relevant data in a manner reasonably
designed to assess the aggregate impact
of all such NQTLs on relevant outcomes
related to access to mental health and
substance use disorder benefits and
medical/surgical benefits. Under these
final rules, the Departments may specify
the type, form, and manner for the
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relevant data evaluation requirement in
future guidance, but for some plans and
issuers already subject to existing data
requirements under MHPAEA, Federal
transparency rules,352 and State law and
private accreditation standards, some of
the additional data burden associated
with this rulemaking will be mitigated.
These final rules could cause plans
and issuers to revise their policies and
procedures to remove or modify NQTLs
in response to the Departments’
clarifications and examples.
Requirements such as covering
meaningful benefits for mental health
conditions and substance use disorders
(determined in comparison to the
benefits provided for medical
conditions and surgical procedures);
assessing whether the relevant data
evaluated suggest that the NQTL
contributes to material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits; and not using
or taking the steps necessary to correct,
cure, or supplement the information,
evidence, sources, or standards used to
inform a factor or evidentiary standard
that would have been biased or not
objective in the absence of such steps
could also cause plans and issuers to
revise their policies and procedures.
For example, a 2016 study examined
how private health plans responded to
the 2010 interim final rules
implementing MHPAEA and found that
the majority of plans had eliminated
quantitative treatment limitations
referred to as ‘‘special annual limits’’
related to behavioral health treatments.
The percentage of health insurance
products with such 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 such
limits on substance use disorder
treatments (from 26 percent in 2009 to
3 percent in 2010).353 A 2019 study of
claims data from both a pre-parity
(January 2005 through December 2010)
and post-parity period (January 2011
through September 2015), found that
while MHPAEA did not appreciably
increase the share of participants
utilizing any outpatient mental health
services, it did increase the frequency of
use and total utilization of outpatient
mental health and substance use
352 85
FR 72158 (Nov. 12, 2020).
M. Horgan, Dominic Hodgkin,
Maureen T. Stewart, Amity Quinn, Elizabeth L.
Merrick, Sharon Reif, Deborah W. Garnick, &
Timothy B. Creedon, Health Plans’ Early Response
to Federal Parity Legislation for Mental Health and
Addiction Services, 67(2) Psychiatric Services pp.
162–168 (2016).
353 Constance
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disorder services of participants already
receiving these services.354
Plans and issuers could incur costs to
implement changes associated with
revising coverage and plan provisions to
ensure that they comply with the
requirements of these final rules or
ceasing the imposition of an NQTL as
directed by the Departments or an
applicable State authority after a final
determination of noncompliance under
Code section 9812(a)(8), ERISA section
712(a)(8), or PHS Act section 2726(a)(8),
or 26 CFR 54.9812–2, 29 CFR 2590.712–
1, or 45 CFR 146.137, which might
result in increased costs from expanded
utilization of mental health and
substance use disorder services. Recent
data suggests that mental health and
substance use disorder services account
for a small portion of total health care
expenditures, representing just 8.4
percent of all expenses in 2021 for
individuals with private insurance.355
The Departments face uncertainty in
quantifying these costs and did not
receive public comments containing
data or information to inform these
estimates. As such, the Departments
cannot estimate the potential increase in
utilization and which services might see
the largest increase in utilization.
8.3.1. Mitigation in Utilization Costs
From Telehealth Expansion
As discussed in section 2 of this
regulatory impact analysis, individuals
seeking mental health or substance use
disorder treatment often face barriers
preventing them from accessing care,
such as inadequate networks. Telehealth
is one method of care that has the
potential to improve access to treatment
for mental health conditions or
substance use disorders, particularly as
research has documented that it can be
as effective as in-person treatment,356
354 Norah Mulvaney-Day, Brent J. Gibbons, Shums
Alikhan, & Mustafa Karakus, Mental Health Parity
and Addiction Equity Act and the Use of Outpatient
Behavioral Health Services in the United States,
2005–2016, 109(S3) Am J Public Health pp. S190–
S196 (2019).
355 Agency for Healthcare Research and Quality,
Medical Expenditure Panel Survey, Total
Expenditures ($) in Millions by Condition, United
States, 2016 to 2021, https://datatools.ahrq.gov/
meps-hc?tab=medical-conditions&dash=17.
356 For example, the following studies found that
telehealth treatment was as effective as in-person
treatment:
David Turgoose, Rachel Ashwick, & Dominic
Murphy, Systematic Review of Lessons Learned
from Delivering Tele-therapy to Veterans with Posttraumatic Stress Disorder, 24(9) Journal of
Telemedicine and Telecare pp. 575–585 (2018);
Nyssa Z. Bulkes, Kaley Davis, Brian Kay, & Bradley
C. Riemann, Comparing Efficacy of Telehealth to InPerson Mental Health Care in Intensive-TreatmentSeeking Adults, 145 Journal of Psychiatric Research
pp. 347–352 (2022); Jaime Moreno-Chaparro, Eliana
I. Parra Esquivel, Angy Lucia Santos Quintero,
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particularly when the treatment is
provided through video instead of
audio-only.357 These final rules require
plans and issuers to collect and evaluate
relevant data and, where the relevant
data suggest that the NQTL contributes
to material differences in access to
mental health and substance use
disorder benefits as compared to
medical/surgical benefits in a
classification, to take reasonable action,
as necessary, to address the material
differences to ensure compliance, in
operation, with 26 CFR 54.9812–1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4). One potential reasonable
action a plan or issuer could take to
address material differences in access
with respect to relevant data for NQTLs
related to network composition may
include expanding the availability of
telehealth arrangements to mitigate any
overall mental health and substance use
disorder provider shortages in a
geographic area.
The COVID–19 pandemic sparked
increased demand for health care
services, including behavioral health
services delivered remotely. While in
February 2020 telehealth claims
accounted for only around 1 percent of
claims pertaining to mental health or
substance use disorder benefits, by
April 2020 they accounted for over 50
percent of the claims and still accounted
for approximately 40 percent of claims
at the end of 2021.358 The expansion
Laura Paez, Sandra Martinez Quinto, Bayron
Esteven Rojas Barrios, Juan Felipe Samudio, & Karol
Madeline Romero Villareal, Telehealth
Interventions Aimed at Parents and Caregivers of
Children Living in Rural Settings: A Systematic
Review, Child Care in Practice pp. 1–24 (2022); Lori
Uscher-Pines, Lauren E. Riedel, Ateev Mehrotra,
Sherri Rose, Alisa B. Busch, & Haiden A. Huskamp,
Many Clinicians Implement Digital Equity
Strategies to Treat Opioid Use Disorder: Study
Examines Clinicians’ Use of Telehealth and Digital
Equity Strategies to Treat Opioid Use Disorder,
42(2) Health Affairs pp. 182–186 (2023).
357 Some studies have found that a majority of
clinicians and patients do not prefer audio-only
telehealth to in-person care, implying that many of
the benefits tied to telehealth are specifically for
telehealth with video. For example:
Lori Uscher-Pines, Lauren E. Riedel, Ateev
Mehrotra, Sherri Rose, Alisa B. Busch, & Haiden A.
Huskamp, Many Clinicians Implement Digital
Equity Strategies to Treat Opioid Use Disorder:
Study Examines Clinicians’ Use of Telehealth and
Digital Equity Strategies to Treat Opioid Use
Disorder, 42(2) Health Affairs pp. 182–186 (2023);
Gillian K. SteelFisher, Caitlin L. McMurtry, Hannah
Caporello, Keri M. Lubell, Lisa M. Koonin, Antonio
J. Neri, Eran N. Ben-Porath, Ateev Mehrotra, Ericka
McGowan, Laura C. Espino, & Michael L. Barnett,
Video Telemedicine Experiences in COVID–19 Were
Positive, but Physicians and Patients Prefer InPerson Care for The Future: Study Examines Patient
and Physician Opinion of Telemedicine
Experiences During COVID–19, 42(4) Health Affairs
pp. 575–584 (2023).
358 Norah Mulvaney-Day, David Dean, Jr., Kay
Miller, & Jessica Camacho-Cook, Trends in Use of
Telehealth for Behavioral Health Care During the
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was significantly aided by the
Departments issuing guidance providing
time-limited Federal flexibilities for
private health plans to expand access to
telehealth, which specifically included
coverage of treatment for mental health
conditions and substance use disorders.
These Federal flexibilities included
‘‘allowing midyear plan design changes
to increase telehealth coverage,’’
‘‘allowing certain employers to offer
coverage only for services provided via
telehealth and other remote care
services,’’ and ‘‘allowing telehealth
coverage pre-deductible’’ for
catastrophic plans and for health
savings account-qualified high
deductible health plans.359
While the COVID–19 PHE ended on
May 11, 2023,360 many of the telehealth
flexibilities it allowed were extended
under the CAA, 2023 through December
31, 2024.361 Additionally, Medicare has
permanently adopted policies allowing
patients to receive behavioral and
mental care through telehealth within
their homes,362 and a survey of States
indicated that, for Medicaid, ‘‘all or
most expansions of behavior health
providers and/or services allowed for
telehealth would be maintained after the
public emergency.’’ 363 For private
plans, access to telehealth for mental
health and substance use disorder care
will depend on plan design.
By nature, telehealth makes accessing
treatment for mental health conditions
and substance use disorders more
convenient for many patients,
particularly for those who do not have
the ability, time, or means to travel to
an appointment or who need care from
a provider that specializes in a
particular treatment that is not available
in their geographic area. Despite
observing similar levels of mental
COVID–19 Pandemic: Considerations for Payers
and Employers, 36(7) American Journal of Health
Promotion pp. 1237–1241 (2022).
359 Congressional Research Service, Federal
Telehealth Flexibilities in Private Health Insurance
During the COVID–19 Public Health Emergency: In
Brief (2023), https://crsreports.congress.gov/
product/pdf/R/R47424.
360 Executive Office of the President, Statement of
Administration Policy (Jan. 30, 2023), https://
www.whitehouse.gov/wp-content/uploads/2023/01/
SAP-H.R.-382-H.J.-Res.-7.pdf.
361 Public Law 117–328 (Dec. 29, 2022).
362 HHS, Telehealth Policy Changes After the
COVID–19 Public Health Emergency (Dec. 19,
2023), https://telehealth.hhs.gov/providers/
telehealth-policy/policy-changes-after-the-covid-19public-health-emergency#temporary-medicarechanges-through-december-31,-2024.
363 Madeline Guth, Telehealth Delivery of
Behavioral Health Care in Medicaid: Findings from
a Survey of State Medicaid Programs, KFF (Jan.
2023), https://www.kff.org/mental-health/issuebrief/telehealth-delivery-of-behavioral-health-carein-medicaid-findings-from-a-survey-of-statemedicaid-programs/.
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illness and psychiatric disorders in
urban residents, one research paper
remarked that rural residents face
‘‘challenges accessing care systems due
to geographic isolation, reduced access
to and engagement with appropriate
providers, lower socioeconomic status,
generally lower levels of educational
attainment, as well as reluctance to seek
help due to discrimination and
stigma.’’ 364 An analysis of 2021
outpatient visits reported that 55
percent of patients in rural areas relied
on telehealth for outpatient mental
health and substance use services
compared to 35 percent in urban
areas.365 Given that 73.3 million people
in the United States live in a geographic
area designated as a mental health
professional shortage area, of which
24.4 million resided in a rural area,
telehealth is likely to continue to be a
necessary means to offset provider
network limitations in these areas.366
As with rural populations, many
underserved racial, ethnic, cultural
minorities, and individuals with
disabilities face barriers to receiving
treatment for mental health conditions
and substance use disorders. These
barriers may include language, stigma,
or finding a therapist that understands
their situation. While important in
many areas of health care, many
underserved populations prefer to
receive treatment for mental health
conditions and substance use disorders
specifically from a provider with an
understanding of their cultural
background. A 2022 study found that
there was an overall increase in the use
and willingness to use video telehealth
during the pandemic, with the highest
levels of increase being seen among
Black adults and adults with lower
educational attainment. Certain
communities became more willing to
use telehealth, since many patients had
their first telehealth experience with
their trusted health care provider during
the pandemic and their positive
364 Dawn A. Morales, Crystal L. Barksdale, &
Andrea C. Beckel-Mitchener, A Call to Action to
Address Rural Mental Health Disparities, 4 Journal
of Clinical and Translational Science pp. 463–467
(2020).
365 Justin Lo, Matthew Rae, Krutika Amin,
Cynthia Cox, Nirmita Panchal, & Benjamin F.
Miller, Telehealth Has Played an Outsized Role
Meeting Mental Health Needs During the COVID–
19 Pandemic, KFF Issue Brief (Mar. 15, 2022),
https://www.kff.org/mental-health/issue-brief/
telehealth-has-played-an-outsized-role-meetingmental-health-needs-during-the-covid-19pandemic/.
366 HHS, Health Resources and Services
Administration, Bureau of Health Workforce,
Designated Health Professional Shortage Areas:
Second Quarter of Fiscal year 2024 Designated
HPSA Quarterly Summary (Mar. 2024), https://
data.hrsa.gov/Default/GenerateHPSAQuarterly
Report.
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experiences eliminated their concerns
with telehealth, such as concerns
related to privacy or to the level of
engagement of a provider through
telehealth.367
In addition to expanding access,
telehealth has also been found to
improve the retention of patients
receiving mental health and substance
use disorder care. A 2023 retrospective
cohort study of treatment-seeking
patients enrolled in a substance use
disorder treatment program in Ohio
found that ‘‘[p]atients who received
services through telehealth with video
in the initial 14 days of diagnosis had
a lower hazard of dropout, compared to
patients receiving solely in-person
services.’’ Moreover, when compared to
in-person care, patients receiving
services through either video or
telephone were more likely to have
higher treatment engagement, which
was defined as ‘‘initiating treatment and
completing at least two treatment visits
within 34 days of the initiation
visit.’’ 368
Research has demonstrated that
telehealth for medical appointments
saves patients time and money.369 A
2021 study focused specifically on the
travel cost savings associated with using
tele-mental health services in a pediatric
outpatient psychology clinic. The study
found that patients experienced a
median of 132 miles saved by not
travelling to an in-person session, which
translated to a median 3.5 hours saved
not travelling to an in-person session
and a median cost savings of $22 per
session over the course of the telehealth
treatment.370 The benefits of telehealth
367 Shira H. Fischer, Zachary Predmore, Elizabeth
Roth, Lori Uscher-Pines, Matthew Baird, & Joshua
Breslau, Use of and Willingness to Use Video
Telehealth Through the COVID–19 Pandemic:
Study Examines the Use of and the Willingness to
Use Video Telehealth During the COVID–19
Pandemic, 41(11) Health Affairs pp. 1645–1651
(2022).
368 Danielle M. Gainer, Celeste Wong, Jared A.
Embree, Nina Sardesh, Amna Amin, & Natalie
Lester, Effects of Telehealth on Dropout and
Retention in Care Among Treatment-Seeking
Individuals with Substance Use Disorder: A
Retrospective Cohort Study, 58(4) Substance Use &
Misuse pp. 481–490 (2023).
369 Studies finding that telehealth has decreased
travel expenses include: Josephine C. Jacobs, Jiaqi
Hu, Cindie Slightam, Amy Gregory, & Donna M.
Zulman, Virtual Savings: Patient-Reported Time
and Money Savings from a VA National Telehealth
Tablet Initiative, 26(8) Telemedicine and e-Health
1178–1183 (2020); Navjit W. Dullet, Estella M.
Geraghty, Taylor Kaufman, Jamie L. Kissee, Jesse
King, Madan Dharmar, Anthony C. Smith, & James
P. Marci, Impact of a University-Based Outpatient
Telemedicine Program on Time Savings, Travel
Costs, and Environmental Pollutants, 20(4) Value in
Health pp. 542–546 (2017).
370 William S. Frye, Lauren Gardner, & Jazmine S.
Mateus, Utilising Telemental Health in a Paediatric
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are particularly relevant for mental
health and substance use disorder
treatment because treatment often
requires frequent sessions or
appointments.
It is important to note that, while
telehealth may improve access, it is not
a perfect solution. For instance, it has
limitations in certain segments of the
population, such as individuals with
limited English proficiency 371 or
without access to computers or the
internet.372 Additionally, many
individuals may prefer in-person care
over telehealth. A survey published in
2023 showed that while patients have
differing preferences for in-person care
or telehealth, many are not able to find
care that fits their preferences. Of the
respondents receiving therapy, less than
half were able to select whether they
received in-person care or telehealth.373
Further, interviews conducted with
respondents found that while many
patients appreciate the convenience of
telehealth, others expressed concern
about the rapport between the patient
and provider during telehealth. The
authors cautioned that while telehealth
is an attractive way to expand access to
mental health care for much of the
population, telehealth may not alone be
sufficient for all individuals or
conditions.374 Therefore, while
telehealth may contribute significantly
to the alleviation of mental health and
substance use disorder provider
shortages, it may not be a viable
alternative for everyone.
8.4. New Regulations (26 CFR 54.9812–
2, 29 CFR 2590.712–1, and 45 CFR
146.137 and 146.180)
These final rules set forth content
requirements for comparative analyses
Outpatient Psychology Clinic: Therapeutic Alliance
and Outcomes, 22(2) Counselling and
Psychotherapy Research pp. 322–330 (2022).
371 Jorge A. Rodriguez, Altaf Saadi, Lee H.
Schwamm, David W. Bates, & Lipika Sama,
Disparities in Telehealth Use Among California
Patients with Limited English Proficiency, 40(3)
Health Affairs pp. 487–495 (2021).
372 United States Census Bureau, Computer and
internet Use in the United States: 2018 (2021),
https://www.census.gov/newsroom/press-releases/
2021/computer-internet-use.html.
373 The survey found that 30.6 percent of
respondents were working with providers who only
offered in-person care or telehealth, while 24.4
percent of respondents were working with
providers who offered both modalities but chose for
the patient.
374 Jessica Sousa, Andrew Smith, Jessica Richard,
Maya Rabinowitz, Pushpa Raja, Ateev Mehrotra,
Alisa B. Busch, Haiden A. Huskamp, & Lori UscherPines, Choosing or Losing in Behavioral Health: A
Study of Patients’ Experiences Selecting Telehealth
Versus In-Person Care, 42(9) Health Affairs pp
1275–1282 (2023).
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required by the CAA, 2021 and outline
the timeframes and processes for plans
and issuers to provide their comparative
analyses to the Departments and
applicable State authorities upon
request. Under these final rules, the
Departments outlined the elements that
a comparative analysis must include for
each NQTL (in addition to the
requirements to include a written list of
all NQTLs imposed under the plan or
coverage). They include, as described in
more detail earlier in this preamble:
• A description of the NQTL,
• Identification and definition of the
factors used to design or apply the
NQTL,
• A description of how factors are
used in the design and application of
the NQTL,
• A demonstration of comparability
and stringency, as written,
• A demonstration of comparability
and stringency, in operation, and
• Findings and conclusions.
However, because these elements are
already required under the CAA, 2021,
the cost of these final rules is more
limited than the full cost of generating
a comparative analysis. For instance,
plans and issuers are already required
under the CAA, 2021 to provide a
description of the specific plan or
coverage terms or other relevant terms
regarding the NQTLs that applies to
such plan or coverage, and a description
of all the mental health and substance
use disorder benefits and medical or
surgical benefits to which each such
term applies in each respective benefit
classification.375 Similarly, plans and
issuers are already required to identify
the factors used to determine that the
NQTLs will apply to mental health or
substance use disorder benefits and
medical or surgical benefits,376 and the
evidentiary standards used for the
factors identified, when applicable,
provided that every 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 or surgical benefits.377
375 Code section 9812(a)(8)(A)(i), ERISA section
712(a)(8)(A)(i), and PHS Act section
2726(a)(8)(A)(i).
376 Code section 9812(a)(8)(A)(ii), ERISA section
712(a)(8)(A)(ii), and PHS Act section
2726(a)(8)(A)(ii).
377 Code section 9812(a)(8)(A)(iii), ERISA section
712(a)(8)(A)(iii), and PHS Act section
2726(a)(8)(A)(iii).
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Moreover, the CAA, 2021 requires that
the comparative analyses demonstrate
that the processes, strategies,
evidentiary standards, and other factors
used to apply NQTLs to mental health
and 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 or surgical benefits in the
benefits classification,378 as well as 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.379
In their comparative analyses, plans
and issuers must describe each NQTL
and identify and define all the factors
and evidentiary standards used to
design or apply the NQTL. The plan or
issuer also must describe how the
factors identified are used in the design
and application of the NQTL, and
evaluate whether 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 with respect to
medical/surgical benefits, both as
written and in operation. The
explanation of how the plan or issuer
evaluates compliance, in operation,
with MHPAEA must identify the
relevant data collected and evaluated,
and document the outcomes that
resulted from the application of the
NQTL to mental health or substance use
disorder benefits and medical/surgical
benefits. In limited circumstances where
relevant data is temporarily unavailable
for a newly imposed NQTL, the
comparative analysis must include a
detailed explanation of the lack of
relevant data, the basis for the plan’s or
issuer’s conclusion that there is a lack
of relevant data, and when and how the
data will become available and be
collected and analyzed. Additionally, in
rare instances where no data exists that
can reasonably assess any relevant
impact of an NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits,
the plan or issuer must provide a
reasoned justification as to the basis for
the conclusion that there are no data
that can reasonably assess the NQTL’s
378 Code section 9812(a)(8)(A)(iv), ERISA section
712(a)(8)(A)(iv), and PHS Act section
2726(a)(8)(A)(iv).
379 Code section 9812(a)(8)(A)(v), ERISA section
712(a)(8)(A)(v), and PHS Act section
2726(a)(8)(A)(v).
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impact, an explanation of why the
nature of the NQTL prevents the plan or
issuer from reasonably measuring its
impact, an explanation of what data was
considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
that the NQTL complies with MHPAEA.
In the instances where there is a
temporary data lag for a newly imposed
NQTL or no data exists that can
reasonably assess any relevant impact of
an NQTL, providing this justification for
the temporary data lag is likely to be
less expensive than the estimated
burden for doing an analysis when there
is data. However, as explained earlier in
this preamble, the Departments are of
the view that nearly all NQTLs will
have some relevant data to collect and
evaluate; therefore, the Departments
estimate the burden as if every plan and
issuer performs the data analysis.
These final rules require additional
specificity with regard to the findings
and conclusion of the comparative
analysis. While these final rules provide
specificity for how a plan or issuer must
comply with the comparative analysis
requirements, they are primarily
providing additional clarification and
requirements with respect to the
statutory content elements of a
comparative analysis outlined in the
CAA, 2021, so that plans and issuers
can perform and document sufficient
comparative analyses.
Additionally, for ERISA plans, these
final rules also require the comparative
analysis to include a certification by one
or more named fiduciaries that they
have engaged in a prudent process to
select one or more qualified service
providers to perform and document a
comparative analysis in connection with
the imposition of any NQTLs that apply
to mental health and substance use
disorder benefits under the plan in
accordance with applicable law and
regulations, and have satisfied their
duty to monitor those service providers
as required under part 4 of ERISA with
respect to the performance and
documentation of such comparative
analysis. The cost to provide the
certification is included in the cost
estimates to prepare the comparative
analysis.
In the proposed rules, the
Departments estimated that, on average,
plans would need to analyze four
separate NQTLs and issuers would need
to analyze eight NQTLs to satisfy the
comparative analysis requirements.380
380 The Departments generally identify a unique
NQTL based on whether a specific plan or issuer
has defined the NQTL using different factors or
evidentiary standards than other NQTLs. For
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77683
The Departments further estimated that
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. Once the
comparative analyses are performed and
documented, the Departments noted
that plans and 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, as well
as medical/surgical benefits. In
subsequent years, the Departments
estimated that plans and issuers 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 response to commenters’ concerns
that the Departments underestimated
the number of NQTLs that each plan or
issuer would need to provide
comparative analyses for, and that plans
and issuers would on average have the
same number of NQTLs, the Department
have revised their assumptions to 10
NQTLs for both plans and issuers.
While one commenter suggested the
average number of NQTLs should be
more than 15 at a minimum, and
another commenter noted that the
proposal and guidance referenced at
least 17 NQTLs, the Departments note
that the number of NQTLs vary by
issuer and plans and that most will not
incorporate every NQTL listed in the
proposal and the guidance (while some
plans and issuers might incorporate
others not listed). Taking into account
the Departments’ experience and
comments received, the Departments
assume 10 NQTLs but present a
sensitivity analysis using 15 NQTLs.
example, if a plan applies an identical prior
authorization requirement NQTL to four different
benefit classifications, or to four different benefit
package options in the same plan, the Departments
would consider the NQTL as just one ‘‘unique’’
NQTL, even though it is technically four separate
NQTLs. When a comparative analysis request is
sent to an issuer with identical NQTLs that apply
to many fully insured plans, the Departments
similarly count the NQTL as one unique NQTL,
even though there are technically many separate
NQTLs for the different plans. The Departments
acknowledge that if they instead counted each
NQTL separately by benefit classification, plan, and
product, irrespective of whether the NQTLs are
administered in the same way in these different
contexts, then the number of NQTLs would be
substantially larger. This distinction may explain
why the Departments’ estimate of NQTLs was lower
than that of commenters.
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The Departments assume that the
incremental costs to collect the data and
review and revise the comparative
analyses will require 60 hours per
NQTL in the first year and 12 hours per
NQTL in subsequent years. For plan
sponsors that receive a generic
comparative analysis from a TPA that
will require customizing to suit the
plan’s specific needs, the Departments
assume that it will take 30 hours per
NQTL in the first year and 6 hours per
NQTL in subsequent years. While plans
and issuers can use other professionals
to fulfill their requirements, for
purposes of developing the wage
estimate, the Departments assume that it
will take a team of data analysts,
actuaries, and attorneys to collect the
data and prepare the comparative
analyses, and have estimated a
composite wage rate of $167.48.381 See
Table 5 for calculations and burden
totals.
The Departments conducted a
sensitivity analysis of the assumption
that plans and issuers would each
analyze 10 NQTLs. If the Departments
assume that plans and issuers analyze
15 NQTLs, the cost burden would
increase by $328.1 million in the first
year and $65.6 million in the
subsequent years, resulting in a 3-year
average cost increase of $153.1 million.
TABLE 5—INCREMENTAL COST TO FULFILL THE DATA REQUIREMENTS AND PREPARE THE COMPARATIVE ANALYSES
Number of
entities
Number of
NQTLs
per entity
Number of
hours per
NQTL for
data and
comparative
analysis
Total hour
burden
Hourly
wage
Cost
(A)
(B)
(C)
(A × B × C)
(D)
(A × B × C × D)
First Year
Issuers (health insurance company/State combinations) .............................
TPAs ..............................................................................................................
Self-funded plans with more than 500 participants that will conduct the
comparative analysis themselves ..............................................................
Self-funded plans with more than 500 participants that will receive generic
comparative analyses from TPAs or service providers, and will then
customize it ................................................................................................
Self-funded non-Federal governmental plans with more than 500 participants that will conduct the comparative analysis themselves ..................
Self-funded non-Federal governmental plans with more than 500 participants that will initially receive generic comparative analyses from TPAs
or service providers, and will then customize it ........................................
Plan MEWAs that are not fully insured .........................................................
Non-plan MEWAs that are not fully insured .................................................
1,467
205
10
10
60
60
880,200
123,000
$167.48
167.48
$147,415,896
20,600,040
709
10
60
425,400
167.48
71,245,992
4,076
10
30
1,222,800
167.48
204,794,544
505
10
60
303,000
167.48
50,746,440
2,906
132
21
10
10
10
30
60
60
871,800
79,200
12,600
167.48
167.48
167.48
146,009,064
13,264,416
2,110,248
First-year Total .......................................................................................
10,021
....................
....................
3,918,000
..............
656,186,640
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Subsequent Years
Issuers (health insurance company/State combinations) .............................
TPAs ..............................................................................................................
Self-funded plans with more than 500 participants that will conduct the
comparative analysis themselves ..............................................................
Self-funded plans with more than 500 participants that will receive generic
comparative analyses from TPAs or service providers, and will then
customize it ................................................................................................
Self-funded non-Federal governmental plans with more than 500 participants that will conduct the comparative analysis themselves ..................
Self-funded non-Federal governmental plans with more than 500 participants that will initially receive generic comparative analyses from TPAs
or service providers, and will then customize it ........................................
Plan MEWAs that are not fully insured .........................................................
Non-plan MEWAs that are not fully insured .................................................
1,467
205
10
10
12
12
176,040
24,600
167.48
167.48
29,483,179
4,120,008
709
10
12
85,080
167.48
14,249,198
4,076
10
6
244,560
167.48
40,958,909
505
10
12
60,600
167.48
10,149,288
2,906
132
21
10
10
10
6
12
6
174,360
15,840
2,520
167.48
167.48
167.48
29,201,813
2,652,883
422,050
Subsequent Years Total ........................................................................
10,021
....................
....................
783,600
..............
131,237,328
Total (3-year average) ....................................................................
10,021
....................
....................
1,828,400
..............
306,220,432
Additionally, plans and issuers must
make the comparative analyses and
other applicable information required
by the CAA, 2021 available upon
request to participants, beneficiaries,
and enrollees in all non-grandfathered
group health plans and nongrandfathered group or individual
health insurance coverage (including a
provider or other person acting as a
participant’s, beneficiary’s, or enrollee’s
authorized representative) in connection
with an adverse benefit determination,
as well as to participants and
beneficiaries in plans subject to ERISA.
The Departments estimate that on
average each plan or issuer will receive
one request annually and that plans and
issuers will annually incur a burden of
5 minutes for a clerical worker to
prepare and send the comparative
analyses to each requesting participant
or beneficiary. The Departments
received comments suggesting that this
381 The wage rate of an attorney, actuary, and data
analyst is, respectively, $165.71, $177.11, and
$159.61. (Internal DOL calculation based on 2024
labor cost data. For a description of DOL’s
methodology for calculating wage rates, see EBSA,
Labor Cost Inputs Used in the Employee Benefits
Security Administration, Office of Policy and
Research’s Regulatory Impact Analyses and
Paperwork Reduction Act Burden Calculations
(June 2019), https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/rules-and-regulations/
technical-appendices/labor-cost-inputs-used-in-
ebsa-opr-ria-and-pra-burden-calculations-june2019.pdf.) The composite wage rate is estimated in
the following manner: [$165.71 × (1 ÷ 3) + $159.61
× (1 ÷ 3) × $177.61 × (1 ÷ 3) = $167.48].
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underestimated the demand for these
analyses as well as the cost to produce
them. However, after reviewing data on
the number of appealed mental health
or substance use disorder claims per
year, which serves as a proxy for when
participants or beneficiaries would
request an analysis, the Departments are
of the view that this estimate is
appropriate. Moreover, because plans
and issuers are already responsible for
preparing these analyses, the only cost
associated with providing them are the
clerical ones outlined earlier in this
preamble. See Table 6 for calculations
and burdens totaling the cost to prepare
the analysis.382
TABLE 6—COSTS TO PREPARE THE COMPARATIVE ANALYSIS UPON PARTICIPANT REQUEST
Number of
entities
Number of
NQTLs per
entity
Number of
hours per
NQTL
Total hour
burden
Hourly
wage
Cost
(A)
(B)
(C)
(A × B × C)
(D)
(A × B × C × D)
Issuers (health insurance company/State combinations) .............................
ERISA-covered group health plans ..............................................................
Non-Federal governmental plans ..................................................................
Plan MEWAs that are not fully insured .........................................................
Non-plan MEWAs that are not fully insured .................................................
1,467
2,129,516
90,887
132
21
1
1
1
1
1
0.0833
0.0833
0.0833
0.0833
0.0833
122
177,460
7,574
11
2
$65.99
65.99
65.99
65.99
65.99
$8,051
11,710,585
499,808
726
132
Annual Total ...........................................................................................
2,222,023
....................
....................
185,169
..............
12,219,302
The Departments further assume that
58.3 percent of requests will be
delivered electronically, resulting in a
de minimis cost.383 The remaining 41.7
percent of requests will be mailed, at a
cost of $2.79 each.384 See Table 7 for
calculations and burden totaling the
cost to distribute the analysis.
khammond on DSKJM1Z7X2PROD with RULES2
TABLE 7—COSTS TO DISTRIBUTE THE COMPARATIVE ANALYSIS UPON PARTICIPANT OR BENEFICIARY REQUEST
Number of
entities
Estimated
page length
Paper and
printing cost
(per page)
Mailing
cost
Cost
(A)
(B)
(C)
(D)
[(A × B × C) + (A × D)]
× 41.7 percent
Issuers (health insurance company/State combinations) .....................................
ERISA-covered Group Health Plans .....................................................................
Non-Federal Governmental Plans ........................................................................
Plan MEWAs that are not fully insured .................................................................
Non-plan MEWAs that are not fully insured .........................................................
1,467
2,129,516
90,887
132
21
15
15
15
15
15
$0.05
0.05
0.05
0.05
0.05
$2.04
2.04
2.04
2.04
2.04
$1,603
2,326,581
105,741
144
23
Annual Total ...................................................................................................
2,222,023
......................
........................
..............
2,585,169
382 In Table 6, the number of ERISA-covered
group health plans is calculated in the following
manner: 410,581 ERISA-covered group health plans
with 50 or more participants + 1,718,935 ERISAcovered fully insured, non-grandfathered plans
with less than 50 participants = 2,129,516.
383 According to data from the National
Telecommunications and Information Agency
(NTIA), 37.4 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
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are automatically enrolled (for a total of 31.4
percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 44.1 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 26.9 percent receiving
electronic disclosure outside of work). Combining
the 31.4 percent who will receive electronic
disclosure at work with the 26.9 percent who will
receive electronic disclosure outside of work
produces a total of 58.3 percent who will receive
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electronic disclosure overall. See Quantria
Strategies, Improving Outcomes with Electronic
Delivery of Retirement Plan Documents (June 2015),
https://www.sparkinstitute.org/content-files/
improving_outcomes_with_electronic_delivery_of_
retirement_plan_documents.pdf. See also Pew
Research Center, 51% of U.S. Adults Bank Online
(Aug. 2013), https://www.pewresearch.org/internet/
wp-content/uploads/sites/9/media/Files/Reports/
2013/PIP_OnlineBanking.pdf. See also NTIA, NTIA
Data Explorer (June 2024), https://www.ntia.gov/
data/explorer.
384 The postage for a first-class mail large
envelope is $2.04 and the material cost is $0.05 per
page. Thus, $2.04 + ($0.05 × 15 pages) = $2.79.
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Finally, these final rules require that
group health plans and health insurance
issuers offering group or individual
health insurance coverage must make
comparative analyses available upon
request to the Departments or an
applicable State authority. The CAA,
2021 requires the Departments to collect
no fewer than 20 comparative analyses
per year, but it also provides that the
Departments 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
Departments determine appropriate.
Based on prior experience and current
funding, DOL and HHS expect to each
request 20 comparative analyses each
year. To provide the Departments with
their comparative analyses and
associated documentation, the
Departments estimate, based on internal
discussion, that it will take a total of 5
hours for plans, with 1 hour for a
general or operations manager and 4
hours for a business operations
specialist. See Table 8 for calculations
and burden totals.
TABLE 8—COSTS OF PROVIDING COMPARATIVE ANALYSES FOR AUDITS
Number of
entities
Hour
burden per
entity
Total hour
burden
Hourly
wage
Cost
(A)
(B)
(A × B)
(C)
(A × B × C)
General Operations Manager (Requested by HHS) ...................................................................
Business Operations Specialist (Requested by HHS) ................................................................
General Operations Manager (Requested by DOL) ...................................................................
Business Operations Specialist (Requested by DOL) ................................................................
20
20
20
20
1
4
1
4
20
80
20
80
$137.67
114.36
137.67
114.36
$2,753
9,149
2,753
9,149
Total .....................................................................................................................................
40
....................
200
..............
23,804
In the first year, group health plans
and issuers will need time to familiarize
themselves with these final rules to
ensure that their comparative analyses
comply with all applicable
requirements. The Departments assume
that on average it will require 6.5 hours
for an attorney to review these final
rules.385 See Table 9 for calculations
and burden totals.
TABLE 9—COSTS FOR RULE FAMILIARIZATION
Number of
entities
Number of
NQTLs per
entity
Hour
burden per
entity
Total hour
burden
(A)
(B)
(C)
(A × B × C)
Hourly
wage
I
(D)
Cost
I (A × B × C × D)
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First Year
Issuers (health insurance company/State combinations) ...........................
TPAs ............................................................................................................
Self-funded plans with more than 500 participants that will conduct the
comparative analysis themselves ............................................................
Self-funded plans with more than 500 participants that will receive generic comparative analyses from TPAs or service providers, and will
then customize it .....................................................................................
Self-funded non-Federal governmental plans with more than 500 participants that will conduct the comparative analysis themselves ................
Self-funded non-Federal governmental plans with more than 500 participants that will initially receive generic comparative analyses from TPAs
or service providers, and will then customize it ......................................
Plan MEWAs that are not fully insured .......................................................
Non-plan MEWAs that are not fully insured ...............................................
1,467
205
1
1
6.5
6.5
9,536
1,333
$165.71
165.71
$1,580,211
220,891
709
1
6.5
4,609
165.71
763,757
4,076
1
6.5
26,494
165.71
4,390,321
505
1
6.5
3,283
165.71
544,026
2,906
132
21
1
1
1
6.5
6.5
6.5
18,889
858
137
165.71
165.71
165.71
3,130,096
142,179
22,702
First-year Total .....................................................................................
10,021
....................
....................
65,139
................
10,794,184
According to the 2022 National
Health Expenditure Data, the total
contribution of private employers to
health insurance premiums is $592.2
billion. The total contribution of State
and local employers to health insurance
premiums is $194.5 billion.386 The total
health expenditure on the individual
market is $93.9 billion.387 In the first
year, the cost to comply with these final
rules is estimated to be approximately
$681.8 million,388 which represents 0.08
percent of total premiums in these
markets. In subsequent years, the cost to
comply with these final rules is
estimated to be approximately $146.1
million,389 which represents 0.02
385 The reading time is calculated based on an
average 250 words per minute reading rate.
386 CMS, National Health Expenditure Data, NHE
Tables—Table 24, https://www.cms.gov/ResearchStatistics-Data-and-Systems/Statistics-Trends-andReports/NationalHealthExpendData/national
healthaccountshistorical.
387 CMS, National Health Expenditure Data, NHE
Tables—Table 21, https://www.cms.gov/ResearchStatistics-Data-and-Systems/Statistics-Trends-and-
Reports/NationalHealthExpendData/
nationalhealthaccountshistorical.
388 The cost is estimated as follows: $656.2
million for collecting the data and preparing the
comparative analyses + $10.8 million for reviewing
the final rules and amendments + $12.2 million to
prepare the comparative analyses upon request of
participants and beneficiaries + $2.6 million to
distribute the comparative analyses to participants
and beneficiaries + $0.02 million for audit of
comparative analyses = $681.8 million.
389 The cost is estimated as follows: $131.2
million for collecting the data and preparing the
comparative analyses + $12.2 million for preparing
the comparative analyses upon request of
participants and beneficiaries + $2.6 million to
distribute the comparative analyses to participants
and beneficiaries + $0.02 million for audit of
comparative analyses = $146.1 million.
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percent of total premiums in these
markets.
In the proposed rules, HHS assumed
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 offered
mental health and substance use
disorder benefits, but that many of these
plans might not be complying with
MHPAEA. HHS assumed that plans
would incur costs to come into
compliance and noted that, in
particular, some plans might 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. HHS also noted
that plans that have opted out of
requirements under MHPAEA would
also need to conduct NQTL comparative
analyses if they were not already doing
so. HHS solicited comments on the
potential costs to these plans to come
into compliance with MHPAEA.
Although the Departments received
comments on the potential
underestimation of costs related to
NQTL comparative analysis
requirements (refer to section IV.8.1 of
this regulatory impact analysis for
further discussion), HHS did not receive
any comments specific to the costs
associated with coming into compliance
for self-funded non-Federal
governmental plans. As such, HHS is
unable to estimate the 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 are expected to
vary from plan to plan.
HHS estimates that the regulatory
amendments to implement a provision
of the CAA, 2023 that sunsets the
election option for sponsors of selffunded non-Federal governmental plans
to opt out of requirements under
MHPAEA eliminates the need for
sponsors to submit a notice to the
Federal Government regarding their
plan’s opt-out election, as long as the
sponsors do not elect to permissibly opt
out of other requirements. HHS
estimates that sponsors of 185 plans will
no longer submit a notice to the Federal
Government regarding their plan’s optout election. This is estimated to
generate a total cost savings of
approximately $11,783 for plans (as
discussed later in section V.2.5 of the
Paperwork Reduction Act analysis for
HHS), and cost savings of approximately
$5,200 for the Federal Government as
HHS will no longer have to process the
opt-out notices previously submitted by
these plans.
8.5. Illustration of Cost Increases for
Plans and Issuers
As discussed in the benefits section,
the Departments estimate that the final
rules will increase access and
subsequently the utilization or
frequency of use of behavioral health
services. The Departments also
recognize that increased service
utilization will likely increase costs for
plans. These costs will likely differ
significantly by the type of condition
and the type of treatment. The analysis
77687
that follows provides an illustration of
potential increases in costs for plans
associated with depression and
substance use disorder treatments.
Increasing access to mental health
services is estimated to result in a
significant reduction in suicides, as
enumerated in section IV.7.2. While
many mental health conditions and
substance use disorders may increase
the risk of suicide, suicide itself is an
outcome that may or may not be tied
directly to mental health conditions or
substance use disorders. As such, it is
difficult to directly tie the decrease in
suicides discussed in section IV.7.2 to
increased costs.
However, the most common mental
health condition among those who
attempt suicide, as well as one of the
most highly prevalent mental health
conditions in the United States, is
depressive disorder.390 391 Research
indicates that individuals with major
depressive disorder are at an elevated
risk of suicide and that approximately
two-thirds have contemplated
suicide.392 Furthermore, major
depressive disorder was the most
common comorbid condition in a study
of U.S. suicides, followed by substance
use disorder.393 Individuals with major
depressive disorder and another
comorbid condition (such as a substance
use disorder or anxiety disorder) are at
even greater risk of suicide.394 Data from
the 2022 NSDUH indicates that
approximately 8 percent of individuals
who have private health insurance
experienced a major depressive episode
in the past year, of whom 64 percent
received treatment for depression.395
TABLE 10—NUMBER OF PEOPLE DIAGNOSED WITH A MAJOR DEPRESSIVE EPISODE IN THE PAST YEAR
2021
Total:
All Ages ................................................................................................................................................
With Private Health Insurance ..............................................................................................................
Receiving Treatment for Depression:
All Ages ................................................................................................................................................
With Private Health Insurance ..............................................................................................................
Not Receiving Treatment for Depression:
All Ages ................................................................................................................................................
With Private Health Insurance ..............................................................................................................
2022
21,553,000
11,750,000
22,475,000
12,551,000
12,932,000
7,540,000
14,088,000
8,240,000
8,621,000
4,210,000
8,387,000
4,311,000
khammond on DSKJM1Z7X2PROD with RULES2
SAMHSA, 2022 National Survey on Drug Use and Health (Nov. 2023), https://www.samhsa.gov/data/report/2022-nsduh-detailed-tables.
As discussed in Section 6.1.3,
MHPAEA has been found to have mixed
effects on the utilization of mental
health services. A 2019 study found
that, outside of substance use disorder,
MHPAEA was not associated with an
390 Jan Fawcett, The Neurological Basis of Suicide
(2012).
391 Ronald C. Kessler, Patricia Berglund, Olga
Demler, Robert Jin, Kathleen R. Merikangas, & Ellen
E. Walters, Lifetime Prevalence and Age-of-Onset
Distributions of DSM–IV Disorders in the National
Comorbidity Survey Replication, 62(6) Arch Gen
Psychiatry pp. 593–602 (2005).
392 Navneet Bains & Sara Abdijadid, Major
Depressive Disorder (2023).
393 Ian Rockett, Rockett, Ian RH, Shuhui Wang,
Yinjuan Lian, & Steven Stack, Suicide-Associated
Comorbidity Among US Males and Females: A
Multiple Cause-of-Death Analysis, 13(5) Injury
Prevention pp. 311–315 (2007).
394 Navneet Bains & Sara Abdijadid, Major
Depressive Disorder (2023).
395 SAMHSA, 2022 National Survey on Drug Use
and Health (Nov. 2023), https://www.samhsa.gov/
data/report/2022-nsduh-detailed-tables.
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Federal Register / Vol. 89, No. 184 / Monday, September 23, 2024 / Rules and Regulations
increase in new utilization of behavioral
healthcare. However, the authors did
find an increase in the average
frequency of monthly outpatient
services per user.396 Critically,
increased frequency of mental health
and OUD treatment utilization have
both been associated with decreasing
risks of mortality from suicide and
OUD.397 398
The 2019 study also found that the
average insurer cost for members
receiving treatment increased following
the passage of MHPAEA. According to
the study, in September 2015, the last
month of data considered, MHPAEA
was associated with an average insurer
cost increase of $16.17 for each member
receiving treatment for mental health
per month.399
For the purposes of this analysis, it is
helpful to consider this measurement in
terms of the increased cost per member
with depression, regardless of treatment
status. To estimate a per-member cost,
regardless of treatment status, the
Departments scaled the estimate by the
proportion of individuals who had a
major depressive episode in 2015, with
private insurance, and who received
treatment for depression. Applying
these assumptions, the Departments
estimate that in 2015, MHPAEA was
associated with a $11.15 increase in
average monthly insurer spending per
member with depression.400
The Departments do not have data on
per-member per-month costs associated
with a major depressive illness alone.
Based on a 2018 Milliman report, the
Departments estimate that the 2015 permember per-month behavioral
healthcare cost 401—including
behavioral inpatient, outpatient,
professional, and prescription drug
costs—was $225.10 for someone with a
serious and persistent mental illness
and $116.59 on average for someone
with any mental illness.402 Milliman
defines a serious and persistent mental
illness as someone treated for bipolar
disorder, major depression, paranoid
and other psychotic disorder, or
schizoaffective disorder. As costs to
treat bipolar disorder, psychotic
disorder, and schizoaffective disorder
are likely higher than costs to treat
major depression, on average, the
Departments are of the view that the
per-member per-month costs represent
an overestimate for costs to treat major
depression. Similarly, the Departments
expect that the per-member per-month
costs to treatment someone with any
396 Noah Mulvaney-Day, Brent Gibbons, Shums
Alikhan, & Mustafa Karakus, Mental Health Parity
and Addiction Equity Act and the Use of Outpatient
Behavioral Health Services in the United States,
2005–2016, 109(3) American Journal of Public
Health pp. 190–196 (2019).
397 Brian K. Ahmedani, Joslyn Westphal, Kirsti
Autio, Farah Elsiss, Edward L. Peterson, Arne Beck,
Beth E. Waitzfelder, Rebecca C. Rossom, Ashli A.
Owen-Smith, Frances Lynch, Christine Y. Lu,
Cathrine Frank, Deepak Prabhakar, Jordan M.
Braciszewski, Lisa R. Miller-Matero, Hsueh-Han
Yeh, Yong Hu, Riddhi Doshi, Stephen C. Waring,
& Gregory E. Simon, Variation in Patterns of Health
Care Before Suicide: A Population Case-Control
Study, 127 Prev Med. (2019), https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC6744956/.
398 Elizabeth Evans, Libo Li, Jeong Min, David
Huang, Darren Urada, Lei Liu, Yih-Ing Hser, &
Bohdan Nosyk, Mortality Among Individuals
Accessing Pharmacological Treatment for Opioid
Dependence in California, 2006—2010, 110(6)
Addiction pp. 996–1005 (2015), https://
pubmed.ncbi.nlm.nih.gov/25644938/.
399 This is calculated by applying the coefficient
estimates found in Table 2 of the study that denote
the average monthly insurer spending per service
user. The study includes 129 months of data, of
which 57 are in the post-period. For month 57, the
cost is estimated to be $86.64 absent MHPAEA and
$102.81 with the implementation of MHPAEA. The
study estimates that insurer spending per service
user will continue to increase over time. However,
this linear trend was established within the sample.
The Department hesitates to extrapolate the linear
trend outside of the sample. Additionally, the study
does not include overall significant or joint
significant tests of this regression. (See Noah
Mulvaney-Day, Brent Gibbons, Shums Alikhan, &
Mustafa Karakus, Mental Health Parity and
Addiction Equity Act and the Use of Outpatient
Behavioral Health Services in the United States,
2005–2016, 109(3) American Journal of Public
Health pp. 190–196 (2019).)
400 In 2015, 9,257,000 individuals with private
insurance had a major depressive episode, of which
6,381,000 received treatment for depression. (See
SAMHSA, Results from the 2015 National Survey
on Drug use and Health: Detailed Tables (Sept.
2016), https://www.samhsa.gov/data/sites/default/
files/NSDUH-DetTabs-2015/NSDUH-DetTabs-2015/
NSDUH-DetTabs-2015.pdf.) This represents
approximately 69 percent. As such, the
Departments estimate the per-member cost increase
as: $16.17 per member receiving treatment × 69
percent of members with depression receiving
treatment = $11.15 per member with depression
(regardless of treatment status).
401 This cost estimate is calculated from costs
incurred by both the participant and the insurer,
similar to expenditures used elsewhere in this
analysis, such as the Medical Expenditure Panel
Survey Household Component (MEPS–HC).
402 Melek (2018) uses 2015 claims data and apply
annual cost trends to estimate 2017 values. The
report states that they use an annual cost trend of
10 percent to behavioral health care and 12 percent
to behavioral prescription costs. For someone with
a serious and persistent mental illness, the report
estimates that the per-member per-month cost was
$119.00 for behavioral health care (i.e. behavioral
inpatient, outpatient, professional care) and $159.00
for behavioral prescriptions, resulting in a total cost
of $178.00. The weighted average per-member permonth cost of having any mental illness, the report
estimates a cost of $55.08 for behavioral health care
and $89.14 for behavioral prescriptions, resulting in
a total of $142.22. Discounting the behavioral health
care and behavioral prescription costs by the
respective annual cost trend, results in an estimate
of a per-member per-month cost of $225.10 for
someone with a serious and persistent mental
illness and $116.59 on average for someone with
any mental illness. (See Stephen Melek, Douglas
Norris, Jordan Paulus, Katherine Matthews,
Alexandra Weaver, & Stoddard Davenport, Potential
Economic Impact of Integrated Medical-Behavioral
Healthcare, Milliman Research Report (Jan. 2018))
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mental illness likely represent an
underestimate due to factors such as
underdiagnosis, comorbidities, and
delayed treatments. Additionally, the
per-member per-month costs may not
fully capture indirect costs or the cost
of out-of-network care, further
suggesting that the total costs of
adequately treating mental illness are
likely higher. As such, the Departments
are of the view that these two measures
create a reasonable range with regard to
major depression.
Based on this analysis, the estimated
$11.15 increase in monthly insurer
spending per-member with depression
accounts for 5.0 percent of the permember per-month costs for someone
with a serious and persistent mental
illness or 9.6 percent of the average cost
for someone with any mental illness. In
2021, total expenditures for private
insurance were $981.2 billion, while
total expenditures for private insurance
for depression were $21.0 billion.403 For
illustrative purposes, if it is assumed
that the increase in costs associated
with MHPAEA had accounted for
between 5.0 percent and 9.6 percent of
private insurance expenditures for
depression in 2021, this would account
for between $1.0 billion and $2.0 billion
of total expenditures for private
insurance for depression.404
In their estimate of benefits associated
with the prevention of suicide fatalities
and reduced mortality from the
utilization of OUD treatments, the
Departments assumed that the effect of
these final rules would be
approximately 40 percent of the initial
impact from MHPAEA. For consistency,
applying this proportion to the
estimated costs, the Departments
estimate that these final rules would be
associated with an increase cost for
treatment related to depression for
private insurers of between $0.42 billion
and $0.80 billion in 2021 dollars or
$0.43 billion and $0.84 billion in 2023
dollars.405
It is important to note that the benefits
estimated in section IV.7.2 and these
cost estimates do not necessarily
capture the same segment. The benefits
related to more frequent treatment of
depression are more expansive than the
estimated benefits in section IV.7.2 that
only focus on suicide prevention. On
the other hand, treatment for other types
403 Agency for Healthcare Research and Quality,
Total Expenditures ($) in Millions by Condition and
Source of Payment, United States, 2021, Medical
Expenditure Panel Survey.
404 This is estimated as: $21.02 billion × 5.0
percent (9.6 percent) = $1.0 billion ($2.0 billion).
405 The estimates in 2023 dollars are estimated
using the Consumer Price Index (CPI) medical care
cost.
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of mental health conditions or substance
use disorders may also contribute to the
decreased prevalence of suicides, the
cost of which is not considered in this
illustration.
Additionally, the Departments
estimate that the final rules will
increase the utilization of substance use
disorder services (specifically, OUD),
resulting in significant benefits arising
from decreased mortality related to
substance use disorders. These benefits
would arise from approximately 40,000
additional individuals receiving
treatment each year. As recent research
indicates that cost of treatment for OUD
is approximately $13,500, the
Departments estimate that the increased
service utilization for OUD would result
in an additional cost of approximately
$579 million annually.406 407 408
9. Transfers
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Achieving parity in coverage of
mental health and substance use
disorder benefits has the potential to
change the spending patterns of plans
and issuers, increase premiums and
contributions, 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 final rules
will result in:
• transfers from plans and issuers to
participants, beneficiaries, and enrollees
caused by lower out-of-pocket spending;
• transfers from participants,
beneficiaries, and enrollees to plans and
issuers caused by higher premiums; and
• transfers between primary care
providers and mental health and
substance use disorder providers for the
treatment of mental health and
substance use disorders resulting from
the anticipated shift of participants,
beneficiaries, and enrollees choosing to
obtain such treatment from a specialist
instead of a primary care provider.
406 Mengyao Li, Cora Peterson, Likang Xu,
Christina A. Mikosz, & Feijun Luo, Medical Costs
of Substance Use Disorders in the US EmployerSponsored Insurance Population, 6(1) JAMA Netw
Open (2023), https://pubmed.ncbi.nlm.nih.gov/
36692881/.
407 The OUD treatment cost estimate of $11,871
has been adjusted using the CPI for medical care
cost to 2023 dollars. See Mengyao Li, Cora Peterson,
Likang Xu, Christina A. Mikosz, & Feijun Luo,
Medical Costs of Substance Use Disorders in the US
Employer-Sponsored Insurance Population, 6(1)
JAMA Netw Open (2023), https://
pubmed.ncbi.nlm.nih.gov/36692881/.
408 $13,448 OUD treatment cost × 43,054
additional persons receiving treatment =
$578,990,192.
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The following sections are primarily
qualitative discussions of transfers that
the Departments expect to occur due to
these final rules. Where possible, the
Departments have referenced studies
with quantitative results that help
indicate the potential magnitude of
these transfers. The Departments
requested comment or data in the
proposal on how large these transfers
might be but did not receive any
comments.
9.1. Transfers From Plans and Issuers to
Participants, Beneficiaries, and
Enrollees Caused by Lower Out-ofPocket Spending
As discussed in section IV.7.2 of this
regulatory impact analysis, these final
rules are expected to increase access to
mental health and substance use
disorder treatments by improving plan
and issuer compliance with the
requirements under MHPAEA. This will
help ensure that NQTLs are no more
restrictive for mental health and
substance use disorder benefits than the
predominant limitations applicable to
substantially all medical/surgical
benefits. For individuals who were
previously prevented from accessing
care because it was not covered by their
plan or coverage in a manner that
violated these final rules, improved
access to treatment is a benefit.
However, for individuals who
previously resorted to out-of-network
treatment, expanded coverage of
treatment—resulting in more access to
in-network providers or facilities—will
result in a transfer from plans and
issuers to participants, beneficiaries,
and enrollees.
Currently, it is more common for
individuals to rely on out-of-network
care for mental health and substance use
disorder treatment than for medical/
surgical treatment. One study found that
patients received out-of-network care
3.5 times more often for behavioral
health clinician office visits than for
medical and surgical clinician office
visits (13.4 percent vs. 3.8 percent).
Further, the study found that when
comparing specialist care, patients
received out-of-network care 8.9 times
more often for psychiatrist office visits
(15.3 percent vs. 1.7 percent) and 10.6
times more often for psychologist office
visits (18.2 percent vs. 1.7 percent) than
for medical and surgical specialist
physicians.409
409 Tami L. Mark & William Parish, Behavioral
Health Parity—Pervasive Disparities in Access to InNetwork Care Continue, RTI International (Apr.
2024), https://dpjh8al9zd3a4.cloudfront.net/
publication/behavioral-health-parity-pervasivedisparities-access-network-care-continue/
fulltext.pdf.
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Receiving out-of-network treatment is
costly, and research has found that
mental health parity decreases out-ofpocket spending on treatment. For
example, a 2013 study that examined
the impact of the 2001 parity directive
in the FEHB Program found that annual
out-of-pocket spending for FEHB
enrollees diagnosed with bipolar
disorder, major depression, or
adjustment disorder decreased by
between $78 and $86, roughly between
11 percent and 18 percent of average
total out-of-pocket spending for
enrollees with one of these diagnoses, as
compared to before the parity
directive.410
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 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 at 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.411
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.412 Additionally,
a 2017 study that examined
expenditures of patients receiving
behavioral health treatment following
the implementation of MHPAEA found
that the out-of-pocket expenditure for
410 Before the parity directive, average out-ofpocket spending was $787 for someone with bipolar
disorder, $563 for someone with major depression,
and $428 for someone with adjustment disorder.
See Alisa B. Busch, Frank Yoon, Colleen L. Barry,
Vanessa Azzone, Sharon-Lise T. Normand, Howard
H. Goldman, & Haiden A. Huskamp, The Effects of
Parity on Mental Health and Substance Use
Disorder Spending and Utilization: Does Diagnosis
Matter?, 170(2) The American Journal of Psychiatry
p. 180 (2013).
411 Alene Kennedy-Hendricks, Andrew J. Epstein,
Elizabeth A. Stuart, Rebecca L. Haffajee, Emma E.
McGinty, Alisa B. Busch, Haiden A. Huskamp, &
Colleen L. Barry, Federal Parity and Spending for
Mental Illness, 142(2) Pediatrics (2018).
412 Rebecca L. Haffajee, Michelle M. Mello, Fang
Zhang, Alisa B. Busch, Alan M. Zaslavsky, & J.
Frank Wharam, Association of Federal Mental
Health Parity Legislation with Health Care Use and
Spending Among High Utilizers of Services, 57(4)
Medical Care p. 245.
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patients had decreased and the total
expenditure for health plans had
increased, with no significant impact on
health care utilization, suggesting that
the costs had shifted from patients to
health plans.413
According to the 2019 MEPS–HC,
private insurance covered $33.87 billion
of expenditures for treatment of mental
health disorders among adults ages 18
and older 414 while all individuals paid
$15.62 billion out-of-pocket.415 As
discussed throughout this analysis,
there are many reasons someone might
seek care out-of-network or pay out-ofpocket for treatment, such as limited
coverage from the issuer or plan,
difficulty finding a network provider, or
long wait times to see an in-network
provider. The Departments acknowledge
that these final rules will not address all
the reasons that individuals pay out-ofpocket for treatment, and there is
significant uncertainty in how these
final rules will affect out-of-network
spending.
Accordingly, the Departments do not
know what proportion of total out-ofpocket spending experienced in the past
will be covered by group health plans
and health insurance coverage following
the applicability of these final rules.
However, to illustrate the potential scale
of transfers from participants,
beneficiaries, and enrollees to plans
under this rulemaking, the Departments
reference a 2020 study of in-network
versus out-of-network psychotherapy
employer-sponsored insurance claims
which found in-network cost sharing
was, on average, $24.41 less that out-ofnetwork cost-sharing for psychotherapy
claims.416 Utilizing tabulations from the
MEPS–HC on events, such as office and
outpatient visits for mental, behavioral,
or neurological conditions, there were
530.7 million of these medical events in
413 Susan L. Ettner, Jessica M. Harwood, Amber
Thalmayer, Michael K. Ong, Haiyong Xu, Michael
J. Bresolin, Kenneth B. Wells, Chi-Hong Tseng, &
Francisca Azocar, The Mental Health Parity and
Addiction Equity Act Evaluation Study: Impact on
Specialty Behavioral Health Utilization and
Expenditures Among ‘‘Carve-Out’’ Enrollees, 50
Journal of Health Economics pp. 131–143 (2016).
414 As defined in the MEPS–HC, mental disorders
include anxiety, depression, bipolar disorder,
schizophrenia, obsessive-compulsive disorder,
attention-deficit and/or hyperactivity disorder,
substance use disorder, and other mental and
neurodevelopmental illnesses.
415 Anita Soni, Healthcare Expenditures for
Treatment of Mental Disorders: Estimates for Adults
Ages 18 and Older, U.S. Civilian
Noninstitutionalized Population, 2019, Agency for
Healthcare Research and Quality, Statistical Brief
#539 (Feb. 2022), https://meps.ahrq.gov/data_files/
publications/st539/stat539.pdf.
416 Nicole M. Benson & Zirui Song, Prices and
Cost Sharing for Psychotherapy In Network Versus
Out Of Network in the United States, 39(7) Health
Affairs pp. 1210–1218 (2020).
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2021 for individuals 65 and under with
private insurance.417 Applying the
initial out-of-network rates of 13.4
percent from the Marsh and Parish
paper would translate into 71.1 million
out-of-network claims, which is 9
percentage points higher for mental
health and substance use disorders than
for medical/surgical treatments.418 It is
assumed that, under these final rules,
the out-of-network utilization rates for
mental health and substance use
disorder benefits fall by just 10 percent
to 12.1 percent of claims, this would
still represent a transfer from plans and
issuers to participants and beneficiaries
of $168.4 million annually in lower
cost-sharing.419
9.2. Transfers From Participants,
Beneficiaries, and Enrollees to Plans
and Issuers Caused by Higher Premiums
These final 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, these
final rules might cause plans and issuers
to increase premiums and change costsharing requirements (for example, by
raising deductibles) to offset these costs.
Similarly, plans and issuers might
reduce the number of NQTLs employed
and increase premiums in order to offset
the costs of participants, beneficiaries,
and enrollees utilizing more mental
health and substance use disorder
benefits.
Many studies attempt to isolate the
changes in health costs associated with
implementing parity requirements. One
2005 study by the Society of Actuaries
on State mental health parity laws
found that ‘‘overall health care costs
increased minimally and in some cases
were even reduced.’’ 420 As discussed
417 Agency for Healthcare Research and Quality,
Number of Events in Thousands by Condition and
Insurance Coverage, United States, 2021, Medical
Expenditure Panel Survey, https://
datatools.ahrq.gov/meps-hc?tab=medicalconditions&-=17.
418 Tami L. Mark & William Parish, Behavioral
Health Parity—Pervasive Disparities in Access to InNetwork Care Continue, RTI International (Apr.
2024), https://dpjh8al9zd3a4.cloudfront.net/
publication/behavioral-health-parity-pervasivedisparities-access-network-care-continue/
fulltext.pdf.
419 This estimate is calculated as follows: 530.7
million medical events × change in share that are
out-of-network (13.4 percent ¥ 12.1 percent) ×
$24.41 = $168.4 million.
420 Steve Melek, 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-
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earlier in section IV.8 of this regulatory
impact analysis, by removing some of
the barriers to access to mental health
and substance use disorder treatments
caused by existing NQTLs, the
Departments expect that the final rules
will result in increased utilization of
mental health and substance use
disorder services, which could increase
costs, including premiums. However, as
discussed in section IV.7.3 of this
regulatory impact analysis, better access
to mental health and substance use
disorder services can lead to better
health outcomes and prevent costly
interventions, which may reduce overall
health care costs and premiums in the
long-term. Thus, the Departments
anticipate that these final rules will
have a minimal impact on premiums,
but there may be instances in which
plans and issuers may impose higher
premiums.
The Departments requested comments
or data on this transfer in the proposal.
A few commenters stated that the
proposal would hinder the ability of
plans to utilize common medical
management techniques that improve
cost and quality outcomes, such as prior
authorization. As a result, commenters
stated there would be an increase in
premiums for participants, beneficiaries,
and enrollees. However, as discussed
previously, these final rules do not
finalize the substantially all and
predominant mathematical tests for
NQTLs as proposed. The final rules also
do not eliminate the use of prior
authorization or other medical
management, but the Departments
emphasize that they must be designed
and applied in parity as required by
law.
9.3. Transfers Between Primary Care
Providers and Mental Health and
Substance Use Disorder Providers
These final rules may result in a
transfer from primary care providers to
mental health and substance use
disorder providers. More specifically,
with improved in-network access to
mental health and substance use
disorder providers, patients may be
more likely to seek treatment from a
behavioral health specialist rather than
a primary care provider.
For example, 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 masterslevel specialists, and relatively little
change for generalist physicians,
section-news/2005/march/hsn-2005-iss49-melekb.pdf.
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psychiatrists, and psychologists,’’
leading to a shift in the use of
nonphysician specialists and away from
generalist physicians.421 Further, a 2020
study compared mental health
outpatient visits of adults in the period
between 2008 and 2011 to the period
between 2012 and 2015 using data from
the MEPS–HC. Between the two time
periods, the study found that the
percentage of adults who visited only
primary care non-physicians, such as
physician assistants and nurse
practitioners, increased by about 4
percent, whereas the percentage of
adults who visited only primary care
physicians decreased by about 2
percent.422 The findings of these papers
suggest that the final rules may lead to
a slight shift in the use of nonphysician
specialists, and away from generalist
physicians.
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9.4. 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 rules
implementing the CAA, 2023 provision
that sunsets the MHPAEA opt-out
election for self-funded non-Federal
governmental plans will have similar
effects as the other provisions examined
in this section IV.9 of the regulatory
impact analysis. These final rules are
generally expected to 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 will lead to lower out-ofpocket costs for plan participants and
beneficiaries who receive mental health
or substance use disorder services,
which will be a transfer from selffunded non-Federal governmental plans
to participants and beneficiaries.
On the other hand, as noted in section
IV.8.2 of this regulatory impact analysis,
if the final rules 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 may
increase, which may cause in the
number of claims submitted, the
421 John K. McConnell, Samuel HN Gast, &
Bentson H. McFarland, The Effect of
Comprehensive Behavioral Health Parity on Choice
of Provider, 50(6) Medical Care p. 527.
422 The study did not find a statistically
significant change in visits to specialty mental
health providers. See Hayley D. Germack, Coleman
Drake, Julie M. Donohue, Ezra Golberstein, & Susan
H. Busch, National Trends in Outpatient Mental
Health Service Use Among Adults Between 2008
and 2015, 71 Psychiatric Services 11 pp. 1127–1135
(2020).
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number of claims paid, and the overall
costs incurred by plans to also increase.
This, in turn, might lead to higher
contributions 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 the
societal cost presented in section IV.8 of
this regulatory impact analysis (and
who bears it).
10. Uncertainty
It is unclear what percentage of plans
and issuers impose greater burdens on
mental health and substance use
disorder benefits than on medical/
surgical benefits. This frequency may
differ among small and large plans and
issuers. The Departments’ experience in
enforcing MHPAEA shows that plans
and issuers are not in full compliance
with MHPAEA, although the extent
across all plans and issuers is not
known. As documented in the fiscal
year (FY) 2022 MHPAEA Enforcement
Fact Sheet, DOL closed investigations
on 145 health plans, with 86 of them
subject to MHPAEA, in fiscal year 2022.
Of these closed investigations, EBSA
cited 18 MHPAEA violations in 11
investigations.423
One commenter stated that the new
requirements of the comparative
analyses would require plans to make
significant changes to their benefits
design and NQTL compliance structure,
which could result in more restrictions
on medical/surgical benefits and/or
higher premiums. The commenter did
not provide any data or evidence. The
Departments note that there is no
evidence from previous parity
requirements that such actions led to
the implementation of new NQTLs,
particularly to medical/surgical benefits,
and impacted cost sharing, medical
management provisions, or medical/
surgical coverage.
There is also the possibility that some
plans and issuers will stop offering
mental health and substance use
disorder benefits. In 2010, 2 percent of
employers reported discontinuing their
coverage of both mental health and
substance use disorder treatments or
only substance use disorder treatments
since MHPAEA was passed.424
Nevertheless, as discussed in section
IV.9.1 of this regulatory impact analysis,
423 EBSA, FY 2022 MHPAEA Enforcement Fact
Sheet, https://www.dol.gov/agencies/ebsa/lawsand-regulations/laws/mental-health-parity/
mhpaea-enforcement-2022.
424 GAO, Mental Health and Substance Use:
Employers’ Insurance Coverage Maintained or
Enhanced Since Parity Act, but Effect of Coverage
on Enrollees Varied, GAO–12–63 (Nov. 2011),
https://www.gao.gov/assets/gao-12-63.pdf.
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77691
the Departments anticipate that these
final rules will expand the level of
coverage for mental health and
substance use disorder benefits, which
will result in reduced out-of-pocket
spending for plan participants,
beneficiaries, and enrollees.
Another commenter also stated that
the proposed rules would largely
eliminate behavioral health carve-out
vendors as a business model, because
such vendors would not be able to build
networks in complete alignment with
medical/surgical disorder networks, as
required under the proposed network
composition NQTL rule. In response,
the Departments note that similar
claims—that MHPAEA would eliminate
behavioral health carve-outs—were
made when MHPAEA was first enacted
in 2008. Furthermore, studies have
found that the number of carve-out
plans have increased since the
enactment of MHPAEA. A 2016 study
examined the impact of MHPAEA on
carve-out plans and found that
MHPAEA ‘‘led to a proliferation of
plans and heterogeneity in benefit
design in the post-parity period among
employer groups choosing to retain the
carve-out model for their behavioral
health coverage.’’ The study also found
no evidence that carve-out plans
dropped coverage altogether for
behavioral health treatments.425 A 2020
study also observing the impact of
MHPAEA on carve-out plans found that
‘‘post-MHPAEA, the number of carveout plans increased relative to carveins’’ and that MHPAEA was associated
with lower copayments and out-ofnetwork coinsurance for emergency
room and outpatient services. The
findings suggest that MHPAEA led to
more generous benefits for carve-out
plans. However, the authors also noted
an increase in deductibles and innetwork outpatient coinsurance,
suggesting that some patients
experienced higher out-of-pocket
costs.426 Nevertheless, these studies
suggest that the purported issues
referenced by commenters were
surmountable.
Additionally, the Departments note
that they are not finalizing the proposed
425 Susan L. Ettner, Jessica M. Harwood, Amber
Thalmayer, Michael K. Ong, Haiyong Xu, & Michael
J. Bresolin, The Mental Health Parity and Addiction
Equity Act Evaluation Study: Impact on Specialty
Behavioral Health Utilization and Expenditures
among ‘‘Carve-Out’’ Enrollees, 50 Journal of Health
Economics pp. 131–143 (2016), https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC5127782.
426 Sarah Friedman, Haiyong Xu, Francisca
Azocar, & Susan L. Ettner, Carve-out Plan Financial
Requirements Associated with National Behavioral
Health Parity, 55(6) Health Services Research pp.
924–931 (2020), https://www.ncbi.nlm.nih.gov/
pmc/articles/PMC7704471/.
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special rule for NQTLs related to
network composition, and are instead
including language in these final rules
to explain how plans and issuers are
expected to comply with the relevant
data evaluation requirements with
respect to those NQTLs. Under these
final rules, material differences in
access to mental health and substance
use disorder benefits as compared to
medical/surgical benefits (including for
NQTLs related to network composition)
will not be treated as a violation;
instead, plans and issuers must take
reasonable action, as necessary, to
address any material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits, and
document those actions in their
comparative analyses.
Further, there may be some possible
societal spillover effects which may
occur as a result of these final rules such
as improving public safety in the longterm from an increase in access to
mental health and substance use
disorder treatments. For example, a
2017 study examined the effect of State
parity laws for substance use disorder
treatments on fatal traffic accidents and
found that enactment of State parity
laws were associated with reduced
annual total traffic fatality rates from 4.1
percent to 5.4 percent.427 Furthermore,
a 2021 study which examined the
impact of State parity laws on crime
between 1994 and 2010 found that the
enactment of State parity laws was
associated with a reduction of violent
crimes by 5 percent to 7 percent and
that the resulting lower crime rates were
associated with an annual savings of $3
billion.428 These studies suggest that the
benefits of these final rules may go
beyond the listed benefits discussed in
this regulatory impact analysis.
The Departments face uncertainty in
estimating the magnitude of savings for
participants, beneficiaries, and
enrollees. The Departments requested
comments and data in the proposal
related to how the Departments may
quantify the impact in out-of-pocket
spending from these rules, but did not
receive any comments.
Additionally, HHS is unable to
precisely forecast how many
participants and beneficiaries will be
affected by the amendments to
427 Ioana Popovici, Johanna Catherine Maclean, &
Michael T. French, The Effects of Health Insurance
Parity Laws for Substance Use Disorder Treatment
on Traffic Fatalities: Evidence of Unintended
Benefits, National Bureau of Economic Research
(2017), https://www.nber.org/system/files/working_
papers/w23388/revisions/w23388.rev0.pdf?sy=388.
428 Keshob Sharma, Do Mental Health Parity Laws
Reduce Crime?, working paper (Nov. 14, 2021).
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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 opt-out filings. See
section IV.5.3 of this regulatory impact
analysis for further discussion on the
affected participants and beneficiaries.
It is possible that some self-funded
non-Federal governmental plans will
stop offering mental health and
substance use disorder benefits in
response to the final rules. 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 provision, to ensure that financial
requirements and treatment limitations
applicable to mental health and
substance use disorder benefits comply
with MHPAEA and its implementing
regulations. HHS anticipates that this is
a less likely outcome of these
amendments.
HHS solicited comments on the
potential number of self-funded nonFederal 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
solicited comments on the potential
number of participants and beneficiaries
that might be affected by these potential
plan changes. HHS did not receive any
comments that provided this
information.
11. Alternatives
In addition to the regulatory approach
outlined in these final 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
earlier in 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 before designing
and applying NQTLs, in a manner that
is consistent with MHPAEA’s
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fundamental purpose. While the
Departments have seen some
improvements in response to their
reviews of plans’ and issuers’
comparative analyses under the CAA,
2021 requirements, they have primarily
seen a great deal of confusion about the
application of the current regulation to
NQTLs and about the parity obligation
generally. Based on the experience with
plans’ and issuers’ attempts to comply
with the existing regulations and
guidance and the CAA, 2021, the
Departments have concluded that the
existing MHPAEA regulations failed to
sufficiently focus attention on the
obligation to ensure that NQTLs, and
associated processes, strategies,
evidentiary standards, and other factors
avoid placing disparate burdens on
participants’, beneficiaries’, and
enrollees’ access to mental health and
substance use disorder benefits as
compared to medical/surgical benefits.
Accordingly, the Departments are of the
view that these final rules will 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 designing and
applying NQTLs and 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 as written, in
operation, 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 will improve
the review of plans’ and issuers’ policies
and processes, and improved parity
outcomes for participants, beneficiaries,
and enrollees.
12. Conclusion
The Departments expect that these
final rules will 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 final rules will
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
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ultimately result in better health
outcomes among those with mental
health conditions and substance use
disorders.
V. Paperwork Reduction Act
1. Paperwork Reduction Act—
Departments of Labor and the Treasury
In accordance with the Paperwork
Reduction Act of 1995 (PRA 95) (44
U.S.C. 3506(c)(2)(A)), the Departments
solicited comments concerning the
information collection requests (ICRs)
included in the proposed rules. At the
same time, the Departments also
submitted ICRs to OMB, in accordance
with 44 U.S.C. 3507(d).
The Departments received comments
that specifically addressed the
paperwork burden analysis of the ICRs
contained in the proposed rules. Many
commenters expressed concern that the
Departments underestimated the burden
of collecting the required data, the
burden required in conducting the
substantially all and predominant
variation analysis, the number of NQTLs
that would need to be analyzed for each
plan and issuer, and the amount of time
that it would take to conduct those
analyses. The Departments reviewed
these public comments in developing
the paperwork burden analysis
discussed here.
The changes made by these final rules
affect the existing OMB control number,
1210–0138. A copy of the ICR for OMB
Control Number 1210–0138 may be
obtained by contacting the PRA
addressee listed in the following
sentence or at www.RegInfo.gov. For
additional information contact, U.S.
Department of Labor, Employee Benefits
Security Administration, Office of
Research and Analysis, Attention: PRA
Officer, 200 Constitution Avenue NW,
Room N–5718, Washington, DC 20210;
or send to ebsa.opr@dol.gov.
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1.1. Final Amendments to Existing
MHPAEA Regulations (26 CFR 54.9812–
1; 29 CFR 2590.712)
These final rules add new definitions,
amend existing definitions, specify new
requirements related to NQTLs,
including by prohibiting discriminatory
factors and evidentiary standards,
amend existing examples illustrating the
rules for NQTLs, and add new examples
illustrating the rules for NQTLs,
providing clarity to interested parties.
The final rules also specify that the way
a plan or issuer defines mental health
benefits, substance use disorder
benefits, and medical/surgical benefits
must be consistent with generally
recognized independent standards of
current medical practice and add more
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specificity as to what conditions or
disorders plans and issuers must treat as
mental health conditions, substance use
disorders, and medical conditions and
surgical procedures. The final rules also
require that plans and issuers provide
meaningful benefits for covered mental
health conditions or substance use
disorders in each classification in which
meaningful medical/surgical benefits
are provided. Additionally, these final
rules require plans and issuers to collect
and evaluate relevant data in a manner
reasonably designed to assess the
impact of the NQTL on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits.
Where the relevant data suggest that the
NQTL contributes to material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits
in a classification, plans and issuers are
required to take reasonable action, as
necessary, to address the material
differences to ensure compliance, in
operation, with 26 CFR 54.9812–1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4). These final rules provide
guidance for how to comply with the
relevant data evaluation requirements in
limited circumstances where data is
initially and temporarily unavailable for
new and newly imposed NQTLs and
where no data exists that can reasonably
measure any relevant impact of the
NQTL on relevant outcomes related to
access to mental health and substance
use disorder benefits and medical/
surgical benefits. In those instances, the
plan or issuer must include specific
information in their comparative
analyses, as explained earlier in this
preamble. However, as explained earlier
in this preamble, the Departments are of
the view that nearly all NQTLs will
have some relevant data to collect and
evaluate; therefore, the Departments
estimate the burden as if every plan and
issuer performs the data analysis.
1.2. New Regulation (26 CFR 54.9812–
2; 29 CFR 2590.712–1)
These final 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.
For the purpose of this analysis, it is
assumed that health insurance issuers
will fulfill the data request for fully
insured group health plans. This burden
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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 will fulfill the
requirements for the vast majority of
self-funded group health plans.
1.3. Burden Estimates for Final Rules
Requirements
The final rules will affect self-funded
plans and MEWAs. The Departments
estimate that 709 self-funded plans with
500 or more participants will prepare
the comparative analysis and data
themselves. The Departments also
estimate that 4,076 self-funded plans
with 500 or more participants will
receive a generic comparative analysis
from their TPA or other service
provider, which they will subsequently
customize to suit their specific needs.
Finally, the Departments estimate that
132 plan MEWAs and 21 non-plan
MEWAs that are not fully insured will
provide assistance to plans in collecting
and analyzing the data, and generating
the comparative analyses. For more
information on how the number of each
type of entity is estimated, please refer
to the Affected Entities section of the
regulatory impact analysis.
Non-grandfathered, fully insured
ERISA plans with less than 50
participants that are subject to MHPAEA
under the EHB requirements of the ACA
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 in States
that substantially fail to enforce
MHPAEA’s requirements and therefore
is accounting for this portion of the
burden in its analysis, in addition to the
burden related to non-Federal
governmental plans. Accordingly, this
analysis considers only the burden
associated with ERISA self-funded
group health plans, which are under the
jurisdiction of the DOL and the
Treasury.
These final rules require that a plan
or issuer perform and document a
comparative analysis of each NQTL
applicable to mental health and
substance use disorder benefits. In the
proposed rules, the Departments
estimated that, on average, plans would
need to analyze four separate NQTLs
and issuers would need to analyze eight
NQTLs to satisfy their additional
comparative analysis requirements. The
Departments further estimated that
plans and issuers preparing their own
comparative analyses would incur a
burden of 20 hours per NQTL in the first
year, with 4 hours for a general or
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operations manager to review the
requirements and outline the changes
needed for the comparative analyses
and 16 hours for a business operations
specialist to prepare the comparative
analyses. Once the comparative analyses
are performed and documented, the
Departments estimated that plans and
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 as well as medical and
surgical benefits. In subsequent years,
the Departments estimated plans would
incur a burden 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 response to commenters’ concerns
that the Departments underestimated
the number of NQTLs that each plan or
issuer would need to create comparative
analyses for, and that plans and issuers
would on average have the same
number NQTLs, the Departments have
revised their assumptions to 10 NQTLs
for both plans and issuers. One
commenter proposed the average
number of NQTLs should be more than
15 at a minimum, while another noted
that there were at least 15 NQTLs
referenced in the proposed rules and
other guidance. However, given that the
number of NQTLs vary by issuer and
plan, that most plans will not have
every NQTL referenced in the proposed
rules and other guidance (although
some might have more), and that NQTLs
can be counted as an umbrella group,
the Departments assume 10 NQTLs.
The Departments assume that
collecting the data, and reviewing and
revising the comparative analyses
would require 60 hours per NQTL in the
first year and 12 hours per NQTL in
subsequent years. For plans that receive
a generic comparative analysis that will
require customizing to suit the plan’s
specific needs, the Departments assume
that it will take 30 hours per NQTL in
the first year and 6 hours per NQTL in
subsequent years. While plans and
issuers can use other professionals to
fulfill their requirements, for purposes
of developing the wage estimate, the
Departments assume that it will take a
team of data analysts, actuaries, and
attorneys to collect the data and prepare
the comparative analyses and have
estimated a composite wage rate of
$167.48.429 See Table 11 for calculations
and burden totals.
TABLE 11—HOUR BURDEN TO FULFILL THE DATA REQUIREMENTS AND PREPARE THE COMPARATIVE ANALYSES
Number of
entities
Number of
NQTLs
per entity
Number of
hours per
NQTL for
data and
comparative
analysis
Total hour
burden
Hourly
wage
Equivalent cost
of hour burden
(A)
(B)
(C)
(A × B × C)
(D)
E (A × B × C ×
D)
First Year
TPAs ..............................................................................................................
Self-funded plans with more than 500 participants that will conduct the
comparative analysis themselves ..............................................................
Self-funded plans with more than 500 participants that will receive generic
comparative analyses from TPAs or service providers, and will then
customize it ................................................................................................
Plan MEWAs that are not fully insured .........................................................
Non-plan MEWAs that are not fully insured .................................................
First-year Total .......................................................................................
103
10
60
61,800
$167.48
$10,350,264
709
10
60
425,400
167.48
71,245,992
4,076
132
21
10
10
10
30
60
60
1,222,800
79,200
12,600
167.48
167.48
167.48
204,794,544
13,264,416
2,110,248
5,041
....................
....................
1,801,800
..............
301,765,464
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Subsequent Years
TPAs ..............................................................................................................
Self-funded plans with more than 500 participants that will conduct the
comparative analysis themselves ..............................................................
Self-funded plans with more than 500 participants that will receive generic
comparative analyses from TPAs or service providers, and will then
customize it ................................................................................................
Plan MEWAs that are not fully insured .........................................................
Non-plan MEWAs that are not fully insured .................................................
103
10
12
12,360
167.48
2,070,053
709
10
12
85,080
167.48
14,249,198
4,076
132
21
10
10
10
6
12
12
244,560
15,840
2,520
167.48
167.48
167.48
40,958,909
2,652,883
422,050
Subsequent Years Total ........................................................................
5,041
....................
....................
360,360
..............
60,353,093
Total (3-year average) ....................................................................
5,041
....................
....................
840,840
..............
140,823,883
These final rules also require that
group health plans offering group health
insurance coverage must make a
comparative analysis available upon
request by the Departments. The CAA,
2021 requires the Departments to collect
no fewer than 20 comparative analyses
per year, but it also provides that the
Departments 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
Departments determine appropriate.
Based on its prior experience and
current funding, DOL expects to request
20 comparative analyses each year. See
Table 12 for calculations and burden
totals.
429 The wage rate of an attorney, actuary, and data
analyst is, respectively, $165.71, $177.11, and
$159.61. (Internal DOL calculation based on 2024
labor cost data. For a description of DOL’s
methodology for calculating wage rates, see EBSA,
Labor Cost Inputs Used in the Employee Benefits
Security Administration, Office of Policy and
Research’s Regulatory Impact Analyses and
Paperwork Reduction Act Burden Calculations
(June 2019), https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/rules-and-regulations/
technical-appendices/labor-cost-inputs-used-in-
ebsa-opr-ria-and-pra-burden-calculations-june2019.pdf.) The composite wage rate is estimated in
the following manner: [$165.71 × (1 ÷ 3) + $159.61
× (1 ÷ 3) × $177.61 × (1 ÷ 3) = $167.48].
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These final rules also require plans
and issuers to make the comparative
analyses and other applicable
information required by the CAA, 2021
available upon request to participants,
beneficiaries, and enrollees in all nongrandfathered group health plans and
non-grandfathered group or individual
health insurance coverage (including a
provider or other person acting as a
participant’s, beneficiary’s, or enrollee’s
authorized representative) in connection
with an adverse benefit determination,
as well as to participants and
beneficiaries in plans subject to ERISA.
The Departments estimate that each
plan will receive one request per
covered health plan annually and that
plans will annually incur a burden of 5
minutes for a clerical worker to prepare
and send the comparative analyses to
each requesting participant or
beneficiary. DOL also assumes that 58.3
percent of requests will be delivered
electronically, resulting in a de minimis
cost.430 The remaining 41.7 percent of
requests will be mailed at a cost of
$2.79.431 See Table 12 for calculations
and burden totals.
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 6-year retention requirement.
For these reasons, the Departments
estimate a minimal additional burden.
The Departments estimate that, on
average, any additional recordkeeping
requirements will take clerical
personnel 5 minutes annually. See
Table 12 for calculations and burden
totals.
TABLE 12—HOUR AND COST BURDEN OF OTHER REQUIREMENTS
Business operations specialists prepare comparative analysis
for audits ....................................................................................
General operation managers prepare comparative analysis for
audits .........................................................................................
Clerical workers prepare and distribute comparative analyses
upon participant request ............................................................
Clerical workers maintain recordkeeping ......................................
Total .......................................................................................
1.5. Overall Summary
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In summary, the total burden
associated with these final rules has a 3year average hour burden of 1,195,860
hours with an equivalent cost of
$164,256,956 and a cost burden of
$2,477,543.
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:
123,1752.
Estimated Number of Annual
Responses: 123,1752.
Frequency of Response: Annual.
Estimated Total Annual Burden
Hours: 1,195,860 (597,930 for DOL,
597,930 for Treasury).
430 According to data from NTIA, 37.4 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 31.4 percent receiving electronic
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Number of
response
Number of
hours per
responses
Total
hour
burden
Wage
rate
Hour
equivalent
of cost
burden
Mailing
cost per
response
Cost burden
(A)
(B)
(A × B)
(C)
(A × B × C)
(D)
(A × D × 41.7
percent)
20
1
20
137.67
2,753
0
0
20
4
80
114.36
9,149
0
0
2,129,516
2,129,516
0.083
0.083
177,460
177,460
65.99
65.99
11,710,585
11,710,585
2.79
0
2,477,543
0
2,129,536
....................
355,020
..............
23,433,073
................
2,477,543
Estimated Total Annual Burden Cost:
$2,477,543 ($1,238,771 for DOL,
$1,238,771 for Treasury).
2. Paperwork Reduction Act—
Department of HHS
In accordance with the Paperwork
Reduction Act of 1995 (PRA 95) (44
U.S.C. 3506(c)(2)(A)), the Department
solicited comments concerning the ICRs
included in the proposed rules. At the
same time, the Departments also
submitted ICRs to OMB, in accordance
with 44 U.S.C. 3507(d).
The Departments received comments
that specifically addressed the
paperwork burden analysis of the ICRs
contained in the proposed rules. Many
commenters expressed concern that the
Departments underestimated the burden
of collecting the required data, the
burden of conducting the substantially
all and predominant variation analysis,
the number of NQTLs that would need
to be analyzed for each plan and issuer,
and the amount of time that it would
take to conduct those analyses. The
disclosure at work). Additionally, the NTIA reports
that 44.1 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 26.9 percent
receiving electronic disclosure outside of work).
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Departments reviewed these public
comments in developing the paperwork
burden analysis discussed here.
The changes made by these final rules
affect the existing OMB control number,
0938–1393. HHS will update the
information collection to account for the
burden related to the provisions in these
final rules.
2.1. Final Amendments to Existing
MHPAEA Regulations (45 CFR 146.136)
The amendments to the existing
MHPAEA regulations in these final
rules add new definitions, amend
existing definitions, clarify the rules for
NQTLs, including by prohibiting
discriminatory factors and evidentiary
standards, amend existing examples
illustrating the rules for NQTLs, and
add new examples illustrating the rules
for NQTLs, providing clarity to the
regulated community. The amendments
also clarify that whether a condition or
disorder is defined by the plan or issuer
as being a mental health condition or a
substance use disorder for purposes of
Combining the 31.4 percent who will receive
electronic disclosure at work with the 26.9 percent
who will receive electronic disclosure outside of
work produces a total of 58.3 percent who will
receive electronic disclosure overall.
431 The postage for a first-class mail large
envelope letter is $2.04 and the material cost is
$0.05 per page. Thus, $2.04 + ($0.05 × 15 pages) =
$2.79.
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MHPAEA must be consistent with
generally recognized independent
standards of current medical practice.
The final rules also require that plans
and issuers provide meaningful benefits
for covered mental health conditions or
substance use disorders in each
classification in which meaningful
medical/surgical benefits are provided.
These final rules also require plans
and issuers to collect and evaluate
relevant data in a manner reasonably
designed to assess the impact of the
NQTL on relevant outcomes related to
access to mental health and substance
use disorder benefits and medical/
surgical benefits. Relevant data for the
majority of NQTLs could include, as
appropriate, but are not limited to, the
number and percentage of claims
denials and any other data relevant to
the NQTL required by State law or
private accreditation standards.
Additionally, relevant data for NQTLs
related to network composition could
include, as appropriate, but are not
limited to, in-network and out-ofnetwork 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 (for
comparable services and as
benchmarked to a reference standard).
2.2. New Regulations (45 CFR 146.137)
These final rules set forth 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 an applicable State
authority upon request.
These final rules provide guidance for
how to comply with the relevant data
evaluation requirements in limited
circumstances where data is initially
and temporarily unavailable for new
and newly imposed NQTLs and where
no data exists that can reasonably
measure any relevant impact of the
NQTL on relevant outcomes related to
access to mental health and substance
use disorder benefits and medical/
surgical benefits. In those instances, the
plan or issuer must include specific
information in their comparative
analyses, as explained earlier in this
preamble. In such instances, providing
this justification is likely to be less
expensive than the estimated burden for
doing an analysis when there is data.
However, as explained earlier in this
preamble, the Departments are of the
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view that nearly all NQTLs will have
some relevant data to collect and
evaluate; therefore, the Departments
estimate the burden as if every plan and
issuer performs the data analysis.
As discussed 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. HHS is therefore accounting
for this portion of the burden in its
analysis, in addition to accounting for
the burden on sponsors of self-funded
non-Federal governmental plans.
2.3. Burden Estimates for Final
Requirements
These final rules will affect issuers,
TPAs, and self-funded non-Federal
governmental plans. Health insurance
issuers offering individual or group
health insurance coverage usually have
multiple products offered in multiple
States. HHS estimates a total of 479
health insurance companies offering
individual or group health insurance
coverage nationwide, with a total of
1,467 issuers (health insurance
company/State combinations). In
addition, there are an estimated 205
TPAs that provide services to group
health plans, particularly for self-funded
plans where TPAs often establish
provider networks and adjudicate
claims, which will be impacted by these
final rules. Furthermore, sponsors of
self-funded non-Federal governmental
plans will be affected by these final
rules. HHS estimates that out of the
estimated 32,901 self-funded nonFederal governmental plans, 505 selffunded non-Federal governmental plans
with 500 or more participants will
prepare the comparative analysis and
data themselves, and 2,906 self-funded
non-Federal governmental plans with
500 or more participants will receive a
generic comparative analysis from their
TPA, which they will subsequently
customize to suit their specific needs.
For more information on how the
number of each type of entity is
estimated, please refer to section IV.5.2
of the regulatory impact analysis.
These final rules require that a plan
or issuer perform and document a
comparative analysis of each NQTL
applicable to mental health and
substance use disorder benefits. In the
proposed rules, the Departments
estimated that, on average, plans would
need to analyze four separate NQTLs
and issuers would need to analyze eight
NQTLs to satisfy their additional
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comparative analysis requirements. The
Departments further estimated that
plans and issuers preparing their own
comparative analyses would incur a
burden of 20 hours per NQTL in the first
year, with 4 hours for a general or
operations manager to review the
requirements and outline the changes
needed for the comparative analyses
and 16 hours for a business operations
specialist to prepare the comparative
analyses. Once the comparative analyses
are performed and documented, plans
and 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, as well as medical and
surgical benefits. In subsequent years,
the Departments estimated plans would
incur a burden 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 response to commenters’ concerns
that the Departments underestimated
the number of NQTLs that each plan or
issuer would need to create comparative
analyses for, and that plans and issuers
would on average have the same
number NQTLs, the Departments have
revised their assumptions to 10 NQTLs
for both plans and issuers. One
commenter proposed the average
number of NQTLs should be more than
15 at a minimum, while another noted
that there were at least 15 NQTLs
referenced in the proposed rules and
other guidance. However, because the
number of NQTLs varies by issuer and
plan, most plans will not have every
NQTL referenced in the rules or
guidance (although some might use
more), and NQTLs can be counted as an
umbrella group, the Departments
assume 10 NQTLs.
The Departments assume that
collecting the data, and reviewing and
revising the comparative analyses will
require 60 hours per NQTL in the first
year and 12 hours per NQTL in
subsequent years. For plan sponsors that
receive a generic comparative analysis
from a TPA that will require
customizing to suit the plan’s specific
needs, the Departments assume that it
will take 30 hours per NQTL in the first
year and 6 hours per NQTL in
subsequent years. While plans and
issuers can use other professionals to
fulfill their requirements, for purposes
of developing the wage estimate, the
Departments assume that it will take a
team of data analysts, actuaries, and
attorneys to collect the data and prepare
the comparative analyses, and have
estimated a composite wage rate of
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$167.48.432 See Table 13 for calculations
and burden totals.
TABLE 13—HOUR BURDEN TO FULFILL THE DATA REQUIREMENTS AND PREPARE THE COMPARATIVE ANALYSES
Number of
entities
Number of
NQTLs
per entity
Number of
hours per
NQTL for
data and
comparative
analysis
Total hour
burden
Hourly
wage
Equivalent
cost of
hour burden
(A)
(B)
(C)
(A × B × C)
(D)
E (A × B × C ×
D)
First Year
Issuers (health insurance company/State combinations) .............................
TPAs ..............................................................................................................
Self-funded non-Federal governmental plans with more than 500 participants that will conduct the comparative analysis themselves ..................
Self-funded non-Federal governmental plans with more than 500 participants that will receive a generic comparative analysis from TPAs or
service providers, and will then customize it ............................................
1,467
103
10
10
60
60
880,200
61,800
$167.48
167.48
$147,415,896
10,350,264
505
10
60
303,000
167.48
50,746,440
2,906
10
30
871,800
167.48
146,009,064
First-year Total .......................................................................................
4,981
....................
....................
2,116,800
..............
354,521,664
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Subsequent Years
Issuers ...........................................................................................................
TPAs ..............................................................................................................
Self-funded non-Federal governmental plans with more than 500 participants that will conduct the comparative analysis themselves ..................
Self-funded non-Federal governmental plans with more than 500 participants that will receive a generic comparative analysis from TPAs or
service providers, and will then customize it ............................................
1,467
103
10
10
12
12
176,040
12,360
167.48
167.48
29,483,179
2,070,053
505
10
12
60,600
167.48
10,149,288
2,906
10
6
174,360
167.48
29,201,813
Subsequent Years Total ........................................................................
4,981
....................
....................
423,360
..............
70,904,333
Total (3-year average) ....................................................................
4,981
....................
....................
987,840
..............
165,443,443
These final rules require that plans or
issuers make their comparative analyses
available upon request to the
Departments. The CAA, 2021 requires
the Departments to collect not fewer
than 20 comparative analyses per year,
but it also provides that the
Departments shall request that a 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
Departments determine appropriate.
HHS expects to request at least 20
comparative analyses each year. See
Table 14 for calculations and burden
totals.
These final rules also require plans
and issuers to make the comparative
analyses and other applicable
information required by the CAA, 2021
available upon request to participants,
beneficiaries, and enrollees in all nongrandfathered group health plans and
non-grandfathered group or individual
health insurance coverage (including a
provider or other person acting as a
participant’s, beneficiary’s, or enrollee’s
authorized representative) in connection
with an adverse benefit determination,
as well as to participants and
beneficiaries in plans subject to ERISA.
HHS estimates that each non-Federal
governmental plan and each issuer will
receive one request annually and that
plans and issuers will 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.
HHS also assumes that 58.3 percent of
requests will be delivered electronically,
resulting in a de minimis cost.433 The
remaining 41.7 percent of requests will
be mailed.434 The annual cost burden to
mail the comparative analyses to the
participants and beneficiaries will
therefore be approximately $107,500.
See Table 14 for calculations and
burden totals.
432 The wage rate of an attorney, actuary, and data
analyst is, respectively, $165.71, $177.11, and
$159.61. (Internal DOL calculation based on 2024
labor cost data. For a description of DOL’s
methodology for calculating wage rates, see EBSA,
Labor Cost Inputs Used in the Employee Benefits
Security Administration, Office of Policy and
Research’s Regulatory Impact Analyses and
Paperwork Reduction Act Burden Calculations
(June 2019), https://www.dol.gov/sites/dolgov/files/
EBSA/laws-and-regulations/rules-and-regulations/
technical-appendices/labor-cost-inputs-used-inebsa-opr-ria-and-pra-burden-calculations-june2019.pdf.) The composite wage rate is estimated in
the following manner: [$165.71 × (1 ÷ 3) + $159.61
× (1 ÷ 3) × $177.61 × (1 ÷ 3) = $167.48].
433 According to data from NTIA, 37.4 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 31.4 percent receiving electronic
disclosure at work). Additionally, the NTIA reports
that 44.1 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 26.9 percent
receiving electronic disclosure outside of work).
Combining the 31.4 percent who will receive
electronic disclosure at work with the 26.9 percent
who will receive electronic disclosure outside of
work produces a total of 58.3 percent who will
receive electronic disclosure overall.
434 The postage for a first-class mail large
envelope is $2.04 and the material cost is $0.05 per
page. Thus, $2.04 + ($0.05 × 15 pages) = $2.79.
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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 final rules.
HHS estimates that each non-Federal
governmental plan and issuer will
annually incur a burden of 5 minutes,
on average. See Table 14 for calculations
and burden totals.
HHS will revise the information
collection approved under OMB Control
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Number 0938–1393 to account for this
burden.435
TABLE 14—HOUR AND COST BURDEN OF OTHER REQUIREMENTS
Business operations specialists prepare comparative analysis
for audits ....................................................................................
General operation managers prepare comparative analysis for
audits .........................................................................................
Clerical workers prepare comparative analyses upon participant
request .......................................................................................
Clerical workers maintain recordkeeping ......................................
Total .......................................................................................
2.5. ICRs Regarding the Self-Funded
Non-Federal Governmental Plan OptOut Provisions (45 CFR 146.180)
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
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The regulatory amendments to
implement a provision in the CAA, 2023
that sunsets the election option for
sponsors of self-funded non-Federal
governmental plans to opt out of
requirements under MHPAEA 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.436 HHS
estimates that sponsors of 185 plans will
no longer need to submit a notice to the
Federal Government regarding their
plan’s opt-out election. HHS estimates
that for each self-funded non-Federal
governmental plan whose sponsor has
elected to opt out of the requirements,
a compensation and benefits manager
will need 15 minutes annually to fill out
and electronically submit the model
notification form to HHS.437 See Table
14 for calculations and cost savings.
435 CMS–10773, Non-Quantitative Treatment
Limitation Analyses and Compliance Under
MHPAEA.
436 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
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Number of
responses
Number of
hours per
response
Total
hour
burden
Wage
rate
Hour
equivalent
of cost
burden
Mailing
cost per
response
Cost burden
(A)
(B)
(A × B)
(C)
(A × B × C)
(D)
(A × D × 41.7
percent)
20
4
80
$114.36
$9,149
$0
$0
20
1
20
137.67
2,753
0
0
92,354
92,354
0.083
0.083
7,696
7,696
65.99
65.99
507,859
507,859
2.79
0
107,477
0
92,374
....................
15,492
..............
1,027,620
................
107,477
These amendments also generate cost
savings for the Federal Government, as
HHS will 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 labor rate for the
employee who completes this task,
which includes the locality pay
adjustment for the area of WashingtonBaltimore-Arlington, and the cost of
fringe benefits and other indirect costs,
is $113.04 per hour for a GS–13, step 1
employee.438 HHS estimates that on
average it takes an HHS employee 15
minutes to process an opt-out notice
submitted by a plan sponsor. See Table
15 for calculations and cost savings.
2.5.2. Notice to Plan Participants of SelfFunded Non-Federal Governmental Plan
Opt-Out: Plan Burden Reduction—
Preparation and Processing of Opt-Out
Election Notice
The regulatory amendments to
implement the provision in the CAA,
2023 that sunsets the election option for
sponsors of self-funded non-Federal
governmental plans to opt out of
requirements under MHPAEA 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
dependent students on medically necessary leave of
absence).
437 This includes the time required by the
individual signing the certification to conduct a
thorough review of the election contents.
438 See Office of Personnel Management, 2024
General Schedule (GS) Locality Pay Tables, https://
www.opm.gov/policy-data-oversight/pay-leave/
salaries-wages/salary-tables/pdf/2024/DCB_h.pdf.
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long as the sponsors do not elect to
permissibly opt out of other
requirements. HHS estimates that
sponsors of 185 plans will no longer
need to prepare and disseminate an optout notice to plan participants. HHS
estimates that for each self-funded nonFederal governmental plan whose
sponsor has elected to opt out of the
requirements under MHPAEA, an
administrative assistant will need 15
minutes to develop and update the HHS
standardized disclosure statement
annually. Further, self-funded nonFederal governmental plan sponsors
will no longer be required to print and
mail the opt-out notice to plan
participants and will therefore no longer
incur costs associated with this
requirement. As noted earlier in section
IV.5.2 of the regulatory impact analysis,
HHS estimates that there are
approximately 261 participants in each
self-funded non-Federal governmental
plan, and therefore approximately
48,285 notices 439 will no longer have to
be printed and mailed. See Table 15 for
calculations and cost savings.
The burden related to HIPAA opt-outs
is currently approved under OMB
Control Number 0938–0702.440 HHS
will update the information collection
to account for this burden reduction.
439 This estimate is calculated as follows: 185
plans × 261 participants per plan on average =
48,285 notices in total.
440 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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77699
TABLE 15—COST SAVINGS OF PREPARING AND DISTRIBUTING OPT-OUT ELECTION NOTICE
Number of
hours per
entity
Total hour
burden
Wage
rate
Mailing
cost per
response
Cost savings
(A)
(B)
(A × B)
(C)
(D)
(A × B × C) or
(A × D)
General operation managers preparing and processing of opt-out election
notice to Federal Government ...................................................................
Clerical workers preparing and processing of opt-out election notice to
plan participants ........................................................................................
Clerical workers distributing opt-out election notice to plan participants .....
185
0.25
46
$131.14
....................
$6,032
185
48,285
0.25
....................
46
....................
42.58
....................
....................
$0.05
1,959
2,414
Total .......................................................................................................
48,470
....................
92
....................
....................
10,405
2.6. Overall Summary
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Number of
responses
In summary, the total new burden
imposed by these final rules regarding
NQTL comparative analyses and
compliance, has a 3-year average hour
burden of approximately 1,003,332
hours with an equivalent cost of
approximately $166,471,063 and a total
cost burden of approximately $107,447.
The final amendments to implement the
CAA, 2023 provision that sunsets the
MHPAEA opt-out election for sponsors
of self-funded non-Federal
governmental plans will result in an
annual burden reduction of
approximately 92 hours with an
equivalent annual cost savings of
approximately $7,991 and total cost
savings of approximately $10,405.
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:
92,457.
Estimated Number of Annual
Responses: 189,709.
Frequency of Response: Annual.
Estimated Total Annual Burden
Hours: 1,003,332.
Estimated Total Annual Burden Cost:
$107,447.
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.
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Estimated Total Annual Burden
Hours: (92).
Estimated Total Annual Burden Cost:
($2,414).
Note: Numbers in parentheses denote a
burden reduction.
VI. Regulatory Flexibility Act
The Regulatory Flexibility Act
(RFA) 441 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 and are
likely to have a significant economic
impact on a substantial number of small
entities. Unless the head of an agency
determines that a final rule is not likely
to have a significant economic impact
on a substantial number of small
entities, section 604 442 of the RFA
requires the agency to present a final
regulatory flexibility analysis of these
final rules.
The Departments certify that these
final rules will not have a significant
impact on a substantial number of small
entities. The Departments have prepared
the following justification for this
determination.
1. Need for and Objectives of the Rule
As documented in the 2022 MHPAEA
Report to Congress and the 2023
MHPAEA Comparative Analysis Report
to Congress,443 the Departments found
that none of the NQTL comparative
analyses they reviewed upon initial
receipt contained sufficient information
and documentation.
These final rules clarify existing
definitions, add new definitions of key
terms, and provide additional examples
441 5
U.S.C. 601 et seq. (1980).
U.S.C. 604 (1980).
443 2022 MHPAEA Report to Congress, https://
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2022-realizing-parity-reducing-stigmaand-raising-awareness.pdf; 2023 MHPAEA
Comparative Analysis Report to Congress,
www.dol.gov/sites/dolgov/files/EBSA/laws-andregulations/laws/mental-health-parity/report-tocongress-2023-mhpaea-comparative-analysis.pdf.
442 5
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of the application of MHPAEA to
NQTLs to improve the understanding
and ability of the regulated community
to comply with MHPAEA. The final
rules also clarify that plan and issuer
definitions of conditions or disorders as
mental health conditions and substance
use disorders must be consistent with
generally recognized independent
standards of current medical practice
and add more specificity as to what
plans and issuers must treat as mental
health conditions or substance use
disorders. The final rules also require
that plans and issuers must provide
meaningful benefits for covered mental
health conditions or substance use
disorders in each such classification in
which medical/surgical benefits are
provided. These final rules also require
plans and issuers to 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. Relevant data
for the majority of NQTLs could
include, as appropriate, but are not
limited to, the number and percentage
of claims denials and any other data
relevant to the NQTL as required by
State law or private accreditation
standards. Additionally, for NQTLs
related to network composition, relevant
data could include, as appropriate, but
are not limited to, in-network and outof-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 (for comparable services and as
benchmarked to a reference standard).
Under these final rules, the Departments
may specify the type, form, and manner
for the relevant data evaluation
requirements in future guidance, which
will allow the Departments to adjust the
data requirements as needed to account
for enforcement experience and
industry trends.
These final rules also set more
specific content requirements for
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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.
The Departments expect that these
final rules will result in plans and
issuers having a better understanding of
the MHPAEA requirements for NQTLs.
These final rules will also improve the
manner in which parity is measured,
compared, and demonstrated by plans
and issuers. The Departments are of the
view that these final rules will improve
the compliance of plans and issuers
with these requirements, resulting in
greater parity in access to benefits for
mental health conditions and substance
use disorders as compared with
medical/surgical benefits, as intended
by MHPAEA.
Additionally, in these final rules,
HHS finalizes regulatory amendments to
implement a provision in the CAA, 2023
that sunsets the election option for
sponsors of self-funded non-Federal
governmental plans to opt out of
requirements under MHPAEA. HHS is
of the view that these regulatory
amendments will ultimately increase
access to mental health and substance
use disorder services, and increase
parity of benefits for such services as
compared to benefits for medical/
surgical services by requiring selffunded non-Federal governmental plans
that had previously opted out to come
into compliance with the requirements
under MHPAEA.
2. Affected Small Entities
For purposes of analysis under the
RFA, the Departments consider
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 of Labor may also
provide for exemptions or simplified
annual reporting and disclosure for
welfare benefit plans. Under 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
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are maintained generally by small
employers. Thus, the Departments are of
the view that assessing the impact of
these final 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
the definition of small business based
on size standards (revenue or number of
employees) issued by the Small
Business Administration (SBA) under
the Small Business Act.
As discussed in section IV.5.2 of the
regulatory impact analysis, these final
rules will affect nearly all small ERISAcovered group health plans, including
fully insured group health plans and
self-funded group health plans, as well
as small health insurance issuers and
non-Federal governmental plans. The
Departments estimate that these final
rules will affect approximately 106,000
fully insured plans with 50 to 100
participants,444 and approximately
1,719,000 fully insured, nongrandfathered plans with less than 50
participants.445
The Departments also estimate that
approximately 25,300 self-funded plans
with less than 100 participants will be
affected by these final rules.446
Additionally, the Departments estimate
that approximately 18,000 self-funded
non-Federal governmental plans with
less than 100 participants will also be
affected by these final rules.447 The
444 The Departments estimate that there are
140,998 ERISA-covered group health plans with 50
to 100 participants based on the MEPS–IC and the
2020 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 these same data. Thus, the
Departments have calculated the number of fully
insured plans with 50 to 100 participants in the
following manner: 140,998 ERISA-covered group
health plans with 50 to 100 participants × 75
percent = 105,749.
445 The Departments estimate that there are
2,465,483 ERISA-covered group health plans with
less than 50 participants based on data from the
2022 MEPS–IC and the 2020 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 2022 MEPS–IC. The 2020
KFF 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 percent (100 percent¥16 percent). KFF,
2020 Employer Health Benefits Survey (Oct. 8,
2020), https://files.kff.org/attachment/ReportEmployer-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:
2,465,483 small ERISA-covered group health plans
× 83 percent × 84 percent = 1,718,935.
446 Estimates based on the 2021 Form 5500 data.
447 Based on the 2022 Census of Governments,
there are 90,887 non-Federal governmental plans.
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Departments assume that these small,
self-funded plans will receive assistance
with the comparative analyses and data
requirements from TPAs or other service
providers involved with the plan. Due
to many small plans using identical
insurance products, these small plans
are not expected to be significantly
impacted as costs are spread across
many small plans.
As discussed in section IV.5.1 of the
regulatory impact analysis, these final
rules will also affect health insurance
issuers. The Departments estimate that
these final rules will affect 479 health
insurance companies nationwide that
provide mental health and substance
use disorder benefits in the group and
individual health insurance markets,
with a total of 1,467 issuers (health
insurance company/State
combinations).448
Health insurance companies 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.449 The
Departments expect that few, if any,
health insurance companies
underwriting health insurance policies
fall below these size thresholds. Based
on data from MLR annual report
submissions for the 2022 MLR reporting
year, approximately 87 out of 487 health
insurance companies (of which 479 are
impacted by these final rules) had total
premium revenue of $47 million or
less.450 However, it should be noted that
at least 76 percent of these small
companies belong to larger holding
groups that may not be small, and many,
Based on the 2022 MEPS–IC, the Departments
estimate that 36.2 percent of non-Federal
governmental plans are self-funded Thus, 90,887
plans × 36.2 percent = 32,901 self-funded nonFederal governmental plans. Based on the 2021
Form 5500 data, the Departments estimate that 54.6
percent of self-funded health plans with less than
100 participants have filed the Form 5500. The
Departments use the percent of self-funded health
plans with less than 100 participants that have filed
a Form 5500 as a proxy for the percent of selffunded non-Federal governmental plans with less
than 100 participants. Thus, 32,901 self-funded
non-Federal governmental plans × 54.6 percent =
17,964 self-funded non-Federal governmental plans
with less than 100 participants.
448 The Departments’ estimate of the number of
health insurance issuers are based on MLR reports
submitted by issuers for the 2022 reporting year.
CMS, Medical Loss Ratio Data and System
Resources (2022), https://www.cms.gov/CCIIO/
Resources/Data-Resources/mlr.
449 SBA, Table of Size Standards, https://
www.sba.gov/document/support--table-sizestandards, as of March 2023.
450 CMS, Medical Loss Ratio Data and System
Resources (2022), https://www.cms.gov/CCIIO/
Resources/Data-Resources/mlr.html.
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if not all, of these companies are likely
to have non-health lines of business that
would result in their revenues
exceeding $47 million.
The amendments to implement the
CAA, 2023 provision that sunsets the
MHPAEA opt-out election will affect
sponsors of self-funded non-Federal
governmental plans, some of which
might be small entities. As noted in
section IV.8.4 of the regulatory impact
analysis, 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 solicited comments
in the proposal on the number of small
entities that would be impacted by the
implementation of the sunset provision
and the potential effects on small
entities. HHS did not receive any
comments on these estimates.
2.1. Amendments to Existing MHPAEA
Regulation (26 CFR 54.9812–1, 29 CFR
2590.712, and 45 CFR 146.136)
These final rules clarify existing
definitions, add new definitions,
generally ensure that the NQTLs
applicable to mental health and
substance use disorder benefits are
generally no more restrictive than the
predominant NQTLs applied to
substantially all 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. These final
rules 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 add more
specificity as to what plans and issuers
must define as mental health conditions
or substance use disorders. The final
rules also require that plans and issuers
must provide meaningful benefits for
covered mental health conditions or
substance use disorders in each
classification in which medical/surgical
benefits are provided. These final rules
also require plans and issuers to collect
and evaluate relevant data and include
an analysis of the data as part of each
comparative analysis. The Departments
are of the view that plans and issuers
will incur costs in collecting, preparing,
and analyzing the data.
The Departments are of the view that
the final 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
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health and substance use disorder
services. The Departments face
uncertainty in quantifying these costs as
they cannot estimate the increase in
utilization and which services may see
the largest increase in utilization.
2.2. New Regulations (26 CFR 54.9812–
2, 29 CFR 2590.712–1, and 45 CFR
146.137 and 146.180)
These final rules codify existing
guidance, set more specific content
requirements for comparative analyses
required by the CAA, 2021, and outline
the timeframes and process for plans
and issuers to provide their comparative
analyses to the Departments upon
request. Participants and beneficiaries
in ERISA plans may also request a copy
of comparative analyses at any time, and
all participants, beneficiaries, and
enrollees may request a comparative
analysis in connection with an adverse
benefit determination. Additionally, in
these final rules, HHS finalizes
regulatory amendments to implement
the provision in the CAA, 2023 that
sunsets the election option for selffunded non-Federal governmental plans
to opt out of requirements under
MHPAEA.
In the first year, the Departments
estimate that TPAs, MEWAs, issuers,
and self-funded group health plans,
most if not all of which are large
entities, will conduct the comparative
analysis themselves will incur an
incremental per-entity cost of
approximately $101,600 associated with
these final rules. The Departments also
estimate an incremental per-entity cost
of $51,300 in the first year for selffunded group health plans that will
receive a generic comparative analysis
from their TPA or other service provider
and subsequently will customize to suit
their specific needs.
In the subsequent years, the
Departments estimate that TPAs,
MEWAs, issuers, and self-funded group
health plans that will conduct the
comparative analysis themselves, will
incur an incremental per-entity cost of
approximately $20,100 associated with
these final rules and amendments. The
Departments also estimate an
incremental per-entity cost of $10,100 in
subsequent years for self-funded group
health plans that will receive a generic
comparative analysis from their TPA or
other service provider and subsequently
will customize it to suit their specific
needs.
The Departments note that these perentity costs are average costs, and these
costs are expected to vary by plan or
issuer depending on the number of
NQTL analyses performed.
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3. Comment Summary
In the proposal, commenters
expressed concerns that the
Departments underestimated the burden
of collecting the required data and
performing the comparative analyses.
One commenter stated that small plans
lack access to aggregated claims data.
The same commenter suggested that the
proposal was burdensome, since it
required information that was beyond
the possession of small plans. The
commenter contended that small
employers may decide to stop offering
health coverage altogether in favor of
having their employees purchase their
own individual health insurance
coverage through the ACA Exchange,
stating that the penalties under the ACA
for employers not offering coverage may
be preferable compared to the costly
requirements under the proposal. The
Departments note that there are no such
penalties that apply to small employers.
The commenter also did not provide
any data or evidence.
Another commenter stated that there
is a limited market of vendors for
conducting the comparative analyses,
mentioning that these services could
cost upwards of $100,000. The same
commenter expressed concern that the
proposal’s comparative analysis
requirements would disproportionately
consume the health benefits budget of
plan sponsors, potentially causing small
employers to discontinue offering
mental health and substance use
disorder benefits. The Departments note
that while there is a possibility that
some plans and issuers will stop
offering mental health and substance
use disorder benefits, the Departments
anticipate that these final rules will
expand the level of coverage for mental
health and substance use disorder
benefits, which will result in reduced
out-of-pocket spending for plan
participants, beneficiaries, and
enrollees. The Departments also note
that the commenter did not cite any data
or evidence.
Furthermore, another commenter was
concerned that the proposal would
disrupt the operations of plans, by
forcing plans to change their network
composition and eliminate the use of
common medical management
techniques. The same commenter stated
that the burden would fall on small
plans, since they may have insufficient
resources to cope with this
unanticipated cost burden. The
commenter did not provide any data or
evidence to support these assertions. As
discussed earlier in this preamble, these
final rules do not eliminate the use of
prior authorization or other medical
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management techniques, but emphasize
that they must be developed and used
in parity as required by law.
Finally, the Departments did not
receive any comments from the Chief
Counsel for Advocacy of SBA.
4. Duplicate, Overlapping, or Relevant
Federal Rules
There are no duplicate, overlapping,
or relevant Federal rules.
VII. Special Analyses—Department of
the Treasury
Under the Memorandum of
Agreement, Review of Treasury
Regulations under Executive Order
12866 (June 9, 2023), tax regulatory
actions issued by the Internal Revenue
Service (IRS) are not subject to the
requirements of section 6 of Executive
Order 12866, as amended. Therefore, a
regulatory impact analysis is not
required. As required by section 7805(f)
of the Code, these regulations were
submitted to the Chief Counsel for
Advocacy of SBA for comment on their
impact on small business.
VIII. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) 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 one year by State,
local, and Tribal governments, in the
aggregate, or by the private sector.451
For purposes of the UMRA, this
rulemaking is expected to have such an
impact. For the purposes of this
rulemaking, the regulatory impact
analysis shall meet the UMRA
obligations.
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IX. 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.452 Federal
agencies promulgating regulations that
have federalism implications must
consult with State and local officials
and describe the extent of their
451 2
U.S.C. 1501 et seq. (1995).
64 FR 153 (Aug. 4, 1999).
452 Federalism,
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consultation and the nature of the
concerns of State and local officials in
the preamble to these final rules.
In the Departments’ view, these final
rules have federalism implications
because they will 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 final rules could also
have federalism implications because
the Departments remove the reference to
State guidelines in the definitions of
medical/surgical benefits, mental health
benefits, and substance use disorder
benefits, and amend these definitions to
provide that any condition or procedure
defined by the plan or coverage as being
or not being a mental health condition
or substance use disorder, respectively,
must be defined to be consistent with
generally recognized independent
standards of current medical practice,
which for purposes of these final rules
are all conditions or disorders under the
relevant chapters of the ICD or DSM.
Finally, these final rules have
federalism implications because the
implementation of the CAA, 2023
provision that sunsets the election
option for sponsors of self-funded nonFederal governmental plans to opt out of
requirements under MHPAEA will
require State and local government
sponsors of self-funded non-Federal
governmental 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 Conf. Rep.
No. 104–736, pg. 205, reprinted in 1996
U.S. Code Cong. & Admin. News 2018.
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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 final 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.
X. Congressional Review Act
In accordance with Subtitle E of the
Small Business Regulatory Enforcement
Fairness Act of 1996 (also known as the
Congressional Review Act, 5 U.S.C. 801
et seq.), OIRA has determined that this
rule meets the criteria set forth in 5
U.S.C. 804(2). Accordingly, a report
containing a copy of the rule along with
other specified information has been
submitted to each House of the Congress
and to the Comptroller General.
List of Subjects
26 CFR Part 54
Excise taxes, Health care, Health
insurance, Pensions, Reporting and
recordkeeping requirements.
29 CFR Part 2590
Continuation coverage, Disclosure,
Employee benefit plans, Group health
plans, Health care, Health insurance,
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
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and recordkeeping requirements, Sex
discrimination.
Douglas W. O’Donnell,
Deputy Commissioner, Internal Revenue
Service.
Aviva Aron-Dine,
Acting Assistant Secretary (Tax Policy),
Department of the Treasury.
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
26 CFR Part 54
Accordingly, the Treasury Department
and the IRS amend 26 CFR part 54 as
follows:
PART 54—PENSION EXCISE TAXES
Paragraph 1. The authority citation
for part 54 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Par. 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), (c)(2)(ii)(A) introductory text,
(c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
■ d. In paragraph (c)(3)(iii), adding
introductory text;
■ e. Revising paragraphs (c)(3)(iii)(A)
and (B), (c)(3)(iv), (c)(4), (d)(3), (e)(4),
and (i)(1); and
■ f. Adding paragraph (j).
The revisions and additions read as
follows:
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■
■
§ 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
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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 aggregate 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 in the same
classification, 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 or
substance use disorder benefits under
the plan than they impose on access to
medical/surgical benefits in the same
classification of 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 as of
November 22, 2024, is the Diagnostic
and Statistical Manual of Mental
Disorders, Fifth Edition, Text Revision
published in March 2022. A subsequent
version of the DSM published after
November 22, 2024, will be considered
the most current version beginning on
the first day of the plan year that is one
year after the date the subsequent
version is published.
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
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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 as of
November 22, 2024, is the International
Classification of Diseases, 10th
Revision, Clinical Modification adopted
for the period beginning on October 1,
2015. Any subsequent version of the
ICD adopted through 45 CFR 162.1002
after November 22, 2024, will be
considered the most current version
beginning on the first day of the plan
year that is one year after the date the
subsequent version is adopted.
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
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preceding sentence, any condition or
procedure defined by the plan 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
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.
Examples of 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
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requirements that are used to determine
when and how a participant or
beneficiary may access certain services;
and the development and approval of a
treatment plan used in a concurrent
review process to determine whether a
specific request should be granted or
denied. 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 the degree of 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; the method of
determining whether and how to
deviate from generally accepted
standards of care in concurrent reviews;
the selection of information deemed
reasonably necessary to make medical
necessity determinations; reliance on
treatment guidelines or guidelines
provided by third-party organizations in
the design of a nonquantitative
treatment limitation; and rationales
used in selecting and adopting certain
threshold amounts to apply a
nonquantitative treatment limitation,
professional standards and protocols to
determine utilization management
standards, and fee schedules used to
determine provider reimbursement
rates, used as part of a nonquantitative
treatment limitation. Strategies also
include the method of creating and
determining the 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 methods for making
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.
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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 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
(such as standards related to network
composition), which otherwise limit the
scope or duration of benefits for
treatment under a plan. (See paragraph
(c)(4)(ii) 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
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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)(ii) 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
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), it must provide
meaningful benefits for that mental
health condition or substance use
disorder in every classification in which
medical/surgical benefits are provided.
For purposes of this paragraph
(c)(2)(ii)(A), whether the benefits
provided are meaningful benefits is
determined in comparison to the
benefits provided for medical
conditions and surgical procedures in
the classification and requires, at a
minimum, coverage of benefits for that
condition or disorder in each
classification in which the plan
provides benefits for one or more
medical conditions or surgical
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procedures. A plan does not provide
meaningful benefits under this
paragraph (c)(2)(ii)(A) unless it provides
benefits for a core treatment for that
condition or disorder in each
classification in which the plan
provides benefits for a core treatment for
one or more medical conditions or
surgical procedures. For purposes of
this paragraph (c)(2)(ii)(A), a core
treatment for a condition or disorder is
a standard treatment or course of
treatment, therapy, service, or
intervention indicated by generally
recognized independent standards of
current medical practice. If there is no
core treatment for a covered mental
health condition or substance use
disorder with respect to a classification,
the plan is not required to provide
benefits for a core treatment for such
condition or disorder in that
classification (but must provide benefits
for such condition or disorder in every
classification in which medical/surgical
benefits are provided). 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 subclassifications described in paragraph
(c)(3)(iii) of this section:
*
*
*
*
*
(C) Examples. The rules of this
paragraph (c)(2)(ii) 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. With regard to the
examples in this paragraph (c)(2)(ii)(C),
references to any particular core
treatment are included for illustrative
purposes only. Plans must consult
generally recognized independent
standards of current medical practice to
determine the applicable core treatment,
therapy, service, or intervention for any
covered condition or disorder.
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77705
(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 covers
treatment for autism spectrum disorder
(ASD), a mental health condition, and covers
outpatient, out-of-network developmental
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screenings for ASD but excludes all other
benefits for outpatient treatment for ASD,
including applied behavior analysis (ABA)
therapy, when provided on an out-of-network
basis. The plan generally covers the full
range of outpatient treatments (including
core treatments) and treatment settings for
medical conditions and surgical procedures
when provided on an out-of-network basis.
Under the generally recognized independent
standards of current medical practice
consulted by the plan, developmental
screenings alone do not constitute a core
treatment for ASD.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(5) (Example 5), the plan violates
the rules of this paragraph (c)(2)(ii). Although
the plan covers benefits for ASD, in the
outpatient, out-of-network classification, it
only covers developmental screenings, so it
does not cover a core treatment for ASD in
the classification. Because the plan generally
covers the full range of medical/surgical
benefits including a core treatment for one or
more medical conditions or surgical
procedures in the classification, it fails to
provide meaningful benefits for treatment of
ASD in the classification.
(6) Example 6—(i) Facts. Same facts as in
paragraph (c)(2)(ii)(C)(5) of this section
(Example 5), except that the plan is an HMO
that does not cover the full range of medical/
surgical benefits, including a core treatment
for any medical conditions or surgical
procedures in the outpatient, out-of-network
classification (except as required under Code
sections 9816 and 9817), but covers benefits
for medical conditions and surgical
procedures in the inpatient, in-network;
outpatient, in-network; emergency care; and
prescription drug classifications.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(6) (Example 6), the plan does not
violate the rules of this paragraph (c)(2)(ii).
Because the plan does not provide
meaningful benefits, including for a core
treatment for any medical condition or
surgical procedure in the outpatient, out-ofnetwork classification (except as required
under Code sections 9816 and 9817), the plan
is not required to provide meaningful
benefits for any mental health conditions or
substance use disorders in that classification.
Nevertheless, the plan must provide
meaningful benefits for each mental health
condition and substance use disorder for
which the plan provides benefits in every
classification in which meaningful medical/
surgical benefits are provided, as required
under paragraph (c)(2)(ii)(A) of this section.
This example does not address whether the
plan has complied with other applicable
requirements of this section in excluding
coverage of ABA therapy in the outpatient,
out-of-network classification.
(7) Example 7—(i) Facts. A plan provides
extensive benefits, including for core
treatments for many medical conditions and
surgical procedures in the outpatient, innetwork classification, including nutrition
counseling for diabetes and obesity. The plan
also generally covers diagnosis and treatment
for eating disorders, which are mental health
conditions, including coverage for nutrition
counseling to treat eating disorders in the
outpatient, in-network classification.
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Nutrition counseling is a core treatment for
eating disorders, in accordance with
generally recognized independent standards
of current medical practice consulted by the
plan.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(7) (Example 7), the plan does not
violate the rules of this paragraph (c)(2)(ii).
The coverage of diagnosis and treatment for
eating disorders, including nutrition
counseling, in the outpatient, in-network
classification results in the plan providing
meaningful benefits for the treatment of
eating disorders in the classification, as
determined in comparison to the benefits
provided for medical conditions or surgical
procedures in the classification.
(8) Example 8—(i) Facts. A plan provides
extensive benefits for the core treatments for
many medical conditions and surgical
procedures in the outpatient, in-network and
prescription drug classifications. The plan
provides coverage for diagnosis and
treatment for opioid use disorder, a substance
use disorder, in the outpatient, in-network
classification, by covering counseling and
behavioral therapies and, in the prescription
drug classification, by covering medications
to treat opioid use disorder (MOUD).
Counseling and behavioral therapies and
MOUD, in combination, are one of the core
treatments for opioid use disorder, in
accordance with generally recognized
independent standards of current medical
practice consulted by the plan.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(8) (Example 8), the plan does not
violate the rules of this paragraph (c)(2)(ii).
The coverage of counseling and behavioral
therapies and MOUD, in combination, in the
outpatient, in-network classification and
prescription drug classification, respectively,
results in the plan providing meaningful
benefits for the treatment of opioid use
disorder in the outpatient, in-network and
prescription drug classifications.
(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
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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. The rules of this
paragraph (c)(3)(i)(D) 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,
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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.
*
*
*
*
*
77707
(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% ........
N/A .........
10% ..............................
$100x ...........................
10% ..............................
12.5% (100x/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
15% ..............................
$450x ...........................
45% ..............................
56.25% (450x/800x) ....
20% ..............................
$100x ...........................
10% ..............................
12.5% (100x/800x) ......
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-ofnetwork medical/surgical benefits subject to
the coinsurance requirement. The plan may
not impose any level of coinsurance with
30% ..............................
$150x ...........................
15%.
18.75% (150x/800x).
Total
$1,000x
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)
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Copayment amount ..........................
Projected payments ..........................
Percent of total plan costs ...............
Percent subject to copayments ........
$0 ...........
$200x .....
20% ........
N/A .........
$10 ...............................
$200x ...........................
20% ..............................
25% (200x/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
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$15 ...............................
$200x ...........................
20% ..............................
25% (200x/800x) .........
$20 ...............................
$300x ...........................
30% ..............................
37.5% (300x/800x) ......
($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
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$50 ...............................
$100x ...........................
10% ..............................
12.5% (100x/800x) ......
Total
$1,000x
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).
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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 applied to
prescription drug benefits do not violate the
parity requirements of this paragraph (c)(3).
(E) Example 5—(1) Facts. A plan has twotiers 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 innetwork 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 subclassification.
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Non-preferred brand name
drugs (which may have
Tier 1 or Tier 2 alternatives).
60% ...................................
(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, innetwork classification into outpatient, innetwork generalists and outpatient, innetwork specialists.
(2) Conclusion. In this paragraph
(c)(3)(iv)(G) (Example 7), the division of
outpatient, in-network benefits into any subclassifications 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. Consistent with paragraph
(a)(1) of this section, a group health plan
may not impose 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
that applies to substantially all medical/
surgical benefits in the same
classification. For purposes of this
paragraph (c)(4), a nonquantitative
treatment limitation is more restrictive
than the predominant nonquantitative
treatment limitation that applies to
substantially all medical/surgical
benefits in the same classification if the
plan fails to meet the requirements of
paragraph (c)(4)(i) or (iii) of this section.
In such a case, the plan will be
considered to violate Code section
9812(a)(3)(A)(ii), and the
nonquantitative treatment limitation
may not be imposed by the plan with
respect to mental health or substance
use disorder benefits in the
classification.
(i) Requirements related to design and
application of a nonquantitative
treatment limitation—(A) In general. 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,
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Tier 4
Specialty drugs.
50%.
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)(i)(A) of this section, a plan may
not rely upon discriminatory factors or
evidentiary standards to design a
nonquantitative treatment limitation to
be imposed on mental health or
substance use disorder benefits. A factor
or evidentiary standard is
discriminatory if the information,
evidence, sources, or standards on
which the factor or evidentiary standard
are based are biased or not objective in
a manner that discriminates against
mental health or substance use disorder
benefits as compared to medical/
surgical benefits.
(1) Information, evidence, sources, or
standards are considered to be biased or
not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits
if, based on all the relevant facts and
circumstances, the information,
evidence, sources, or standards
systematically disfavor access or are
specifically designed to disfavor access
to mental health or substance use
disorder benefits as compared to
medical/surgical benefits. For purposes
of this paragraph (c)(4)(i)(B)(1), relevant
facts and circumstances may include,
but are not limited to, the reliability of
the source of the information, evidence,
sources, or standards, including any
underlying data; the independence of
the information, evidence, sources, and
standards relied upon; the analyses and
methodologies employed to select the
information and the consistency of their
application; and any known safeguards
deployed to prevent reliance on skewed
data or metrics. Information, evidence,
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sources, or standards are not considered
biased or not objective for this purpose
if the plan has taken the steps necessary
to correct, cure, or supplement any
information, evidence, sources, or
standards that would have been biased
or not objective in the absence of such
steps.
(2) For purposes of this paragraph
(c)(4)(i)(B), historical plan data or other
historical information from a time when
the plan was not subject to Code section
9812 or was not in compliance with
Code section 9812 are considered to be
biased or not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
if the historical plan data or other
historical information systematically
disfavor access or are specifically
designed to disfavor access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits, and the plan has not
taken the steps necessary to correct,
cure, or supplement the data or
information.
(3) For purposes of this paragraph
(c)(4)(i)(B), generally recognized
independent professional medical or
clinical standards and carefully
circumscribed measures reasonably and
appropriately designed to detect or
prevent and prove fraud and abuse that
minimize the negative impact on access
to appropriate mental health and
substance use disorder benefits are not
information, evidence, sources, or
standards that are biased or not
objective in a manner that discriminates
against mental health or substance use
disorder benefits as compared to
medical/surgical benefits. However,
plans must comply with the other
requirements in this paragraph (c)(4), as
applicable, with respect to such
standards or measures that are used as
the basis for a factor or evidentiary
standard used to design or apply a
nonquantitative treatment limitation.
(ii) 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
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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
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.
(iii) Required use of outcomes data—
(A) In general. To ensure that a
nonquantitative treatment limitation
applicable to mental health or substance
use disorder benefits in a classification,
in operation, is no more restrictive than
the predominant nonquantitative
treatment limitation applied to
substantially all medical/surgical
benefits in the classification, a plan
must collect and evaluate relevant data
in a manner reasonably designed to
assess the impact of the nonquantitative
treatment limitation on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits
and carefully consider the impact as
part of the plan’s evaluation. As part of
its evaluation, the plan may not
disregard relevant outcomes data that it
knows or reasonably should know
suggest that a nonquantitative treatment
limitation is associated with material
differences in access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits.
The Secretary, jointly with the Secretary
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)(iii)(A).
(1) Relevant data generally. For
purposes of this paragraph (c)(4)(iii)(A),
relevant data could include, as
appropriate, but are not limited to, the
number and percentage of claims
denials and any other data relevant to
the nonquantitative treatment limitation
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required by State law or private
accreditation standards.
(2) Relevant data for nonquantitative
treatment limitations related to network
composition. In addition to the relevant
data set forth in paragraph
(c)(4)(iii)(A)(1) of this section, relevant
data for nonquantitative treatment
limitations related to network
composition could include, as
appropriate, but are not limited to, 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 (for comparable
services and as benchmarked to a
reference standard).
(3) Unavailability of data. (i) If a plan
newly imposes a nonquantitative
treatment limitation for which relevant
data is initially temporarily unavailable
and the plan therefore cannot comply
with this paragraph (c)(4)(iii)(A), the
plan must include in its comparative
analysis, as required under § 54.9812–
2(c)(5)(i)(C), a detailed explanation of
the lack of relevant data, the basis for
the plan’s conclusion that there is a lack
of relevant data, and when and how the
data will become available and be
collected and analyzed. Such a plan also
must comply with this paragraph
(c)(4)(iii)(A) as soon as practicable once
relevant data becomes available.
(ii) If a plan imposes a
nonquantitative treatment limitation for
which no data exist that can reasonably
assess any relevant impact of the
nonquantitative treatment limitation on
relevant outcomes related to access to
mental health and substance use
disorder benefits and medical/surgical
benefits, the plan must include in its
comparative analysis, as required under
§ 54.9812–2(c)(5)(i)(D), a reasoned
justification as to the basis for the
conclusion that there are no data that
can reasonably assess the
nonquantitative treatment limitation’s
impact, why the nature of the
nonquantitative treatment limitation
prevents the plan from reasonably
measuring its impact, an explanation of
what data was considered and rejected,
and documentation of any additional
safeguards or protocols used to ensure
the nonquantitative treatment limitation
complies with this section. If a plan
becomes aware of data that can
reasonably assess any relevant impact of
the nonquantitative treatment
limitation, the plan must comply with
this paragraph (c)(4)(iii)(A) as soon as
practicable.
(iii) Consistent with paragraph (a)(1)
of this section, paragraphs
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(c)(4)(iii)(A)(3)(i) and (ii) of this section
shall only apply in very limited
circumstances and, where applicable,
shall be construed narrowly.
(B) Material differences. To the extent
the relevant data evaluated under
paragraph (c)(4)(iii)(A) of this section
suggest that the nonquantitative
treatment limitation contributes to
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits in a classification, such
differences will be considered a strong
indicator that the plan violates this
paragraph (c)(4).
(1) Where the relevant data suggest
that the nonquantitative treatment
limitation contributes to material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits
in a classification, the plan must take
reasonable action, as necessary, to
address the material differences to
ensure compliance, in operation, with
this paragraph (c)(4) and must
document the actions that have been or
are being taken by the plan to address
material differences in access to mental
health or substance use disorder
benefits, as compared to medical/
surgical benefits, as required by
§ 54.9812–2(c)(5)(iv).
(2) For purposes of this paragraph
(c)(4)(iii)(B), relevant data are
considered to suggest that the
nonquantitative treatment limitation
contributes to material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits if, based on all
relevant facts and circumstances, and
taking into account the considerations
outlined in this paragraph
(c)(4)(iii)(B)(2), the difference in the data
suggests that the nonquantitative
treatment limitation is likely to have a
negative impact on access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits.
(i) Relevant facts and circumstances,
for purposes of this paragraph
(c)(4)(iii)(B)(2), may include, but are not
limited to, the terms of the
nonquantitative treatment limitation at
issue, the quality or limitations of the
data, causal explanations and analyses,
evidence as to the recurring or nonrecurring nature of the results, and the
magnitude of any disparities.
(ii) Differences in access to mental
health or substance use disorder
benefits attributable to generally
recognized independent professional
medical or clinical standards or
carefully circumscribed measures
reasonably and appropriately designed
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to detect or prevent and prove fraud and
abuse that minimize the negative impact
on access to appropriate mental health
and substance use disorder benefits,
which are used as the basis for a factor
or evidentiary standard used to design
or apply a nonquantitative treatment
limitation, are not considered to be
material for purposes of this paragraph
(c)(4)(iii)(B). To the extent a plan
attributes any differences in access to
the application of such standards or
measures, the plan must explain the
bases for that conclusion in the
documentation prepared under
§ 54.9812–2(c)(5)(iv)(A).
(C) Nonquantitative treatment
limitations related to network
composition. For purposes of applying
paragraph (c)(4)(iii)(A) of this section
with respect to nonquantitative
treatment limitations related to network
composition, a plan must collect and
evaluate relevant data in a manner
reasonably designed to assess the
aggregate impact of all such
nonquantitative treatment limitations on
access to mental health and substance
use disorder benefits and medical/
surgical benefits. Examples of possible
actions that a plan could take to comply
with the requirement under paragraph
(c)(4)(iii)(B)(1) of this section to take
reasonable action, as necessary, to
address any material differences in
access with respect to nonquantitative
treatment limitations related to network
composition, to ensure compliance with
this paragraph (c)(4), include, but are
not limited to:
(1) Strengthening efforts to recruit and
encourage a broad range of available
mental health and substance use
disorder providers and facilities to join
the plan’s network of providers,
including taking actions to increase
compensation or other inducements,
streamline credentialing processes, or
contact providers reimbursed for items
and services provided on an out-ofnetwork basis to offer participation in
the network;
(2) Expanding the availability of
telehealth arrangements to mitigate any
overall mental health and substance use
disorder provider shortages in a
geographic area;
(3) Providing additional outreach and
assistance to participants and
beneficiaries enrolled in the plan to
assist them in finding available innetwork mental health and substance
use disorder providers and facilities;
and
(4) Ensuring that provider directories
are accurate and reliable.
(iv) Prohibition on separate
nonquantitative treatment limitations
applicable only to mental health or
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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.
(v) Effect of final determination of
noncompliance under § 54.9812–2. (A)
If a group health plan receives a final
determination from the Secretary that
the plan is not in compliance with the
requirements of Code section 9812(a)(8)
or § 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 with respect to mental health
or substance use disorder benefits in the
relevant classification, unless and until
the plan demonstrates to the Secretary
compliance with the requirements of
this section or takes appropriate action
to remedy the violation.
(B) A determination by the Secretary
of whether to require cessation of a
nonquantitative treatment limitation
under this paragraph (c)(4)(v) will be
based on an evaluation of the relevant
facts and circumstances involved in the
specific final determination and the
nature of the underlying
nonquantitative treatment limitation
and will take into account the interest
of plan participants and beneficiaries
and feedback from the plan.
(vi) 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.
(A) Example 1 (not comparable and more
stringent factors for reimbursement rate
methodology, in operation)—(1) Facts. A
plan’s reimbursement rate methodology for
outpatient, in-network providers is based on
a variety of factors. 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 are based on a combination of
factors, such as the nature of the service,
duration of the service, intensity and
specialization of training, provider licensure
and type, number of providers qualified to
provide the service in a given geographic
area, and market need (demand). In
operation, the plan utilizes an additional
strategy to further reduce reimbursement
rates for mental health and substance use
disorder non-physician providers from those
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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)(vi)(A) (Example 1), the plan violates
the rules of this paragraph (c)(4). 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 of
mental health and substance use disorder
services by the same percentage for every
CPT code but does not apply the same
reductions to non-physician providers of
medical/surgical services from the rate for
physician providers of medical/surgical
services, in operation, the factors used in
designing and applying the nonquantitative
treatment limitation to mental health and
substance use disorder benefits in the
outpatient, in-network classification are not
comparable to, and are applied more
stringently than, the factors used in designing
and applying the limitation with respect to
medical/surgical benefits in the same
classification. As a result, the
nonquantitative treatment limitation with
respect to mental health or substance use
disorder benefits in the outpatient, innetwork classification is more restrictive than
the predominant nonquantitative treatment
limitation that applies to substantially all
medical/surgical benefits in the same
classification.
(B) Example 2 (strategy for exclusion for
experimental or investigative treatment more
stringently applied to ABA therapy in
operation)—(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, as
experimental, a treatment or procedure when
no professionally recognized treatment
guidelines include the treatment or
procedure as a clinically appropriate
standard 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 as one intervention to treat certain
children with ASD.
(2) Conclusion. In this paragraph
(c)(4)(vi)(B) (Example 2), the plan violates the
rules of this paragraph (c)(4). As written, the
plan excludes coverage of 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
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disorder as including the treatment or
procedure at issue, and fewer than two
randomized controlled trials are available to
support the treatment’s use with respect to
the given condition or procedure. However,
in operation, the plan deviates from this
strategy with respect to ABA therapy because
more than one professionally recognized
treatment guideline defines clinically
appropriate standards of care for ASD as
including ABA therapy to treat certain
children with ASD and more than two
randomized controlled trials are available to
support the use of ABA therapy to treat
certain children with ASD. Therefore, in
operation, the strategy used to design the
nonquantitative treatment limitation for
benefits for the treatment of ASD, which is
a mental health condition, in the outpatient,
in-network classification is not comparable
to, and is applied more stringently than, the
strategy used to design the nonquantitative
treatment limitation for medical/surgical
benefits in the same classification. As a
result, the nonquantitative treatment
limitation with respect to mental health or
substance use disorder benefits in the
outpatient, in-network classification is more
restrictive than the predominant
nonquantitative treatment limitation that
applies to substantially all medical/surgical
benefits in the same classification.
(C) Example 3 (step therapy protocol with
exception for severe or irreversible
consequences, discriminatory factor)—(1)
Facts. A plan’s written terms include a step
therapy protocol that requires participants
and beneficiaries who are prescribed certain
drugs to try and fail a generic or preferred
brand name drug before the plan will cover
the drug originally prescribed by a
participant’s or beneficiary’s attending
provider. The plan provides an exception to
this protocol that was developed solely based
on a methodology developed by an external
third-party organization. The third-party
organization’s methodology, which is not
based on a generally recognized independent
professional medical or clinical standard,
identifies instances in which a delay in
treatment with a drug prescribed for a
medical condition or surgical procedure
could result in either severe or irreversible
consequences. However, with respect to a
drug prescribed for a mental health condition
or a substance use disorder, the third-party
organization’s methodology only identifies
instances in which a delay in treatment could
result in both severe and irreversible
consequences, and the plan does not take any
steps to correct, cure, or supplement the
methodology.
(2) Conclusion. In this paragraph
(c)(4)(vi)(C) (Example 3), the plan violates the
rules of paragraph (c)(4)(i)(B) of this section.
The source upon which the factor used to
apply the step therapy protocol is based is
biased or not objective in a manner that
discriminates against mental health or
substance use disorder benefits as compared
to medical/surgical benefits because it
addresses instances in which a delay in
treatment with a drug prescribed for a
medical condition or surgical procedure
could result in either severe or irreversible
consequences, but only addresses instances
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in which a delay in treatment with a drug
prescribed for a mental health condition or
substance use disorder could result in both
severe and irreversible consequences, and the
plan fails to take the steps necessary to
correct, cure, or supplement the methodology
so that it is not biased and is objective. Based
on the relevant facts and circumstances, this
source systematically disfavors access or is
specifically designed to disfavor access to
mental health or substance use disorder
benefits as compared to medical/surgical
benefits. Therefore, the factor used to apply
the step therapy protocol is discriminatory
for purposes of determining comparability
and stringency under paragraph (c)(4)(i)(A) of
this section, and may not be relied upon by
the plan.
(D) Example 4 (use of historical plan data
and plan steps to correct, cure, or
supplement)—(1) Facts. A plan’s
methodology for calculating provider
reimbursement rates relies only on historical
plan data on total plan spending for each
specialty, divided between mental health and
substance use disorder providers and
medical/surgical providers, from a time when
the plan was not subject to Code section
9812. The plan has used these historical plan
data for many years to establish base
reimbursement rates in all provider
specialties for which it provides medical/
surgical, mental health, and substance use
disorder benefits in the inpatient, in-network
classification. In evaluating the use of these
historical plan data in the design of the
methodology for calculating provider
reimbursement rates, the plan determined,
based on all the relevant facts and
circumstances, that the historical plan data
systematically disfavor access or are
specifically designed to disfavor access to
mental health or substance use disorder
benefits as compared to medical/surgical
benefits. To ensure this information about
historical reimbursement rates is not biased
and is objective, the plan supplements its
methodology to develop the base
reimbursement rates for mental health and
substance use disorder providers in
accordance with additional information,
evidence, sources, and standards that reflect
the increased demand for mental health and
substance use disorder benefits in the
inpatient, in-network classification and to
attract sufficient mental health and substance
use disorder providers to the network, so that
the relevant facts and circumstances indicate
the supplemented information, evidence,
sources, or standards do not systematically
disfavor access and are not specifically
designed to disfavor access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
(2) Conclusion. In this paragraph
(c)(4)(vi)(D) (Example 4), the plan does not
violate the rules of paragraph (c)(4)(i)(B) of
this section with respect to the plan’s
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification. The relevant facts and
circumstances indicate that the plan’s use of
only historical plan data to design its
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification would otherwise be
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considered to be biased or not objective in a
manner that discriminates against mental
health or substance use disorder benefits as
compared to medical/surgical benefits under
paragraph (c)(4)(i)(B)(2) of this section, since
the historical data systematically disfavor
access or are specifically designed to disfavor
access to mental health or substance use
disorder benefits as compared to medical/
surgical benefits. However, the plan took the
steps necessary to supplement the
information, evidence, sources, and
standards to reasonably reflect the increased
demand for mental health and substance use
disorder benefits in the inpatient, in-network
classification, and adjust the methodology to
increase reimbursement rates for those
benefits, thereby ensuring that the
information, evidence, sources, and
standards relied upon by the plan for this
purpose are not biased and are objective.
Therefore, the factors and evidentiary
standards used to design the plan’s
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification are not discriminatory.
(E) Example 5 (generally recognized
independent professional medical or clinical
standards and more stringent prior
authorization requirement in operation)—(1)
Facts. The provisions of a plan state that it
relies on, and does not deviate from,
generally recognized independent
professional medical or clinical standards to
inform the factor used to design prior
authorization requirements for both medical/
surgical and mental health and substance use
disorder benefits in the prescription drug
classification. The 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 for treatment of opioid use
disorder, every 30 days, which is
inconsistent with the generally recognized
independent professional medical standard
on which the factor used to design the
limitation is based. The plan’s factor used to
design prior authorization requirements for
medical/surgical benefits in the prescription
drug classification relies on, and does not
deviate from, generally recognized
independent professional medical or clinical
standards.
(2) Conclusion. In this paragraph
(c)(4)(vi)(E) (Example 5), the plan violates the
rules of this paragraph (c)(4). The American
Society of Addiction Medicine national
practice guidelines on which the factor used
to design prior authorization requirements
for substance use disorder benefits is based
are generally recognized independent
professional medical or clinical standards
that are not considered to be biased or not
objective in a manner that discriminates
against mental health and substance use
disorder benefits under paragraph
(c)(4)(i)(B)(3) of this section. However, the
plan must comply with other requirements in
this paragraph (c)(4), as applicable, with
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respect to such standards or measures that
are used as the basis for a factor or
evidentiary standard used to design or apply
a nonquantitative treatment limitation. In
operation, the plan’s factor used to design
and apply prior authorization requirements
with respect to substance use disorder
benefits is not comparable to, and is applied
more stringently than, the same factor used
to design and apply prior authorization
requirements for medical/surgical benefits,
because the factor relies on, and does not
deviate from, generally recognized
independent professional medical or clinical
standards for medical/surgical benefits, but
deviates from the relevant guidelines for
substance use disorder benefits. As a result,
the nonquantitative treatment limitation with
respect to substance use disorder benefits in
the prescription drug classification is more
restrictive than the predominant
nonquantitative treatment limitation that
applies to substantially all medical/surgical
benefits in the same classification.
(F) Example 6 (plan claims no data exist
to reasonably assess impact of
nonquantitative treatment limitation on
access; medical necessity criteria)—(1) Facts.
A plan approves or denies claims for mental
health and substance use disorder benefits
and for medical/surgical benefits in the
inpatient, in-network and outpatient, innetwork classifications based on medical
necessity criteria. The plan states in its
comparative analysis that no data exist that
can reasonably assess any relevant impact of
the medical necessity criteria nonquantitative
treatment limitation on relevant outcomes
related to access to mental health or
substance use disorder benefits as compared
to the plan’s medical necessity criteria
nonquantitative treatment limitation’s impact
on relevant outcomes related to access to
medical/surgical benefits in the relevant
classifications, without further explanation.
(2) Conclusion. In this paragraph
(c)(4)(vi)(F) (Example 6), the plan violates
this paragraph (c)(4). The plan does not
comply with paragraph (c)(4)(iii)(A)(3)(ii) of
this section because the plan did not include
in its comparative analysis, as required under
§ 54.9812–2(c)(5)(i)(D), a reasoned
justification as to the basis for its conclusion
that there are no data that can reasonably
assess the nonquantitative treatment
limitation’s impact, an explanation of why
the nature of the nonquantitative treatment
limitation prevents the plan from reasonably
measuring its impact, an explanation of what
data was considered and rejected, and
documentation of any additional safeguards
or protocols used to ensure the
nonquantitative treatment limitation
complies with this paragraph (c)(4). Data that
could reasonably assess the medical
necessity criteria nonquantitative treatment
limitation’s impact might include, for
example, the number and percentage of
claims denials, or the number and percentage
of claims that were approved for a lower
level of care than the level requested on the
initial claim. Therefore, because the plan has
not collected and evaluated relevant data in
a manner reasonably designed to assess the
impact of the nonquantitative treatment
limitation on relevant outcomes related to
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access to mental health and substance use
disorder benefits and medical/surgical
benefits in the relevant classifications, the
plan violates the requirements of paragraph
(c)(4)(iii) of this section, and violates the
requirements under § 54.9812–2(c)(5)(i)(D)
because it did not include sufficient
information in its comparative analysis with
respect to the lack of relevant data.
(G) Example 7 (concurrent review data
collection; no material difference in access)—
(1) Facts. A plan follows a written process to
apply a concurrent review nonquantitative
treatment limitation to all medical/surgical
benefits and mental health and substance use
disorder benefits within the inpatient, innetwork classification. Under this 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. The
plan collects relevant data, including the
number of referrals to second-level review,
and the number of denials of claims for
medical/surgical benefits and mental health
and substance use disorder benefits subject to
concurrent review as compared to the total
number of claims subject to concurrent
review, in the inpatient, in-network
classification. The plan also collects and
evaluates the number of denied claims for
medical/surgical benefits and mental health
and substance use disorder benefits that are
overturned on appeal in the inpatient, innetwork classification. The plan evaluates
the relevant data and determines that, based
on the relevant facts and circumstances, the
data do not suggest that the concurrent
review nonquantitative treatment limitation
contributes to material differences in access
to mental health or substance use disorder
benefits as compared to medical/surgical
benefits in the classification Upon requesting
the plan’s comparative analysis for the
concurrent review nonquantitative treatment
limitation and reviewing the relevant data,
the Secretary does not request additional data
and agrees that the data do not suggest
material differences in access.
(2) Conclusion. In this paragraph
(c)(4)(vi)(G) (Example 7), the plan does not
violate the rules of paragraph (c)(4)(iii) of this
section. The plan collected and evaluated
relevant data in a manner reasonably
designed to assess the impact of the
nonquantitative treatment limitation on
relevant outcomes related to access to mental
health and substance use disorder benefits
and medical/surgical benefits and considered
the impact as part of its evaluation. Because
the relevant data evaluated do not suggest
that the nonquantitative treatment limitation
contributes to material differences in access
to mental health and substance use disorder
benefits as compared to medical/surgical
benefits in the inpatient, in-network
classification, under paragraph (c)(4)(iii)(B)
of this section, there is no strong indicator
that the plan violates this paragraph (c)(4).
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(H) Example 8 (material difference in
access for prior authorization requirement
with reasonable action)—(1) Facts. A plan
requires prior authorization 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. The plan
collects and evaluates relevant data in a
manner reasonably designed to assess the
impact of the prior authorization requirement
on relevant outcomes related to access to
mental health and substance use disorder
benefits and medical/surgical benefits in the
inpatient, in-network classification. The
plan’s written process for prior authorization
states that the plan approves inpatient, innetwork benefits for medical conditions and
surgical procedures and mental health and
substance use disorder benefits 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.
Approvals for mental health and substance
use disorder benefits are most commonly
given only for 1 day, after which a treatment
plan must be submitted by the patient’s
attending provider and approved by the plan.
The relevant data show that approvals for 7
days are most common for medical
conditions and surgical procedures under
this plan. Based on all the relevant facts and
circumstances, the difference in the relevant
data suggests that the nonquantitative
treatment limitation is likely to have a
negative impact on access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
Therefore, the data suggest that the
nonquantitative treatment limitation
contributes to material differences in access.
To address these material differences in
access, the plan consults more recent medical
guidelines to update the factors that inform
its medical necessity nonquantitative
treatment limitations. Based on this review,
the plan modifies the limitation so that
inpatient, in-network prior authorization
requests for mental health or substance use
disorder benefits are approved for similar
periods to what is approved for medical/
surgical benefits. The plan includes
documentation of this action as part of its
comparative analysis.
(2) Conclusion. In this paragraph
(c)(4)(vi)(H) (Example 8), the plan does not
violate the rules of paragraph (c)(4)(iii) of this
section. While relevant data for the plan’s
prior authorization requirements suggested
that the nonquantitative treatment limitation
contributes to material differences in access
to mental health and substance use disorder
benefits as compared to inpatient, in-network
medical/surgical benefits under paragraph
(c)(4)(iii)(B) of this section, the plan has
taken reasonable action, as necessary, to
ensure compliance, in operation, with this
paragraph (c)(4) by updating the factors that
inform its prior authorization
nonquantitative treatment limitation for
inpatient, in-network mental health and
substance use disorder benefits so that these
benefits are approved for similar periods to
what is approved for medical/surgical
benefits. The plan also documents its action
taken to address material differences in
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access to inpatient, in-network benefits as
required by paragraph (c)(4)(iii)(B)(1) of this
section.
(I) Example 9 (differences attributable to
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 factors
and evidentiary standards used to design and
apply the medical management requirement
rely on independent professional medical or
clinical standards that are generally
recognized by health care providers and
facilities in relevant clinical specialties. 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. The plan collects
and evaluates relevant data in a manner
reasonably designed to assess the impact of
the medical management nonquantitative
treatment limitation on relevant outcomes
related to access to mental health and
substance use disorder benefits and medical/
surgical benefits, and considers the impact as
part of the plan’s evaluation, as required by
paragraph (c)(4)(iii)(A) of this section. 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. The plan correctly determines that
these differences in access are attributable to
the generally recognized independent
professional medical or clinical standards
used as the basis for the factors and
evidentiary standards used to design or apply
the limitation and adequately explains the
bases for that conclusion as part of its
comparative analysis.
(2) Conclusion. In this paragraph
(c)(4)(vi)(I) (Example 9), the plan does not
violate the rules of this paragraph (c)(4).
Generally recognized independent
professional medical or clinical standards of
care are not considered to be information,
evidence, sources, or standards that are
biased and not objective in a manner that
discriminates against mental health or
substance use disorder benefits as compared
to medical/surgical benefits, and the plan
otherwise complies with the requirements in
paragraph (c)(4)(i) of this section.
Additionally, the plan does not violate
paragraph (c)(4)(iii) of this section because it
has collected and evaluated relevant data, the
differences in access are attributable to the
generally recognized independent
professional medical or clinical standards
that are used as the basis for the factors and
evidentiary standards used to design or apply
the medical management nonquantitative
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treatment limitation, and the plan explains
the bases for this conclusion in its
comparative analysis. As a result, the
nonquantitative treatment limitation with
respect to mental health or substance use
disorder benefits in the inpatient, out-ofnetwork classification is no more restrictive
than the predominant nonquantitative
treatment limitation that applies to
substantially all medical/surgical benefits in
the same classification.
(J) Example 10 (material differences in
access for standards for provider admission
to a network with reasonable action)—(1)
Facts. A plan applies nonquantitative
treatment limitations related to network
composition in the inpatient, in-network and
outpatient, 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 processes, strategies,
evidentiary standards, and other factors used
in designing and applying the
nonquantitative treatment limitations related
to network composition for mental health or
substance use disorder benefits in the
outpatient, in-network and inpatient, innetwork 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)(i) of this section. In
order to ensure, in operation, that the
nonquantitative treatment limitations are no
more restrictive than the predominant
nonquantitative treatment limitations applied
to substantially all medical/surgical benefits
in the classification, the plan collects and
evaluates relevant data in a manner
reasonably designed to assess the aggregate
impact of all the nonquantitative treatment
limitations related to network composition
on relevant outcomes related to 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 evaluation. The plan
considers relevant data that is known, or
reasonably should be known, including
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 (for comparable services
and benchmarked to a reference standard, as
appropriate); and in-network and out-ofnetwork utilization rates (including data
related to the dollar value and number of
provider claims submissions). The plan
determines that the relevant data suggest that
the nonquantitative treatment limitations in
the aggregate contribute to material
differences in access to mental health and
substance use disorder benefits compared to
medical/surgical benefits in the
classifications because, based on all the
relevant facts and circumstances, the
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differences in the data suggest that the
nonquantitative treatment limitations related
to network composition are likely to have a
negative impact on access to mental health or
substance use disorder benefits as compared
to medical/surgical benefits. The plan takes
reasonable actions, as necessary, to address
the material differences in access, to ensure
compliance, in operation, with this
paragraph (c)(4), by strengthening its efforts
to recruit and encourage a broad range of
available providers and facilities to join the
plan’s network of providers, including by
taking actions to increase compensation and
other inducements, streamline credentialing
processes, contact providers reimbursed for
items and services provided on an out-ofnetwork basis to offer participation in the
network, and develop a process to monitor
the effects of such efforts; expanding the
availability of telehealth arrangements to
mitigate overall provider shortages in certain
geographic areas; providing additional
outreach and assistance to participants and
beneficiaries enrolled in the plan to assist
them in finding available in-network
providers and facilities; and ensuring that the
plan’s provider directories are accurate and
reliable. The plan documents the efforts that
it has taken to address the material
differences in access that the data revealed,
and the plan includes the documentation as
part of its comparative analysis submission.
(2) Conclusion. In this paragraph
(c)(4)(vi)(J) (Example 10), the plan does not
violate the rules of this paragraph (c)(4). The
plan’s nonquantitative treatment limitations
related to network composition comply with
the rules of paragraph (c)(4)(i) of this section.
Additionally, the plan collects and evaluates
relevant data, as required under paragraph
(c)(4)(iii)(A) of this section, in a manner
reasonably designed to assess the aggregate
impact of all such nonquantitative treatment
limitations on relevant outcomes related to
access to mental health and substance use
disorder benefits and medical/surgical
benefits, as required under paragraph
(c)(4)(iii)(C) of this section. While the data
suggest that the nonquantitative treatment
limitations contribute to material differences
in access to mental health and substance use
disorder benefits as compared to medical/
surgical benefits, the plan has taken
reasonable action, as necessary, to ensure
compliance with this paragraph (c)(4). The
plan also documents the actions that have
been and are being taken by the plan to
address material differences as required by
§ 54.9812–21(c)(5)(iv). As a result, the
network composition nonquantitative
treatment limitations with respect to mental
health or substance use disorder benefits in
the inpatient, in-network and outpatient, innetwork classifications are no more
restrictive than the predominant
nonquantitative treatment limitations that
apply to substantially all medical/surgical
benefits in the same classifications.
(K) Example 11 (separate EAP exhaustion
treatment limitation applicable only to
mental health or substance use disorder
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
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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)(vi)(K) (Example 11), the requirement
that limits 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)(4). 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)(iv) 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 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 exclusion for
treatment in a residential facility applicable
only to mental health and substance use
disorder benefits)—(1) Facts. A plan
generally covers inpatient, in-network and
inpatient, out-of-network treatment without
any limitations on setting, including skilled
nursing facilities and rehabilitation hospitals,
provided other medical necessity standards
are satisfied. The plan has an exclusion for
treatment at residential facilities, 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)(vi)(L) (Example 12), the plan violates
the rules of paragraph (c)(4)(iv) of this
section. The exclusion of treatment at
residential facilities is a separate
nonquantitative treatment limitation
applicable only to mental health and
substance use disorder benefits in the
inpatient, in-network and inpatient, out-ofnetwork classifications because the plan does
not apply a comparable exclusion with
respect to any medical/surgical benefits in
the same benefit classification.
(M) Example 13 (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 the plan’s exclusion
of mental health and substance use disorder
benefits for failure to complete a course of
treatment in the inpatient, in-network
classification under § 54.9812–2(d), the plan
submits a comparative analysis for the
nonquantitative treatment limitation. After
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review of the comparative analysis, as well
as additional information submitted by the
plan after the Secretary determines that the
plan has not submitted sufficient information
to be responsive to the request, 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
inpatient, in-network 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. Under
§ 54.9812–2(d)(3), the plan submits a
corrective action plan and additional
comparative analyses within 45 calendar
days after the initial determination. However,
the corrective action plan does not alter or
eliminate the exclusion or alter the processes,
strategies, evidentiary standards, and other
factors used in designing and applying the
exclusion. Moreover, the additional
comparative analysis still does not include
sufficient information. The Secretary then
determines that the additional comparative
analyses do not demonstrate compliance
with the requirements of this paragraph
(c)(4). Accordingly, the plan receives a final
determination of noncompliance with Code
section 9812(a)(8) and § 54.9812–2 from the
Secretary, which concludes that the plan did
not demonstrate compliance through the
comparative analysis process. After
considering the relevant facts and
circumstances, and considering the interests
of plan participants and beneficiaries, as well
as feedback from the plan, the Secretary
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 exclusion of benefits for failure to
complete a course of treatment in the
inpatient, in-network classification.
(2) Conclusion. In this paragraph
(c)(4)(vi)(M) (Example 13), by continuing to
impose the exclusion of mental health and
substance use disorder benefits for failure to
complete a course of treatment in the
inpatient, in-network classification after the
Secretary directs the plan not to impose this
nonquantitative treatment limitation, the
plan violates the requirements of paragraph
(c)(4)(v) of this section.
*
*
*
*
*
* * *
(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,
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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 § 54.9812–2. In addition, 29
CFR 2560.503–1 and § 54.9815–2719 set
forth rules regarding claims and
appeals, including the right of claimants
(or their authorized representative) who
have received 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
that is required to provide 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 at 45 CFR 146.136 and
146.137 to satisfy the requirement to
provide coverage for mental health and
substance use disorder services,
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including behavioral health treatment,
as part of essential health benefits.
*
*
*
*
*
(i) * * *
(1) In general. Except as provided in
paragraph (i)(2) of this section—
(i) This section applies to group
health plans on the first day of the first
plan year beginning on or after January
1, 2025, except that the requirements of
paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and
(c)(4)(iii) of this section apply on the
first day of the first plan year beginning
on or after January 1, 2026.
(ii) Until the applicability date in
paragraph (i)(1)(i) of this section, plans
are required to continue to comply with
26 CFR 54.9812–1, revised as of April 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.
■ Par. 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
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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.
(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 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; and
(iii) A description of which benefits
are included in each classification set
forth in § 54.9812–1(c)(2)(ii)(A).
(2) Identification and definition of the
factors and evidentiary standards 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 every factor
considered or relied upon, 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;
(B) A description of each evidentiary
standard used to design or apply each
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factor (and the source of each
evidentiary standard) identified under
paragraph (c)(2)(i) of this section; and
(C) A description of any steps the plan
has taken to correct, cure, or
supplement any information, evidence,
sources, or standards that would
otherwise have been considered biased
or not objective under § 54.9812–
1(c)(4)(i)(B)(1) in the absence of such
steps.
(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 under
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
designations 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 deviations or variations 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
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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 deviations or
variations.
(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 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 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 nonquantitative treatment
limitation or that address the
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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 reasons for
any deviations or variations 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
deviations or variations, 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, 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 evaluates whether, 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;
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(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;
(C) With respect to a nonquantitative
treatment limitation for which relevant
data is temporarily unavailable as
described in § 54.9812–
1(c)(4)(iii)(A)(3)(i), a detailed
explanation of the lack of relevant data,
the basis for the plan’s conclusion that
there is a lack of relevant data, and
when and how the data will become
available and be collected and analyzed;
and
(D) With respect to a nonquantitative
treatment limitation for which no data
exist that can reasonably assess any
relevant impact of the nonquantitative
treatment limitation on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits as
described in § 54.9812–
1(c)(4)(iii)(A)(3)(ii), a reasoned
justification as to the basis for the
conclusion that there are no data that
can reasonably assess the
nonquantitative treatment limitation’s
impact, an explanation of why the
nature of the nonquantitative treatment
limitation prevents the plan from
reasonably measuring its impact, an
explanation of what data was
considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
that the nonquantitative treatment
limitation complies with § 54.9812–
1(c)(4);
(ii) Identification of the relevant data
collected and evaluated, as required
under § 54.9812–1(c)(4)(iii)(A);
(iii) Documentation 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:
(A) The evaluation of relevant data as
required under § 54.9812–1(c)(4)(iii)(A);
and
(B) A reasoned justification and
analysis that explains why the plan
concluded that any differences in the
relevant data do or do not suggest the
nonquantitative treatment limitation
contributes to material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits, in accordance
with § 54.9812–1(c)(4)(iii)(B)(2);
(iv) A detailed explanation of any
material differences in access
demonstrated by the outcomes
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evaluated under paragraph (c)(5)(iii) of
this section, including:
(A) A reasoned explanation of any
material differences in access 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 (including any
considerations beyond a plan’s control
that contribute to the existence of
material differences) and a detailed
explanation of the bases for concluding
that material differences are not
attributable to differences in the
comparability or relative stringency of
the nonquantitative treatment
limitation; and
(B) To the extent differences in access
to mental health or substance use
disorder benefits are attributable to
generally recognized independent
professional medical or clinical
standards or carefully circumscribed
measures reasonably and appropriately
designed to detect or prevent and prove
fraud and abuse that minimize the
negative impact on access to appropriate
mental health and substance use
disorder benefits, and such standards or
measures are used as the basis for a
factor or evidentiary standard used to
design or apply a nonquantitative
treatment limitation, documentation
explaining how any such differences are
attributable to those standards or
measures, as required in § 54.9812–
1(c)(4)(iii)(B)(2)(ii); and
(v) A discussion of the actions that
have been or are being taken by the plan
to address any material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits, including the
actions the plan has taken or is taking
under § 54.9812–1(c)(4)(iii)(B)(1) to
address material differences to comply,
in operation, with § 54.9812–1(c)(4),
including, as applicable:
(A) A reasoned explanation of any
material differences in access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits that persist despite
reasonable actions that have been or are
being taken; and
(B) For a plan designing and applying
one or more nonquantitative treatment
limitations related to network
composition, a discussion of the actions
that have been or are being taken to
address material differences in access to
in-network mental health and substance
use disorder benefits as compared to innetwork medical/surgical benefits,
including those listed in § 54.9812–
1(c)(4)(iii)(C).
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(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 or is not (or
might or might not be) in compliance
with the requirements of § 54.9812–
1(c)(4), including any additional 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 not otherwise
discussed in the comparative analysis;
(iv) The date the analysis is
completed 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
the 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 determine whether the
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comparative analysis required in
paragraph (b) of this section complies
with paragraph (c) of this section or
whether the plan complies with
§ 54.9812–1(c)(4), 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). 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
initial determination by 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 (c) of this
section that demonstrate compliance
with § 54.9812–1(c)(4), not 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 business days of
receipt of the final determination of
noncompliance, and the plan must
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 timeframe.
(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 the
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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 submitted or
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 § 54.9812–1(c)(4) or this section,
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 concurred
with those actions; 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
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paragraph (b) of this section when
requested by:
(1) Any applicable State authority;
and
(2) A participant or beneficiary
(including 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), on the first day of
the first plan year beginning on or after
January 1, 2025, except the
requirements of paragraphs (c)(2)(ii)(C),
(c)(5)(i)(C) and (D), and (c)(5)(ii) through
(v) of this section apply on the first day
of the first plan year beginning on or
after January 1, 2026.
(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
amends 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;
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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), (c)(2)(ii)(A) introductory text,
(c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
■ d. In paragraph (c)(3)(iii), adding
introductory text;
■ e. Revising paragraphs (c)(3)(iii)(A)
and (B), (c)(3)(iv), (c)(4), (d)(3), (e)(4),
and (i)(1); and
■ f. 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 aggregate
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
in the same classification, 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
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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 or substance use
disorder benefits under the plan or
coverage than they impose on access to
medical/surgical benefits in the same
classification of 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 as of
November 22, 2024, is the Diagnostic
and Statistical Manual of Mental
Disorders, Fifth Edition, Text Revision
published in March 2022. A subsequent
version of the DSM published after
November 22, 2024, will be considered
the most current version beginning on
the first day of the plan year that is one
year after the date the subsequent
version is published.
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
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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 as of
November 22, 2024, is the International
Classification of Diseases, 10th
Revision, Clinical Modification adopted
for the period beginning on October 1,
2015. Any subsequent version of the
ICD adopted through 45 CFR 162.1002
after November 22, 2024, will be
considered the most current version
beginning on the first day of the plan
year that is one year after the date the
subsequent version is adopted.
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
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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.
Examples of 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 that are used to determine
when and how a participant or
beneficiary may access certain services;
and the development and approval of a
treatment plan used in a concurrent
review process to determine whether a
specific request should be granted or
denied. Processes also include the
specific procedures used by staff or
other representatives of a plan or issuer
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(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 the degree of 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; the method of
determining whether and how to
deviate from generally accepted
standards of care in concurrent reviews;
the selection of information deemed
reasonably necessary to make medical
necessity determinations; reliance on
treatment guidelines or guidelines
provided by third-party organizations in
the design of a nonquantitative
treatment limitation; and rationales
used in selecting and adopting certain
threshold amounts to apply a
nonquantitative treatment limitation,
professional standards and protocols to
determine utilization management
standards, and fee schedules used to
determine provider reimbursement
rates, used as part of a nonquantitative
treatment limitation. Strategies also
include the method of creating and
determining the 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 or issuer’s methods
for making 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
(such as standards related to network
composition), which otherwise limit the
scope or duration of benefits for
treatment under a plan or coverage. (See
paragraph (c)(4)(ii) 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
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include annual, episode, and lifetime
day and visit limits. See paragraph
(c)(4)(ii) 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), it must provide
meaningful benefits for that mental
health condition or substance use
disorder in every classification in which
medical/surgical benefits are provided.
For purposes of this paragraph
(c)(2)(ii)(A), whether the benefits
provided are meaningful benefits is
determined in comparison to the
benefits provided for medical
conditions and surgical procedures in
the classification and requires, at a
minimum, coverage of benefits for that
condition or disorder in each
classification in which the plan (or
coverage) provides benefits for one or
more medical conditions or surgical
procedures. A plan (or coverage) does
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not provide meaningful benefits under
this paragraph (c)(2)(ii)(A) unless it
provides benefits for a core treatment for
that condition or disorder in each
classification in which the plan (or
coverage) provides benefits for a core
treatment for one or more medical
conditions or surgical procedures. For
purposes of this paragraph (c)(2)(ii)(A),
a core treatment for a condition or
disorder is a standard treatment or
course of treatment, therapy, service, or
intervention indicated by generally
recognized independent standards of
current medical practice. If there is no
core treatment for a covered mental
health condition or substance use
disorder with respect to a classification,
the plan (or coverage) is not required to
provide benefits for a core treatment for
such condition or disorder in that
classification (but must provide benefits
for such condition or disorder in every
classification in which medical/surgical
benefits are provided). 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) Examples. The rules of this
paragraph (c)(2)(ii) 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. With regard to the
examples in this paragraph (c)(2)(ii)(C),
references to any particular core
treatment are included for illustrative
purposes only. Plans and issuers must
consult generally recognized
independent standards of current
medical practice to determine the
applicable core treatment, therapy,
service, or intervention for any covered
condition or disorder.
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77721
(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 covers
treatment for autism spectrum disorder
(ASD), a mental health condition, and covers
outpatient, out-of-network developmental
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screenings for ASD but excludes all other
benefits for outpatient treatment for ASD,
including applied behavior analysis (ABA)
therapy, when provided on an out-of-network
basis. The plan generally covers the full
range of outpatient treatments (including
core treatments) and treatment settings for
medical conditions and surgical procedures
when provided on an out-of-network basis.
Under the generally recognized independent
standards of current medical practice
consulted by the plan, developmental
screenings alone do not constitute a core
treatment for ASD.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(5) (Example 5), the plan violates
the rules of this paragraph (c)(2)(ii). Although
the plan covers benefits for ASD in the
outpatient, out-of-network classification, it
only covers developmental screenings, so it
does not cover a core treatment for ASD in
the classification. Because the plan generally
covers the full range of medical/surgical
benefits, including a core treatment for one
or more medical conditions or surgical
procedures in the classification, it fails to
provide meaningful benefits for treatment of
ASD in the classification.
(6) Example 6—(i) Facts. Same facts as in
paragraph (c)(2)(ii)(C)(5) of this section
(Example 5), except that the plan is an HMO
that does not cover the full range of medical/
surgical benefits, including a core treatment
for any medical conditions or surgical
procedures in the outpatient, out-of-network
classification (except as required under
ERISA sections 716 and 717), but covers
benefits for medical conditions and surgical
procedures in the inpatient, in-network;
outpatient, in-network; emergency care; and
prescription drug classifications.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(6) (Example 6), the plan does not
violate the rules of this paragraph (c)(2)(ii).
Because the plan does not provide
meaningful benefits, including for a core
treatment for any medical condition or
surgical procedure in the outpatient, out-ofnetwork classification (except as required
under ERISA sections 716 and 717), the plan
is not required to provide meaningful
benefits for any mental health conditions or
substance use disorders in that classification.
Nevertheless, the plan must provide
meaningful benefits for each mental health
condition and substance use disorder for
which the plan provides benefits in every
classification in which meaningful medical/
surgical benefits are provided as required
under paragraph (c)(2)(ii)(A) of this section.
This example does not address whether the
plan has complied with other applicable
requirements of this section in excluding
coverage of ABA therapy in the outpatient,
out-of-network classification.
(7) Example 7—(i) Facts. A plan provides
extensive benefits, including for core
treatments for many medical conditions and
surgical procedures in the outpatient, innetwork classification, including nutrition
counseling for diabetes and obesity. The plan
also generally covers diagnosis and treatment
for eating disorders, which are mental health
conditions, including coverage for nutrition
counseling to treat eating disorders in the
outpatient, in-network classification.
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Nutrition counseling is a core treatment for
eating disorders, in accordance with
generally recognized independent standards
of current medical practice consulted by the
plan.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(7) (Example 7), the plan does not
violate the rules of this paragraph (c)(2)(ii).
The coverage of diagnosis and treatment for
eating disorders, including nutrition
counseling, in the outpatient, in-network
classification results in the plan providing
meaningful benefits for the treatment of
eating disorders in the classification, as
determined in comparison to the benefits
provided for medical conditions or surgical
procedures in the classification.
(8) Example 8—(i) Facts. A plan provides
extensive benefits for the core treatments for
many medical conditions and surgical
procedures in the outpatient, in-network and
prescription drug classifications. The plan
provides coverage for diagnosis and
treatment for opioid use disorder, a substance
use disorder, in the outpatient, in-network
classification, by covering counseling and
behavioral therapies and, in the prescription
drug classification, by covering medications
to treat opioid use disorder (MOUD).
Counseling and behavioral therapies and
MOUD, in combination, are one of the core
treatments for opioid use disorder, in
accordance with generally recognized
independent standards of current medical
practice consulted by the plan.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(8) (Example 8), the plan does not
violate the rules of this paragraph (c)(2)(ii).
The coverage of counseling and behavioral
therapies and MOUD, in combination, in the
outpatient, in-network classification and
prescription drug classification, respectively,
results in the plan providing meaningful
benefits for the treatment of opioid use
disorder in the outpatient, in-network and
prescription drug classifications.
(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
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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. The rules of this
paragraph (c)(3)(i)(D) 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
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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
77723
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% ........
N/A .........
10% ..............................
$100x ...........................
10% ..............................
12.5% (100x/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
15% ..............................
$450x ...........................
45% ..............................
56.25% (450x/800x) ....
20% ..............................
$100x ...........................
10% ..............................
12.5% (100x/800x) ......
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-ofnetwork medical/surgical benefits subject to
the coinsurance requirement. The plan may
not impose any level of coinsurance with
30% ..............................
$150x ...........................
15%.
18.75% (150x/800x).
Total.
$1,000x.
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)
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Copayment amount ..........................
Projected payments ..........................
Percent of total plan costs ...............
Percent subject to copayments ........
$0 ...........
$200x .....
20% ........
N/A .........
$10 ...............................
$200x ...........................
20% ..............................
25% (200x/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
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$15 ...............................
$200x ...........................
20% ..............................
25% (200x/800x) .........
$20 ...............................
$300x ...........................
30% ..............................
37.5% (300x/800x) ......
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
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$50 ...............................
$100x ...........................
10%.
12.5% (100x/800x).
Total.
$1,000x.
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).
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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 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 innetwork 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 subclassification.
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Non-preferred brand name
drugs (which may have
Tier 1 or Tier 2 alternatives).
60% ...................................
(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, innetwork classification into outpatient, innetwork generalists and outpatient, innetwork specialists.
(2) Conclusion. In this paragraph
(c)(3)(iv)(G) (Example 7), the division of
outpatient, in-network benefits into any subclassifications 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. Consistent with paragraph
(a)(1) 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 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 that applies to substantially
all medical/surgical benefits in the same
classification. For purposes of this
paragraph (c)(4), a nonquantitative
treatment limitation is more restrictive
than the predominant nonquantitative
treatment limitation that applies to
substantially all medical/surgical
benefits in the same classification if the
plan or issuer fails to meet the
requirements of paragraph (c)(4)(i) or
(iii) of this section. In such a case, the
plan (or health insurance coverage) will
be considered to violate ERISA section
712(a)(3)(A)(ii), and the nonquantitative
treatment limitation may not be
imposed by the plan (or health
insurance coverage) with respect to
mental health or substance use disorder
benefits in the classification.
(i) Requirements related to design and
application of a nonquantitative
treatment limitation—(A) In general. A
plan (or health insurance coverage) may
not impose a nonquantitative treatment
limitation with respect to mental health
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Tier 4
Specialty drugs.
50%.
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)(i)(A) of this section, a plan (or
health insurance coverage) may not rely
upon discriminatory factors or
evidentiary standards to design a
nonquantitative treatment limitation to
be imposed on mental health or
substance use disorder benefits. A factor
or evidentiary standard is
discriminatory if the information,
evidence, sources, or standards on
which the factor or evidentiary standard
are based are biased or not objective in
a manner that discriminates against
mental health or substance use disorder
benefits as compared to medical/
surgical benefits.
(1) Information, evidence, sources, or
standards are considered to be biased or
not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits
if, based on all the relevant facts and
circumstances, the information,
evidence, sources, or standards
systematically disfavor access or are
specifically designed to disfavor access
to mental health or substance use
disorder benefits as compared to
medical/surgical benefits. For purposes
of this paragraph (c)(4)(i)(B)(1), relevant
facts and circumstances may include,
but are not limited to, the reliability of
the source of the information, evidence,
sources, or standards, including any
underlying data; the independence of
the information, evidence, sources, and
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standards relied upon; the analyses and
methodologies employed to select the
information and the consistency of their
application; and any known safeguards
deployed to prevent reliance on skewed
data or metrics. Information, evidence,
sources, or standards are not considered
biased or not objective for this purpose
if the plan or issuer has taken the steps
necessary to correct, cure, or
supplement any information, evidence,
sources, or standards that would have
been biased or not objective in the
absence of such steps.
(2) For purposes of this paragraph
(c)(4)(i)(B), historical plan data or other
historical information from a time when
the plan or coverage was not subject to
ERISA section 712 or was not in
compliance with ERISA section 712 are
considered to be biased or not objective
in a manner that discriminates against
mental health or substance use disorder
benefits as compared to medical/
surgical benefits, if the historical plan
data or other historical information
systematically disfavor access or are
specifically designed to disfavor access
to mental health or substance use
disorder benefits as compared to
medical/surgical benefits, and the plan
or issuer has not taken the steps
necessary to correct, cure, or
supplement the data or information.
(3) For purposes of this paragraph
(c)(4)(i)(B), generally recognized
independent professional medical or
clinical standards and carefully
circumscribed measures reasonably and
appropriately designed to detect or
prevent and prove fraud and abuse that
minimize the negative impact on access
to appropriate mental health and
substance use disorder benefits are not
information, evidence, sources, or
standards that are biased or not
objective in a manner that discriminates
against mental health or substance use
disorder benefits as compared to
medical/surgical benefits. However,
plans and issuers must comply with the
other requirements in this paragraph
(c)(4), as applicable, with respect to
such standards or measures that are
used as the basis for a factor or
evidentiary standard used to design or
apply a nonquantitative treatment
limitation.
(ii) 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;
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(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.
(iii) Required use of outcomes data—
(A) In general. To ensure that a
nonquantitative treatment limitation
applicable to mental health or substance
use disorder benefits in a classification,
in operation, is no more restrictive than
the predominant nonquantitative
treatment limitation applied to
substantially all medical/surgical
benefits in the classification, 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
relevant outcomes related to access to
mental health and substance use
disorder benefits and medical/surgical
benefits and carefully consider the
impact as part of the plan’s or issuer’s
evaluation. As part of its evaluation, the
plan or issuer may not disregard
relevant outcomes data that it knows or
reasonably should know suggest that a
nonquantitative treatment limitation is
associated with material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits. 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
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77725
collection and evaluation for the data
required under this paragraph
(c)(4)(iii)(A).
(1) Relevant data generally. For
purposes of this paragraph (c)(4)(iii)(A),
relevant data could include, as
appropriate, but are 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) Relevant data for nonquantitative
treatment limitations related to network
composition. In addition to the relevant
data set forth in paragraph
(c)(4)(iii)(A)(1) of this section, relevant
data for nonquantitative treatment
limitations related to network
composition could include, as
appropriate, but are not limited to, 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 (for comparable
services and as benchmarked to a
reference standard).
(3) Unavailability of data. (i) If a plan
or issuer newly imposes a
nonquantitative treatment limitation for
which relevant data is initially
temporarily unavailable and the plan or
issuer therefore cannot comply with this
paragraph (c)(4)(iii)(A), the plan or
issuer must include in its comparative
analysis, as required under § 2590.712–
1(c)(5)(i)(C), a detailed explanation of
the lack of relevant data, the basis for
the plan’s or issuer’s conclusion that
there is a lack of relevant data, and
when and how the data will become
available and be collected and analyzed.
Such a plan or issuer also must comply
with this paragraph (c)(4)(iii)(A) as soon
as practicable once relevant data
becomes available.
(ii) If a plan or issuer imposes a
nonquantitative treatment limitation for
which no data exist that can reasonably
assess any relevant impact of the
nonquantitative treatment limitation on
relevant outcomes related to access to
mental health and substance use
disorder benefits and medical/surgical
benefits, the plan or issuer must include
in its comparative analysis, as required
under § 2590.712–1(c)(5)(i)(D), a
reasoned justification as to the basis for
the conclusion that there are no data
that can reasonably assess the
nonquantitative treatment limitation’s
impact, why the nature of the
nonquantitative treatment limitation
prevents the plan or issuer from
reasonably measuring its impact, an
explanation of what data was
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considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
the nonquantitative treatment limitation
complies with this section. If a plan or
issuer becomes aware of data that can
reasonably assess any relevant impact of
the nonquantitative treatment
limitation, the plan or issuer must
comply with this paragraph (c)(4)(iii)(A)
as soon as practicable.
(iii) Consistent with paragraph (a)(1)
of this section, paragraphs
(c)(4)(iii)(A)(3)(i) and (ii) of this section
shall only apply in very limited
circumstances and, where applicable,
shall be construed narrowly.
(B) Material differences. To the extent
the relevant data evaluated under
paragraph (c)(4)(iii)(A) of this section
suggest that the nonquantitative
treatment limitation contributes to
material differences in access to mental
health and substance use disorder
benefits as compared to medical/
surgical benefits in a classification, such
differences will be considered a strong
indicator that the plan or issuer violates
this paragraph (c)(4).
(1) Where the relevant data suggest
that the nonquantitative treatment
limitation contributes to material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits
in a classification, the plan or issuer
must take reasonable action, as
necessary, to address the material
differences to ensure compliance, in
operation, with this paragraph (c)(4) and
must document the actions that have
been or are being taken by the plan or
issuer to address material differences in
access to mental health or substance use
disorder benefits, as compared to
medical/surgical benefits, as required by
§ 2590.712–1(c)(5)(iv).
(2) For purposes of this paragraph
(c)(4)(iii)(B), relevant data are
considered to suggest that the
nonquantitative treatment limitation
contributes to material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits if, based on all
relevant facts and circumstances, and
taking into account the considerations
outlined in this paragraph
(c)(4)(iii)(B)(2), the difference in the data
suggests that the nonquantitative
treatment limitation is likely to have a
negative impact on access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits.
(i) Relevant facts and circumstances,
for purposes of this paragraph
(c)(4)(iii)(B)(2), may include, but are not
limited to, the terms of the
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nonquantitative treatment limitation at
issue, the quality or limitations of the
data, causal explanations and analyses,
evidence as to the recurring or nonrecurring nature of the results, and the
magnitude of any disparities.
(ii) Differences in access to mental
health or substance use disorder
benefits attributable to generally
recognized independent professional
medical or clinical standards or
carefully circumscribed measures
reasonably and appropriately designed
to detect or prevent and prove fraud and
abuse that minimize the negative impact
on access to appropriate mental health
and substance use disorder benefits,
which are used as the basis for a factor
or evidentiary standard used to design
or apply a nonquantitative treatment
limitation, are not considered to be
material for purposes of this paragraph
(c)(4)(iii)(B). To the extent a plan or
issuer attributes any differences in
access to the application of such
standards or measures, the plan or
issuer must explain the bases for that
conclusion in the documentation
prepared under § 2590.712–
1(c)(5)(iv)(A).
(C) Nonquantitative treatment
limitations related to network
composition. For purposes of applying
paragraph (c)(4)(iii)(A) of this section
with respect to nonquantitative
treatment limitations related to network
composition, a plan or issuer must
collect and evaluate relevant data in a
manner reasonably designed to assess
the aggregate impact of all such
nonquantitative treatment limitations on
access to mental health and substance
use disorder benefits and medical/
surgical benefits. Examples of possible
actions that a plan or issuer could take
to comply with the requirement under
paragraph (c)(4)(iii)(B)(1) of this section
to take reasonable action, as necessary,
to address any material differences in
access with respect to nonquantitative
treatment limitations related to network
composition, to ensure compliance with
this paragraph (c)(4), include, but are
not limited to:
(1) Strengthening efforts to recruit and
encourage a broad range of available
mental health and substance use
disorder providers and facilities to join
the plan’s or issuer’s network of
providers, including taking actions to
increase compensation or other
inducements, streamline credentialing
processes, or contact providers
reimbursed for items and services
provided on an out-of-network basis to
offer participation in the network;
(2) Expanding the availability of
telehealth arrangements to mitigate any
overall mental health and substance use
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disorder provider shortages in a
geographic area;
(3) Providing additional outreach and
assistance to participants and
beneficiaries enrolled in the plan or
coverage to assist them in finding
available in-network mental health and
substance use disorder providers and
facilities; and
(4) Ensuring that provider directories
are accurate and reliable.
(iv) 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.
(v) Effect of final determination of
noncompliance under § 2590.712–1. (A)
If a group health plan (or health
insurance issuer offering coverage in
connection with a group health plan)
receives a final determination from the
Secretary that the plan or issuer is not
in compliance with the requirements of
ERISA section 712(a)(8) or § 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 with respect to
mental health or substance use disorder
benefits in the relevant classification,
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.
(B) A determination by the Secretary
of whether to require cessation of a
nonquantitative treatment limitation
under this paragraph (c)(4)(v) will be
based on an evaluation of the relevant
facts and circumstances involved in the
specific final determination and the
nature of the underlying
nonquantitative treatment limitation
and will take into account the interest
of plan participants and beneficiaries
and feedback from the plan or issuer.
(vi) 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.
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(A) Example 1 (not comparable and more
stringent factors for reimbursement rate
methodology, in operation)—(1) Facts. A
plan’s reimbursement rate methodology for
outpatient, in-network providers is based on
a variety of factors. 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 are based on a combination of
factors, such as the nature of the service,
duration of the service, intensity and
specialization of training, provider licensure
and type, number of providers qualified to
provide the service in a given geographic
area, and market need (demand). In
operation, the plan utilizes an additional
strategy to further reduce reimbursement
rates for mental health and substance use
disorder non-physician providers from those
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)(vi)(A) (Example 1), the plan violates
the rules of this paragraph (c)(4). 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 of
mental health and substance use disorder
services by the same percentage for every
CPT code but does not apply the same
reductions to non-physician providers of
medical/surgical services from the rate for
physician providers of medical/surgical
services, in operation, the factors used in
designing and applying the nonquantitative
treatment limitation to mental health and
substance use disorder benefits in the
outpatient, in-network classification are not
comparable to, and are applied more
stringently than, the factors used in designing
and applying the limitation with respect to
medical/surgical benefits in the same
classification. As a result, the
nonquantitative treatment limitation with
respect to mental health or substance use
disorder benefits in the outpatient, innetwork classification is more restrictive than
the predominant nonquantitative treatment
limitation that applies to substantially all
medical/surgical benefits in the same
classification.
(B) Example 2 (strategy for exclusion for
experimental or investigative treatment more
stringently applied to ABA therapy in
operation)—(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, as
experimental, a treatment or procedure when
no professionally recognized treatment
guidelines include the treatment or
procedure as a clinically appropriate
standard 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
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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 as one intervention to treat certain
children with ASD.
(2) Conclusion. In this paragraph
(c)(4)(vi)(B) (Example 2), the plan violates the
rules of this paragraph (c)(4). As written, the
plan excludes coverage of 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 as including the treatment or
procedure at issue, and fewer than two
randomized controlled trials are available to
support the treatment’s use with respect to
the given condition or procedure. However,
in operation, the plan deviates from this
strategy with respect to ABA therapy because
more than one professionally recognized
treatment guideline defines clinically
appropriate standards of care for ASD as
including ABA therapy to treat certain
children with ASD and more than two
randomized controlled trials are available to
support the use of ABA therapy to treat
certain children with ASD. Therefore, in
operation, the strategy used to design the
nonquantitative treatment limitation for
benefits for the treatment of ASD, which is
a mental health condition, in the outpatient,
in-network classification is not comparable
to, and is applied more stringently than, the
strategy used to design the nonquantitative
treatment limitation for medical/surgical
benefits in the same classification. As a
result, the nonquantitative treatment
limitation with respect to mental health or
substance use disorder benefits in the
outpatient, in-network classification is more
restrictive than the predominant
nonquantitative treatment limitation that
applies to substantially all medical/surgical
benefits in the same classification.
(C) Example 3 (step therapy protocol with
exception for severe or irreversible
consequences, discriminatory factor)—(1)
Facts. A plan’s written terms include a step
therapy protocol that requires participants
and beneficiaries who are prescribed certain
drugs to try and fail a generic or preferred
brand name drug before the plan will cover
the drug originally prescribed by a
participant’s or beneficiary’s attending
provider. The plan provides an exception to
this protocol that was developed solely based
on a methodology developed by an external
third-party organization. The third-party
organization’s methodology, which is not
based on a generally recognized independent
professional medical or clinical standard,
identifies instances in which a delay in
treatment with a drug prescribed for a
medical condition or surgical procedure
could result in either severe or irreversible
consequences. However, with respect to a
drug prescribed for a mental health condition
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77727
or a substance use disorder, the third-party
organization’s methodology only identifies
instances in which a delay in treatment could
result in both severe and irreversible
consequences, and the plan does not take any
steps to correct, cure, or supplement the
methodology.
(2) Conclusion. In this paragraph
(c)(4)(vi)(C) (Example 3), the plan violates the
rules of paragraph (c)(4)(i)(B) of this section.
The source upon which the factor used to
apply the step therapy protocol is based is
biased or not objective in a manner that
discriminates against mental health or
substance use disorder benefits as compared
to medical/surgical benefits because it
addresses instances in which a delay in
treatment with a drug prescribed for a
medical condition or surgical procedure
could result in either severe or irreversible
consequences, but only addresses instances
in which a delay in treatment with a drug
prescribed for a mental health condition or
substance use disorder could result in both
severe and irreversible consequences, and the
plan fails to take the steps necessary to
correct, cure, or supplement the methodology
so that it is not biased and is objective. Based
on the relevant facts and circumstances, this
source systematically disfavors access or is
specifically designed to disfavor access to
mental health or substance use disorder
benefits as compared to medical/surgical
benefits. Therefore, the factor used to apply
the step therapy protocol is discriminatory
for purposes of determining comparability
and stringency under paragraph (c)(4)(i)(A) of
this section, and may not be relied upon by
the plan.
(D) Example 4 (use of historical plan data
and plan steps to correct, cure, or
supplement)—(1) Facts. A plan’s
methodology for calculating provider
reimbursement rates relies only on historical
plan data on total plan spending for each
specialty, divided between mental health and
substance use disorder providers and
medical/surgical providers, from a time when
the plan was not subject to ERISA section
712. The plan has used these historical plan
data for many years to establish base
reimbursement rates in all provider
specialties for which it provides medical/
surgical, mental health, and substance use
disorder benefits in the inpatient, in-network
classification. In evaluating the use of these
historical plan data in the design of the
methodology for calculating provider
reimbursement rates, the plan determined,
based on all the relevant facts and
circumstances, that the historical plan data
systematically disfavor access or are
specifically designed to disfavor access to
mental health or substance use disorder
benefits as compared to medical/surgical
benefits. To ensure this information about
historical reimbursement rates is not biased
and is objective, the plan supplements its
methodology to develop the base
reimbursement rates for mental health and
substance use disorder providers in
accordance with additional information,
evidence, sources, and standards that reflect
the increased demand for mental health and
substance use disorder benefits in the
inpatient, in-network classification and to
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attract sufficient mental health and substance
use disorder providers to the network, so that
the relevant facts and circumstances indicate
the supplemented information, evidence,
sources, or standards do not systematically
disfavor access and are not specifically
designed to disfavor access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
(2) Conclusion. In this paragraph
(c)(4)(vi)(D) (Example 4), the plan does not
violate the rules of paragraph (c)(4)(i)(B) of
this section with respect to the plan’s
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification. The relevant facts and
circumstances indicate that the plan’s use of
only historical plan data to design its
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification would otherwise be
considered to be biased or not objective in a
manner that discriminates against mental
health or substance use disorder benefits as
compared to medical/surgical benefits under
paragraph (c)(4)(i)(B)(2) of this section, since
the historical data systematically disfavor
access or are specifically designed to disfavor
access to mental health or substance use
disorder benefits as compared to medical/
surgical benefits. However, the plan took the
steps necessary to supplement the
information, evidence, sources, and
standards to reasonably reflect the increased
demand for mental health and substance use
disorder benefits in the inpatient, in-network
classification, and adjust the methodology to
increase reimbursement rates for those
benefits, thereby ensuring that the
information, evidence, sources, and
standards relied upon by the plan for this
purpose are not biased and are objective.
Therefore, the factors and evidentiary
standards used to design the plan’s
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification are not discriminatory.
(E) Example 5 (generally recognized
independent professional medical or clinical
standards and more stringent prior
authorization requirement in operation)—(1)
Facts. The provisions of a plan state that it
relies on, and does not deviate from,
generally recognized independent
professional medical or clinical standards to
inform the factor used to design prior
authorization requirements for both medical/
surgical and mental health and substance use
disorder benefits in the prescription drug
classification. The 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 for treatment of opioid use
disorder, every 30 days, which is
inconsistent with the generally recognized
independent professional medical standard
on which the factor used to design the
limitation is based. The plan’s factor used to
design prior authorization requirements for
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medical/surgical benefits in the prescription
drug classification relies on, and does not
deviate from, generally recognized
independent professional medical or clinical
standards.
(2) Conclusion. In this paragraph
(c)(4)(vi)(E) (Example 5), the plan violates the
rules of this paragraph (c)(4). The American
Society of Addiction Medicine national
practice guidelines on which the factor used
to design prior authorization requirements
for substance use disorder benefits is based
are generally recognized independent
professional medical or clinical standards
that are not considered to be biased or not
objective in a manner that discriminates
against mental health and substance use
disorder benefits under paragraph
(c)(4)(i)(B)(3) of this section. However, the
plan must comply with other requirements in
this paragraph (c)(4), as applicable, with
respect to such standards or measures that
are used as the basis for a factor or
evidentiary standard used to design or apply
a nonquantitative treatment limitation. In
operation, the plan’s factor used to design
and apply prior authorization requirements
with respect to substance use disorder
benefits is not comparable to, and is applied
more stringently than, the same factor used
to design and apply prior authorization
requirements for medical/surgical benefits,
because the factor relies on, and does not
deviate from, generally recognized
independent professional medical or clinical
standards for medical/surgical benefits, but
deviates from the relevant guidelines for
substance use disorder benefits. As a result,
the nonquantitative treatment limitation with
respect to substance use disorder benefits in
the prescription drug classification is more
restrictive than the predominant
nonquantitative treatment limitation that
applies to substantially all medical/surgical
benefits in the same classification.
(F) Example 6 (plan claims no data exist
to reasonably assess impact of
nonquantitative treatment limitation on
access; medical necessity criteria)—(1) Facts.
A plan approves or denies claims for mental
health and substance use disorder benefits
and for medical/surgical benefits in the
inpatient, in-network and outpatient, innetwork classifications based on medical
necessity criteria. The plan states in its
comparative analysis that no data exist that
can reasonably assess any relevant impact of
the medical necessity criteria nonquantitative
treatment limitation on relevant outcomes
related to access to mental health or
substance use disorder benefits as compared
to the plan’s medical necessity criteria
nonquantitative treatment limitation’s impact
on relevant outcomes related to access to
medical/surgical benefits in the relevant
classifications, without further explanation.
(2) Conclusion. In this paragraph
(c)(4)(vi)(F) (Example 6), the plan violates
this paragraph (c)(4). The plan does not
comply with paragraph (c)(4)(iii)(A)(3)(ii) of
this section because the plan did not include
in its comparative analysis, as required under
§ 2590.712–1(c)(5)(i)(D), a reasoned
justification as to the basis for its conclusion
that there are no data that can reasonably
assess the nonquantitative treatment
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limitation’s impact, an explanation of why
the nature of the nonquantitative treatment
limitation prevents the plan from reasonably
measuring its impact, an explanation of what
data was considered and rejected, and
documentation of any additional safeguards
or protocols used to ensure the
nonquantitative treatment limitation
complies with this paragraph (c)(4). Data that
could reasonably assess the medical
necessity criteria nonquantitative treatment
limitation’s impact might include, for
example, the number and percentage of
claims denials, or the number and percentage
of claims that were approved for a lower
level of care than the level requested on the
initial claim. Therefore, because the plan has
not collected and evaluated relevant data in
a manner reasonably designed to assess the
impact of the nonquantitative treatment
limitation on relevant outcomes related to
access to mental health and substance use
disorder benefits and medical/surgical
benefits in the relevant classifications, the
plan violates the requirements of paragraph
(c)(4)(iii) of this section, and violates the
requirements under § 2590.712–1(c)(5)(i)(D)
because it did not include sufficient
information in its comparative analysis with
respect to the lack of relevant data.
(G) Example 7 (concurrent review data
collection; no material difference in access)—
(1) Facts. A plan follows a written process to
apply a concurrent review nonquantitative
treatment limitation to all medical/surgical
benefits and mental health and substance use
disorder benefits within the inpatient, innetwork classification. Under this 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. The
plan collects relevant data, including the
number of referrals to second-level review,
and the number of denials of claims for
medical/surgical benefits and mental health
and substance use disorder benefits subject to
concurrent review as compared to the total
number of claims subject to concurrent
review, in the inpatient, in-network
classification. The plan also collects and
evaluates the number of denied claims for
medical/surgical benefits and mental health
and substance use disorder benefits that are
overturned on appeal in the inpatient, innetwork classification. The plan evaluates
the relevant data and determines that, based
on the relevant facts and circumstances, the
data do not suggest that the concurrent
review nonquantitative treatment limitation
contributes to material differences in access
to mental health or substance use disorder
benefits as compared to medical/surgical
benefits in the classification Upon requesting
the plan’s comparative analysis for the
concurrent review nonquantitative treatment
limitation and reviewing the relevant data,
the Secretary does not request additional data
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and agrees that the data do not suggest
material differences in access.
(2) Conclusion. In this paragraph
(c)(4)(vi)(G) (Example 7), the plan does not
violate the rules of paragraph (c)(4)(iii) of this
section. The plan collected and evaluated
relevant data in a manner reasonably
designed to assess the impact of the
nonquantitative treatment limitation on
relevant outcomes related to access to mental
health and substance use disorder benefits
and medical/surgical benefits and considered
the impact as part of its evaluation. Because
the relevant data evaluated do not suggest
that the nonquantitative treatment limitation
contributes to material differences in access
to mental health and substance use disorder
benefits as compared to medical/surgical
benefits in the inpatient, in-network
classification, under paragraph (c)(4)(iii)(B)
of this section, there is no strong indicator
that the plan violates this paragraph (c)(4).
(H) Example 8 (material difference in
access for prior authorization requirement
with reasonable action)—(1) Facts. A plan
requires prior authorization 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. The plan
collects and evaluates relevant data in a
manner reasonably designed to assess the
impact of the prior authorization requirement
on relevant outcomes related to access to
mental health and substance use disorder
benefits and medical/surgical benefits in the
inpatient, in-network classification. The
plan’s written process for prior authorization
states that the plan approves inpatient, innetwork benefits for medical conditions and
surgical procedures and mental health and
substance use disorder benefits 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.
Approvals for mental health and substance
use disorder benefits are most commonly
given only for 1 day, after which a treatment
plan must be submitted by the patient’s
attending provider and approved by the plan.
The relevant data show that approvals for 7
days are most common for medical
conditions and surgical procedures under
this plan. Based on all the relevant facts and
circumstances, the difference in the relevant
data suggests that the nonquantitative
treatment limitation is likely to have a
negative impact on access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
Therefore, the data suggest that the
nonquantitative treatment limitation
contributes to material differences in access.
To address these material differences in
access, the plan consults more recent medical
guidelines to update the factors that inform
its medical necessity nonquantitative
treatment limitations. Based on this review,
the plan modifies the limitation so that
inpatient, in-network prior authorization
requests for mental health or substance use
disorder benefits are approved for similar
periods to what is approved for medical/
surgical benefits. The plan includes
documentation of this action as part of its
comparative analysis.
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(2) Conclusion. In this paragraph
(c)(4)(vi)(H) (Example 8), the plan does not
violate the rules of paragraph (c)(4)(iii) of this
section. While relevant data for the plan’s
prior authorization requirements suggested
that the nonquantitative treatment limitation
contributes to material differences in access
to mental health and substance use disorder
benefits as compared to inpatient, in-network
medical/surgical benefits under paragraph
(c)(4)(iii)(B) of this section, the plan has
taken reasonable action, as necessary, to
ensure compliance, in operation, with this
paragraph (c)(4) by updating the factors that
inform its prior authorization
nonquantitative treatment limitation for
inpatient, in-network mental health and
substance use disorder benefits so that these
benefits are approved for similar periods to
what is approved for medical/surgical
benefits. The plan also documents its action
taken to address material differences in
access to inpatient, in-network benefits as
required by paragraph (c)(4)(iii)(B)(1) of this
section.
(I) Example 9 (differences attributable to
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 factors
and evidentiary standards used to design and
apply the medical management requirement
rely on independent professional medical or
clinical standards that are generally
recognized by health care providers and
facilities in relevant clinical specialties. 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. The plan collects
and evaluates relevant data in a manner
reasonably designed to assess the impact of
the medical management nonquantitative
treatment limitation on relevant outcomes
related to access to mental health and
substance use disorder benefits and medical/
surgical benefits, and considers the impact as
part of the plan’s evaluation, as required by
paragraph (c)(4)(iii)(A) of this section. 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. The plan correctly determines that
these differences in access are attributable to
the generally recognized independent
professional medical or clinical standards
used as the basis for the factors and
evidentiary standards used to design or apply
the limitation and adequately explains the
bases for that conclusion as part of its
comparative analysis.
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(2) Conclusion. In this paragraph
(c)(4)(vi)(I) (Example 9), the plan does not
violate the rules of this paragraph (c)(4).
Generally recognized independent
professional medical or clinical standards of
care are not considered to be information,
evidence, sources, or standards that are
biased and not objective in a manner that
discriminates against mental health or
substance use disorder benefits as compared
to medical/surgical benefits, and the plan
otherwise complies with the requirements in
paragraph (c)(4)(i) of this section.
Additionally, the plan does not violate
paragraph (c)(4)(iii) of this section because it
has collected and evaluated relevant data, the
differences in access are attributable to the
generally recognized independent
professional medical or clinical standards
that are used as the basis for the factors and
evidentiary standards used to design or apply
the medical management nonquantitative
treatment limitation, and the plan explains
the bases for this conclusion in its
comparative analysis. As a result, the
nonquantitative treatment limitation with
respect to mental health or substance use
disorder benefits in the inpatient, out-ofnetwork classification is no more restrictive
than the predominant nonquantitative
treatment limitation that applies to
substantially all medical/surgical benefits in
the same classification.
(J) Example 10 (material differences in
access for standards for provider admission
to a network with reasonable action)—(1)
Facts. A plan applies nonquantitative
treatment limitations related to network
composition in the inpatient, in-network and
outpatient, 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 processes, strategies,
evidentiary standards, and other factors used
in designing and applying the
nonquantitative treatment limitations related
to network composition for mental health or
substance use disorder benefits in the
outpatient, in-network and inpatient, innetwork 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)(i) of this section. In
order to ensure, in operation, that the
nonquantitative treatment limitations are no
more restrictive than the predominant
nonquantitative treatment limitations applied
to substantially all medical/surgical benefits
in the classification, the plan collects and
evaluates relevant data in a manner
reasonably designed to assess the aggregate
impact of all the nonquantitative treatment
limitations related to network composition
on relevant outcomes related to 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 evaluation. The plan
considers relevant data that is known, or
reasonably should be known, including
metrics relating to the time and distance from
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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 (for comparable services
and benchmarked to a reference standard, as
appropriate); and in-network and out-ofnetwork utilization rates (including data
related to the dollar value and number of
provider claims submissions). The plan
determines that the relevant data suggest that
the nonquantitative treatment limitations in
the aggregate contribute to material
differences in access to mental health and
substance use disorder benefits compared to
medical/surgical benefits in the
classifications because, based on all the
relevant facts and circumstances, the
differences in the data suggest that the
nonquantitative treatment limitations related
to network composition are likely to have a
negative impact on access to mental health or
substance use disorder benefits as compared
to medical/surgical benefits. The plan takes
reasonable actions, as necessary, to address
the material differences in access, to ensure
compliance, in operation, with this
paragraph (c)(4), by strengthening its efforts
to recruit and encourage a broad range of
available providers and facilities to join the
plan’s network of providers, including by
taking actions to increase compensation and
other inducements, streamline credentialing
processes, contact providers reimbursed for
items and services provided on an out-ofnetwork basis to offer participation in the
network, and develop a process to monitor
the effects of such efforts; expanding the
availability of telehealth arrangements to
mitigate overall provider shortages in certain
geographic areas; providing additional
outreach and assistance to participants and
beneficiaries enrolled in the plan to assist
them in finding available in-network
providers and facilities; and ensuring that the
plan’s provider directories are accurate and
reliable. The plan documents the efforts that
it has taken to address the material
differences in access that the data revealed,
and the plan includes the documentation as
part of its comparative analysis submission.
(2) Conclusion. In this paragraph
(c)(4)(vi)(J) (Example 10), the plan does not
violate the rules of this paragraph (c)(4). The
plan’s nonquantitative treatment limitations
related to network composition comply with
the rules of paragraph (c)(4)(i) of this section.
Additionally, the plan collects and evaluates
relevant data, as required under paragraph
(c)(4)(iii)(A) of this section, in a manner
reasonably designed to assess the aggregate
impact of all such nonquantitative treatment
limitations on relevant outcomes related to
access to mental health and substance use
disorder benefits and medical/surgical
benefits, as required under paragraph
(c)(4)(iii)(C) of this section. While the data
suggest that the nonquantitative treatment
limitations contribute to material differences
in access to mental health and substance use
disorder benefits as compared to medical/
surgical benefits, the plan has taken
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reasonable action, as necessary, to ensure
compliance with this paragraph (c)(4). The
plan also documents the actions that have
been and are being taken by the plan to
address material differences as required by
§ 2590.712–1(c)(5)(iv). As a result, the
network composition nonquantitative
treatment limitations with respect to mental
health or substance use disorder benefits in
the inpatient, in-network and outpatient, innetwork classifications are no more
restrictive than the predominant
nonquantitative treatment limitations that
apply to substantially all medical/surgical
benefits in the same classifications.
(K) Example 11 (separate EAP exhaustion
treatment limitation applicable only to
mental health or substance use disorder
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)(vi)(K) (Example 11), the requirement
that limits 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)(4). 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)(iv) 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 exclusion for
treatment in a residential facility applicable
only to mental health and substance use
disorder benefits)—(1) Facts. A plan
generally covers inpatient, in-network and
inpatient, out-of-network treatment without
any limitations on setting, including skilled
nursing facilities and rehabilitation hospitals,
provided other medical necessity standards
are satisfied. The plan has an exclusion for
treatment at residential facilities, 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)(vi)(L) (Example 12), the plan violates
the rules of paragraph (c)(4)(iv) of this
section. The exclusion of treatment at
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residential facilities is a separate
nonquantitative treatment limitation
applicable only to mental health and
substance use disorder benefits in the
inpatient, in-network and inpatient, out-ofnetwork classifications because the plan does
not apply a comparable exclusion with
respect to any medical/surgical benefits in
the same benefit classification.
(M) Example 13 (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 the plan’s exclusion
of mental health and substance use disorder
benefits for failure to complete a course of
treatment in the inpatient, in-network
classification under § 2590.712–1(d), the plan
submits a comparative analysis for the
nonquantitative treatment limitation. After
review of the comparative analysis, as well
as additional information submitted by the
plan after the Secretary determines that the
plan has not submitted sufficient information
to be responsive to the request, 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
inpatient, in-network 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. Under
§ 2590.712–1(d)(3), the plan submits a
corrective action plan and additional
comparative analyses within 45 calendar
days after the initial determination. However,
the corrective action plan does not alter or
eliminate the exclusion or alter the processes,
strategies, evidentiary standards, and other
factors used in designing and applying the
exclusion. Moreover, the additional
comparative analysis still does not include
sufficient information. The Secretary then
determines that the additional comparative
analyses do not demonstrate compliance
with the requirements of this paragraph
(c)(4). Accordingly, the plan receives a final
determination of noncompliance with ERISA
section 712(a)(8) and § 2590.712–1 from the
Secretary, which concludes that the plan did
not demonstrate compliance through the
comparative analysis process. After
considering the relevant facts and
circumstances, and considering the interests
of plan participants and beneficiaries, as well
as feedback from the plan, the Secretary
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 exclusion of benefits for failure to
complete a course of treatment in the
inpatient, in-network classification.
(2) Conclusion. In this paragraph
(c)(4)(vi)(M) (Example 13), by continuing to
impose the exclusion of mental health and
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substance use disorder benefits for failure to
complete a course of treatment in the
inpatient, in-network classification after the
Secretary directs the plan not to impose this
nonquantitative treatment limitation, the
plan violates the requirements of paragraph
(c)(4)(v) of this section.
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*
*
*
*
*
(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) who have
received 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 § 2590.712–1.
(e) * * *
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(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
that is required to provide 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 at 45 CFR 146.136 and
146.137 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—
(i) 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, except that the requirements of
paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and
(c)(4)(iii) of this section apply on the
first day of the first plan year beginning
on or after January 1, 2026.
(ii) Until the applicability date in
paragraph (i)(1)(i) of this section, 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:
§ 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).
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(b) In general. In the case of a group
health plan (or health insurance issuer
offering 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,
which must be provided to the named
fiduciaries of the plan who are required
to include a certification as part 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
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
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substance use disorder benefits and
which benefits are considered medical/
surgical benefits; and
(iii) A description of which benefits
are included in each classification set
forth in § 2590.712(c)(2)(ii)(A).
(2) Identification and definition of the
factors and evidentiary standards 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 every factor
considered or relied upon, 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;
(B) A description of each evidentiary
standard used to design or apply each
factor (and the source of each
evidentiary standard) identified under
paragraph (c)(2)(i) of this section; and
(C) A description of any steps the plan
or issuer has taken to correct, cure, or
supplement any information, evidence,
sources, or standards that would
otherwise have been considered biased
or not objective under
§ 2590.712(c)(4)(i)(B)(1) in the absence
of such steps.
(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 under
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
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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
designations 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 deviations or variations 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 deviations or
variations.
(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
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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 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 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 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 reasons for
any deviations or variations 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 deviations or variations, 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, in
operation, the processes, strategies,
evidentiary standards, or other factors
used in designing and applying the
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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 evaluates
whether, 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;
(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;
(C) With respect to a nonquantitative
treatment limitation for which relevant
data is temporarily unavailable as
described in
§ 2590.712(c)(4)(iii)(A)(3)(i), a detailed
explanation of the lack of relevant data,
the basis for the plan’s or issuer’s
conclusion that there is a lack of
relevant data, and when and how the
data will become available and be
collected and analyzed; and
(D) With respect to a nonquantitative
treatment limitation for which no data
exist that can reasonably assess any
relevant impact of the nonquantitative
treatment limitation on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits as
described in
§ 2590.712(c)(4)(iii)(A)(3)(ii), a reasoned
justification as to the basis for the
conclusion that there are no data that
can reasonably assess the
nonquantitative treatment limitation’s
impact, an explanation of why the
nature of the nonquantitative treatment
limitation prevents the plan or issuer
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from reasonably measuring its impact,
an explanation of what data was
considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
that the nonquantitative treatment
limitation complies with
§ 2590.712(c)(4);
(ii) Identification of the relevant data
collected and evaluated, as required
under § 2590.712(c)(4)(iii)(A);
(iii) Documentation 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:
(A) The evaluation of relevant data as
required under § 2590.712(c)(4)(iii)(A);
and
(B) A reasoned justification and
analysis that explains why the plan or
issuer concluded that any differences in
the relevant data do or do not suggest
the nonquantitative treatment limitation
contributes to material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits, in accordance
with § 2590.712(c)(4)(iii)(B)(2);
(iv) A detailed explanation of any
material differences in access
demonstrated by the outcomes
evaluated under paragraph (c)(5)(iii) of
this section, including:
(A) A reasoned explanation of any
material differences in access 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 (including any
considerations beyond a plan’s or
issuer’s control that contribute to the
existence of material differences) and a
detailed explanation of the bases for
concluding that material differences are
not attributable to differences in the
comparability or relative stringency of
the nonquantitative treatment
limitation; and
(B) To the extent differences in access
to mental health or substance use
disorder benefits are attributable to
generally recognized independent
professional medical or clinical
standards or carefully circumscribed
measures reasonably and appropriately
designed to detect or prevent and prove
fraud and abuse that minimize the
negative impact on access to appropriate
mental health and substance use
disorder benefits, and such standards or
measures are used as the basis for a
factor or evidentiary standard used to
design or apply a nonquantitative
treatment limitation, documentation
explaining how any such differences are
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attributable to those standards or
measures, as required in
§ 2590.712(c)(4)(iii)(B)(2)(ii); and
(v) A discussion of the actions that
have been or are being taken by the plan
or issuer to address 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
has taken or is taking under
§ 2590.712(c)(4)(iii)(B)(1) to address
material differences to comply, in
operation, with § 2590.712(c)(4),
including, as applicable:
(A) A reasoned explanation of any
material differences in access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits that persist despite
reasonable actions that have been or are
being taken; and
(B) For a plan or issuer designing and
applying one or more nonquantitative
treatment limitations related to network
composition, a discussion of the actions
that have been or are being taken to
address material differences in access to
in-network mental health and substance
use disorder benefits as compared to innetwork medical/surgical benefits,
including those listed in
§ 2590.712(c)(4)(iii)(C).
(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 or
is not (or might or might not be) in
compliance with the requirements of
§ 2590.712(c)(4), including any
additional 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 not otherwise
discussed in the comparative analysis;
(iv) The date the analysis is
completed and the title and credentials
of all relevant persons who participated
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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 the
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 that they have
engaged in a prudent process to select
one or more qualified service providers
to perform and document a comparative
analysis in connection with the
imposition of any nonquantitative
treatment limitations that apply to
mental health and substance use
disorder benefits under the plan in
accordance with applicable law and
regulations, and have satisfied their
duty to monitor those service providers
as required under part 4 of ERISA with
respect to the performance and
documentation of such comparative
analysis.
(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 coverage in
connection with 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
or issuer has not submitted sufficient
information under paragraph (d)(1) of
this section for the Secretary to
determine whether the comparative
analysis required in paragraph (b) of this
section complies with paragraph (c) of
this section or whether the plan or
issuer complies with § 2590.712(c)(4),
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). 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
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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 initial determination by
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 (c) of this
section that demonstrate compliance
with § 2590.712(c)(4), 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 business days of receipt of the
final determination of noncompliance,
and the plan or issuer must 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 timeframe.
(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
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participant or beneficiary to have a
claim for benefits submitted or
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 § 2590.712(c)(4) or this
section, 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,
when the plan or issuer will take such
actions, and a clear and accurate
statement explaining whether the
Secretary has concurred with those
actions; 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
(including a provider or other person
acting as a participant’s or beneficiary’s
authorized representative) who has
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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
§ 2590.712(f) or (g), on the first day of
the first plan year beginning on or after
January 1, 2025, except the
requirements of paragraphs (c)(2)(ii)(C),
(c)(5)(i)(C) and (D), and (c)(5)(ii) through
(v) of this section apply on the first day
of the first plan year beginning on or
after January 1, 2026.
(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 amends 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 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;
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■
■
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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), (c)(2)(ii)(A) introductory text,
(c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
■ d. In paragraph (c)(3)(iii), adding
introductory text;
■ e. Revising paragraphs (c)(3)(iii)(A)
and (B), (c)(3)(iv), (c)(4), (d)(3), (e)(4),
and (i)(1); and
■ f. Adding paragraph (j).
The revisions and additions read as
follows:
■
§ 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 aggregate
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
in the same classification, 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 or substance use disorder
benefits under the plan or coverage than
they impose on access to medical/
surgical benefits in the same
classification of benefits. The provisions
of PHS Act 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).
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(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 as of
November 22, 2024, is the Diagnostic
and Statistical Manual of Mental
Disorders, Fifth Edition, Text Revision
published in March 2022. A subsequent
version of the DSM published after
November 22, 2024, will be considered
the most current version beginning on
the first day of the plan year that is one
year after the date the subsequent
version is published.
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
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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 as of November 22, 2024, is the
International Classification of Diseases,
10th Revision, Clinical Modification
adopted for the period beginning on
October 1, 2015. Any subsequent
version of the ICD adopted through
§ 162.1002 of this subtitle after
November 22, 2024, will be considered
the most current version beginning on
the first day of the plan year that is one
year after the date the subsequent
version is adopted.
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
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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.
Examples of 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 that are used to determine
when and how a participant or
beneficiary may access certain services;
and the development and approval of a
treatment plan used in a concurrent
review process to determine whether a
specific request should be granted or
denied. 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 the degree of reviewer
discretion in adhering to criteria
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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; the method of
determining whether and how to
deviate from generally accepted
standards of care in concurrent reviews;
the selection of information deemed
reasonably necessary to make medical
necessity determinations; reliance on
treatment guidelines or guidelines
provided by third-party organizations in
the design of a nonquantitative
treatment limitation; and rationales
used in selecting and adopting certain
threshold amounts to apply a
nonquantitative treatment limitation,
professional standards and protocols to
determine utilization management
standards, and fee schedules used to
determine provider reimbursement
rates, used as part of a nonquantitative
treatment limitation. Strategies also
include the method of creating and
determining the 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 or issuer’s methods
for making 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
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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
(such as standards related to network
composition), which otherwise limit the
scope or duration of benefits for
treatment under a plan or coverage. (See
paragraph (c)(4)(ii) 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
day and visit limits. See paragraph
(c)(4)(ii) 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
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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), it must provide
meaningful benefits for that mental
health condition or substance use
disorder in every classification in which
medical/surgical benefits are provided.
For purposes of this paragraph
(c)(2)(ii)(A), whether the benefits
provided are meaningful benefits is
determined in comparison to the
benefits provided for medical
conditions and surgical procedures in
the classification and requires, at a
minimum, coverage of benefits for that
condition or disorder in each
classification in which the plan (or
coverage) provides benefits for one or
more medical conditions or surgical
procedures. A plan (or coverage) does
not provide meaningful benefits under
this paragraph (c)(2)(ii)(A) unless it
provides benefits for a core treatment for
that condition or disorder in each
classification in which the plan (or
coverage) provides benefits for a core
treatment for one or more medical
conditions or surgical procedures. For
purposes of this paragraph (c)(2)(ii)(A),
a core treatment for a condition or
disorder is a standard treatment or
course of treatment, therapy, service, or
intervention indicated by generally
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recognized independent standards of
current medical practice. If there is no
core treatment for a covered mental
health condition or substance use
disorder with respect to a classification,
the plan (or coverage) is not required to
provide benefits for a core treatment for
such condition or disorder in that
classification (but must provide benefits
for such condition or disorder in every
classification in which medical/surgical
benefits are provided). 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) Examples. The rules of this
paragraph (c)(2)(ii) 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. With regard to the
examples in this paragraph (c)(2)(ii)(C),
references to any particular core
treatment are included for illustrative
purposes only. Plans and issuers must
consult generally recognized
independent standards of current
medical practice to determine the
applicable core treatment, therapy,
service, or intervention for any covered
condition or disorder.
(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
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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 covers
treatment for autism spectrum disorder
(ASD), a mental health condition, and covers
outpatient, out-of-network developmental
screenings for ASD but excludes all other
benefits for outpatient treatment for ASD,
including applied behavior analysis (ABA)
therapy, when provided on an out-of-network
basis. The plan generally covers the full
range of outpatient treatments (including
core treatments) and treatment settings for
medical conditions and surgical procedures
when provided on an out-of-network basis.
Under the generally recognized independent
standards of current medical practice
consulted by the plan, developmental
screenings alone do not constitute a core
treatment for ASD.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(5) (Example 5), the plan violates
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the rules of this paragraph (c)(2)(ii). Although
the plan covers benefits for ASD in the
outpatient, out-of-network classification, it
only covers developmental screenings, so it
does not cover a core treatment for ASD in
the classification. Because the plan generally
covers the full range of medical/surgical
benefits, including a core treatment for one
or more medical conditions or surgical
procedures in the classification, it fails to
provide meaningful benefits for treatment of
ASD in the classification.
(6) Example 6—(i) Facts. Same facts as in
paragraph (c)(2)(ii)(C)(5) of this section
(Example 5), except that the plan is an HMO
that does not cover the full range of medical/
surgical benefits including a core treatment
for any medical conditions or surgical
procedures in the outpatient, out-of-network
classification (except as required under PHS
Act sections 2799A–1 and 2799A–2), but
covers benefits for medical conditions and
surgical procedures in the inpatient, innetwork; outpatient, in-network; emergency
care; and prescription drug classifications.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(6) (Example 6), the plan does not
violate the rules of this paragraph (c)(2)(ii).
Because the plan does not provide
meaningful benefits including for a core
treatment for any medical condition or
surgical procedure in the outpatient, out-ofnetwork classification (except as required
under PHS Act sections 2799A–1 and
2799A–2), the plan is not required to provide
meaningful benefits for any mental health
conditions or substance use disorders in that
classification. Nevertheless, the plan must
provide meaningful benefits for each mental
health condition and substance use disorder
for which the plan provides benefits in every
classification in which meaningful medical/
surgical benefits are provided as required
under paragraph (c)(2)(ii)(A) of this section.
This example does not address whether the
plan has complied with other applicable
requirements of this section in excluding
coverage of ABA therapy in the outpatient,
out-of-network classification.
(7) Example 7—(i) Facts. A plan provides
extensive benefits, including for core
treatments for many medical conditions and
surgical procedures in the outpatient, innetwork classification, including nutrition
counseling for diabetes and obesity. The plan
also generally covers diagnosis and treatment
for eating disorders, which are mental health
conditions, including coverage for nutrition
counseling to treat eating disorders in the
outpatient, in-network classification.
Nutrition counseling is a core treatment for
eating disorders, in accordance with
generally recognized independent standards
of current medical practice consulted by the
plan.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(7) (Example 7), the plan does not
violate the rules of this paragraph (c)(2)(ii).
The coverage of diagnosis and treatment for
eating disorders, including nutrition
counseling, in the outpatient, in-network
classification results in the plan providing
meaningful benefits for the treatment of
eating disorders in the classification, as
determined in comparison to the benefits
provided for medical conditions or surgical
procedures in the classification.
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(8) Example 8—(i) Facts. A plan provides
extensive benefits for the core treatments for
many medical conditions and surgical
procedures in the outpatient, in-network and
prescription drug classifications. The plan
provides coverage for diagnosis and
treatment for opioid use disorder, a substance
use disorder, in the outpatient, in-network
classification, by covering counseling and
behavioral therapies and, in the prescription
drug classification, by covering medications
to treat opioid use disorder (MOUD).
Counseling and behavioral therapies and
MOUD, in combination, are one of the core
treatments for opioid use disorder, in
accordance with generally recognized
independent standards of current medical
practice consulted by the plan.
(ii) Conclusion. In this paragraph
(c)(2)(ii)(C)(8) (Example 8), the plan does not
violate the rules of this paragraph (c)(2)(ii).
The coverage of counseling and behavioral
therapies and MOUD, in combination, in the
outpatient, in-network classification and
prescription drug classification, respectively,
results in the plan providing meaningful
benefits for the treatment of opioid use
disorder in the outpatient, in-network and
prescription drug classifications.
(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
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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. The rules of this
paragraph (c)(3)(i)(D) 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 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
77739
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% ........
N/A .........
10% ..............................
$100x ...........................
10% ..............................
12.5% (100x/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
15% ..............................
$450x ...........................
45% ..............................
56.25% (450x/800x) ....
20% ..............................
$100x ...........................
10% ..............................
12.5% (100x/800x) ......
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-ofnetwork medical/surgical benefits subject to
the coinsurance requirement. The plan may
not impose any level of coinsurance with
30% ..............................
$150x ...........................
15%.
18.75% (150x/800x).
Total.
$1,000x.
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)
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Copayment amount ..........................
Projected payments ..........................
Percent of total plan costs ...............
Percent subject to copayments ........
$0 ...........
$200x .....
20% ........
N/A .........
$10 ...............................
$200x ...........................
20% ..............................
25% (200x/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
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$15 ...............................
$200x ...........................
20% ..............................
25% (200x/800x) .........
$20 ...............................
$300x ...........................
30% ..............................
37.5% (300x/800x) ......
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
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$50 ...............................
$100x ...........................
10%.
12.5% (100x/800x).
Total.
$1,000x.
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
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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).
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TABLE 3 TO PARAGRAPH (c)(3)(iv)(D)(1)
Tier 1
Tier 2
Tier 3
Tier description ..............
Generic drugs ..........
Preferred brand name drugs ..
Percent paid by plan ......
90% ..........................
80% ........................................
Non-preferred brand name drugs (which may have Tier 1 or
Tier 2 alternatives).
60% .........................................................................................
(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 innetwork benefits into sub-classifications that
reflect the preferred and participating
provider tiers does not violate the parity
requirements of this paragraph (c)(3).
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(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 subclassification.
(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, innetwork classification into outpatient, innetwork generalists and outpatient, innetwork specialists.
(2) Conclusion. In this paragraph
(c)(3)(iv)(G) (Example 7), the division of
outpatient, in-network benefits into any subclassifications 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. Consistent with paragraph
(a)(1) 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 any
nonquantitative treatment limitation
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Tier 4
Specialty drugs.
50%.
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 that applies to substantially
all medical/surgical benefits in the same
classification. For purposes of this
paragraph (c)(4), a nonquantitative
treatment limitation is more restrictive
than the predominant nonquantitative
treatment limitation that applies to
substantially all medical/surgical
benefits in the same classification if the
plan or issuer fails to meet the
requirements of paragraph (c)(4)(i) or
(iii) of this section. In such a case, the
plan (or health insurance coverage) will
be considered to violate PHS Act section
2726 (a)(3)(A)(ii), and the
nonquantitative treatment limitation
may not be imposed by the plan (or
health insurance coverage) with respect
to mental health or substance use
disorder benefits in the classification.
(i) Requirements related to design and
application of a nonquantitative
treatment limitation—(A) In general. A
plan (or health insurance coverage) 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,
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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)(i)(A) of this section, a plan (or
health insurance coverage) may not rely
upon discriminatory factors or
evidentiary standards to design a
nonquantitative treatment limitation to
be imposed on mental health or
substance use disorder benefits. A factor
or evidentiary standard is
discriminatory if the information,
evidence, sources, or standards on
which the factor or evidentiary standard
are based are biased or not objective in
a manner that discriminates against
mental health or substance use disorder
benefits as compared to medical/
surgical benefits.
(1) Information, evidence, sources, or
standards are considered to be biased or
not objective in a manner that
discriminates against mental health or
substance use disorder benefits as
compared to medical/surgical benefits
if, based on all the relevant facts and
circumstances, the information,
evidence, sources, or standards
systematically disfavor access or are
specifically designed to disfavor access
to mental health or substance use
disorder benefits as compared to
medical/surgical benefits. For purposes
of this paragraph (c)(4)(i)(B)(1), relevant
facts and circumstances may include,
but are not limited to, the reliability of
the source of the information, evidence,
sources, or standards, including any
underlying data; the independence of
the information, evidence, sources, and
standards relied upon; the analyses and
methodologies employed to select the
information and the consistency of their
application; and any known safeguards
deployed to prevent reliance on skewed
data or metrics. Information, evidence,
sources, or standards are not considered
biased or not objective for this purpose
if the plan or issuer has taken the steps
necessary to correct, cure, or
supplement any information, evidence,
sources, or standards that would have
been biased or not objective in the
absence of such steps.
(2) For purposes of this paragraph
(c)(4)(i)(B), historical plan data or other
historical information from a time when
the plan or coverage was not subject to
PHS Act section 2726 or was not in
compliance with PHS Act section 2726
are considered to be biased or not
objective in a manner that discriminates
against mental health or substance use
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disorder benefits as compared to
medical/surgical benefits, if the
historical plan data or other historical
information systematically disfavor
access or are specifically designed to
disfavor access to mental health or
substance use disorder benefits as
compared to medical/surgical benefits,
and the plan or issuer has not taken the
steps necessary to correct, cure, or
supplement the data or information.
(3) For purposes of this paragraph
(c)(4)(i)(B), generally recognized
independent professional medical or
clinical standards and carefully
circumscribed measures reasonably and
appropriately designed to detect or
prevent and prove fraud and abuse that
minimize the negative impact on access
to appropriate mental health and
substance use disorder benefits are not
information, evidence, sources, or
standards that are biased or not
objective in a manner that discriminates
against mental health or substance use
disorder benefits as compared to
medical/surgical benefits. However,
plans and issuers must comply with the
other requirements in this paragraph
(c)(4), as applicable, with respect to
such standards or measures that are
used as the basis for a factor or
evidentiary standard used to design or
apply a nonquantitative treatment
limitation.
(ii) 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;
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77741
(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.
(iii) Required use of outcomes data—
(A) In general. To ensure that a
nonquantitative treatment limitation
applicable to mental health or substance
use disorder benefits in a classification,
in operation, is no more restrictive than
the predominant nonquantitative
treatment limitation applied to
substantially all medical/surgical
benefits in the classification, 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
relevant outcomes related to access to
mental health and substance use
disorder benefits and medical/surgical
benefits and carefully consider the
impact as part of the plan’s or issuer’s
evaluation. As part of its evaluation, the
plan or issuer may not disregard
relevant outcomes data that it knows or
reasonably should know suggest that a
nonquantitative treatment limitation is
associated with material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits. 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)(iii)(A).
(1) Relevant data generally. For
purposes of this paragraph (c)(4)(iii)(A),
relevant data could include, as
appropriate, but are 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) Relevant data for nonquantitative
treatment limitations related to network
composition. In addition to the relevant
data set forth in paragraph
(c)(4)(iii)(A)(1) of this section, relevant
data for nonquantitative treatment
limitations related to network
composition could include, as
appropriate, but are not limited to, innetwork and out-of-network utilization
rates (including data related to provider
claim submissions), network adequacy
metrics (including time and distance
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data, and data on providers accepting
new patients), and provider
reimbursement rates (for comparable
services and as benchmarked to a
reference standard).
(3) Unavailability of data. (i) If a plan
or issuer newly imposes a
nonquantitative treatment limitation for
which relevant data is initially
temporarily unavailable and the plan or
issuer therefore cannot comply with this
paragraph (c)(4)(iii)(A), the plan or
issuer must include in its comparative
analysis, as required under
§ 146.137(c)(5)(i)(C), a detailed
explanation of the lack of relevant data,
the basis for the plan’s or issuer’s
conclusion that there is a lack of
relevant data, and when and how the
data will become available and be
collected and analyzed. Such a plan or
issuer also must comply with this
paragraph (c)(4)(iii)(A) as soon as
practicable once relevant data becomes
available.
(ii) If a plan or issuer imposes a
nonquantitative treatment limitation for
which no data exist that can reasonably
assess any relevant impact of the
nonquantitative treatment limitation on
relevant outcomes related to access to
mental health and substance use
disorder benefits and medical/surgical
benefits, the plan or issuer must include
in its comparative analysis, as required
under § 146.137(c)(5)(i)(D), a reasoned
justification as to the basis for the
conclusion that there are no data that
can reasonably assess the
nonquantitative treatment limitation’s
impact, why the nature of the
nonquantitative treatment limitation
prevents the plan or issuer from
reasonably measuring its impact, an
explanation of what data was
considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
the nonquantitative treatment limitation
complies with this section. If a plan or
issuer becomes aware of data that can
reasonably assess any relevant impact of
the nonquantitative treatment
limitation, the plan or issuer must
comply with this paragraph (c)(4)(iii)(A)
as soon as practicable.
(iii) Consistent with paragraph (a)(1)
of this section, paragraphs
(c)(4)(iii)(A)(3)(i) and (ii) of this section
shall only apply in very limited
circumstances and, where applicable,
shall be construed narrowly.
(B) Material differences. To the extent
the relevant data evaluated under
paragraph (c)(4)(iii)(A) of this section
suggest that the nonquantitative
treatment limitation contributes to
material differences in access to mental
health and substance use disorder
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benefits as compared to medical/
surgical benefits in a classification, such
differences will be considered a strong
indicator that the plan or issuer violates
this paragraph (c)(4).
(1) Where the relevant data suggest
that the nonquantitative treatment
limitation contributes to material
differences in access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits
in a classification, the plan or issuer
must take reasonable action, as
necessary, to address the material
differences to ensure compliance, in
operation, with this paragraph (c)(4) and
must document the actions that have
been or are being taken by the plan or
issuer to address material differences in
access to mental health or substance use
disorder benefits, as compared to
medical/surgical benefits, as required by
§ 146.137(c)(5)(iv).
(2) For purposes of this paragraph
(c)(4)(iii)(B), relevant data are
considered to suggest that the
nonquantitative treatment limitation
contributes to material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits if, based on all
relevant facts and circumstances, and
taking into account the considerations
outlined in this paragraph
(c)(4)(iii)(B)(2), the difference in the data
suggests that the nonquantitative
treatment limitation is likely to have a
negative impact on access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits.
(i) Relevant facts and circumstances,
for purposes of this paragraph
(c)(4)(iii)(B)(2), may include, but are not
limited to, the terms of the
nonquantitative treatment limitation at
issue, the quality or limitations of the
data, causal explanations and analyses,
evidence as to the recurring or nonrecurring nature of the results, and the
magnitude of any disparities.
(ii) Differences in access to mental
health or substance use disorder
benefits attributable to generally
recognized independent professional
medical or clinical standards or
carefully circumscribed measures
reasonably and appropriately designed
to detect or prevent and prove fraud and
abuse that minimize the negative impact
on access to appropriate mental health
and substance use disorder benefits,
which are used as the basis for a factor
or evidentiary standard used to design
or apply a nonquantitative treatment
limitation, are not considered to be
material for purposes of this paragraph
(c)(4)(iii)(B). To the extent a plan or
issuer attributes any differences in
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access to the application of such
standards or measures, the plan or
issuer must explain the bases for that
conclusion in the documentation
prepared under § 146.137(c)(5)(iv)(A).
(C) Nonquantitative treatment
limitations related to network
composition. For purposes of applying
paragraph (c)(4)(iii)(A) of this section
with respect to nonquantitative
treatment limitations related to network
composition, a plan or issuer must
collect and evaluate relevant data in a
manner reasonably designed to assess
the aggregate impact of all such
nonquantitative treatment limitations on
access to mental health and substance
use disorder benefits and medical/
surgical benefits. Examples of possible
actions that a plan or issuer could take
to comply with the requirement under
paragraph (c)(4)(iii)(B)(1) of this section
to take reasonable action, as necessary,
to address any material differences in
access with respect to nonquantitative
treatment limitations related to network
composition, to ensure compliance with
this paragraph (c)(4), include, but are
not limited to:
(1) Strengthening efforts to recruit and
encourage a broad range of available
mental health and substance use
disorder providers and facilities to join
the plan’s or issuer’s network of
providers, including taking actions to
increase compensation or other
inducements, streamline credentialing
processes, or contact providers
reimbursed for items and services
provided on an out-of-network basis to
offer participation in the network;
(2) Expanding the availability of
telehealth arrangements to mitigate any
overall mental health and substance use
disorder provider shortages in a
geographic area;
(3) Providing additional outreach and
assistance to participants and
beneficiaries enrolled in the plan or
coverage to assist them in finding
available in-network mental health and
substance use disorder providers and
facilities; and
(4) Ensuring that provider directories
are accurate and reliable.
(iv) 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
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medical/surgical benefits in the same
benefit classification.
(v) Effect of final determination of
noncompliance under § 146.137. (A) If a
group health plan (or health insurance
issuer offering coverage in connection
with a group health plan) receives a
final determination from the Secretary
or applicable State authority that the
plan or issuer is not in compliance with
the requirements of PHS Act section
2726(a)(8) or § 146.137 with respect to a
nonquantitative treatment limitation,
the nonquantitative treatment limitation
violates this paragraph (c)(4) and the
Secretary or applicable State authority
may direct the plan or issuer not to
impose the nonquantitative treatment
limitation with respect to mental health
or substance use disorder benefits in the
relevant classification, unless and until
the plan or issuer demonstrates to the
Secretary or applicable State authority
compliance with the requirements of
this section or takes appropriate action
to remedy the violation.
(B) A determination by the Secretary
of whether to require cessation of a
nonquantitative treatment limitation
under this paragraph (c)(4)(v) will be
based on an evaluation of the relevant
facts and circumstances involved in the
specific final determination and the
nature of the underlying
nonquantitative treatment limitation
and will take into account the interest
of plan participants and beneficiaries
and feedback from the plan or issuer.
(vi) 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.
(A) Example 1 (not comparable and more
stringent factors for reimbursement rate
methodology, in operation)—(1) Facts. A
plan’s reimbursement rate methodology for
outpatient, in-network providers is based on
a variety of factors. 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 are based on a combination of
factors, such as the nature of the service,
duration of the service, intensity and
specialization of training, provider licensure
and type, number of providers qualified to
provide the service in a given geographic
area, and market need (demand). In
operation, the plan utilizes an additional
strategy to further reduce reimbursement
rates for mental health and substance use
disorder non-physician providers from those
paid to mental health and substance use
disorder physicians by the same percentage
for every CPT code, but does not apply the
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same reductions for non-physician medical/
surgical providers.
(2) Conclusion. In this paragraph
(c)(4)(vi)(A) (Example 1), the plan violates
the rules of this paragraph (c)(4). 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 of
mental health and substance use disorder
services by the same percentage for every
CPT code but does not apply the same
reductions to non-physician providers of
medical/surgical services from the rate for
physician providers of medical/surgical
services, in operation, the factors used in
designing and applying the nonquantitative
treatment limitation to mental health and
substance use disorder benefits in the
outpatient, in-network classification are not
comparable to, and are applied more
stringently than, the factors used in designing
and applying the limitation with respect to
medical/surgical benefits in the same
classification. As a result, the
nonquantitative treatment limitation with
respect to mental health or substance use
disorder benefits in the outpatient, innetwork classification is more restrictive than
the predominant nonquantitative treatment
limitation that applies to substantially all
medical/surgical benefits in the same
classification.
(B) Example 2 (strategy for exclusion for
experimental or investigative treatment more
stringently applied to ABA therapy in
operation)—(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, as
experimental, a treatment or procedure when
no professionally recognized treatment
guidelines include the treatment or
procedure as a clinically appropriate
standard 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 as one intervention to treat certain
children with ASD.
(2) Conclusion. In this paragraph
(c)(4)(vi)(B) (Example 2), the plan violates the
rules of this paragraph (c)(4). As written, the
plan excludes coverage of 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 as including the treatment or
procedure at issue, and fewer than two
randomized controlled trials are available to
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support the treatment’s use with respect to
the given condition or procedure. However,
in operation, the plan deviates from this
strategy with respect to ABA therapy because
more than one professionally recognized
treatment guideline defines clinically
appropriate standards of care for ASD as
including ABA therapy to treat certain
children with ASD and more than two
randomized controlled trials are available to
support the use of ABA therapy to treat
certain children with ASD. Therefore, in
operation, the strategy used to design the
nonquantitative treatment limitation for
benefits for the treatment of ASD, which is
a mental health condition, in the outpatient,
in-network classification is not comparable
to, and is applied more stringently than, the
strategy used to design the nonquantitative
treatment limitation for medical/surgical
benefits in the same classification. As a
result, the nonquantitative treatment
limitation with respect to mental health or
substance use disorder benefits in the
outpatient, in-network classification is more
restrictive than the predominant
nonquantitative treatment limitation that
applies to substantially all medical/surgical
benefits in the same classification.
(C) Example 3 (step therapy protocol with
exception for severe or irreversible
consequences, discriminatory factor)—(1)
Facts. A plan’s written terms include a step
therapy protocol that requires participants
and beneficiaries who are prescribed certain
drugs to try and fail a generic or preferred
brand name drug before the plan will cover
the drug originally prescribed by a
participant’s or beneficiary’s attending
provider. The plan provides an exception to
this protocol that was developed solely based
on a methodology developed by an external
third-party organization. The third-party
organization’s methodology, which is not
based on a generally recognized independent
professional medical or clinical standard,
identifies instances in which a delay in
treatment with a drug prescribed for a
medical condition or surgical procedure
could result in either severe or irreversible
consequences. However, with respect to a
drug prescribed for a mental health condition
or a substance use disorder, the third-party
organization’s methodology only identifies
instances in which a delay in treatment could
result in both severe and irreversible
consequences, and the plan does not take any
steps to correct, cure, or supplement the
methodology.
(2) Conclusion. In this paragraph
(c)(4)(vi)(C) (Example 3), the plan violates the
rules of paragraph (c)(4)(i)(B) of this section.
The source upon which the factor used to
apply the step therapy protocol is based is
biased or not objective in a manner that
discriminates against mental health or
substance use disorder benefits as compared
to medical/surgical benefits because it
addresses instances in which a delay in
treatment with a drug prescribed for a
medical condition or surgical procedure
could result in either severe or irreversible
consequences, but only addresses instances
in which a delay in treatment with a drug
prescribed for a mental health condition or
substance use disorder could result in both
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severe and irreversible consequences, and the
plan fails to take the steps necessary to
correct, cure, or supplement the methodology
so that it is not biased and is objective. Based
on the relevant facts and circumstances, this
source systematically disfavors access or is
specifically designed to disfavor access to
mental health or substance use disorder
benefits as compared to medical/surgical
benefits. Therefore, the factor used to apply
the step therapy protocol is discriminatory
for purposes of determining comparability
and stringency under paragraph (c)(4)(i)(A) of
this section, and may not be relied upon by
the plan.
(D) Example 4 (use of historical plan data
and plan steps to correct, cure, or
supplement)—(1) Facts. A plan’s
methodology for calculating provider
reimbursement rates relies only on historical
plan data on total plan spending for each
specialty, divided between mental health and
substance use disorder providers and
medical/surgical providers, from a time when
the plan was not subject to PHS Act section
2726. The plan has used these historical plan
data for many years to establish base
reimbursement rates in all provider
specialties for which it provides medical/
surgical, mental health, and substance use
disorder benefits in the inpatient, in-network
classification. In evaluating the use of these
historical plan data in the design of the
methodology for calculating provider
reimbursement rates, the plan determined,
based on all the relevant facts and
circumstances, that the historical plan data
systematically disfavor access or are
specifically designed to disfavor access to
mental health or substance use disorder
benefits as compared to medical/surgical
benefits. To ensure this information about
historical reimbursement rates is not biased
and is objective, the plan supplements its
methodology to develop the base
reimbursement rates for mental health and
substance use disorder providers in
accordance with additional information,
evidence, sources, and standards that reflect
the increased demand for mental health and
substance use disorder benefits in the
inpatient, in-network classification and to
attract sufficient mental health and substance
use disorder providers to the network, so that
the relevant facts and circumstances indicate
the supplemented information, evidence,
sources, or standards do not systematically
disfavor access and are not specifically
designed to disfavor access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
(2) Conclusion. In this paragraph
(c)(4)(vi)(D) (Example 4), the plan does not
violate the rules of paragraph (c)(4)(i)(B) of
this section with respect to the plan’s
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification. The relevant facts and
circumstances indicate that the plan’s use of
only historical plan data to design its
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification would otherwise be
considered to be biased or not objective in a
manner that discriminates against mental
health or substance use disorder benefits as
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compared to medical/surgical benefits under
paragraph (c)(4)(i)(B)(2) of this section, since
the historical data systematically disfavor
access or are specifically designed to disfavor
access to mental health or substance use
disorder benefits as compared to medical/
surgical benefits. However, the plan took the
steps necessary to supplement the
information, evidence, sources, and
standards to reasonably reflect the increased
demand for mental health and substance use
disorder benefits in the inpatient, in-network
classification, and adjust the methodology to
increase reimbursement rates for those
benefits, thereby ensuring that the
information, evidence, sources, and
standards relied upon by the plan for this
purpose are not biased and are objective.
Therefore, the factors and evidentiary
standards used to design the plan’s
methodology for calculating provider
reimbursement rates in the inpatient, innetwork classification are not discriminatory.
(E) Example 5 (generally recognized
independent professional medical or clinical
standards and more stringent prior
authorization requirement in operation)—(1)
Facts. The provisions of a plan state that it
relies on, and does not deviate from,
generally recognized independent
professional medical or clinical standards to
inform the factor used to design prior
authorization requirements for both medical/
surgical and mental health and substance use
disorder benefits in the prescription drug
classification. The 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 for treatment of opioid use
disorder, every 30 days, which is
inconsistent with the generally recognized
independent professional medical standard
on which the factor used to design the
limitation is based. The plan’s factor used to
design prior authorization requirements for
medical/surgical benefits in the prescription
drug classification relies on, and does not
deviate from, generally recognized
independent professional medical or clinical
standards.
(2) Conclusion. In this paragraph
(c)(4)(vi)(E) (Example 5), the plan violates the
rules of this paragraph (c)(4). The American
Society of Addiction Medicine national
practice guidelines on which the factor used
to design prior authorization requirements
for substance use disorder benefits is based
are generally recognized independent
professional medical or clinical standards
that are not considered to be biased or not
objective in a manner that discriminates
against mental health and substance use
disorder benefits under paragraph
(c)(4)(i)(B)(3) of this section. However, the
plan must comply with other requirements in
this paragraph (c)(4), as applicable, with
respect to such standards or measures that
are used as the basis for a factor or
evidentiary standard used to design or apply
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a nonquantitative treatment limitation. In
operation, the plan’s factor used to design
and apply prior authorization requirements
with respect to substance use disorder
benefits is not comparable to, and is applied
more stringently than, the same factor used
to design and apply prior authorization
requirements for medical/surgical benefits,
because the factor relies on, and does not
deviate from, generally recognized
independent professional medical or clinical
standards for medical/surgical benefits, but
deviates from the relevant guidelines for
substance use disorder benefits. As a result,
the nonquantitative treatment limitation with
respect to substance use disorder benefits in
the prescription drug classification is more
restrictive than the predominant
nonquantitative treatment limitation that
applies to substantially all medical/surgical
benefits in the same classification.
(F) Example 6 (plan claims no data exist
to reasonably assess impact of
nonquantitative treatment limitation on
access; medical necessity criteria)—(1) Facts.
A plan approves or denies claims for mental
health and substance use disorder benefits
and for medical/surgical benefits in the
inpatient, in-network and outpatient, innetwork classifications based on medical
necessity criteria. The plan states in its
comparative analysis that no data exist that
can reasonably assess any relevant impact of
the medical necessity criteria nonquantitative
treatment limitation on relevant outcomes
related to access to mental health or
substance use disorder benefits as compared
to the plan’s medical necessity criteria
nonquantitative treatment limitation’s impact
on relevant outcomes related to access to
medical/surgical benefits in the relevant
classifications, without further explanation.
(2) Conclusion. In this paragraph
(c)(4)(vi)(F) (Example 6), the plan violates
this paragraph (c)(4). The plan does not
comply with paragraph (c)(4)(iii)(A)(3)(ii) of
this section because the plan did not include
in its comparative analysis, as required under
§ 146.137(c)(5)(i)(D), a reasoned justification
as to the basis for its conclusion that there
are no data that can reasonably assess the
nonquantitative treatment limitation’s
impact, an explanation of why the nature of
the nonquantitative treatment limitation
prevents the plan from reasonably measuring
its impact, an explanation of what data was
considered and rejected, and documentation
of any additional safeguards or protocols
used to ensure the nonquantitative treatment
limitation complies with this paragraph
(c)(4). Data that could reasonably assess the
medical necessity criteria nonquantitative
treatment limitation’s impact might include,
for example, the number and percentage of
claims denials, or the number and percentage
of claims that were approved for a lower
level of care than the level requested on the
initial claim. Therefore, because the plan has
not collected and evaluated relevant data in
a manner reasonably designed to assess the
impact of the nonquantitative treatment
limitation on relevant outcomes related to
access to mental health and substance use
disorder benefits and medical/surgical
benefits in the relevant classifications, the
plan violates the requirements of paragraph
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(c)(4)(iii) of this section, and violates the
requirements under § 146.137(c)(5)(i)(D)
because it did not include sufficient
information in its comparative analysis with
respect to the lack of relevant data.
(G) Example 7 (concurrent review data
collection; no material difference in access)—
(1) Facts. A plan follows a written process to
apply a concurrent review nonquantitative
treatment limitation to all medical/surgical
benefits and mental health and substance use
disorder benefits within the inpatient, innetwork classification. Under this 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. The
plan collects relevant data, including the
number of referrals to second-level review,
and the number of denials of claims for
medical/surgical benefits and mental health
and substance use disorder benefits subject to
concurrent review as compared to the total
number of claims subject to concurrent
review, in the inpatient, in-network
classification. The plan also collects and
evaluates the number of denied claims for
medical/surgical benefits and mental health
and substance use disorder benefits that are
overturned on appeal in the inpatient, innetwork classification. The plan evaluates
the relevant data and determines that, based
on the relevant facts and circumstances, the
data do not suggest that the concurrent
review nonquantitative treatment limitation
contributes to material differences in access
to mental health or substance use disorder
benefits as compared to medical/surgical
benefits in the classification. Upon
requesting the plan’s comparative analysis
for the concurrent review nonquantitative
treatment limitation and reviewing the
relevant data, the Secretary does not request
additional data and agrees that the data do
not suggest material differences in access.
(2) Conclusion. In this paragraph
(c)(4)(vi)(G) (Example 7), the plan does not
violate the rules of paragraph (c)(4)(iii) of this
section. The plan collected and evaluated
relevant data in a manner reasonably
designed to assess the impact of the
nonquantitative treatment limitation on
relevant outcomes related to access to mental
health and substance use disorder benefits
and medical/surgical benefits and considered
the impact as part of its evaluation. Because
the relevant data evaluated do not suggest
that the nonquantitative treatment limitation
contributes to material differences in access
to mental health and substance use disorder
benefits as compared to medical/surgical
benefits in the inpatient, in-network
classification, under paragraph (c)(4)(iii)(B)
of this section, there is no strong indicator
that the plan violates this paragraph (c)(4).
(H) Example 8 (material difference in
access for prior authorization requirement
with reasonable action)—(1) Facts. A plan
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requires prior authorization 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. The plan
collects and evaluates relevant data in a
manner reasonably designed to assess the
impact of the prior authorization requirement
on relevant outcomes related to access to
mental health and substance use disorder
benefits and medical/surgical benefits in the
inpatient, in-network classification. The
plan’s written process for prior authorization
states that the plan approves inpatient, innetwork benefits for medical conditions and
surgical procedures and mental health and
substance use disorder benefits 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.
Approvals for mental health and substance
use disorder benefits are most commonly
given only for 1 day, after which a treatment
plan must be submitted by the patient’s
attending provider and approved by the plan.
The relevant data show that approvals for 7
days are most common for medical
conditions and surgical procedures under
this plan. Based on all the relevant facts and
circumstances, the difference in the relevant
data suggests that the nonquantitative
treatment limitation is likely to have a
negative impact on access to mental health
and substance use disorder benefits as
compared to medical/surgical benefits.
Therefore, the data suggest that the
nonquantitative treatment limitation
contributes to material differences in access.
To address these material differences in
access, the plan consults more recent medical
guidelines to update the factors that inform
its medical necessity nonquantitative
treatment limitations. Based on this review,
the plan modifies the limitation so that
inpatient, in-network prior authorization
requests for mental health or substance use
disorder benefits are approved for similar
periods to what is approved for medical/
surgical benefits. The plan includes
documentation of this action as part of its
comparative analysis.
(2) Conclusion. In this paragraph
(c)(4)(vi)(H) (Example 8), the plan does not
violate the rules of paragraph (c)(4)(iii) of this
section. While relevant data for the plan’s
prior authorization requirements suggested
that the nonquantitative treatment limitation
contributes to material differences in access
to mental health and substance use disorder
benefits as compared to inpatient, in-network
medical/surgical benefits under paragraph
(c)(4)(iii)(B) of this section, the plan has
taken reasonable action, as necessary, to
ensure compliance, in operation, with this
paragraph (c)(4) by updating the factors that
inform its prior authorization
nonquantitative treatment limitation for
inpatient, in-network mental health and
substance use disorder benefits so that these
benefits are approved for similar periods to
what is approved for medical/surgical
benefits. The plan also documents its action
taken to address material differences in
access to inpatient, in-network benefits as
required by paragraph (c)(4)(iii)(B)(1) of this
section.
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(I) Example 9 (differences attributable to
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 factors
and evidentiary standards used to design and
apply the medical management requirement
rely on independent professional medical or
clinical standards that are generally
recognized by health care providers and
facilities in relevant clinical specialties. 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. The plan collects
and evaluates relevant data in a manner
reasonably designed to assess the impact of
the medical management nonquantitative
treatment limitation on relevant outcomes
related to access to mental health and
substance use disorder benefits and medical/
surgical benefits, and considers the impact as
part of the plan’s evaluation, as required by
paragraph (c)(4)(iii)(A) of this section. 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. The plan correctly determines that
these differences in access are attributable to
the generally recognized independent
professional medical or clinical standards
used as the basis for the factors and
evidentiary standards used to design or apply
the limitation and adequately explains the
bases for that conclusion as part of its
comparative analysis.
(2) Conclusion. In this paragraph
(c)(4)(vi)(I) (Example 9), the plan does not
violate the rules of this paragraph (c)(4).
Generally recognized independent
professional medical or clinical standards of
care are not considered to be information,
evidence, sources, or standards that are
biased and not objective in a manner that
discriminates against mental health or
substance use disorder benefits as compared
to medical/surgical benefits, and the plan
otherwise complies with the requirements in
paragraph (c)(4)(i) of this section.
Additionally, the plan does not violate
paragraph (c)(4)(iii) of this section because it
has collected and evaluated relevant data, the
differences in access are attributable to the
generally recognized independent
professional medical or clinical standards
that are used as the basis for the factors and
evidentiary standards used to design or apply
the medical management nonquantitative
treatment limitation, and the plan explains
the bases for this conclusion in its
comparative analysis. As a result, the
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nonquantitative treatment limitation with
respect to mental health or substance use
disorder benefits in the inpatient, out-ofnetwork classification is no more restrictive
than the predominant nonquantitative
treatment limitation that applies to
substantially all medical/surgical benefits in
the same classification.
(J) Example 10 (material differences in
access for standards for provider admission
to a network with reasonable action)—(1)
Facts. A plan applies nonquantitative
treatment limitations related to network
composition in the inpatient, in-network and
outpatient, 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 processes, strategies,
evidentiary standards, and other factors used
in designing and applying the
nonquantitative treatment limitations related
to network composition for mental health or
substance use disorder benefits in the
outpatient, in-network and inpatient, innetwork 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)(i) of this section. In
order to ensure, in operation, that the
nonquantitative treatment limitations are no
more restrictive than the predominant
nonquantitative treatment limitations applied
to substantially all medical/surgical benefits
in the classification, the plan collects and
evaluates relevant data in a manner
reasonably designed to assess the aggregate
impact of all the nonquantitative treatment
limitations related to network composition
on relevant outcomes related to 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 evaluation. The plan
considers relevant data that is known, or
reasonably should be known, including
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 (for comparable services
and benchmarked to a reference standard, as
appropriate); and in-network and out-ofnetwork utilization rates (including data
related to the dollar value and number of
provider claims submissions). The plan
determines that the relevant data suggest that
the nonquantitative treatment limitations in
the aggregate contribute to material
differences in access to mental health and
substance use disorder benefits compared to
medical/surgical benefits in the
classifications because, based on all the
relevant facts and circumstances, the
differences in the data suggest that the
nonquantitative treatment limitations related
to network composition are likely to have a
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negative impact on access to mental health or
substance use disorder benefits as compared
to medical/surgical benefits. The plan takes
reasonable actions, as necessary, to address
the material differences in access, to ensure
compliance, in operation, with this
paragraph (c)(4), by strengthening its efforts
to recruit and encourage a broad range of
available providers and facilities to join the
plan’s network of providers, including by
taking actions to increase compensation and
other inducements, streamline credentialing
processes, contact providers reimbursed for
items and services provided on an out-ofnetwork basis to offer participation in the
network, and develop a process to monitor
the effects of such efforts; expanding the
availability of telehealth arrangements to
mitigate overall provider shortages in certain
geographic areas; providing additional
outreach and assistance to participants and
beneficiaries enrolled in the plan to assist
them in finding available in-network
providers and facilities; and ensuring that the
plan’s provider directories are accurate and
reliable. The plan documents the efforts that
it has taken to address the material
differences in access that the data revealed,
and the plan includes the documentation as
part of its comparative analysis submission.
(2) Conclusion. In this paragraph
(c)(4)(vi)(J) (Example 10), the plan does not
violate the rules of this paragraph (c)(4). The
plan’s nonquantitative treatment limitations
related to network composition comply with
the rules of paragraph (c)(4)(i) of this section.
Additionally, the plan collects and evaluates
relevant data, as required under paragraph
(c)(4)(iii)(A) of this section, in a manner
reasonably designed to assess the aggregate
impact of all such nonquantitative treatment
limitations on relevant outcomes related to
access to mental health and substance use
disorder benefits and medical/surgical
benefits, as required under paragraph
(c)(4)(iii)(C) of this section. While the data
suggest that the nonquantitative treatment
limitations contribute to material differences
in access to mental health and substance use
disorder benefits as compared to medical/
surgical benefits, the plan has taken
reasonable action, as necessary, to ensure
compliance with this paragraph (c)(4). The
plan also documents the actions that have
been and are being taken by the plan to
address material differences as required by
§ 146.137(c)(5)(iv). As a result, the network
composition nonquantitative treatment
limitations with respect to mental health or
substance use disorder benefits in the
inpatient, in-network and outpatient, innetwork classifications are no more
restrictive than the predominant
nonquantitative treatment limitations that
apply to substantially all medical/surgical
benefits in the same classifications.
(K) Example 11 (separate EAP exhaustion
treatment limitation applicable only to
mental health or substance use disorder
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
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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)(vi)(K) (Example 11), the requirement
that limits 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)(4). 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)(iv) 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 exclusion for
treatment in a residential facility applicable
only to mental health and substance use
disorder benefits)—(1) Facts. A plan
generally covers inpatient, in-network and
inpatient, out-of-network treatment without
any limitations on setting, including skilled
nursing facilities and rehabilitation hospitals,
provided other medical necessity standards
are satisfied. The plan has an exclusion for
treatment at residential facilities, 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)(vi)(L) (Example 12), the plan violates
the rules of paragraph (c)(4)(iv) of this
section. The exclusion of treatment at
residential facilities is a separate
nonquantitative treatment limitation
applicable only to mental health and
substance use disorder benefits in the
inpatient, in-network and inpatient, out-ofnetwork classifications because the plan does
not apply a comparable exclusion with
respect to any medical/surgical benefits in
the same benefit classification.
(M) Example 13 (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 the plan’s exclusion
of mental health and substance use disorder
benefits for failure to complete a course of
treatment in the inpatient, in-network
classification under § 146.137(d), the plan
submits a comparative analysis for the
nonquantitative treatment limitation. After
review of the comparative analysis, as well
as additional information submitted by the
plan after the Secretary determines that the
plan has not submitted sufficient information
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to be responsive to the request, 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
inpatient, in-network 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. Under
§ 146.137(d)(3), the plan submits a corrective
action plan and additional comparative
analyses within 45 calendar days after the
initial determination. However, the
corrective action plan does not alter or
eliminate the exclusion or alter the processes,
strategies, evidentiary standards, and other
factors used in designing and applying the
exclusion. Moreover, the additional
comparative analysis still does not include
sufficient information. The Secretary then
determines that the additional comparative
analyses do not demonstrate compliance
with the requirements of this paragraph
(c)(4). Accordingly, the plan receives a final
determination of noncompliance with PHS
Act section 2726 (a)(8) and § 146.137 from
the Secretary, which concludes that the plan
did not demonstrate compliance through the
comparative analysis process. After
considering the relevant facts and
circumstances, and considering the interests
of plan participants and beneficiaries, as well
as feedback from the plan, the Secretary
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 exclusion of benefits for failure to
complete a course of treatment in the
inpatient, in-network classification.
(2) Conclusion. In this paragraph
(c)(4)(vi)(M) (Example 13), by continuing to
impose the exclusion of mental health and
substance use disorder benefits for failure to
complete a course of treatment in the
inpatient, in-network classification after the
Secretary directs the plan not to impose this
nonquantitative treatment limitation, the
plan violates the requirements of paragraph
(c)(4)(v) of this section.
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*
*
*
*
*
(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
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authorized representative) who have
received 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)
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 that is required to
provide 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 section and § 146.137
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—
(i) 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, except that the requirements of
paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and
(c)(4)(iii) of this section apply on the
first day of the first plan year beginning
on or after January 1, 2026.
(ii) Until the applicability date in
paragraph (i)(1)(i) of this section, plans
and issuers are required to continue to
comply with 45 CFR 146.136, revised as
of October 1, 2023.
*
*
*
*
*
(j) Severability. If any provision of this
section is held to be invalid or
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77747
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 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.
(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,
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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; and
(iii) A description of which benefits
are included in each classification set
forth in § 146.136(c)(2)(ii)(A).
(2) Identification and definition of the
factors and evidentiary standards 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 every factor
considered or relied upon, 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;
(B) A description of each evidentiary
standard used to design or apply each
factor (and the source of each
evidentiary standard) identified under
paragraph (c)(2)(i) of this section; and
(C) A description of any steps the plan
or issuer has taken to correct, cure, or
supplement any information, evidence,
sources, or standards that would
otherwise have been considered biased
or not objective under
§ 146.136(c)(4)(i)(B)(1) in the absence of
such steps.
(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 under
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
designations 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 deviations or variations 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 deviations or
variations.
(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 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 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 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 reasons for
any deviations or variations 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,
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and how the plan or issuer establishes
such deviations or variations, 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, 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 evaluates
whether, 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;
(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;
(C) With respect to a nonquantitative
treatment limitation for which relevant
data is temporarily unavailable as
described in § 146.136(c)(4)(iii)(A)(3)(i),
a detailed explanation of the lack of
relevant data, the basis for the plan’s or
issuer’s conclusion that there is a lack
of relevant data, and when and how the
data will become available and be
collected and analyzed; and
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(D) With respect to a nonquantitative
treatment limitation for which no data
exist that can reasonably assess any
relevant impact of the nonquantitative
treatment limitation on relevant
outcomes related to access to mental
health and substance use disorder
benefits and medical/surgical benefits as
described in § 146.136(c)(4)(iii)(A)(3)(ii),
a reasoned justification as to the basis
for the conclusion that there are no data
that can reasonably assess the
nonquantitative treatment limitation’s
impact, an explanation of why the
nature of the nonquantitative treatment
limitation prevents the plan or issuer
from reasonably measuring its impact,
an explanation of what data was
considered and rejected, and
documentation of any additional
safeguards or protocols used to ensure
that the nonquantitative treatment
limitation complies with § 146.136(c)(4);
(ii) Identification of the relevant data
collected and evaluated, as required
under § 146.136(c)(4)(iii)(A);
(iii) Documentation 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:
(A) The evaluation of relevant data as
required under § 146.136(c)(4)(iii)(A);
and
(B) A reasoned justification and
analysis that explains why the plan or
issuer concluded that any differences in
the relevant data do or do not suggest
the nonquantitative treatment limitation
contributes to material differences in
access to mental health or substance use
disorder benefits as compared to
medical/surgical benefits, in accordance
with § 146.136(c)(4)(iii)(B)(2);
(iv) A detailed explanation of any
material differences in access
demonstrated by the outcomes
evaluated under paragraph (c)(5)(iii) of
this section, including:
(A) A reasoned explanation of any
material differences in access 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 (including any
considerations beyond a plan’s or
issuer’s control that contribute to the
existence of material differences) and a
detailed explanation of the bases for
concluding that material differences are
not attributable to differences in the
comparability or relative stringency of
the nonquantitative treatment
limitation; and
(B) To the extent differences in access
to mental health or substance use
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77749
disorder benefits are attributable to
generally recognized independent
professional medical or clinical
standards or carefully circumscribed
measures reasonably and appropriately
designed to detect or prevent and prove
fraud and abuse that minimize the
negative impact on access to appropriate
mental health and substance use
disorder benefits, and such standards or
measures are used as the basis for a
factor or evidentiary standard used to
design or apply a nonquantitative
treatment limitation, documentation
explaining how any such differences are
attributable to those standards or
measures, as required in
§ 146.136(c)(4)(iii)(B)(2)(ii); and
(v) A discussion of the actions that
have been or are being taken by the plan
or issuer to address 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
has taken or is taking under
§ 146.136(c)(4)(iii)(B)(1) to address
material differences to comply, in
operation, with § 146.136(c)(4),
including, as applicable:
(A) A reasoned explanation of any
material differences in access to mental
health or substance use disorder
benefits as compared to medical/
surgical benefits that persist despite
reasonable actions that have been or are
being taken; and
(B) For a plan or issuer designing and
applying one or more nonquantitative
treatment limitations related to network
composition, a discussion of the actions
that have been or are being taken to
address material differences in access to
in-network mental health and substance
use disorder benefits as compared to innetwork medical/surgical benefits,
including those listed in
§ 146.136(c)(4)(iii)(C).
(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 or
is not (or might or might not be) in
compliance with the requirements of
§ 146.136(c)(4), including any additional
actions the plan or issuer has taken or
intends to take to address any potential
areas of concern or noncompliance;
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(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 not otherwise
discussed in the comparative analysis;
(iv) The date the analysis is
completed 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 the
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 coverage in
connection with 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
or issuer has not submitted sufficient
information under paragraph (d)(1) of
this section for the Secretary to
determine whether the comparative
analysis required in paragraph (b) of this
section complies with paragraph (c) of
this section or whether the plan or
issuer complies with § 146.136(c)(4), 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). 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
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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 initial determination by
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 (c) of this
section that demonstrate compliance
with § 146.136(c)(4), 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 business days of receipt of the
final determination of noncompliance,
and the plan or issuer must 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 timeframe.
(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 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 submitted or
reprocessed;
PO 00000
Frm 00166
Fmt 4701
Sfmt 4700
(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 § 146.136(c)(4) or this
section, 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 concurred with those
actions; 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 Centers for Medicare &
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
(including a provider or other person
acting as a participant’s or beneficiary’s
authorized representative) who has
received an adverse benefit
E:\FR\FM\23SER2.SGM
23SER2
Federal Register / Vol. 89, No. 184 / Monday, September 23, 2024 / Rules and Regulations
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), on the first day of the
first plan year beginning on or after
January 1, 2025, except the
requirements of paragraphs (c)(2)(ii)(C),
(c)(5)(i)(C) and (D), and (c)(5)(ii) through
(v) of this section apply on the first day
of the first plan year beginning on or
after January 1, 2026.
(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.
■ 10. 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:
khammond on DSKJM1Z7X2PROD with RULES2
§ 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
VerDate Sep<11>2014
19:41 Sep 20, 2024
Jkt 262001
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 plans 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 1st 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
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.
PO 00000
Frm 00167
Fmt 4701
Sfmt 9990
77751
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
11. 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.
12. Revise § 147.160 to read as
follows:
■
§ 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, incorporating 45 CFR 146.136,
each revised as of October 1, 2023. This
section applies to non-grandfathered
and grandfathered health plans as
defined in § 147.140.
[FR Doc. 2024–20612 Filed 9–13–24; 4:15 pm]
BILLING CODE 4510–29–P; 4830–01–P; 4120–01–P
E:\FR\FM\23SER2.SGM
23SER2
]]>Agencies
[Federal Register Volume 89, Number 184 (Monday, September 23, 2024)]
[Rules and Regulations]
[Pages 77586-77751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20612]
[[Page 77585]]
Vol. 89
Monday,
No. 184
September 23, 2024
Part II
Department of the Treasury
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Internal Revenue Service
Department of Labor
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Employee Benefits Security Administration
Department of Health and Human Services
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26 CFR Part 54
29 CFR Part 2590
45 CFR Parts 146 and 147
Requirements Related to the Mental Health Parity and Addiction Equity
Act; Final Rule
Federal Register / Vol. 89 , No. 184 / Monday, September 23, 2024 /
Rules and Regulations
[[Page 77586]]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 54
[TD 10006]
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-F]
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: Final rules.
-----------------------------------------------------------------------
SUMMARY: This document sets forth final rules amending regulations
implementing the Paul Wellstone and Pete Domenici Mental Health Parity
and Addiction Equity Act of 2008 (MHPAEA) and adding 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
final rules amend the existing NQTL standard to prohibit group health
plans and health insurance issuers offering group or individual health
insurance coverage from using NQTLs that place greater restrictions on
access to mental health and substance use disorder benefits as compared
to medical/surgical benefits. As part of these changes, these final
rules require plans and issuers to collect and evaluate relevant data
in a manner reasonably designed to assess the impact of NQTLs on
relevant outcomes related to access to mental health and substance use
disorder benefits and medical/surgical benefits and to take reasonable
action, as necessary, to address material differences in access to
mental health or substance use disorder benefits as compared to
medical/surgical benefits. These final rules also amend existing
examples and add new examples on the application of the rules for NQTLs
to clarify and illustrate the requirements of MHPAEA. Additionally,
these final rules 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 to participants, beneficiaries, and
enrollees. Finally, HHS finalizes 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:
Effective date: These regulations are effective on November 22,
2024.
Applicability date: See the SUPPLEMENTARY INFORMATION section for
information on the applicability dates.
FOR FURTHER INFORMATION CONTACT: William Fischer, 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.
SUPPLEMENTARY INFORMATION:
I. Background
America continues to experience a mental health and substance use
disorder crisis affecting people across all demographics, with
marginalized communities disproportionately impacted.\1\ The COVID-19
pandemic exacerbated the crisis, but its effects have continued post-
pandemic.\2\ From August 19, 2020, to February 1, 2021, the percentage
of adults exhibiting symptoms of an anxiety or a depressive disorder
rose from 36.4 percent to 41.5 percent.\3\ In 2022, there were an
estimated 15.4 million adults aged 18 or older in the United States
with a serious mental illness and nearly one in four adults (59.3
million) living with any mental illness.\4\
---------------------------------------------------------------------------
\1\ Kaiser Family Foundation (2022), Five key findings on mental
health and substance use disorders by race/ethnicity, https://www.kff.org/mental-health/issue-brief/five-key-findings-on-mental-health-and-substance-use-disorders-by-race-ethnicity/.
\2\ American Psychological Association (2023), Stress in
AmericaTM 2023: A nation grappling with psychological
impacts of collective trauma, https://www.apa.org/news/press/releases/2023/11/psychological-impacts-collective-trauma.
\3\ 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, Aug. 2020-Feb. 2021, MMWR Morb Mortal Wkly Rep 2021;70:490-
494, https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e2.htm.
\4\ SAMHSA (2023), Key substance use and mental health
indicators in the United States: Results from the 2022 National
Survey on Drug Use and Health (HHS Publication No. PEP23-07-01-006,
NSDUH Series H-58), https://www.samhsa.gov/data/report/2022-nsduh-annual-national-report.
---------------------------------------------------------------------------
Additionally, in 2022, nearly 54.6 million people aged 12 or older
were classified as needing treatment for substance use, but only about
24 percent of those people received any treatment, according to the
Substance Abuse and Mental Health Services Administration's (SAMHSA)
National Survey on Drug Use and Health (NSDUH).\5\ The unmet need for
treatment for substance use disorders has been even greater among
racial minorities and other marginalized communities. Between 2019 and
2021, median monthly overdose deaths among persons aged 10-19 years
increased 109 percent; and deaths involving illicitly manufactured
fentanyl increased 182 percent.\6\ In 2021, American Indian and Alaskan
Native men aged 15-34 had an age-adjusted death rate caused by drug
overdoses of 42 per 100,000 people, compared to 20.5 age-adjusted
deaths per 100,000 people during the same time period in 2018.\7\ Non-
Hispanic Black or African American men aged 35-64 had an age-adjusted
death rate caused by drug overdoses of 61.2 per 100,000 people; an
increase from 30.6 deaths per 100,000 people during the same time
period in 2018.\8\
---------------------------------------------------------------------------
\5\ Ibid.
\6\ Tanz, L.J., Dinwiddie, A.T., Mattson, C.L., O'Donnell, J.,
Davis, N.L. (2022), Drug Overdose Deaths Among Persons Aged 10-19
Years--United States, July 2019-Dec. 2021. MMWR Morb Mortal Wkly Rep
2022;71:1576-1582, https://www.cdc.gov/mmwr/volumes/71/wr/mm7150a2.htm.
\7\ Han, B., Einstein, E.B., Jones, C.M., Cotto, J., Compton,
W.M., Volkow, N.D. (2022), Racial and Ethnic Disparities in Drug
Overdose Deaths in the US During the COVID-19 Pandemic, JAMA Netw
Open, 5(9):e2232314, DOI:10.1001/jamanetworkopen.2022.32314, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9490498/. Age-adjusted death
rates are death rates that control for the effects of differences in
population age distributions.
\8\ Ibid.
---------------------------------------------------------------------------
Following the COVID-19 pandemic, employers highlighted that they
have responded to the impact of the pandemic on the mental health and
substance use disorder crisis by offering more comprehensive benefits,
including
[[Page 77587]]
mental health support. According to a report published in 2021, ``about
three in four large employers and two in four small/medium employers
report that they offer at least one type of mental health support for
employees.'' \9\ In a recent survey, 87 percent of large employers
stated that access to mental health care was a top priority, and
another survey found that ``the number of in-network behavioral health
providers has increased by an average of 48 percent in 3 years among
commercial health plans.'' \10\ Group health plans and health insurance
issuers have taken steps to ensure mental health parity is reflected in
their benefit designs and to educate participants, beneficiaries, and
enrollees \11\ about MHPAEA's requirements, by reaching out to members,
expanding telehealth availability, expanding behavioral health provider
networks, integrating behavioral health with physical health care, and
working to reduce stigmatization of seeking treatment.
---------------------------------------------------------------------------
\9\ Coe, E., Cordina, J., Enomoto, K., Mandel, A., Stueland, J.
(2021), National Surveys Reveal Disconnect Between Employees and
Employers Around Mental Health Need, McKinsey & Company, https://www.mckinsey.com/industries/healthcare/our-insights/national-surveys-reveal-disconnect-between-employees-and-employers-around-mental-health-need.
\10\ America's Health Insurance Plans (AHIP), Health Insurance
Providers Facilitate Broad Access to Mental Health Support (Aug.
2022), https://ahiporg-production.s3.amazonaws.com/documents/Mental-Health-Survey-July-2022-FINAL.pdf.
\11\ Consistent with the proposed rules, these final rules apply
directly to group health plans or health insurance coverage offered
by an issuer in connection with a group health plan, and 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 later in this preamble, HHS is finalizing an
amendment to 45 CFR 147.160 to also include a cross-reference to 45
CFR 146.137 to similarly extend the new 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 to 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.
---------------------------------------------------------------------------
Despite these efforts, disparities in coverage between mental
health and substance use disorder benefits and medical/surgical
benefits have grown. In the preamble to the proposed rules,\12\ the
Departments cited a 2019 Milliman report \13\ that found a growing
disparity in the utilization of out-of-network behavioral health care
providers relative to out-of-network medical/surgical care providers. A
recent study by RTI International \14\ found that out-of-network use
was 3.5 times higher for all behavioral health clinician office visits
than for all out-of-network medical/surgical clinician office visits;
in addition, the study noted that these disparities in out-of-network
use for behavioral health office visits compared to medical/surgical
office visits have remained large and, according to the study, are not
fully attributable to behavioral health provider shortages. The study
concluded that these results demonstrate the need for more robust
parity enforcement.
---------------------------------------------------------------------------
\12\ 88 FR 51552, 51554 (Aug. 3, 2023).
\13\ Melek, S., Davenport, S., Gray, T.J. (2019), Addiction and
mental health vs. physical health: Widening disparities in network
use and provider reimbursement, Milliman, 6, https://assets.milliman.com/ektron/Addiction_and_mental_health_vs_physical_health_Widening_disparities_in_network_use_and_provider_reimbursement.pdf.
\14\ Mark, T.L., Parish, W. (2024), Behavioral health parity--
Pervasive disparities in access to in-network care continue, RTI
International, https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf.
---------------------------------------------------------------------------
RTI concluded that its analyses of the most recent, comprehensive
private insurance claims data
reveal material differences in access to mental health and substance
use disorder benefits as compared to medical/surgical benefits, as
reflected in much greater use of out-of-network providers. . . .
These disparities indicate that behavioral health networks are
clearly inadequate and signal potential noncompliance with the NQTL
requirements of MHPAEA.\15\
---------------------------------------------------------------------------
\15\ Id. at 46.
These final rules aim to strengthen consumer protections consistent
with MHPAEA's fundamental purpose--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 burdens on access to benefits for those
conditions or disorders than they would face when seeking coverage for
the treatment of a medical condition or a surgical procedure.\16\ As
highlighted in the preamble to the proposed rules,\17\ such barriers
are particularly problematic when the benefits that the plan or issuer
purports to make available and that individuals reasonably expect to be
covered are not in fact covered. To the extent these barriers
disproportionately limit access to mental health or substance use
disorder benefits, such practices contravene MHPAEA's statutory
language, which requires that the financial requirements and treatment
limitations applicable to mental health or substance use disorder
benefits be ``no more restrictive'' than the predominant requirements
and limitations applicable to substantially all medical/surgical
benefits.\18\ The Departments' enforcement efforts have shown that such
barriers persist more than 15 years after MHPAEA's enactment.\19\ These
final rules are critical to addressing barriers to access to mental
health and substance use disorder benefits.
---------------------------------------------------------------------------
\16\ 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 (Mar. 4, 2008), 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.'').
\17\ 88 FR 51552 (Aug. 3, 2023).
\18\ 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).
\19\ See, e.g., 2022 MHPAEA Report to Congress (Jan. 2022),
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 Comparative
Analysis Report to Congress (July 2023), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------
The problems persist notwithstanding the Departments' unprecedented
commitment to advance parity for mental health and substance use
disorder benefits in recent years, as reflected through increased
enforcement efforts and the Departments' work with interested parties
to help them understand and comply with MHPAEA's requirements.\20\ To
promote compliance, the Departments have provided extensive guidance
and compliance assistance materials, especially with respect to
NQTLs,\21\ yet disparities still persist.
---------------------------------------------------------------------------
\20\ More information on the Departments' enforcement efforts
and guidance issued under MHPAEA is available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/mental-health-and-substance-use-disorder-parity/tools-and-resources and https://www.cms.gov/marketplace/private-health-insurance/mental-health-parity-addiction-equity.
\21\ As discussed in more detail later in this preamble, NQTLs
are generally non-numerical limits on the scope or duration of
treatment, such as prior authorization requirements, step therapy,
and standards related to network composition.
---------------------------------------------------------------------------
In 1996, Congress enacted the Mental Health Parity Act of 1996
(MHPA 1996), which required parity in aggregate
[[Page 77588]]
lifetime and annual dollar limits for mental health benefits and
medical/surgical benefits for group health plans and health insurance
coverage offered in connection with such plans.\22\ These mental health
parity provisions were codified in Code section 9812, ERISA section
712, and PHS Act section 2705.\23\ Congress expanded on these efforts
in 2008 with the enactment of MHPAEA,\24\ which amended Code section
9812, ERISA section 712, and PHS Act section 2705 by adding
requirements for plans and issuers related to financial requirements
and treatment limitations and made further amendments to the existing
mental health parity provisions, including provisions to apply the
mental health parity requirements to substance use disorder benefits.
---------------------------------------------------------------------------
\22\ 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).
\23\ The Departments published interim final rules implementing
MHPA 1996 at 62 FR 66932 (Dec. 22, 1997).
\24\ 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 (Oct. 3, 2008)).
---------------------------------------------------------------------------
The Affordable Care Act (ACA) \25\ 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 ACA 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 included by these references are sections 2701 through
2728. The ACA extended MHPAEA to apply to individual health insurance
coverage and redesignated MHPAEA in the PHS Act as section 2726.\26\
Additionally, section 1311(j) of the ACA applies PHS Act section 2726
to qualified health plans \27\ in the same manner and to the same
extent as it applies to health insurance issuers and group health
plans. The ACA also included a requirement for coverage of mental
health and substance use disorder services, including behavioral health
treatment, as a category of essential health benefits (EHB).\28\ HHS'
EHB regulations 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 to
satisfy the requirement to cover ``mental health and substance use
disorder services, including behavioral health treatment,'' as part of
EHB.\29\
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\25\ References to the Affordable Care Act or ACA include the
Patient Protection and Affordable Care Act (Pub. L. 111-148, 123
Stat. 3028) enacted on March 23, 2010, and the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152, 124 Stat.
1029) enacted on March 30, 2010.
\26\ The requirements of MHPAEA generally apply to both
grandfathered and non-grandfathered health plans. See section 1251
of the ACA 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
ACA, grandfathered health plans are exempted only from certain ACA
requirements enacted in Subtitles A and C of Title I of the ACA. 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.
\27\ A qualified health plan is a health insurance plan that is
certified by a health insurance exchange that it meets certain
minimum standards established under the ACA and described in subpart
C of 45 CFR part 156. See 45 CFR 155.20.
\28\ Section 1302 of the ACA requires non-grandfathered health
plans in the individual and small group markets to cover 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.
\29\ Section 1302(b)(1)(E) of the ACA; 45 CFR 156.115(a)(3).
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The Departments published a request for information soliciting
comments on issues under MHPAEA \30\ and subsequently issued interim
final regulations to implement the requirements of MHPAEA.\31\ After
considering the comments, the Departments published the 2013 final
regulations.\32\ As detailed in the preamble to the proposed rules, in
the years after the 2013 final regulations were published, the
Departments 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, including the 2020 MHPAEA Self-Compliance Tool,\33\ which
provided a basic framework for plans and issuers to assess whether
their NQTLs satisfy MHPAEA's parity requirements.\34\
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\30\ 74 FR 19155 (Apr. 28, 2009).
\31\ 75 FR 5410 (Feb. 2, 2010).
\32\ 78 FR 68240 (Nov. 13, 2013).
\33\ See Self-Compliance Tool for the Mental Health Parity and
Addiction Equity Act (MHPAEA) (2020), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
\34\ 88 FR 51552, 51555-56 (Aug. 2, 2023).
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The CAA, 2021 was enacted by Congress on December 27, 2020,\35\ and
amended MHPAEA, in part, by expressly requiring group health plans and
health insurance issuers that provide both medical/surgical benefits
and mental health or substance use disorder benefits to perform and
document comparative analyses of the design and application of NQTLs
that apply to mental health or substance use disorder benefits. The
statute also requires plans and issuers to make their analyses
available to the Departments or applicable State authorities, upon
request, effective February 10, 2021. Additionally, the CAA, 2021 sets
forth a process by which the Departments must evaluate the requested
NQTL comparative analyses and enforce the comparative analyses
requirements and requires the Departments to submit annually to
Congress and make publicly available a report summarizing the
comparative analyses requested for review by the Departments.\36\
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\35\ Section 203 of title II of Division BB of the CAA, 2021,
Public Law 116-260, 134 Stat. 1182 (Dec. 27, 2020).
\36\ The report must state, in part, whether each plan or issuer
that submitted a comparative analysis upon request submitted
sufficient information to permit review; whether and why the
Departments determined 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 its comparative analysis; and, for
each plan or issuer the Departments determined not to be in
compliance, specifications of the actions that the plan or issuer
must take to come into compliance. See 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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To help plans and issuers comply with the amendments to MHPAEA made
by the CAA, 2021, the Departments issued Frequently Asked Questions
(FAQs) About Mental Health and Substance Use Disorder Parity
Implementation and the Consolidated Appropriations Act, 2021 Part 45
(FAQs Part 45).\37\ As detailed in the preamble to the proposed rules,
these FAQs provided initial guidance to plans and issuers on these
amendments to MHPAEA.\38\ Additionally, as required
[[Page 77589]]
by the CAA, 2021, the Departments provided reports to Congress on the
NQTL comparative analyses reviews conducted by the Departments.\39\
These reports highlighted that nearly all of the comparative analyses
reviewed by the Departments during the relevant time periods contained
insufficient information to support a finding of compliance upon
initial receipt and reflected common insufficiencies.
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\37\ FAQs about Mental Health and Substance Use Disorder Parity
Implementation and the Consolidated Appropriations Act, 2021 Part 45
(Apr. 2, 2021), 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.
\38\ 88 FR 51552, 51562 (Aug. 3, 2023).
\39\ Ibid.
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Building on the lessons learned from implementing and enforcing
MHPAEA, as well as the guidance provided in FAQs Part 45, on August 3,
2023, the Departments published proposed rules to amend existing MHPAEA
regulations at 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136;
\40\ to add a proposed new regulation at 26 CFR 54.9812-2, 29 CFR
2590.712-1, and 45 CFR 146.137 in order to codify minimum standards for
developing NQTL comparative analyses; and to codify HHS-only amendments
to implement the sunset provision for self-funded non-Federal
governmental plan elections to opt out of compliance with MHPAEA. On
September 28, 2023, the Departments extended the comment period that
was set to expire on October 2, 2023, by 15 days to October 17, 2023,
to give interested parties additional time to review the proposed rules
and submit comments.\41\
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\40\ 88 FR 51552 (Aug. 3, 2023). On July 25, 2023, DOL, in
collaboration with HHS and the Treasury, also issued Technical
Release 2023-01P. The Technical Release set out principles and
sought public comment to inform future guidance with respect to the
application of the proposed data collection and evaluation
requirements to NQTLs related to network composition and a potential
time-limited enforcement safe harbor for plans and issuers that
include data in their comparative analyses that demonstrate they
meet or exceed all the thresholds identified in future guidance with
respect to NQTLs related to network composition. The Departments
encouraged interested parties to submit their comments consistent
with the instructions contained in it separate from any comments
they submitted in response to the proposed rules. The Departments
are considering these comments separately and these final rules do
not respond to those comments. Plans and issuers would be allowed
adequate time to conform to any future guidance on the type, form,
and manner of collection and evaluation for the relevant data
required under the final rules.
\41\ 88 FR 66728 (Sept. 28, 2023).
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The Departments received 9,503 comments that were submitted during
the comment period \42\ in response to the proposed rules from a wide
variety of interested parties, including private citizens; consumer and
advocacy organizations; employers, employee organizations, and other
plan sponsors; Federal, State, and local officials; health care
providers and facilities and health systems; health insurance issuers;
service providers, including managed behavioral health organizations
(MBHOs), third-party administrators (TPAs), and pharmacy benefit
managers (PBMs); trade and professional associations; and researchers.
Many commenters provided detailed feedback on multiple aspects of the
proposed rules and in response to various specific comment
solicitations included in the preamble to the proposed rules and the
request for information.
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\42\ The comment period for the proposed rules was extended by
15 days to October 17, 2023.
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In general, many commenters supported the proposed rules, because
they would formalize and, according to these commenters, provide
greater clarity on what health plans and issuers must do to comply with
MHPAEA. Some commenters highlighted that the existing rules were
insufficient and that the proposed rules were timely and necessary to
strengthen MHPAEA and ensure fair access to mental health and substance
use disorder care. Commenters highlighted the importance of the
proposed rules to participants, beneficiaries, and enrollees, including
children, teens, young adults, and others living with mental health
conditions and substance use disorders. Several other commenters,
however, expressed either opposition or concern regarding the proposed
rules. Several commenters stated that the proposed rules would increase
health plan and issuer costs and reduce treatment quality. A few
commenters recommended the Departments withdraw the proposed rules and
initiate a new rulemaking process after additional input from
interested parties.
After reviewing the comments received during the comment period,
the Departments are finalizing the proposed rules, with some changes in
response to comments as described in more detail later in this
preamble, to ensure that participants, beneficiaries, and enrollees can
access the mental health and substance use disorder care they need
without facing greater restrictions than when accessing medical and
surgical care, consistent with the fundamental purpose of MHPAEA. These
final rules provide additional clarity to plans and issuers on how to
comply with MHPAEA's requirements and, as a result, will strengthen the
protections of MHPAEA. As highlighted earlier in this preamble, since
the 2013 final regulations, the Departments repeatedly sought input
from interested parties on MHPAEA's requirements; therefore, the
Departments decline to withdraw the proposed rules or initiate a new
rulemaking process after soliciting additional input from interested
parties. As explained throughout this preamble, the amendments made by
these final rules are faithful to MHPAEA's parity requirements and
sensitive to the flexibility plans and issuers have in designing
benefits for group health plans and health insurance coverage.\43\
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\43\ The Departments note that impacts on plan and issuer costs
are discussed in more detail in the regulatory impact analysis,
later in this preamble.
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Among other things, these final rules:
Make clear that MHPAEA requires that individuals will not
face greater restrictions on access to mental health and substance use
disorder benefits as compared to medical/surgical benefits.
Reinforce that health plans and issuers cannot use NQTLs,
such as prior authorization and other medical management techniques,
standards related to network composition, or methodologies to determine
out-of-network reimbursement rates, for mental health and substance use
disorder benefits, that are more restrictive than the predominant NQTLs
applied to substantially all medical/surgical benefits in the same
classification.
Require plans and issuers to collect and evaluate data and
take reasonable action, as necessary, to address material differences
in access to mental health and substance use disorder benefits as
compared to medical/surgical benefits, where the relevant data suggest
that the NQTL contributes to material differences in access.
Codify the requirement in MHPAEA, as amended by the CAA,
2021, that health plans and issuers conduct comparative analyses to
measure the impact of NQTLs. This includes evaluating standards related
to network composition, out-of-network reimbursement rates, and medical
management and prior authorization NQTLs.
Prohibit plans and issuers from using discriminatory
information, evidence, sources, or standards that systematically
disfavor or are specifically designed to disfavor access to mental
health and substance use disorder benefits when designing NQTLs.
Implement the sunset provision for self-funded non-Federal
governmental plan elections to opt out of compliance with MHPAEA.
As a result, the Departments anticipate that these final rules will
result in changes in network composition and medical management
techniques related to mental health and substance use disorder care,
more robust mental health and substance use disorder provider networks,
and fewer
[[Page 77590]]
and less restrictive prior authorization requirements for individuals
seeking mental health and substance use disorder care, as well as
provide additional clarity and information needed for plans and issuers
to meet their obligations under MHPAEA and for the Departments and
States to enforce those obligations.
II. Overview of the Final Rules--Departments of the Treasury, Labor,
and HHS
The Departments are issuing these final rules 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 final rules 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 the steps that plans and issuers must take
to meet their obligations under MHPAEA. These final rules also add new
regulations at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137
codifying minimum standards for developing NQTL comparative analyses to
assess whether an NQTL, as written and in operation, complies with
MHPAEA's requirements and setting forth the content elements of
comparative analyses and the period for plans and issuers to respond to
a request from the Departments to submit their comparative analyses.
Additionally, in these final rules, HHS finalizes an amendment to 45
CFR 147.160 to specify that the final regulations at 45 CFR 146.137
apply to individual health insurance coverage offered by a health
insurance issuer in the same manner and to the same extent that the
regulations apply to health insurance coverage offered by a health
insurance issuer in connection with a group health plan in the large
group market.\44\ Consistent with the existing text at 45 CFR
147.160(a), HHS is also extending the same requirements and framework
outlined in the amendments to 45 CFR 146.136 in these final rules to
individual health insurance coverage in the same manner and to the same
extent as the amendments that apply to group health insurance coverage.
Finally, HHS is finalizing 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).\45\
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\44\ 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
will also be required to comply with the comparative analysis
requirements finalized under 45 CFR 146.137. See 45 CFR
156.115(a)(3).
\45\ Division FF, title I, subtitle C, chapter 3, section 1321,
Public Law 117-328, 136 Stat. 4459 (Dec. 29. 2022).
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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 the preamble to the proposed rules, the Departments stated that
the fundamental purpose of the MHPAEA statute, the 2013 final
regulations, and the 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 when seeking those benefits than when seeking medical/
surgical benefits under the terms of the plan or coverage. The
Departments also stated that the fundamental purpose of MHPAEA should
serve as the guiding principle for plans and issuers as they work to
comply with the requirements of the law and its implementing
regulations. Accordingly, the Departments proposed to add a purpose
section to the regulations, specifying this fundamental purpose, and
that MHPAEA and its implementing regulations should be interpreted in a
manner that is consistent with this purpose.
Many commenters supported the addition of the purpose section and
the principles it addressed, including the goal of increasing access to
mental health and substance use disorder benefits, to ensure equal
treatment for mental health and substance use disorder benefits and
medical/surgical benefits. A few commenters expressed opposition to the
proposed purpose section, arguing that its language goes beyond the
intent of MHPAEA (as Congress did not direct the Departments to provide
a purpose in regulations, either initially or in later amendments).
The purpose section is important to highlight the overall goals of
MHPAEA and to emphasize that the provisions of the 2013 final
regulations, as amended by these final rules, should be interpreted in
light of these goals. Congress provided authority to the Departments to
``promulgate such regulations as may be necessary or appropriate to
carry out the provisions of'' chapter 100 of the Code, part 7 of ERISA,
and title XXVII of the PHS Act, including MHPAEA.\46\ MHPAEA was
enacted to address barriers to access to mental health and substance
use disorder benefits as compared to medical/surgical benefits. These
final rules implement MHPAEA's requirements and provide clarifying text
to promote compliance with the law. The Departments are finalizing the
purpose section as proposed, with minor changes in response to
comments.
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\46\ See Code section 9833, ERISA section 734, and PHS Act
section 2792.
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Several commenters requested that the reference to ``generally
comparable'' medical/surgical benefits in the proposed purpose section
be revised to refer to the classification of benefits. These commenters
noted that, consistent with the 2013 final regulations, evaluation of a
plan's or issuer's MHPAEA compliance is assessed within the relevant
classification of benefits, and that use of the term ``comparable,''
which is used in the 2013 final regulations and amendments made to
MHPAEA by the CAA, 2021 with respect to requirements for NQTLs, is
confusing and should be revised.
The Departments agree with commenters who noted that use of the
term ``comparable'' can be confusing when used in this context, because
compliance with the requirements for financial requirements,
quantitative treatment limitations, and NQTLs has historically been
determined within one of the six classifications of benefits.\47\
Therefore, these final rules remove the reference to ``generally
comparable'' medical/surgical benefits and instead specify that 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 or substance use disorder
benefits under the plan or coverage than they impose on access to
medical/surgical benefits in the same classification of benefits. The
[[Page 77591]]
Departments are finalizing the purpose section without any other
substantive changes, but with a few minor clarifications to ensure that
terms are used consistently with and accurately describe other parts of
these final rules.
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\47\ The six classifications of benefits listed 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) include inpatient, in-network; inpatient, out-
of-network; outpatient, in-network; outpatient, out-of-network;
emergency care, and prescription drugs. Special rules for multi-
tiered prescription drug benefits, multiple network tiers, and
permissible sub-classifications for office visits, separate from
other outpatient services, are addressed at 26 CFR 54.9812-
1(c)(3)(iii), 29 CFR 2590.712(c)(3)(iii), and 45 CFR
146.136(c)(3)(iii).
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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)
a. Medical/Surgical Benefits, Mental Health Benefits, and Substance Use
Disorder Benefits
Under the statute and the 2013 final regulations, the term
``medical/surgical benefits'' means benefits for medical or surgical
services as defined under the terms of the plan or health insurance
coverage but does not include mental health or substance use disorder
benefits. The 2013 final regulations further provide that the term must
be defined in accordance with applicable Federal and State law, and
that any condition defined by the plan or coverage as being or as not
being a medical/surgical condition must be defined to be consistent
with generally recognized independent standards of current medical
practice (for example, the most current version of the International
Classification of Diseases (ICD) or State guidelines).
The proposed rules generally retained the first sentence of the
2013 final regulations' definition of ``medical/surgical benefits,''
\48\ but amended the definition to provide that, notwithstanding this
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). Further, the proposed rules stated
that, 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 also proposed to remove the
reference to State guidelines in the definition of the term in the 2013
final regulations, both to make the definitions more consistent with
the statute, and to minimize situations where differences between
generally recognized independent standards of current medical practice
and State guidelines create conflicts and improperly limit protections
under MHPAEA.
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\48\ Under the 2013 final regulations, the term ``medical/
surgical benefits'' means benefits with respect to items or services
for medical conditions or surgical procedures, as defined under the
terms of the plan or health insurance coverage and in accordance
with applicable Federal and State law, but does not include mental
health or substance use disorder benefits. 26 CFR 54.9812-1(a), 29
CFR 2590.712(a), and 45 CFR 146.136(a).
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The Departments also proposed to make similar changes to the
definitions of ``mental health benefits'' and ``substance use disorder
benefits'' by amending the first sentence of each definition and
removing the references to State guidelines, consistent with the
changes described above for ``medical/surgical benefits.'' \49\ For
purposes of the requirement that any condition or disorder defined by
the plan or coverage as being or not being a mental health condition
must be defined to be consistent with generally recognized independent
standards of current medical practice, the proposed rules stated that
the plan's or coverage's 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 American Psychiatric Association (APA)
Diagnostic and Statistical Manual of Mental Disorders (DSM). Similarly,
the proposed rules stated that the plan's or coverage's definition of
``substance use disorder benefits'' 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. The proposed rules solicited
comments on whether any additional clarification is needed on how State
law may interact with the proposed amended definitions of ``medical/
surgical benefits,'' ``mental health benefits'' and ``substance use
disorder benefits.''
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\49\ Consistent with the statute and the 2013 final regulations,
the Departments note that references to ``mental health and
substance use disorder benefits'' and ``mental health or substance
use disorder benefits'' throughout these final rules are intended to
have the same meaning as the terms ``mental health benefits'' and
``substance use disorder benefits'' in combination.
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In general, many commenters supported modifying these key
definitions in existing MHPAEA regulations by specifying that, to be
consistent with generally recognized independent standards of current
medical practice, the terms of the plan or coverage must accord with
appropriate chapters of the ICD or DSM. Many commenters generally
supported requiring plans and issuers to follow the ICD or DSM,
reasoning that both are generally accepted, peer-reviewed, nonprofit
professional standards for diagnosis and descriptions of medical
conditions, mental health conditions, and substance use disorders, and
that following these authoritative and comprehensive diagnostic tools
promotes uniform and standard application of MHPAEA to mental health
conditions and substance use disorders. Several commenters noted that
these changes would significantly improve clarity and would increase
access to care, especially for intellectual and neurodevelopmental
disorders, including dementia and autism spectrum disorder (ASD).
Another commenter recommended clarifying whether plans and issuers are
required to consider both the ICD and the DSM in categorizing benefits
for the purposes of the proposed rules. One commenter added that the
Departments' proposal to align and clarify the definitions of ``mental
health benefits'' and ``substance use disorder benefits'' would ensure
parity between the relevant terms and protect the application of MHPAEA
for conditions and disorders recognized under independent standards of
current medical practice. Another commenter expressing support reasoned
that the proposed amendments would clearly specify how mental health
conditions and substance use disorders must be defined for MHPAEA
compliance purposes and minimize contradictions with State guidelines
that now limit MHPAEA protections. The commenter also remarked that
self-insured plans frequently include language from State-level
mandated benefit requirements prevalent in the plan's geographic area
that may not be MHPAEA-compliant.
Several commenters supported the removal of any reference to State
guidelines to prevent situations in which contradictions between
Federal and State guidelines would result in a loss of protections
under MHPAEA. One commenter wrote that State law definitions often
predate MHPAEA, may conflict with ICD and DSM standards, and should not
be the operable standard, while others stated that State
[[Page 77592]]
guidelines should not be given precedence over Federal regulations to
ensure that MHPAEA's protections are not subverted. However, one
commenter urged that the Departments continue allowing plans and
issuers to use State guidelines to inform the definitions of ``medical/
surgical benefits,'' ``mental health benefits,'' and ``substance use
disorder benefits,'' regardless of whether State law is consistent with
generally recognized independent standards of current medical practice.
The commenter noted that independent standards of medical practice vary
and change over time and are not established with the same intents and
purposes as State laws. The commenter also stated that States have been
the traditional regulators of health insurance issuers when it comes to
interpretive and enforcement matters, even for coverage issues subject
to Federal law (such as the ACA and MHPAEA). Another commenter
supported the clarification that, when the DSM or ICD does not indicate
whether a condition or disorder is a mental health condition or
substance use disorder, plans and issuers may define the condition or
disorder in accordance with applicable Federal and State law.
In the proposed rules, the Departments noted that, to the extent
applicable 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 ensuring compliance with MHPAEA. To better
understand interested parties' concerns in implementing this
requirement, the Departments solicited comments on potential challenges
in applying MHPAEA to all benefits for a mental health condition or
substance use disorder where a specific item or service can be
furnished 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.
In response to this comment solicitation, commenters identified
several instances in which an individual with a mental health or
substance use disorder diagnosis may need a particular treatment for
that condition or disorder that may also be provided to treat a medical
condition. For example, ASD \50\ might be treated with speech and
occupational therapy, which is also used to treat some medical
conditions. Additionally, an eating disorder might require medical
nutrition therapy, which could also be used to treat a medical
condition (such as for the treatment of obesity or diabetes). Moreover,
with respect to benefits for prescription drugs, a commenter noted that
claims for reimbursement generally do not include diagnosis
information. Some commenters explained that many specific prescription
drugs are prescribed for mental health conditions and substance use
disorders, as well as for medical/surgical conditions, and including
diagnosis information would require a range of different entities and
interested parties to change their current practice. Commenters also
recommended several methods under which the rules could allow plans and
issuers to characterize items and services as medical/surgical
benefits, mental health benefits, or substance use disorder benefits.
One commenter suggested items and services be characterized as either
mental health benefits, substance use disorder benefits, or medical/
surgical benefits based on the condition or disorder being treated.
Similarly, another commenter suggested that items and services be
characterized as mental health benefits or substance use disorder
benefits when a claim's primary diagnosis is a mental health condition
or substance use disorder, respectively, as that diagnosis is driving
the treatment provided. Alternatively, several commenters suggested the
rules could be aligned with existing Centers for Medicare & Medicaid
Services (CMS) guidance on MHPAEA compliance for Medicaid and the
Children's Health Insurance Program (CHIP) so that plans and issuers
could use a ``reasonable method'' for defining services commonly used
to treat both medical conditions and mental health conditions or
substance use disorders, for example, by using the plan's or issuer's
annual claims experience to determine its spending on the service in
question.\51\
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\50\ As discussed later in this preamble, the Departments stated
in the proposed rules and reiterate in these final rules that ASD is
a mental health condition for purposes of MHPAEA.
\51\ CMS, Frequently Asked Questions: Mental Health and
Substance Use Disorder Parity Final Rule for Medicaid and CHIP (Oct.
11, 2017), Q4, https://www.medicaid.gov/federal-policy-guidance/downloads/faq101117.pdf.
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After reviewing comments received from interested parties, the
Departments are finalizing the definitions of ``medical/surgical
benefits,'' ``mental health benefits'' and ``substance use disorder
benefits'' as proposed. 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,
and the definitions in these final rules include sufficient safeguards
to protect against defining a benefit in a manner that could result in
limitations on access to mental health or substance use disorder
benefits that are more restrictive than those applicable to medical/
surgical benefits. Further, while the Departments acknowledge the
concern that independent standards of current medical practice change
over time and may not have been established with the same intents and
purposes as State law or State guidelines, such standards better ensure
that plans and issuers define mental health conditions and substance
use disorders in a manner consistent with the purposes of MHPAEA. The
Departments agree with one commenter's concern that some State laws, in
particular, might predate MHPAEA. As a result, such State laws might
not offer the same safeguards to access to mental health or substance
use disorder benefits as MHPAEA. The Departments also note that plans
and issuers are required to ensure that the definitions used in the
plan or coverage are consistent with the appropriate chapters of the
most current version of either the ICD or the DSM.
Additionally, while States generally are the traditional regulators
of health insurance issuers, with respect to MHPAEA, the Departments
are not persuaded that this necessitates permitting plans and issuers
to use definitions of ``medical/surgical benefits,'' ``mental health
benefits'' and ``substance use disorder benefits'' that are solely tied
to applicable State law or guidelines. The definitions of ``medical/
surgical benefits,'' ``mental health benefits,'' and ``substance use
disorder benefits'' in these final rules preserve the ability of plans
and issuers to use applicable Federal and State law to inform their
definitions, but only to the extent that those laws are consistent with
generally recognized independent standards of current medical
practice.\52\
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\52\ The final rules also permit plans and issuers to use
applicable Federal and State law to inform their definitions to the
extent generally recognized independent standards of current medical
practice do not address whether a condition or disorder is a medical
condition, surgical procedure, mental health condition, or substance
use disorder.
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These final rules do not make any changes to the proposed
definitions to specifically address how plans and
[[Page 77593]]
issuers should apply MHPAEA where a specific item or service may be
used to treat both medical conditions or surgical procedures as well as
mental health conditions or substance use disorders. These final rules,
like the proposed rules and the 2013 final regulations, require plans
and issuers to continue to characterize items and services as medical/
surgical benefits, mental health benefits, or substance use disorder
benefits based on the condition or disorder being treated. This
interpretation is the most appropriate reading of the definitions of
medical/surgical benefits, mental health benefits, and substance use
disorder benefits, consistent with the statute and the purpose of
MHPAEA. The Departments note that the existing CMS mental health and
substance use disorder parity guidance for Medicaid and CHIP identified
by several commenters addresses long-term services and supports
provided through Medicaid and CHIP, not items and services covered by
group health plans and health insurance coverage. The Departments
reiterate that, if a plan (or coverage) defines a condition or disorder
as a mental health condition or substance use disorder, plans and
issuers subject to these final rules must treat all benefits for the
condition or disorder as mental health benefits or substance use
disorder benefits, respectively, for purposes of compliance with
MHPAEA. The Departments decline to adopt the alternative methods
suggested by commenters that plans and issuers might use to
characterize items and services as medical/surgical benefits, mental
health benefits, or substance use disorder benefits, as they may be
insufficient to ensure consistency with generally recognized
independent standards of current medical practice and in accordance
with applicable State and Federal law. Furthermore, while the
Departments acknowledge the particular challenges with respect to
prescription drug benefits due to the lack of diagnostic information on
claims for reimbursement, these final rules, similar to the 2013 final
regulations, provide plans and issuers enough flexibility to make
decisions about how to classify items and services, including
prescription drugs, as either mental health benefits, substance use
disorder benefits, or medical/surgical benefits.
To provide guidance to plans and issuers on how to ensure that they
define benefits consistent with generally recognized independent
standards of current medical practice, the proposed rules proposed
separate definitions of the ICD and DSM. Specifically, the Departments
proposed that 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 APA's Diagnostic and Statistical Manual of Mental
Disorders. The proposed definitions also specified, for purposes of the
definition, which version of the ICD or DSM is the most current as of a
particular date. This was intended to provide clarity on when a plan or
issuer would be required to begin to rely on a new version of the ICD
or DSM after it is released and allow sufficient time after the
adoption of an updated version of the ICD or DSM for a plan or issuer
to update the terms of its plan or coverage to be consistent with any
changes made from the previous version. The proposed definitions stated
that the most current version of the ICD or DSM, respectively, would be
the version applicable no earlier than the date that is 1 year before
the first day of the applicable plan year; however, the proposed rules
would permit the use of an updated version before the plan or issuer is
required to use it. Finally, in recognition of the fact 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,'' the proposed amended definitions referred to ``equivalent
categories'' and ``equivalent chapters.''
The Departments received several comments on the proposed
definitions of the terms ``ICD'' and ``DSM,'' with some commenters
suggesting alternatives to the language identifying the most current
versions of the DSM and ICD. One commenter suggested specifying that if
a new version of the DSM or ICD is published in the middle of a plan
year, then plans and issuers must use the updated version by the start
of the next plan year. One commenter suggested that the most current
version of an independent standard should encompass any version
commonly in use among providers, and any version used in the most
recent claims experience available to plans and issuers.
The Departments are finalizing the definition of ``ICD'' as
proposed, with clarifications with respect to the most current version
of the ICD. Specifically, under these final rules, the most current
version of the ICD as of November 22, 2024, the effective date of these
final rules, is the International Classification of Diseases, 10th
Revision, Clinical Modification adopted for the period beginning on
October 1, 2015, through HHS regulations at 45 CFR 162.1002 (or
successor regulations).\53\ Any subsequent version of the ICD adopted
through 45 CFR 162.1002 (or successor regulations) after November 22,
2024, will be considered the most current version beginning on the
first day of the plan year that is one year after the date the
subsequent version is adopted.
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\53\ These HHS regulations implement section 212 of the
Protecting Access to Medicare Act of 2014 by setting compliance
dates for the 10th Revision of the ICD for diagnosis and procedure
coding.
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The Departments are also finalizing the definition of ``DSM'' as
proposed, with similar clarifications, which note that the most current
version as of November 22, 2024, the effective date of these final
rules, is the Diagnostic and Statistical Manual of Mental Disorders,
Fifth Edition, Text Revision published in March 2022. A subsequent
version of the DSM published after November 22, 2024, will be
considered the most current version beginning on the first day of the
plan year that is one year after the date the subsequent version is
published (as the DSM is published, rather than made applicable).
Consistent with this clarification, if a new version of the DSM is
published in the middle of a plan year, plans and issuers will have at
least one full year before they are required to use the updated version
with respect to a plan year. For example, if a new version of the DSM
is published on August 1, 2025, for a calendar year plan, that version
of the DSM would be the most current version with respect to the plan
year beginning on January 1, 2027.
It is important to provide specificity with regard to the relevant
versions of the ICD and DSM instead of allowing the use of multiple
versions, as suggested by commenters, to ensure that plans and issuers
do not select a version that restricts access to mental health and
substance use disorder benefits in a manner that is more restrictive
than access to medical/surgical benefits. Because the Departments
understand that the ICD and DSM are both broadly utilized by providers
and facilities, as well as plans and issuers, and were referenced in
the 2013 final regulations, these final rules continue to rely on such
standards.
Finally, the preamble to the proposed rules noted that interested
parties requested that the Departments confirm whether specific
conditions are mental health conditions for purposes of MHPAEA.
Consistent with the 2013 final regulations and section 13007 of
[[Page 77594]]
the 21st Century Cures Act (Cures Act),\54\ the Departments confirmed
in the proposed rules 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.\55\ Similarly, the proposed rules made clear that,
for purposes of MHPAEA, ASD is a mental health condition under
generally recognized independent standards of current medical
practice.\56\ Therefore, benefits for these disorders are considered
mental health benefits, and subject to the protections of MHPAEA and
its implementing regulations, including these final rules.
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\54\ Public Law 114-255, 130 Stat. 1033 (Dec. 13, 2016). 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.
\55\ See, e.g., DSM Disorders (5th ed.), Section II: Diagnostic
Criteria and Codes, Feeding and Eating Disorders; ICD-10, Chapter V:
Mental and behavioral disorders, Code F50: Eating disorders.
\56\ DSM (5th ed.), Section II: Diagnostic Criteria and Codes,
Autism Spectrum Disorder.
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The Departments also solicited comments on other specific mental
health conditions or substance use disorders that may warrant
additional clarification for purposes of analyzing parity and ensuring
compliance with MHPAEA. The Departments received only a few comments in
response, including a request to clarify whether gender dysphoria is a
mental health condition. Because the most current versions of both the
ICD and DSM include gender dysphoria as a mental health condition as of
the time of the issuance of these final rules, benefits for this
condition are currently subject to the protections of MHPAEA and its
implementing regulations, consistent with the framework described
earlier in this preamble.\57\
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\57\ DSM (5th ed.), Section II: Diagnostic Criteria and Codes,
Gender Dysphoria; ICD-10, Chapter V: Mental and behavioural
disorders, Code F64: Gender identity disorders.
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b. Processes, Strategies, Evidentiary Standards, and Factors
The proposed rules included proposed new definitions of terms used
in paragraph (c)(4)(i) of the 2013 final regulations, which states 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 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
applying the limitation with respect to medical/surgical benefits in
the same classification. These terms and the corresponding standard
were incorporated into MHPAEA's statutory language in the amendments
made by the CAA, 2021.\58\ Because the Departments heard from
interested parties prior to the issuance of the proposed rules that it
can be difficult to determine what constitute relevant processes,
strategies, evidentiary standards, and other factors, the Departments
proposed definitions of these terms and included an illustration of the
interaction of the definitions of these terms in the preamble to the
proposed rules. The illustration described how a plan might rely on
various combinations of processes, strategies, evidentiary standards,
and other factors in designing and applying an NQTL, and gave examples
of each term. The Departments also solicited comments on the proposed
definitions, including any alternate definitions or additional
clarifications that should be considered.
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\58\ Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A), and
PHS Act section 2726(a)(8)(A).
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In general, many commenters supported the proposed definitions of
these key terms, which they described as foundational to the
development of sufficient comparative analyses and necessary to hold
plans and issuers accountable for discriminatory NQTLs. Several
commenters described widespread misinterpretation by plans and issuers
of the meaning of these key terms. Other commenters wrote that the
proposed definitions would help clarify the difference between
``factors'' and ``evidentiary standards,'' and draw a clear distinction
between ``strategies'' and ``processes,'' which relate, respectively,
to plans' and issuers' approaches to the design of an NQTL, and to
their application of an NQTL. Other commenters stated that the
definitions of these terms should clearly distinguish between each
component of a plan's or issuer's required comparative analysis and
assign each step of the analysis to a particular component of the
comparative analysis. Additionally, a commenter requested more specific
examples of processes and evidentiary standards, and the differences
between factors and evidentiary standards. One commenter stated that
the proposed definitions are not coherent as applied to network
contracting activities, development of reimbursement methodologies, or
most other network composition NQTLs. This commenter claimed that there
is no algorithmic approach to decision making that can be documented
and requested the Departments to provide guidance on how the many
activities involved in constructing provider networks and provider
reimbursements across different plan types, service settings, and
reimbursement methodologies should be categorized.
As stated in the preamble to the proposed rules, the proposed
definitions for the terms ``processes,'' ``strategies,'' ``evidentiary
standards,'' and ``factors'' are intended to further clarify how to
properly apply and distinguish between these terms, and to help
facilitate proper comparisons between the design and application of
NQTLs to medical/surgical benefits and mental health and substance use
disorder benefits in the same classification, compliance with the
requirements related to NQTLs, and the development of sufficient
comparative analyses, as required under the CAA, 2021 and these final
rules. The definitions in these final rules improve clarity and add
specificity to the terms used in MHPAEA, as amended by the CAA, 2021,
to reduce misinterpretations, and are consistent with the requirements
in these final rules that set forth the manner in which plans and
issuers are required to perform and document comparative analyses,
discussed later in this preamble. The Departments also provide
additional guidance on how plans and issuers must comply with the
provisions of these final rules with respect to NQTLs related to
network composition,\59\ later in this preamble.
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\59\ The term ``NQTLs related to network composition'' generally
refers to the NQTLs listed in 26 CFR 54.9812-1(c)(4)(ii)(D), 29 CFR
2590.712(c)(4)(ii)(D), and 45 CFR 146.136(c)(4)(ii)(D) of these
final rules: 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.
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The Departments note that nothing in these final rules requires an
``algorithmic'' decision making process; however, plans and issuers
must perform and document their comparative analyses as required under
26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 to show that
the processes, strategies, evidentiary standards, and other factors
used in designing or applying an NQTL to mental health and substance
use
[[Page 77595]]
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 in designing or applying
the NQTL to medical/surgical benefits in the relevant classification.
Additionally, anything used by a plan or issuer to design or apply an
NQTL should be considered a process, strategy, evidentiary standard, or
factor (or information, evidence, sources, or standards on which a
factor or evidentiary standard is based), consistent with the
Departments' broad interpretation of these terms.
Under the proposed rules, the Departments proposed that evidentiary
standards generally would not be considered factors, but instead would
be considered or relied upon in designing or applying a factor. The
Departments noted that, although the framework established in the 2013
final regulations treated the terms within the phrase ``processes,
strategies, evidentiary standards, and other factors'' as having
overlapping meanings (and the term ``other factors'' was utilized as a
catch-all), the CAA, 2021 added to MHPAEA other references to factors
and evidentiary standards that indicate Congress meant to distinguish
between them.\60\ The Departments requested comments on this approach
to defining evidentiary standards separately from factors, including
whether there are any circumstances under which an evidentiary standard
should also be considered a factor under the framework outlined in the
proposed rules, but did not receive any specific comments on this
issue. Therefore, under these final rules, consistent with the proposed
rules, evidentiary standards are not considered to be factors.
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\60\ The preamble to the proposed rules noted that, for example,
Code section 9812(a)(8)(A)(iii), ERISA section 712(a)(8)(A)(iii),
and PHS Act section 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. See 88 FR 51552, 51567 (Aug. 3, 2023).
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The proposed rules provided that the term ``evidentiary standards''
would mean any evidence, sources, or standards that a plan or issuer
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 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 also provides
that evidentiary standards would 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.
One commenter recommended not including specific benchmarks or
thresholds and professional standards and protocols in the definition
of the term ``evidentiary standards.'' The commenter noted that many
plans and issuers do not define their evidentiary standards numerically
and that finalizing the definition as proposed could require plans and
issuers to do so, thereby compelling plans and issuers not to use
relevant, critical data in the development of their NQTLs. The
commenter also remarked that including professional standards and
protocols in the definition would require plans and issuers to
incorporate potentially unproven medical guidance as a standard to
dictate mental health or substance use disorder benefits, which could
override common medical management practices. The commenter added that,
if the reference to professional standards and protocols is retained,
the Departments should clarify that the definition of ``evidentiary
standards'' does not imply that all professional standards and
protocols must be referenced or that benchmarks or thresholds are
required to be applied to professional standards and protocols.
The Departments are finalizing the definition of ``evidentiary
standards'' as proposed. The definition is consistent with the use of
the term by Congress in the amendments made to MHPAEA by the CAA, 2021.
The definition of the term ``evidentiary standards'' does not require
plans and issuers to define their evidentiary standards numerically,
nor does it imply that all professional standards and protocols must be
referenced or that benchmarks or thresholds are required to be applied
to professional standards and protocols (for example, where the
standards are qualitative in nature). However, to the extent these
types of evidentiary standards are used to design or apply an NQTL,
they must be analyzed for compliance with MHPAEA. The list of examples
of evidentiary standards included in the definition is not intended to
be exhaustive, nor are any of the evidentiary standards listed required
to be considered or relied upon in designing or applying a factor with
respect to an NQTL.
In the proposed rules, the Departments proposed that the definition
of the term ``factors'' be read broadly, so that factors are all
information, including processes and strategies (but not evidentiary
standards), that a plan or issuer considered or relied upon to design
an NQTL or to determine whether or how the NQTL applies to benefits
under the plan or coverage. The Departments noted that by defining the
term ``factor'' broadly, the Departments' intention was to capture any
information used to design or apply an NQTL (other than evidentiary
standards), regardless of whether a plan or issuer believes that
information could also be characterized as a ``process'' or a
``strategy,'' as those terms were proposed to be defined. The
Departments proposed that the term ``factors'' includes information
(but 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.\61\ The proposed definition also provided
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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\61\ See FAQs About Affordable Care Act Implementation Part 31,
Mental Health Parity Implementation, and Women's Health and Cancer
Rights Act Implementation, Q9 (Apr. 20, 2016), 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, 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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[[Page 77596]]
With respect to the ``broad'' reading of the term ``factor,'' a
commenter stated that the proposed definition subsumes ``processes''
and ``strategies,'' and suggested eliminating or clarifying this
distinction with additional guidance. The commenter also remarked that
the broad definition of ``factor'' would make the multiple steps in a
comparative analysis less distinguishable, and the requirement that
plans identify, define, and describe the use of every factor in the
design or application of an NQTL unworkably expansive. A few commenters
remarked that the breadth of the definition of ``factor'' makes it
unclear how a plan or issuer would demonstrate that a factor is
unbiased or not discriminatory for the purposes of the comparative
analyses and recommended narrowing the definition of ``factor'' to
distinguish it from evidentiary standards, processes, and strategies,
and instead use the term to describe the basis for the plan's or
issuer's application of an NQTL. Another commenter recommended not
including information that the plan or issuer considered but rejected
in the definition of factors, because it is not illustrative of the
ultimate value of the mental health or substance use disorder benefit
or the plan's or issuer's compliance with MHPAEA's NQTL standards. The
commenter stated that the actual design of the benefit and how it
translates to payments, denials, and reimbursement should substantiate
whether the benefit design complies with parity requirements, without
examining extraneous information on considerations early in the
benefit's development process. A commenter suggested the Departments
include an example of what the Departments would consider a complete
definition of a factor and information about how to specify the weight
assigned to factors.
The Departments are finalizing the definition of the term
``factor'' as proposed. The definition and list of examples of factors
in the definition contained in these final rules are sufficiently
detailed to provide context to plans and issuers in identifying
factors, including by distinguishing evidentiary standards from factors
and acknowledging that factors other than processes and strategies,
which are types of factors, may exist. Under the 2013 final
regulations, plans and issuers were permitted to utilize a wide array
of factors in designing and applying their NQTLs to mental health and
substance use disorder benefits provided they were comparable to, and
applied no more stringently than, those utilized to design and apply
NQTLs to medical/surgical benefits. Similarly, the CAA, 2021 did not
limit what factors plans and issuers could use to design and apply
their NQTLs, but instead required that these factors be identified and
analyzed in the comparative analyses.
As noted in the preamble to the proposed rules, taking into account
not only the factors that the plan or issuer relied upon, but also
those that were considered but ultimately rejected in the definition of
factors, is consistent with previous guidance on MHPAEA, namely because
it is a factor that a plan or issuer uses in designing and applying an
NQTL. The Departments recognize that the language used in the proposed
rules, which included factors that were considered and rejected, rather
than those that are relied upon and rejected, could be interpreted as
including a broader set of information than prior guidance, which had
interpreted ``considered'' to include ``factors that were relied upon
and were rejected.'' The Departments did not intend to broaden the set
of information included as a factor, and agree with the commenter who
questioned the utility of providing information that was considered
early in the design process but rejected. However, the Departments
affirm that taking into account information that the plan or issuer
relied upon and rejected in the definition of factors is necessary to
analyze compliance with MHPAEA.
In the proposed rules, the Departments proposed to define
``processes'' and ``strategies'' as types of factors, and to clarify
the differences between the two terms as they relate to the design and
application of an NQTL. Specifically, the Departments proposed defining
``processes'' as relating to the application of an NQTL, while
``strategies'' would relate to the design of an NQTL. After review of
the comments, the Departments continue to be of the view that the best
read of the statutory text (as well as the 2013 final regulations) is
that processes and strategies are types of factors, rather than
components of a factor to be separately evaluated.
The Departments proposed to define ``processes'' to mean actions,
steps, or procedures that a plan or issuer uses to apply an NQTL,
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.
Under the proposed rules, processes include, but are not limited to:
prior authorization procedures, provider referral requirements, and the
development and approval of a treatment plan. The proposed definition
also provided 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.
A commenter expressed appreciation for the proposed rules' intent
and requested the Departments to include more specific examples of
``processes.'' Another commenter stated that the proposed definition
for ``processes'' is too broad and focuses only on the end result of
access to benefits, which the commenter stated is inconsistent with the
Departments' previous guidance and regulations, and recommended
narrowing the definition to focus on the operational application of any
requirements.
After reviewing comments, the Departments are finalizing the
definition of the term ``processes,'' with minor changes so that the
examples of processes more clearly illustrate the way the action, step,
or procedure is used to apply an NQTL.\62\ While the Departments
decline to add examples to the definition, these modifications will add
clarity to the definition in these final rules.\63\ The Departments
note that the final definition of the term does not focus only on the
end result of access to benefits, but also includes the operational
application of an NQTL, as evidenced by the framing of the definition
in terms of actions, steps, or procedures used to apply an NQTL. For
example, prior authorization processes include the procedures
established by a plan or issuer for a review to determine how a
specific request for prior authorization should be granted or denied.
Concurrent review processes include the procedures established by a
plan or issuer for a review to determine whether a specific request
should be
[[Page 77597]]
granted or denied, such as when peer-to-peer review is required.
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\62\ The Departments are also finalizing a non-substantive
modification so that the definition more closely parallels the
definition of ``strategies.''
\63\ For example, these final rules clarify that provider
referral requirements are processes if they are used to determine
when and how a participant or beneficiary may access certain
services. Similarly, the development and approval of a treatment
plan are processes if they are used in a concurrent review process
to determine whether a specific request should be granted or denied.
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The proposed rules proposed to define ``strategies'' as practices,
methods, or internal metrics that a plan or issuer considers, reviews,
or uses to design an NQTL, and included examples of strategies. The
proposed definition of strategies included the following examples: 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. The
proposed definition of strategies also specifically included: 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 or issuer's decisions related to 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.
One commenter supported the inclusion in the definition of
``strategies'' of practices that involve ``deviations from generally
accepted standards of care.'' Several commenters also recommended that
the Departments include actions to detect or prevent and prove fraud,
waste, and abuse in the definitions of either or both ``processes'' and
``strategies,'' rather than including those actions as a stand-alone
exception from the NQTL requirements in the final rules. Another
commenter appreciated the clear distinction made in the proposed
definitions of processes and strategies and stated that they would
appreciate if these distinctions tracked with separate steps in the
comparative analyses.\64\
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\64\ The content elements of comparative analyses are addressed
later in this preamble.
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The Departments are generally finalizing the definition of the term
``strategies'' with some minor changes to the examples to add
specificity. The definition of the term ``strategies'' in these final
rules includes examples of strategies used to design an NQTL, such as
the method of determining whether and how to deviate from generally
accepted standards of care in concurrent reviews; rationales used in
selecting and adopting certain threshold amounts to apply an NQTL;
professional standards and protocols to determine utilization
management standards; and fee schedules used to determine provider
reimbursement rates, used as part of an NQTL. The Departments note
that, once a plan or issuer uses a strategy to design an NQTL, that
design also may result in the establishment or use of processes to
apply the NQTL.
While the Departments acknowledge comments suggesting that actions
to detect or prevent and prove fraud, waste, and abuse be defined as
either ``processes'' or ``strategies,'' and acknowledge that such
actions certainly could constitute either processes or strategies
(depending on whether the action is undertaken to design or apply the
NQTL), the Departments decline to add a specific reference to actions
to detect or prevent and prove fraud, waste, and abuse to the relevant
definitions, as the proposed exception for standards to detect or
prevent and prove fraud, waste, and abuse is not being finalized, as
discussed later in this preamble.\65\ However, the Departments are
providing additional language to explain what constitutes a standard to
detect or prevent and prove fraud and abuse (also referred to as
``fraud and abuse measures'') later in this preamble and how such
standards must comply with MHPAEA under these final rules.
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\65\ The proposed rules referred to fraud, waste, and abuse.
However, as explained later in this preamble, the Departments agree
with commenters that the term ``waste'' can be construed in a manner
that is overly broad. Thus, in these final rules, when discussing
the exception in the proposed rules for NQTLs that are narrowly and
reasonably designed to detect or prevent and prove fraud, waste, and
abuse, while minimizing the impact on access to appropriate mental
health and substance use disorder benefits, this preamble refers to
``fraud, waste, and abuse measures.'' When discussing provisions of
this final rule related to carefully circumscribed measures
reasonably and appropriately designed to detect or prevent and prove
fraud and abuse, this preamble refers to ``fraud and abuse
measures.''
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c. Treatment Limitations
The Departments proposed to amend the definition of ``treatment
limitations'' 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'' (rather than ``permanent'') exclusion of
all benefits for a particular condition or disorder is not a treatment
limitation for purposes of the definition. In the preamble to the
proposed rules, the Departments noted that, 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, and such NQTLs would still be evaluated in
accordance with the rules for NQTLs under the statute and implementing
regulations.
Several commenters supported the Departments' amendment to the
definition of ``treatment limitation'' to specify that ``a complete
exclusion of all benefits for a particular condition or disorder is not
a treatment limitation for purposes of this definition,'' rather than
retaining the reference in the 2013 final regulations to a
``permanent'' exclusion. These commenters stated that the proposed
definition more clearly specifies that a plan or issuer can exclude a
particular condition or service without creating an NQTL, but that in
doing so, the exclusion must be total. The commenters suggested the
Departments include specific examples of permissible exclusions and
impermissible exclusionary language. Other commenters expressed concern
that the proposed definition of ``treatment limitation'' is too broad
and argued that the proposed definition would lead to increased
uncertainty in determining which common plan practices could constitute
an NQTL. One commenter stated that if there is no comparable medical or
surgical treatment limitation, there is nothing to compare a treatment
limitation on a mental health or substance use disorder benefit to, and
that therefore such a limitation on the mental health or substance use
disorder benefit is not subject to parity requirements. Several
commenters recommended adopting a consistent and exhaustive definition
for determining whether a medical management technique is a treatment
limitation.
The Departments are finalizing the definition of ``treatment
limitation'' as proposed, with minor modifications to add an example of
an NQTL. As reflected in the definition, medical management techniques
are NQTLs if they limit the scope or duration of treatment. While the
definition as amended is broad, plans and issuers have great latitude
in the types of limitations that they may impose, and the Departments
understand that plans and issuers do in fact impose a broad range of
limitations on the scope or duration of treatment. In enacting MHPAEA
and the amendments to MHPAEA contained in the CAA, 2021, Congress did
not prohibit the use of these limitations for mental health and
substance use disorder benefits, but
[[Page 77598]]
required that plans and issuers ensure that NQTLs satisfy the statutory
requirements that (1) any treatment limitations imposed on mental
health and substance use disorder benefits are no more restrictive than
the predominant treatment limitations imposed on substantially all
medical/surgical benefits; (2) that no treatment limitations be imposed
only with respect to mental health and substance use disorder benefits;
and (3) that plans and issuers perform and document comparative
analyses of the design and application of NQTLs. Because of the broad
range of treatment limitations that plans and issuers may impose,
combined with the freedom that plans and issuers have to design their
own unique limitations, the Departments cannot provide a comprehensive
and exhaustive list of all limitations, as further explained later in
this preamble.
The Departments note that if a plan or issuer applies a treatment
limitation to mental health and substance use disorder benefits where
medical/surgical benefits are not subject to a comparable treatment
limitation in the same classification, the plan or issuer would violate
MHPAEA because it must not apply separate treatment limitations only to
mental health and substance use disorder benefits. Further, the
Departments have stated that, if a plan or issuer provides any benefits
for a mental health condition or substance use disorder but excludes
benefits for items or services for that condition or disorder in a
classification in which it provides medical/surgical benefits, such an
exclusion of a benefit for a condition or disorder that is otherwise
covered is a treatment limitation because it is a limit on the scope or
duration of treatment offered.\66\ While the Departments decline to
provide additional examples of permissible exclusions and impermissible
exclusionary language in these final rules, examples of such exclusions
and language have been provided in guidance and in the Departments'
reports to Congress.
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\66\ See 75 FR 5410, 5413 (Feb. 2, 2010).
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3. Nonquantitative Treatment Limitations--26 CFR 54.9812-1(c)(4), 29
CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4)
In the proposed rules, the Departments proposed changes designed to
better ensure that plans and issuers do not design and implement NQTLs
that impose greater restrictions on access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits. The Departments proposed to add requirements that apply to
NQTLs with respect to mental health and substance use disorder
benefits, to ensure that plans and issuers do not impose a greater
burden on participants and beneficiaries accessing those benefits than
the burden imposed on participants and beneficiaries accessing medical/
surgical benefits, while preserving the ability of plans and issuers to
impose NQTLs to the extent they are consistent with generally
recognized independent professional medical or clinical standards or
legitimate and narrowly designed standards related to fraud, waste, and
abuse. Subject to those two narrow exceptions for those types of NQTLs,
the proposed rules provided that plans and issuers would not be
permitted to impose an NQTL on mental health or substance use disorder
benefits unless they satisfied all of the following three requirements:
(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 as the no more restrictive requirement); (2) the plan or
issuer satisfies requirements related to the design and application of
the NQTL (also referred to as the design and application requirements);
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 as the relevant data evaluation
requirements).
Specifically, under the no more restrictive requirement, the
proposed rules specified 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. This requirement was
intended to ensure that the implementing regulations more closely
mirrored the statutory language in Code section 9812(a)(3)(A), ERISA
section 712(a)(3)(A), and PHS Act section 2726(a)(3)(A).
The proposed rules outlined a four-prong test for a plan or issuer
to determine compliance with the no more restrictive requirement.
Specifically, this provision would have required plans and issuers to
determine: (1) the portion of plan payments for medical/surgical
benefits subject to an NQTL in a classification; (2) whether the NQTL
applies to substantially all medical/surgical benefits in the
classification; (3) if the NQTL applies to substantially all medical/
surgical benefits in the classification, the predominant variation of
the NQTL that applies to substantially all medical/surgical benefits in
the classification; and (4) 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.
The second proposed requirement for NQTLs, the design and
application requirements, retained the requirements for NQTLs from the
2013 final regulations focused on the processes, strategies,
evidentiary standards, and other factors used to apply an NQTL, with a
proposed modification to better align the rules with the statute's
focus on the design of an NQTL in addition to its application. In
addition, the Departments proposed to 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 was based discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits.
The third requirement for NQTLs under the proposed rules, the
relevant data evaluation requirements, proposed to require plans and
issuers to collect and evaluate relevant outcomes data and take
reasonable action to address material differences in access between
mental health and substance use disorder benefits and medical/surgical
benefits as necessary to ensure compliance, in operation, with MHPAEA.
This requirement also included a proposed special rule for NQTLs
related to network composition.
The proposed rules stated that, if a plan or issuer fails to meet
any of the three requirements under the proposed rules with respect to
an NQTL in a classification, the NQTL would violate MHPAEA and, as a
result, could not be imposed on mental health or substance use disorder
benefits in the classification without changes to the terms of the plan
or coverage, or the way the NQTL is designed or applied, to ensure
compliance with MHPAEA.
The Departments proposed two limited exceptions to some of the
requirements for NQTLs, consistent with the Departments' intention to
avoid interference with a plan's or issuer's attempts to ensure that
NQTLs imposed with respect to benefits for
[[Page 77599]]
treatment of mental health conditions or substance use disorders are
consistent with generally accepted independent professional medical or
clinical standards of care (also referred to as independent
professional medical or clinical standards) or are narrowly and
reasonably designed to detect or prevent and prove fraud, waste, and
abuse, while minimizing the impact on access to appropriate mental
health and substance use disorder benefits (also referred to as fraud,
waste, and abuse measures). The Departments proposed to exempt NQTLs
qualifying for the exception for independent professional medical or
clinical standards from compliance with the no more restrictive
requirement, the prohibition on discriminatory factors and evidentiary
standards, and the relevant data evaluation requirements. The
Departments proposed to exempt NQTLs qualifying for the exception for
fraud, waste, and abuse measures from compliance with the no more
restrictive requirement and the prohibition on discriminatory factors
and evidentiary standards, but not the relevant data evaluation
requirements.
Finally, the Departments proposed to 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, would also be in violation
of the substantive requirements that apply to NQTLs under MHPAEA, as
determined by the Departments. Upon such a determination, the proposed
rules would permit the Departments to 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.
The Departments requested comments on all aspects of these proposed
amendments, including the exceptions to the proposed rules regarding
NQTLs. Many commenters expressed support for these provisions of the
proposed rules as a whole, as a means of achieving increased access to
mental health and substance use disorder benefits by targeting NQTLs
that otherwise impede access. Other commenters expressed support for
the proposed rules' enhanced specificity with respect to the
requirements for imposing NQTLs, with one commenter also indicating
that the proposals would help State insurance regulators better enforce
MHPAEA and clarify plans' and issuers' compliance obligations.
However, other commenters expressed the view that these provisions
of the proposed rules were complex, ambiguous, confusing, subject to
interpretation, or difficult to operationalize, which they argued could
lead to substantial uncertainty for plans and issuers attempting to
comply. Commenters also stated that it may be impossible for plans or
issuers to meet the proposed mathematical substantially all and
predominant tests as applied to NQTLs, leading them to eliminate
necessary utilization management tools. Some commenters also indicated
that these provisions of the proposed rules could lead to inconsistent
application of NQTLs across plans administered by the same TPA or
issuer, which could result in administrative complexity and cause
confusion for consumers and providers. Other commenters highlighted
that the proposed requirements would significantly increase the cost of
administering plans and health insurance coverage. One commenter
indicated that some plans might consider excluding all treatments or
services for a particular mental health condition or substance use
disorder as a result of the additional burdens imposed by the
substantially all and predominant tests, if finalized as proposed. Some
commenters also stated that the additional proposed requirements for
NQTLs do not add value beyond distinctions already captured by the
design and application requirements included in the 2013 final
regulations, with some commenters stating those additional requirements
go beyond MHPAEA's statutory requirements. Comments specific to each of
the three requirements and two exceptions proposed at 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) are discussed in greater
detail later in this preamble.
The Departments acknowledge the concerns expressed by commenters
and, in response to comments, the Departments are finalizing a modified
framework that is still intended to prevent plans and issuers from
designing and applying NQTLs that impose greater burdens on access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits, while limiting uncertainty, increases in
cost, operational difficulty, and unintended consequences. These final
rules streamline the proposed rules' general requirements to eliminate
redundancies and add clarity for plans and issuers in a manner that
remains consistent with the statutory text of MHPAEA, while also
ensuring participants and beneficiaries will not face greater
restrictions on access to mental health and substance use disorder
benefits as compared to medical/surgical benefits.
These final rules do not finalize the language of the proposed ``no
more restrictive'' requirement, as discussed in more detail later in
this preamble, and instead incorporate the statutory requirements of
Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act
section 2726(a)(3)(A) as the overall general rule for NQTLs in 26 CFR
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4).
Specifically, these final rules state that, consistent with the
fundamental purpose of MHPAEA, a group health plan (or health insurance
coverage offered by an issuer in connection with a group health plan)
may not impose any NQTL 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 NQTL that applies to
substantially all medical/surgical benefits in the same classification.
However, as discussed later in this preamble, the Departments are
declining to finalize the proposed four-prong test for the no more
restrictive requirement, which was proposed to determine compliance
with statutory requirements as they apply to NQTLs.\67\ Rather, to
demonstrate compliance with the no more restrictive requirement, which
is now the general rule for NQTLs, a plan or issuer is required under
these final rules to satisfy (1) the design and application
requirements and (2) the relevant data evaluation requirements, each of
which the Departments are finalizing with modifications, as discussed
in more detail later in this preamble. Additionally, the Departments
are not finalizing the exceptions set forth in the proposed rules, but
have added language to these final rules to explain how plans and
issuers should analyze and account for independent professional medical
or clinical standards and fraud and abuse measures in designing and
applying their NQTLs. Finally, the Departments are finalizing a
provision providing that, depending on the relevant facts and
circumstances, the Departments or an applicable State authority may
direct a plan or issuer that has received a final determination of
noncompliance under the comparative analysis review process
[[Page 77600]]
established by the CAA, 2021 to not apply an impermissible NQTL.
---------------------------------------------------------------------------
\67\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and
PHS Act section 2726(a)(3)(A).
---------------------------------------------------------------------------
a. Requirement That NQTLs Be No More Restrictive for Mental Health
Benefits and Substance Use Disorder Benefits--26 CFR 54.9812-1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4)
Through the proposed mathematical substantially all and predominant
tests for NQTLs as part of the no more restrictive requirement, the
Departments proposed to require plans and issuers 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 (referred to in this preamble as the proposed
mathematical substantially all and predominant tests). As noted in the
proposed rules, the steps in the proposed mathematical substantially
all and predominant tests would have involved 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; if the NQTL applies to
substantially all medical/surgical benefits in the classification, the
predominant variation of the NQTL that applies to substantially all
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.
Many commenters generally supported application of the proposed
mathematical substantially all and predominant tests to NQTLs, with
some indicating that the tests would provide additional clarity,
eliminate subjectivity, assist regulators, and result in compliance
improvements. Many of these commenters also stated that the statute
clearly supports the tests, as it requires treatment limitations to be
``no more restrictive'' than the predominant treatment limitations that
apply to substantially all medical/surgical benefits. Other commenters
generally opposed the inclusion of the substantially all and
predominant tests for NQTLs as part of the no more restrictive
requirement. Some of these commenters stated that the proposed
mathematical substantially all and predominant tests are a reversal of
policy from the 2013 final regulations and are inconsistent with
congressional intent, because Congress codified the design and
application requirements from the 2013 final regulations in the CAA,
2021. These commenters highlighted that the Departments had stated
previously that they understood NQTLs could not be easily quantified
and that the Departments had not sufficiently explained their change in
interpretation under the proposed rules.
Some commenters expressed general concerns that NQTLs are
inherently unquantifiable, arguing that the proposal would result in
unworkable standards or arbitrary outcomes that could prohibit plans
and issuers from using evidence-based medical guidelines or other
relevant factors specific to the item or service under consideration.
Commenters also raised concerns that imposition of the proposed
mathematical substantially all and predominant tests on certain types
of NQTLs that are not commonly utilized for medical/surgical benefits
may lead to some types of legitimate NQTLs no longer being permitted
with respect to mental health and substance use disorder benefits.
Specifically, several of these commenters contended that the proposed
mathematical substantially all and predominant tests, as proposed,
would result in the elimination of plans' and issuers' ability to
impose certain NQTLs with respect to mental health and substance use
disorder benefits, such as step therapy, prior authorization, and
concurrent review, which they posited would negatively impact the
quality and cost of care. Some commenters also cited potential
negative, unintended consequences of the application of the proposed
mathematical substantially all and predominant tests, as proposed,
including patient safety concerns; impacts on health outcomes, quality,
and affordability; and a chilling effect on access improvements and
innovation. Further, some commenters expressed concern with the
increased costs associated with complying with the proposed
mathematical substantially all and predominant tests, with some stating
that this increased burden would not be offset by any resulting
increase in access to mental health and substance use disorder benefits
for participants and beneficiaries.
Several commenters expressed confusion as to how these tests, as
proposed, would be applied in practice and highlighted the need for
more detail. Specifically, some commenters stated that these proposed
provisions lack clarity in how the tests apply to certain types of
NQTLs (including those related to network composition), and the
potential consequences of enforcement of these requirements. Many
commenters provided specific comments and feedback on aspects of each
part of the substantially all and predominant tests included in the
proposed rules, as discussed later in this preamble, and highlighted
ambiguities and challenges operationalizing the proposed quantitative
testing requirements with respect to NQTLs.
Under the first prong of the proposed mathematical substantially
all and predominant tests, plans and issuers would have been required
to determine the portion of plan payments for medical/surgical benefits
in the classification 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). The proposed rules stated
that, for purposes of this determination, any reasonable method could
be used to determine the dollar amount expected to be paid under a plan
for medical/surgical benefits.
The Departments received many comments on the proposed requirement
that the plan or issuer determine the portion of plan payments for
medical/surgical benefits expected to be subject to an NQTL in the
benefit classification. Several commenters indicated that the
determination of the dollar amount of all plan payments for medical/
surgical benefits expected to be paid may be an inappropriate measure
altogether because NQTLs like medical management, assessments related
to medical necessity, experimental/investigational treatment
exclusions, prior authorization requests, and provider network
admission standards are not generally attached to claims. Some
commenters highlighted that self-insured plan sponsors may face
challenges in obtaining a complete and reliable set of plan-level
claims data, and accordingly, would have limited data to use to assess
individual NQTLs, or would incur additional costs.
After determining the portion of plan payments for medical/surgical
benefits in the classification expected to be subject to the NQTL, the
Departments proposed that, under the second prong, plans and issuers
would be required to determine whether the NQTL applies to
substantially all medical/surgical benefits in the classification,
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. Under the proposed rules, an NQTL would be considered to
apply to substantially all medical/surgical benefits in a
[[Page 77601]]
classification if it applies to at least two-thirds of all medical/
surgical benefits in that classification. Under the proposed rules,
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.\68\ The
proposed rules further provided that if an NQTL does not apply to at
least two-thirds of all medical/surgical benefits in a classification,
that NQTL would not be permitted to be applied to mental health or
substance use disorder benefits in that classification.
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\68\ 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, under the
proposed rules, 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). 88 FR 51552, 51570 (Aug. 3, 2023).
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The Departments received many comments regarding this prong of the
proposed mathematical substantially all and predominant tests. As
mentioned earlier in this preamble, many commenters stated that, in
practice, a numerical ``substantially all'' determination would be
difficult to apply and assess for NQTLs for many reasons, including
because they are often not quantifiable, and there are more medical/
surgical items and services (and associated benefits) than there are
mental health and substance use disorder items and services.
Additionally, commenters highlighted that plans and issuers already
experience difficulty in obtaining data from service providers and
would have difficulty in determining which NQTLs apply to at least two-
thirds of medical/surgical benefits in a classification. Some
commenters predicted that, if the Departments finalize the
substantially all and predominant tests as proposed, plans and issuers
might increase the application of NQTLs to medical/surgical benefits to
meet the two-thirds threshold.
Further, some commenters requested that the Departments specify and
provide examples showing how to apply the substantially all test to
NQTLs that are not associated with plan payments, such as prescription
drug formularies and network composition standards. One commenter
highlighted that it is difficult to calculate the amount of plan
payments expected to be paid for prescription drugs subject to an NQTL.
Another commenter urged the Departments to clarify the determination of
whether an NQTL applies regardless of whether the NQTL was triggered.
For example, this commenter highlighted that insurers might state that
prior authorization ``applies'' to all benefits in a classification
where a benefit is considered or evaluated under the various factors
for determining whether to apply prior authorization, even if the
benefit ultimately is determined to not be subject to prior
authorization based on the application of factors and evidentiary
standards.
In addition, in the proposed rules, the Departments solicited
comments on whether plans and issuers maintain systems capable of
determining, under the proposed mathematical substantially all and
predominant tests, whether an NQTL applies to substantially all
medical/surgical benefits in a classification, and the administrative
burden that would be associated with such determinations. Several
commenters highlighted that it would be difficult to comply with the
substantially all and predominant tests as proposed, including because
the requisite data may be housed in different parts of a plan's or
issuer's organization. One commenter emphasized that current
administrative systems would need to be adapted, and plans and issuers
would need to hire additional staff or service providers to be able to
perform the analysis that would be required under the proposed
mathematical substantially all and predominant tests.
Under the proposed rules, if a plan or issuer determined that an
NQTL applies to substantially all medical/surgical benefits in a
classification, the third prong of the test would require a plan or
issuer 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 proposed that the term
``predominant'' would, for this purpose, mean the most common or most
frequent variation of an NQTL within a benefit classification.
The Departments received many comments regarding this part of the
proposed tests. Numerous commenters stated that this aspect of the
substantially all and predominant tests is unworkable. Some commenters
noted that, with a lack of guidance on how to identify all the
variations of a particular NQTL (especially those that are complex and
nuanced), the proposed rules may not be feasible for plans, issuers,
and regulators to apply in real-life situations. Several commenters
stated that, while financial requirements and quantitative treatment
limitations will have only a few different variations, NQTLs are
multifactorial and each difference could be considered a different
variation, or even a separate NQTL. For example, some of these
commenters highlighted that prior authorization or concurrent review
may take varied forms: an admission that requires advance prior
authorization; an admission that requires notification but no clinical
review; a nonclinical review based on predetermined standards; a first-
level or nurse clinical review; a second-level or physician clinical
review; and a peer-to-peer clinical review. These commenters noted that
some processes may be automated or manual, some may be handled by
vendors or directly by the plan or issuer, and some may have multiple
utilization management systems within all of the aforementioned
categories. Another commenter highlighted that a plan or regulator
could conceivably determine that ``variations'' include a wide range of
aspects, such as the credentials of the reviewer, the type or source of
clinical criteria applied, the timing of the review (for example,
urgent vs. nonurgent), the modality of authorization submission (for
example, via electronic health record vs. fax or pdf form), among
others. As a result, these commenters stated that determining how to
identify the predominant variation of an NQTL may not be feasible
without additional clarifications. Many commenters requested that the
Departments provide a definition of the term ``variation'' and an
explanation of how to determine whether a variation exists, as well as
additional guidance and examples illustrating when an NQTL has no
variation and when an NQTL has multiple variations (beyond variations
based on numerical distinctions). These commenters also noted that,
under the proposed rules, the predominant variation may only apply to a
small percentage of medical/surgical services or items in the
applicable benefit classification.
Lastly, under the fourth prong, the proposed rules provided that an
NQTL applied to mental health or substance use disorder benefits cannot
be more restrictive than the predominant variation of the NQTL applied
to substantially all medical/surgical benefits in the same
classification. Under the proposed rules, for this purpose, an NQTL
would be considered restrictive if it imposes conditions, terms, or
requirements that limit access to benefits under the terms of the plan
or coverage. For this purpose,
[[Page 77602]]
conditions, terms, or requirements would include, but not be 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.
As discussed later in this preamble, the Departments also proposed 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 fraud, waste, and abuse
measures, that meet specific requirements.
Some commenters supported this approach to the ``more restrictive''
part of the test in the proposed rules because, according to these
commenters, it provided a more concrete and less subjective standard.
Other commenters emphasized, as discussed earlier in this preamble,
that the proposed mathematical substantially all and predominant tests,
which provide a quantitative basis for comparison, are unworkable for
NQTLs and administratively burdensome. Many of these commenters
requested that, if the proposed mathematical substantially all and
predominant tests are finalized, the Departments provide extensive and
detailed implementation guidance to assist plans and issuers in
complying with what the commenters characterized as this challenging
framework. Another commenter suggested that the Departments establish a
safe harbor for plans and issuers from the substantially all and
predominant tests for any variation in NQTL outcomes data driven by
State law or regulation.
The Departments appreciate the detailed comments received on all
aspects of the proposed mathematical substantially all and predominant
tests, including comments particular to each aspect of the proposed
four-prong test. The Departments acknowledge that many commenters
expressed concerns that applying to NQTLs the same proposed
mathematical substantially all and predominant tests that are
applicable to financial requirements or quantitative treatment
limitations may be difficult to operationalize and could be unworkable.
The Departments acknowledge that this framework was first developed for
financial requirements and quantitative treatment limitations, where
there are relatively clear and limited numbers of variations, and that
the framework might be impractical or impossible for NQTLs, which
differ in how they are designed and applied to various benefits.
At the same time, the Departments agree with commenters who stated
that applying the statutory no more restrictive requirement to NQTLs
under the proposed rules would assist regulators tasked with enforcing
MHPAEA's requirements and result in overall compliance improvements by
formalizing and providing greater clarity on what plans and issuers
must do to comply with MHPAEA. The Departments also agree with
commenters who emphasized the importance of the statutory requirement
that plans and issuers shall ensure that the treatment limitations they
impose on mental health and substance use disorder benefits generally
are no more restrictive than those they impose on medical/surgical
benefits. The proposed rules made clear that the incorporation of this
statutory language into regulations is key to ensuring that people
seeking mental health and substance use disorder treatment do not face
a greater burden on access to benefits for such treatment than on
access to benefits for medical treatment and surgical procedures, a
premise that is central to MHPAEA.
After reviewing all the comments on the proposed four prongs of the
no more restrictive requirement, the Departments have sought to address
many of the workability concerns expressed by commenters, while
honoring statutory requirements. Specifically, due to concerns raised
by the commenters, the Departments are declining to finalize the
proposed mathematical substantially all and predominant tests for
NQTLs, which would have based these determinations on the dollar amount
of all plan payments for medical/surgical benefits expected to be paid,
similar to the steps that apply when analyzing parity with respect to
financial requirements or quantitative treatment limitations under the
2013 final regulations. These final rules address commenters'
operability and feasibility concerns with respect to the proposed
mathematical substantially all and predominant tests, while continuing
to set forth a standard for parity compliance that is grounded in
MHPAEA's statutory text and is also sufficiently flexible to account
for the unique and nonquantifiable nature of NQTLs. As noted later in
this preamble, these final rules retain the focus on the design and
application of NQTLs, including with respect to relevant outcomes
measures, to ensure that NQTLs are no more restrictive in the context
of mental health and substance use disorder benefits than in the
context of medical/surgical benefits.
Therefore, these final rules do not finalize the provisions
proposed under 26 CFR 54.9812-1(c)(4)(i)(A) through (E), 29 CFR
2590.712(c)(4)(i)(A) through (E), and 45 CFR 146.136(c)(4)(i)(A)
through (E). Instead, consistent with MHPAEA's express statutory
requirement,\69\ the Departments are finalizing under 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) the general
rule that, consistent with the fundamental purpose of MHPAEA, a group
health plan (or health insurance coverage offered by an issuer in
connection with a group health plan) may not impose any NQTL 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 NQTL that applies to substantially all medical/
surgical benefits in the same classification. Through this requirement,
the Departments reiterate the importance of promoting the goals of the
statute and ensuring that individuals have access to the mental health
and substance use disorder benefits under their plan or coverage in a
way that is not more restrictive than their access to the medical/
surgical benefits under their health coverage. For this purpose,
consistent with the fundamental purpose of MHPAEA, an NQTL is more
restrictive than the predominant NQTL that applies to substantially all
medical/surgical benefits in the same classification if the plan or
issuer fails to satisfy the design and application requirements at 26
CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i) or the relevant data evaluation requirements at 26 CFR
54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii). Accordingly, plans and issuers must ensure that the
processes, strategies, evidentiary standards, and other factors used to
design and apply an NQTL to mental health or substance use disorder
benefits are comparable to, and applied no more stringently than, the
processes, strategies, evidentiary standards, and other factors used to
design and apply the NQTL for medical/surgical benefits, including by
ensuring that the information, evidence, sources, or standards on which
factors and evidentiary standards are based are not biased and are
objective. Additionally, plans and issuers must comply with the
relevant data evaluation requirements,
[[Page 77603]]
including by collecting and evaluating relevant data, determining
whether the data suggest an NQTL contributes to material differences in
relevant outcomes related to access to mental health and substance use
disorder benefits as compared to medical/surgical benefits, and if
material differences in relevant outcomes related to access exist,
taking reasonable action, as necessary, to address the material
differences to ensure compliance, in operation, with 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). Absent
compliance with both the design and application requirements and the
relevant data evaluation requirements with respect to an NQTL, which
are addressed in more detail later in this preamble, a plan or issuer
fails to comply with Code section 9812(a)(3)(A)(ii), ERISA section
712(a)(3)(A)(ii), and PHS Act section 2726(a)(3)(A)(ii), as applicable,
and may not impose the NQTL with respect to mental health or substance
use disorder benefits. These requirements, taken together, require a
plan to consider and evaluate an NQTL's design, application, and
resulting outcomes to ensure that an NQTL is not more restrictive, as
written or in operation, than the predominant NQTL that applies to
substantially all medical/surgical benefits in the same classification.
---------------------------------------------------------------------------
\69\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and
PHS Act section 2726(a)(3)(A).
---------------------------------------------------------------------------
These final rules also include a few technical changes to this
language, including relocation of the reference to 26 CFR 54.9812-
1(a)(1), 29 CFR 2590.712(a)(1), and 45 CFR 146.136(a)(1) from the
beginning of the general rule of the design and application
requirements to the beginning of the regulatory requirements for NQTLs
at 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4), to make clear that plans and issuers should consider the
fundamental purpose of MHPAEA in complying with all parts of the
requirements for NQTLs. Additionally, the Departments are incorporating
the phrase ``may not impose'' from the beginning of the proposed
regulatory requirements for NQTLs, to make clear that this standard
applies both to the design and application of NQTLs. The Departments
are also replacing the word ``applied'' with ``applies'' in the clause
describing ``the predominant NQTL that applies to substantially all
medical/surgical benefits in the same classification.'' This adjustment
from past to present tense is intended to clarify that plans and
issuers should evaluate compliance with MHPAEA with respect to NQTLs
that are currently imposed under the plan or coverage, rather than just
those that might have been imposed at some point in the past.
b. Requirements Related to Design and Application of the NQTL--26 CFR
54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i)
The Departments proposed to redesignate the 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) in the 2013 final regulations as paragraph
(c)(4)(ii)(A) and amend it to align with the Departments'
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
(as compared to only applying, as under the 2013 final regulations) the
NQTL to mental health and substance use disorder benefits are
comparable to, and are applied no more stringently than those used in
designing and applying the limitation with respect to medical/surgical
benefits in the classification. To codify this interpretation, and for
consistency with the statutory language added by the CAA, 2021, the
Departments proposed to revise the regulatory text to make this
requirement with respect to designing the NQTL explicit.
Some commenters generally supported the proposed design and
application requirements as part of an overall framework for evaluating
compliance with MHPAEA's requirements with respect to NQTLs. Some
commenters indicated that they have encountered barriers in identifying
whether plans and issuers comply with MHPAEA's requirements, and this
proposal would help them identify whether the plan or issuer is
compliant with respect to the design and application of NQTLs. Other
commenters generally opposed the proposed changes to the design and
application requirements. One commenter also stated that the design and
application requirements would not improve benefit quality and would
also constitute an impermissible retroactive application of the
regulation in the case of regulated entities that were not required to
comply with MHPAEA when they designed their benefit plans.
With respect to commenters' concern that the design and application
requirements would not improve benefit quality, the Departments
anticipate that greater clarity with respect to these requirements,
including the definitions of the terms ``processes,'' ``strategies,''
``evidentiary standards,'' and ``factors'' under these final rules, as
discussed earlier in this preamble, will help plans and issuers assess
their compliance and remedy any parity violations, which will result in
improved benefit quality overall. The Departments also disagree with
the concern expressed by commenters that the design and application
requirements impermissibly apply to plans and issuers that were not
required to comply with MHPAEA when they designed their benefit plans.
As stated earlier in this preamble, this provision codifies the
Departments' longstanding interpretation of the design and application
requirements and the CAA, 2021 amendments to the MHPAEA statute. The
CAA, 2021 amendments apply generally to 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. Congress did not exempt plans or issuers whose plans
or benefit designs predated these requirements, and the Departments
similarly did not take such an approach in implementing the 2010
interim final regulations or the 2013 final regulations. In fact, as
described in more detail later in this preamble, Congress included a
provision in the CAA, 2023 that sunsets the option for self-funded non-
Federal governmental plans to elect to opt out of compliance with
respect to MHPAEA, so that plans that previously were exempt from the
requirements as a result of an opt-out election will no longer be able
to make such an election.
The Departments are finalizing as proposed the general rule with
respect to the design and application requirements for NQTLs, with a
few minor amendments. Accordingly, this provision clarifies that to
satisfy these requirements, a plan or issuer must consider, as part of
its assessment of an NQTL's compliance with the no more restrictive
requirement, whether 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 limitation with respect to medical/surgical
benefits in the classification. By requiring processes, strategies,
evidentiary standards, or other factors used to be comparable to and
applied no more stringently than, the design and application
requirements
[[Page 77604]]
of these final rules give meaning to the statutory terms
``substantially all'' and ``predominant.'' By making explicit in these
final rules the Departments' interpretation of the design and
application requirements, and codifying the requirements of the CAA,
2021, this provision will help plans and issuers better understand
their MHPAEA compliance obligations with respect to NQTLs, by
emphasizing that, as written and in operation, the design of an NQTL is
equally relevant as how it is applied. The design and application
requirements of these final rules will also ensure that plans and
issuers do not place greater burdens on access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits.
The Departments note that a plan or issuer must comply with the
relevant requirements under these final rules with respect to NQTLs
applicable to mental health or substance use disorder benefits once the
final rules become applicable to the plan or coverage, including with
respect to any NQTLs that were developed and imposed when a plan or
issuer was not subject to MHPAEA and that continue to be imposed after
the applicability date. However, these final rules are not applicable
to an NQTL imposed with respect to mental health or substance use
disorder benefits for any such prior period of time (including a period
when MHPAEA was not applicable).
In these final rules, the Departments are codifying the design and
application requirements at 26 CFR 54.9812-1(c)(4)(i)(A), 29 CFR
2590.712(c)(4)(i)(A), and 45 CFR 146.136(c)(4)(i)(A), rather than as
proposed at 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) because, as
discussed earlier in this preamble, these final rules structure the
design and application requirements as part of the statutory no more
restrictive requirement, rather than as a unique prong of the three
requirements for NQTLs included in the proposed rules. In addition, the
Departments are making a technical correction by amending the
regulatory text to refer to health insurance coverage, rather than an
issuer, to generally use consistent terminology throughout the
regulations. Finally, as noted earlier in this preamble, these final
rules move the reference to 26 CFR 54.9812-1(a)(1), 29 CFR
2590.712(a)(1), and 45 CFR 146.136(a)(1) from the beginning of the
general rule of the design and application requirements to the
beginning of the regulatory requirements for NQTLs at 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4).
Prohibition on Discriminatory Factors and Evidentiary Standards
The proposed rules would add a new provision that, for purposes of
determining comparability and stringency under the design and
application requirements of proposed 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), plans and
issuers would be prohibited from relying upon any factor or evidentiary
standard if the information, evidence, sources, or standards on which
the factor or evidentiary standard is based discriminate against mental
health or substance use disorder benefits as compared to medical/
surgical benefits. The proposed rules stated that information would be
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 would include, but not be limited
to, the source of the information, the purpose or context of the
information, and the content of the information. Therefore, under the
proposed rules, plans and issuers would not be permitted to rely on
information that reflects bias, as those factors or evidentiary
standards would be discriminatory.
For this purpose, the Departments stated in the proposed rules that
information resulting 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.
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 the
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. The
Departments also proposed that impartially applied independent
professional medical or clinical standards and fraud, waste, and abuse
measures that meet specific requirements would qualify for an exception
and would not be considered to discriminate against mental health or
substance use disorder benefits.
Additionally, in the preamble to the proposed rules the Departments
noted that the proposed prohibition on discriminatory factors and
evidentiary standards 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. The Departments provided an example illustrating that 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 result in less
favorable treatment of mental health and substance use disorder
benefits. Consequently, under the framework in the proposed rules,
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. The proposed rules stated,
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 would violate the prohibition on
discriminatory factors and evidentiary standards 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).
Many commenters expressed general support for this provision of the
proposed rules. For example, one commenter noted that the prohibition
on discriminatory factors and evidentiary standards would more
effectively protect against the inappropriate application of NQTLs
that, although appearing to be compliant with MHPAEA as written, have a
disproportionately negative effect on access to mental health and
substance use disorder benefits. Some commenters also indicated that
the proposed provision is consistent with the text and purpose of
MHPAEA, as well as the ACA, and favored a broad interpretation
[[Page 77605]]
of the requirement to address particular examples of discrimination by
plans and issuers, to which some of them expressly cited. Other
commenters expressed opposition to the proposed prohibition on
discriminatory factors and evidentiary standards. Some of these
commenters stated that the proposal would be administratively
burdensome, and it would be difficult for plans and issuers to
operationalize due to ambiguity and inherent subjectivity. Some
commenters opposed to the proposed prohibition stated that it is
duplicative of the proposed relevant data evaluation requirements.
These commenters thought the prohibition on discriminatory factors and
evidentiary standards should be eliminated as superfluous, because the
required evaluation of outcomes data under the proposed rules is
intended to ensure that factors are applied no more stringently to
mental health and substance use disorder benefits than medical/surgical
benefits and do not result in a material difference in access.
Some commenters expressed concern that the proposed requirement
that information must not be biased and must be objective (which is
based on facts and circumstances) is too subjective, can only be
determined retroactively (yet must be applied prospectively), and is
too difficult to apply for plans or issuers to be certain of
compliance. One commenter requested clarification on the documentation
and evidence required to demonstrate the absence of bias. Another
commenter expressed concern that plans may not have the ability to
prove that information is unbiased and objective.
One commenter stated that it is unclear whether the Departments
intend to focus on the factors and evidentiary standards themselves or
on the effects of using those factors and standards. Some commenters
assumed that whether a factor or evidentiary standard is discriminatory
would be based on an evaluation of outcomes, and that therefore any
disparity in outcomes data could be viewed as use of a discriminatory
factor or evidentiary standard. These commenters requested examples of
outcomes that would demonstrate compliance. In addition, many
commenters requested examples of discriminatory factors and evidentiary
standards and of nondiscriminatory information and data sources.
Several commenters requested the Departments to make clear that plans
and issuers may not establish compliance by relying on a fee schedule
used by Medicare, although another commenter requested that plans and
issuers be able to access a safe harbor if they paid above-Medicare
rates.
After considering commenters' feedback, the Departments are
finalizing the prohibition on discriminatory factors and evidentiary
standards with modifications. As the Departments stated in the preamble
to the proposed rules this provision will help address the concern that
various factors and evidentiary standards that plans and issuers have
relied on to design NQTLs with respect to mental health or substance
use disorder benefits might themselves discriminate against mental
health and substance use disorder benefits by treating them in a less
favorable manner. At the same time, the Departments acknowledge
commenters' concerns about potential ambiguities in the proposed
prohibition on discriminatory factors and evidentiary standards,
questions about whether this provision is duplicative of other parts of
the proposed rules, and confusion about how to operationalize the
prohibition.
In response to these concerns, and to assist plans and issuers in
complying with the prohibition on discriminatory factors and
evidentiary standards in these final rules, the Departments have
modified the prohibition by providing additional clarity regarding what
it means for information, evidence, sources, or standards to be
``biased or not objective.'' The final rules both clarify the
prohibition in a manner to ensure that it can be applied prospectively
and revise it to expressly provide that potentially biased or not
objective information, evidence, sources, or standards can be
corrected, cured, or supplemented, and then relied upon by a plan or
issuer to inform a factor or evidentiary standard that is not
discriminatory. The Departments also provide additional examples of
discriminatory factors and evidentiary standards later in this
preamble.
First, with respect to the general prohibition on discriminatory
factors and evidentiary standards, these final rules at 26 CFR 54.9812-
1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B), and 45 CFR
146.136(c)(4)(i)(B) \70\ provide that, for purposes of determining
comparability and stringency under 26 CFR 54.9812-1(c)(4)(i)(A), 29 CFR
2590.712(c)(4)(i)(A), and 45 CFR 146.136(c)(4)(i)(A), a plan (or health
insurance coverage) may not rely upon discriminatory factors and
evidentiary standards to design an NQTL to be imposed on mental health
or substance use disorder benefits. The Departments intend that the
focus of this prohibition be specifically on the design of NQTLs, to
further distinguish the prohibition on discriminatory factors and
evidentiary standards from the relevant data evaluation requirements.
These final rules provide the necessary clarity for plans and issuers
to determine whether information, evidence, sources, or standards are
biased or not objective, and if so, cannot be used as the basis for a
factor or evidentiary standard used to design an NQTL applicable to
mental health or substance use disorder benefits.
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\70\ As noted earlier in this preamble, the Departments are
codifying the design and application requirements (including the
prohibition on discriminatory factors and evidentiary standards) at
26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR
146.136(c)(4)(i), rather than as proposed at 26 CFR 54.9812-
1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR
146.136(c)(4)(ii), because these final rules structure the design
and application requirements as part of the no more restrictive
requirement, rather than as a unique prong of the 3-part test
proposed in the proposed rules.
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Specifically, these final rules state that a factor or evidentiary
standard is discriminatory if the information, evidence, sources, or
standards on which the factor or evidentiary standard are based are
biased or not objective in a manner that discriminates against mental
health or substance use disorder benefits as compared to medical/
surgical benefits. This language is similar to that included under
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) but adds the phrase ``is biased or not
objective in a manner that,'' preceding the word ``discriminates.''
This phrase, in conjunction with the other changes to the prohibition
on discriminatory factors and evidentiary standards discussed later in
this preamble, was modified in response to comments and is intended to
help clarify that a plan or issuer is expected to assess whether the
information, evidence, sources, or standards on which each factor or
evidentiary standard are based are biased or not objective in a manner
that discriminates against mental health or substance use disorder
benefits as compared to medical/surgical benefits. This analysis is
distinct from the final rules' requirement to compare the comparability
and stringency of factors and evidentiary standards used to design and
apply an NQTL.
Second, the Departments are finalizing a modified version of the
provision originally proposed under 26 CFR 54.9812-1(c)(4)(ii)(B)(3),
29 CFR 2590.712(c)(4)(ii)(B)(3), and 45 CFR 146.136(c)(4)(ii)(B)(3) as
26 CFR 54.9812-1(c)(4)(i)(B)(1), 29 CFR 2590.712(c)(4)(i)(B)(1), and 45
CFR 146.136(c)(4)(i)(B)(1) of these final rules. This provision of the
proposed rules
[[Page 77606]]
provided that 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. As mentioned earlier in this
preamble, the Departments received many comments opposing this
provision as proposed, including comments expressing confusion as to
how it is different from the relevant data evaluation requirements,
questions regarding the kind of documentation and evidence needed to
show compliance, and concern that it is subjective and difficult to
operationalize.
The prohibition on discriminatory factors and evidentiary standards
is intended to work together with the other provisions of these final
rules, including the relevant data evaluation requirements. Like all
the provisions of these final rules, the provision further implements
the statutory requirement that NQTLs be no more restrictive with
respect to mental health or substance use disorder benefits than the
predominant limitations applicable to substantially all medical/
surgical benefits. The test specifically focuses on the importance of
ensuring that the factors and evidentiary standards relied upon by
plans and issuers in designing NQTLs do not have built-in biases (at
the time NQTLs are designed) against mental health or substance use
disorder benefits as compared to medical/surgical benefits. To the
extent plans and issuers rely upon factors and evidentiary standards to
design NQTLs that systematically disfavor access or are specifically
designed to disfavor access to mental health and substance use disorder
benefits, the resultant NQTLs are more restrictive with respect to
mental health or substance use disorder benefits than for medical/
surgical benefits.
The Departments note that a factor or evidentiary standard may be
based on or include information that solely relates to medical/surgical
benefits (and is silent or without corollary with respect to mental
health or substance use disorder benefits). Such a factor or
evidentiary standard is not considered discriminatory for this purpose.
For example, a plan can reasonably rely on a source of information on
the clinical efficacy of a treatment or service to inform a factor used
to design a medical management NQTL, even though that source does not
address the clinical efficacy of any treatment of any mental health
conditions or substance use disorders, without violating the
prohibition on discriminatory factors and evidentiary standards.
However, the use of such factor or evidentiary standard must comply
with the design and application requirements, as described earlier in
this preamble.
In response to comments to provide additional clarity, the final
rules elaborate on the meaning of the phrase ``biased and not objective
in a manner that discriminates against mental health or substance use
disorder benefits.'' Specifically, these final rules provide that
information, evidence, sources, or standards are considered to be
biased or not objective in a manner that discriminates against mental
health or substance use disorder benefits as compared to medical/
surgical benefits if, based on all the relevant facts and
circumstances, they systematically disfavor access or are specifically
designed to disfavor access to mental health or substance use disorder
benefits as compared to medical/surgical benefits.
For purposes of determining whether information, evidence, sources,
or standards are considered to be biased or not objective under these
final rules, relevant facts and circumstances may include, but are not
limited to, the reliability of information, evidence, sources, or
standards, including any underlying data and the independence of the
information, evidence, sources, and standards relied upon. The
Departments note that internal data or information, such as claims
data, would generally not be considered independent, but would not
necessarily be considered discriminatory on that basis alone. In the
Departments' view, independence is a relevant fact and circumstance for
determining whether information, evidence, sources, or standards are
considered to be biased or not objective. For example, a standard that
is created or funded by the plan or issuer, or its service provider,
would likely lack independence compared to a standard created by an
impartial third party or governmental entity, and might require strong
indicators of reliability in order to demonstrate that it is objective
and unbiased. Additionally, relevant facts and circumstances include
the analyses and methodologies employed to select the information,
evidence, sources, or standards, and the consistency of their
application; and any known safeguards deployed to prevent reliance on
skewed data or metrics when determining whether they are biased or not
objective. The Departments note that these final rules only provide
examples, and not a comprehensive list, of relevant facts and
circumstances that indicate information, evidence, sources, or
standards are biased or not objective. Because plans and issuers rely
on myriad factors and evidentiary standards to design NQTLs for their
own unique benefit designs, this evaluation necessarily will be
specific to the particular plan or coverage.
Under these final rules, information, evidence, sources, and
standards are not considered biased or not objective for purposes of
the prohibition on discriminatory factors and evidentiary standards, if
a plan or issuer has taken steps necessary to address the bias or lack
of objectivity by correcting, curing, or supplementing the information,
evidence, sources, or standards that would have been biased or not
objective in the absence of such steps. If information, evidence,
sources, or standards are corrected, cured, or supplemented, they may
be used by plans and issuers as the basis for factors and evidentiary
standards used to design an NQTL.
Several commenters asked about the use of a fee schedule used by
Medicare and CMS-set standards, such as network time and distance
standards, by a plan or issuer to inform plan design. For example, some
plans use the Medicare Physician Fee Schedule \71\ to establish base
rates for in-network physician services. The Departments do not
consider fee schedules used by Medicare and standards set by CMS to be
biased or not objective, as defined under these rules, when used as the
basis for a factor or evidentiary standard to design an NQTL such as
reimbursement rate methodology.
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\71\ The Medicare Physician Fee Schedule is developed by CMS. To
develop the Medicare Physician Fee Schedule, CMS utilizes
recommendations from an independent assessment by a multi-specialty
body and other market-based information sources, as well as
independent assessment by CMS medical officers, to develop proposed
relative value units for each physician service. CMS then engages in
notice and comment rulemaking, including consideration of public
comments, before establishing payment rates for specific services.
Furthermore, CMS has made, and continues to make, numerous
adjustments to the underlying methodology to increasingly ensure
appropriate reimbursement for services paid under the Medicare
Physician Fee Schedule, including behavioral health services. See,
e.g., Medicare and Medicaid Programs; CY 2024 Payment Policies Under
the Physician Fee Schedule and Other Changes to Part B Payment and
Coverage Policies; Medicare Shared Savings Program Requirements;
Medicare Advantage; Medicare and Medicaid Provider and Supplier
Enrollment Policies; and Basic Health Program, 88 FR 78818 (Nov. 16,
2023).
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The Departments note, however, that the mere use of the Medicare
Physician Fee Schedule, for example, as one type of information,
evidence, source, or standard that informs a factor used to design an
NQTL does not automatically
[[Page 77607]]
render the NQTL permissible. For example, in most cases, a plan would
be unable to justify a reimbursement rate methodology that paid
physicians in medical/surgical specialties 125 percent of the Medicare
Physician Fee Schedule rate and that paid physicians in mental health
and substance use disorder specialties 75 percent of the Medicare
Physician Fee Schedule rate.
The Departments received several comments in support of the example
included in the preamble to the proposed rules that illustrated the
prohibition on plans' and issuers' reliance on historical plan data or
other historical information from a time when the plan or coverage was
not subject to MHPAEA, or not compliant with MHPAEA. Some commenters
recognized that many plans and issuers have used their own historical
data from a time when their plan or coverage was not subject to MHPAEA
and have benefited from historic inequities in benefit structures that
MHPAEA sought to prohibit. One commenter requested that this example be
codified in the regulatory text of the final rules. The Departments
agree that the example illustrating how the prohibition on
discriminatory factors and evidentiary standards applies to the use of
historical data and information to design an NQTL should be clearly set
forth in the regulation text at 26 CFR 54.9812-1(c)(4)(ii)(B)(2), 29
CFR 2590.712(c)(4)(ii)(B)(2), and 45 CFR 146.136(c)(4)(ii)(B)(2). To
ensure compliance with this standard, plans and issuers that utilize
historical data or information from a time when their plan or coverage
was not subject to, or not compliant with, MHPAEA should ensure that
the use of such data and information (for example, in cost calculations
and controls) for mental health and substance use disorder benefits
does not include, as a baseline, years when financial requirements and
treatment limitations that would have been impermissible under MHPAEA
were imposed on such benefits (unless they take steps to correct, cure,
or supplement the data or information, as discussed earlier in this
preamble).
Some commenters provided other examples that they recommended
including as illustrations of discriminatory factors and evidentiary
standards in these final rules, including prior authorization for a
prescription of buprenorphine to treat opioid use disorder (OUD)
requiring additional licensure or certification for mental health and
substance use disorder providers that is not required of similar
medical/surgical providers; subjecting mental health and substance use
disorder claims to different fraud, waste, and abuse processes, or
requiring more documentation, than for medical/surgical claims; not
covering nutrition counseling for the treatment of eating disorders
while covering it for medical conditions; and requiring that mental
health and substance use disorder claims and appeals be filed with a
TPA, but not making this clear to enrollees, nor properly coordinating
operations between the plan/issuer and TPA.
However, many of these examples focus on the use of a factor to
apply an NQTL to mental health and substance use disorder benefits in a
manner that is not comparable or is more stringent than the use of the
factor to apply an NQTL to medical/surgical benefits, or focus on the
NQTL itself (rather than the discriminatory factor or evidentiary
standard). The prohibition on discriminatory factors and evidentiary
standards in these final rules, however, focuses on the information,
evidence, sources, and standards that inform the factors and
evidentiary standards used to design an NQTL. Factors and evidentiary
standards that incorporate or otherwise rely on underlying data or
information that systematically disfavor access or are specifically
designed to disfavor access to mental health or substance use disorder
benefits place a greater burden on access to such benefits. Therefore,
these final rules prohibit the use of any factor or evidentiary
standard to design an NQTL if the underlying information, evidence,
sources, and standards are themselves biased or not objective in a
manner that discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits, unless the
plan or issuer takes steps to correct, cure, or supplement the
information, evidence, sources and standards to address the bias or
lack of objectivity.
These final rules set forth a general rule to determine which
specific factors and evidentiary standards (and the information,
evidence, sources, and standards on which they are based) might or
might not be biased and not objective in a manner that discriminates
against mental health or substance use disorder benefits as compared to
medical/surgical benefits. The Departments have provided new examples
in these final rules illustrating the prohibition on discriminatory
factors and evidentiary standards, which are discussed later in this
preamble. The Departments acknowledge that these examples are not
exhaustive and may provide additional examples in future guidance.
Finally, as discussed in greater detail later in this preamble, the
Departments are not finalizing the exceptions to the prohibition on
discriminatory factors and evidentiary standards for independent
professional medical or clinical standards and fraud, waste, and abuse
measures. However, these final rules expressly clarify at 26 CFR
54.9812-1(c)(4)(i)(B)(3), 29 CFR 2590.712(c)(4)(i)(B)(3), and 45 CFR
146.136(c)(4)(i)(B)(3) that generally recognized independent
professional medical or clinical standards and fraud and abuse measures
that minimize the negative impact on access to appropriate mental
health and substance use disorder benefits are not information,
evidence, sources, or standards that are biased or not objective in a
manner that discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits.
The Departments recognize that commenters requested specificity as
to what qualifies as independent professional medical or clinical
standards. To ensure that they are not biased and are objective,
independent professional medical or clinical standards should reflect
the standards of care and clinical practice that are generally
recognized in relevant clinical specialties across a range of settings
of care and should be transparent. For example, sources that include
such standards could be peer-reviewed scientific studies and medical
literature, formal published recommendations of Federal Government
agencies, drug labeling approved by the United States Food and Drug
Administration (FDA), and recommendations of relevant nonprofit health
care provider professional associations and specialty societies,
including, but not limited to, patient placement criteria and clinical
practice guidelines. Additionally, fraud and abuse measures should be
reliably established through unbiased and objective data and narrowly
tailored in a manner that minimizes the negative impact on access to
appropriate mental health and substance use disorder benefits.
These final rules also clarify that plans and issuers that rely on
independent professional medical or clinical standards or fraud and
abuse measures must comply with the general rule of the design and
application requirements at 26 CFR 54.9812-1(c)(4)(i)(A), 29 CFR
2590.712(c)(4)(i)(A), and 45 CFR 146.136(c)(4)(i)(A). If such a
standard or measure is used as an NQTL, the plan or issuer also must
comply with the relevant data evaluation requirements at 26 CFR
54.9812-1(c)(4)(iii), 29 CFR
[[Page 77608]]
2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) in these final
rules.
c. Illustrative, Non-Exhaustive List of NQTLs--26 CFR 54.9812-
1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii)
The proposed rules proposed to 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 list. First,
the Departments proposed amendments to make clear that this
illustrative list of NQTLs is non-exhaustive and that there are
additional NQTLs not captured in the list. The Departments also
proposed to 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.'' Additionally, the Departments proposed to amend the
description of the illustrative NQTL ``plan methods for determining
usual, customary, and reasonable charges'' 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. Finally, the
Departments proposed to 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.
Some commenters supported the clarification in the proposed rules
that the illustrative list is non-exhaustive and that there are
additional NQTLs not included in the list. In general, many commenters
found the list to be helpful for plans and issuers to identify NQTLs.
Some of these commenters pointed out that the non-exhaustive nature of
the list would allow new NQTLs developed by plans and issuers to fall
under the scope of the requirements in these final rules. One commenter
also noted that the definition of an NQTL is sufficiently clear such
that an exhaustive list would not be needed to put plans or issuers on
notice of their compliance obligations.
Other commenters requested that the Departments instead provide an
exhaustive list of NQTLs to eliminate uncertainty, promote consistency,
and clarify plans' and issuers' compliance obligations. Several of
these commenters suggested that the Departments update such an
exhaustive list as new NQTLs are identified and allow adequate time for
plans and issuers to come into compliance with respect to such NQTLs.
Other commenters advocated for an approach where an exhaustive list of
NQTLs would also represent the scope of NQTLs for which the relevant
Secretary could request a comparative analysis. Some of these
commenters requested that to the extent the relevant Secretary
requested a comparative analysis for an NQTL not on the list, plans and
issuers be provided with additional time to respond.
The Departments agree with the commenter generally stating that the
definition of an NQTL under 26 CFR 54.9812-1(a), 29 CFR 2590.712(a),
and 45 CFR 146.136(a), in addition to the non-exhaustive, illustrative
list of NQTLs, is sufficient to put plans and issuers on notice that a
given plan provision would fall under the definition of an NQTL.
Therefore, the Departments are finalizing as proposed the clarification
that this illustrative list of NQTLs is non-exhaustive.
The Departments decline to provide an exhaustive list of NQTLs, as
requested by commenters, in these final rules; however, as described
further below, the Departments may consider issuing separate guidance
to add additional examples if needed. Plans and issuers, rather than
the Departments, are best positioned to initially identify NQTLs,
including any NQTLs that plans and issuers newly implement as their
plan or coverage designs evolve over time. MHPAEA does not limit the
scope of NQTLs that plans and issuers may impose on mental health and
substance use disorder benefits. However, for any NQTLs applicable to
such benefits, a plan or issuer must comply with MHPAEA and its
implementing regulations. Any exhaustive list of NQTLs published by the
Departments would likely lag behind those actually utilized by plans
and issuers due to this information gap, along with the wide
variability in NQTLs that exist now and could exist in the future.
Furthermore, while some commonalities exist, plans and issuers
generally do not use uniform nomenclature to refer to their medical
management techniques or other NQTLs, making the task of identifying an
exhaustive list difficult, if not impossible.
An exhaustive list of NQTLs that does not include the full scope of
NQTLs utilized by plans and issuers at any given time would undermine
the fundamental purpose of MHPAEA and these final rules. While the
Departments acknowledge and have considered plans' and issuers'
requests for a finite list of NQTLs for which the Departments may
request comparative analyses, the exhaustive nature of such a list
would leave open a compliance loophole by incentivizing plans and
issuers to wait to evaluate, document, and address compliance for an
NQTL that is newly developed or has not come to the attention of the
Departments. The approach some commenters suggested to expressly limit
the comparative analysis requirement under 26 CFR 54.9812-2, 29 CFR
2590.712-1, and 45 CFR 146.137 to only those NQTLs identified in an
exhaustive list is similarly untenable due to a foreseeable mismatch
between the NQTLs included on such an exhaustive list, and those
utilized by plans and issuers over time, particularly where the
Departments may receive a complaint or have reason to believe there may
be a potential violation. The Departments recognize the desire of plans
and issuers to have a list of NQTLs on which the Departments will focus
their enforcement efforts. The Departments highlight that the most
recent reports to Congress on MHPAEA contain lists of the NQTLs on
which the Departments have focused their enforcement efforts, and the
NQTLs the Departments have mostly commonly found to be
noncompliant.\72\ Additionally, the 2020 MHPAEA Self-Compliance Tool
includes an illustrative, non-exhaustive list of NQTLs.\73\ The
statute, however, requires the Departments to request
[[Page 77609]]
comparative analyses from a plan or issuer for any NQTL that involves
potential violations of MHPAEA or complaints regarding noncompliance
with MHPAEA that concern NQTLs. To limit the Departments to requesting
comparative analyses for only certain NQTLs identified in a list would
not only be inconsistent with the statute but would also limit the
ability of the Departments to dynamically respond to new NQTLs that
plans and issuers design and apply that may restrict participant and
beneficiary access to mental health and substance use disorder benefits
as compared to medical/surgical benefits.
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\72\ See, e.g., 2022 MHPAEA Report to Congress (Jan. 2022), pg.
13, 19-20, 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 Comparative Analysis Report to Congress (July 2023), pg. 47-
48, 55-56, https://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.
\73\ See Self-Compliance Tool for the Mental Health Parity and
Addiction Equity Act (MHPAEA) (2020), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
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Additionally, allowing plans and issuers to categorically have
additional time to assemble a comparative analysis for NQTLs that are
not on a finite list of NQTLs, as requested by commenters, would also
be inconsistent with the statutory requirement that, without exception,
plans and issuers perform and document such comparative analyses of
NQTLs applicable to mental health or substance use disorder benefits,
beginning 45 days after the enactment of the CAA, 2021, and would
result in the post-hoc justifications addressed with the CAA, 2021's
enactment.\74\ The Departments nonetheless acknowledge commenters'
requests for additional guidance about plan provisions that would be
considered to be NQTLs and intend to provide additional examples of
NQTLs through future reports to Congress, updates to the 2020 MHPAEA
Self-Compliance Tool, and other guidance.
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\74\ 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 received a handful of comments on the proposed
expansion of the illustrative list's description of standards for
provider admission to participate in a network, including reimbursement
rates, to also refer 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. Some commenters supported these
proposed amendments to ensure that patients have an adequate provider
network. Others suggested that parity requirements for provider
networks should address the administrative burden and credentialing
requirements on providers when joining networks, which may limit
network adequacy. The Departments are finalizing this amendment as
proposed. The Departments agree with commenters who stated that MHPAEA
applies to credentialing standards, as well as the procedures to join a
network, and note that 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 are intended to be
interpreted broadly, consistent with the fundamental purpose of MHPAEA.
Because these final rules do not retain the proposed mathematical
substantially all and predominant tests, the illustrative list appears
in these final rules at 26 CFR 54.9812-1(c)(4)(ii), 29 CFR
2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii) instead of 26 CFR
54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii) as in the proposed rules.
d. Required Use of Outcomes Data and Special Rule for NQTLs Related to
Network Composition--26 CFR 54.9812-1(c)(4)(iii), 29 CFR
2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii)
In the proposed rules, the Departments proposed to amend the 2013
final regulations to add a requirement 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 the NQTL, in operation, complies
with the proposed no more restrictive requirement and the design and
application requirements. The proposed rules included the general types
of data that plans and issuers would have to collect and evaluate with
regard to all NQTLs and additional data sets that would have to be
collected and evaluated for NQTLs related to network composition
standards. To the extent the relevant data collected and evaluated by
the plan or issuer show material differences in access to mental health
benefits and substance use disorder benefits as compared to medical/
surgical benefits, under the proposed rules, the differences would be
considered a strong indicator that the plan or issuer violated the
proposed rules. In these instances, 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 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), and would also be required to document
the action that has been or is being taken by the plan or issuer to
mitigate any material differences in access in the plan's or issuer's
comparative analysis for the NQTL in that classification.
Additionally, the Departments noted in the preamble to the proposed
rules their concerns about standards related to network composition and
other related NQTLs. Specifically, the Departments noted that network
composition is the result of the design and application of myriad NQTLs
and is informed by various processes, strategies, evidentiary
standards, and other factors, many of which interact in complex ways.
The Departments also expressed concern that NQTLs related to network
composition inherently impact a participant's or beneficiary's access
to mental health and substance use disorder benefits. Accordingly, the
proposed rules included a special rule applicable to NQTLs related to
network composition. Specifically, under the proposed rules, when
designing and applying one or more NQTLs related to network composition
standards, a plan or issuer would fail 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 benefits and substance use disorder benefits as compared to in-
network medical/surgical benefits in a classification.
The Departments also proposed that plans and issuers would not be
required to comply with the relevant data evaluation requirements for
NQTLs that impartially apply independent professional medical or
clinical standards. However, proposed 26 CFR 54.9812-1(c)(4)(iv)(D), 29
CFR 2590.712(c)(4)(iv)(D), and 45 CFR 146.136(c)(4)(iv)(D) did not
provide a comparable exception for fraud, waste, and abuse measures, as
the Departments stated these tools, while important, are more likely to
result in NQTLs that improperly restrict access to mental health or
substance use disorder benefits and therefore the impact of those NQTLs
should be assessed.
In General
The Departments received many comments expressing general support
for the proposal to require plans and issuers to collect and evaluate
relevant data to assess an NQTL's impact on
[[Page 77610]]
access to mental health and substance use disorder benefits and
medical/surgical benefits, including the proposed requirement related
to data for network composition NQTLs. These commenters noted that the
data collection and evaluation requirements would promote transparency
and compliance with MHPAEA, stating that collecting and evaluating
outcomes data is essential to assessing in-operation compliance and
that plans and issuers had failed to conduct and share such analyses.
Other commenters noted that collection and evaluation of data is
critical to assessing an NQTL's impact on access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits, and by requiring plans and issuers to collect and assess
outcomes data and to address material differences in access, the
Departments are better aligning the focus of NQTL compliance with the
fundamental purpose of MHPAEA. These commenters stated that, under the
2013 final regulations, plans and issuers rarely appropriately measure
and analyze an NQTL's impact on access in the manner outlined in the
proposed rules, and instead rely on process-related rationales to
justify disparate access to treatment for mental health conditions and
substance use disorders as compared to access to treatment for medical
conditions and surgical procedures.
Other commenters stated that requiring plan sponsors to evaluate
outcomes data to determine whether access to mental health and
substance use disorder benefits is in parity with access to medical/
surgical benefit is not supported by the statute and stated this
provision of the proposed rules would be a significant departure from
previous guidance under MHPAEA, under which the Departments stated that
outcomes are not determinative of compliance. These commenters also
stated that, because not all NQTLs are quantifiable, data metrics
should not be required to determine parity, and disagreed with the
Departments' interpretation of the term ``in operation'' as the basis
for the requirement that plans and issuers measure outcomes. The
Departments also received many comments on the various components and
specific comment solicitations related to the relevant data evaluation
requirements in the proposed rules.
The determination of whether an NQTL is ``more restrictive,''
within the meaning of the statute, as applied to mental health and
substance use disorder benefits, cannot be divorced from the impact the
NQTL has on access to these benefits. Accordingly, the Departments are
finalizing the relevant data evaluation requirements, with some
modifications based on the comments. These final rules require that
plans and issuers be attentive to the impact of their NQTLs, in
operation, by collecting and evaluating relevant data in a manner
reasonably designed to assess the impact of the NQTL on relevant
outcomes related to access, and carefully considering the impact as
part of the plan's or issuer's evaluation.
For this purpose, the term ``relevant data'' under these final
rules is meant to be interpreted broadly but does not require a plan or
issuer to collect and evaluate duplicative or overlapping data that
reflect the same analysis. The obligation is to collect and evaluate
relevant data in a manner reasonably designed to assess the impact of
NQTLs. It is not a requirement to exhaustively survey all available
data, nor a requirement that plans and issuers evaluate additional data
that is duplicative or unlikely to change the determination of whether
there is a material difference in access to mental health and substance
use disorder benefits as compared to medical/surgical benefits.
However, as discussed later in this preamble, a plan or issuer may be
required to collect and evaluate more than one form of data to assess
the aggregate impact of the NQTL (or NQTLs as related to network
composition). For example, under these final rules, to assess the
aggregate impact of NQTLs related to network composition, a plan or
issuer could evaluate, as appropriate, 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 (for comparable services and as benchmarked to a
reference standard).
Further, a plan's or issuer's data collection and evaluation
approach will not be considered to be conducted in a manner reasonably
designed to assess the impact of an NQTL on relevant outcomes related
to access to mental health and substance use disorder benefits and
medical/surgical benefits if the plan or issuer does not consider data
that it knows or reasonably should know suggest that the NQTL is
associated with a material difference in access. The Departments expect
that, in designing their data collection and evaluation approach, plans
and issuers will consider outcomes data as necessary to assess the
impact of the NQTL on access to mental health and substance use
disorder benefits and medical/surgical benefits in the same
classification. As explained later in this preamble, the plan's or
issuer's evaluation of this data must be included as part of the
comparative analysis of the NQTL. The Departments may require a plan or
issuer to submit additional information to ensure that plans and
issuers do not only collect and evaluate the impact of some relevant
data, while disregarding other relevant data that is reasonably
available and suggests the NQTL contributes to material differences in
access to mental health or substance use disorder benefits as compared
to medical/surgical benefits.
The statutory language requires that a plan or issuer ensure that
the treatment limitations (quantitative or nonquantitative) themselves
that are 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).\75\ The relevant data evaluation requirements
at 26 CFR 54.9812-1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR
146.136(c)(4)(iii) are intended to give particular meaning to the
statutory language with respect to an NQTL itself, which, in these
final rules, also requires compliance, in operation, with the design
and application requirements under 26 CFR 54.9812-1(c)(4)(i), 29 CFR
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i). The Departments agree
with commenters who noted that these requirements will promote
transparency and compliance with MHPAEA, that such information is
critical to assessing an NQTL's compliance with the statute, and that
requiring plans and issuers to collect and assess outcomes data and
address material differences in access appropriately aligns the focus
of NQTL compliance more closely with the fundamental purpose of MHPAEA.
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\75\ Code section 9812(a)(3)(A)(ii), ERISA section
712(a)(3)(A)(ii), and PHS Act section 2726(a)(3)(A)(ii).
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As stated in the preamble to the proposed rules, it is necessary to
review and consider quantitative outcomes data to ascertain how the
NQTL functions in the context of the plan's or issuer's administration
and provision of benefits.\76\ Because the relevant data evaluation
requirements in these final rules are meant to ensure and determine
compliance, in operation, with the statutory language in Code section
9812(a)(3)(A)(ii), ERISA section 712(a)(3)(A)(ii), and PHS Act section
2726(a)(3)(A)(ii), as noted earlier in this
[[Page 77611]]
preamble, plans and issuers must comply with both the design and
application requirements and the relevant data evaluation requirements
in these final rules to demonstrate compliance with MHPAEA. That is,
if, with respect to an NQTL, a plan or issuer fails to comply with
either set of requirements in 26 CFR 54.9812-1(c)(4)(i) or (iii), 29
CFR 2590.712(c)(4)(i) or (iii), and 45 CFR 146.136(c)(4)(i) or (iii),
as applicable, the plan or issuer will be considered to violate MHPAEA
and the relevant NQTL may not be imposed with respect to mental health
or substance use disorder benefits in the classification unless and
until the plan or issuer takes appropriate action to remedy the
violation.
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\76\ 88 FR 51552, 51575. (Aug. 3, 2023).
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Relevant Data
The proposed rules identified types of relevant data that plans and
issuers would be required to collect and evaluate for all NQTLs in each
individual comparative analysis. Under the proposed rules, relevant
data for all NQTLs would include, but would not be limited to, the
number and percentage of claims denials and any other data relevant to
the NQTL as required by State law or private accreditation standards.
Additionally, relevant data for network composition NQTLs 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). The
proposed rules further provided that the Departments may specify the
type, form, and manner for the relevant data evaluation requirements in
future guidance.\77\
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\77\ Contemporaneously with the proposed rules, DOL, in
collaboration with HHS and the Treasury, issued Technical Release
2023-01P, which set out principles and asked for public comment to
inform future guidance with respect to data submissions for NQTLs
related to network composition and a potential enforcement safe
harbor. The comment period for the Technical Release closed on
October 2, 2023. Comments on the Technical Release are available on
DOL's website at https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/tr-23-01. Those
comments were solicited separately and are not addressed in these
final rules. Plans and issuers would be allowed adequate time to
conform to any future guidance on the type, form, and manner of
collection and evaluation for the relevant data required under the
final rules.
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Many commenters supported the required use of data outcomes as
proposed. Several commenters noted that many plans and issuers do not
have access to the data they would need to comply with the relevant
data evaluation requirements. Specifically, the Departments received
several comments regarding limited access to data held by service
providers, highlighting inconsistencies in service providers'
willingness or ability to provide data and the extensive systems
changes and expenses necessary to allow data to be provided. Some
commenters suggested that, because plan sponsors do not have access to
complete and reliable sets of claims data, the final rules should
specify that a plan or issuer can meet its obligations related to the
relevant data evaluation requirements by requesting access to data,
documenting such requests, and advising service providers that their
refusal to provide data will be relayed to the Departments.
Some commenters suggested the Departments issue the ``type, form,
and manner of collection and evaluation'' for the relevant data
evaluation requirements in guidance that can be periodically updated.
Other commenters suggested that the final rules provide an exception
from the relevant data evaluation requirements for NQTLs for which no
such data are reasonably available, and that data evaluation be
required only for outcomes that can be reasonably measured. One of
these commenters highlighted that many NQTLs, including certain types
of medical management techniques, assessments related to medical
necessity, and exclusions for experimental/investigational treatments,
are not generally associated with claims. Some commenters requested
that the Departments provide an exhaustive list of a uniform set of
outcomes data that plans and issuers are required to collect and assess
as part of their comparative analysis with respect to an NQTL.
Commenters suggested additional or different types of data that
should be considered relevant data and that could be provided by plans
and issuers, as well as their service providers, including the
percentage of in-network claims covered vs. those submitted; time and
distance data that includes virtual or telehealth visits; median in-
network payments as compared to Medicare rates for inpatient benefits,
office visits, and outpatient benefits; member satisfaction, as
reported by standardized surveys such as the Consumer Assessment of
Healthcare Providers and Systems program; and allowed amounts for
certain specific Current Procedural Terminology (CPT) codes for various
types of mental health and substance use disorder and medical/surgical
providers. Many commenters suggested that relevant data include the
number of authorizations issued for participants and beneficiaries for
each of the levels (and sub-levels) of care described in the American
Society for Addiction Medicine (ASAM) criteria and the age-specific
Level of Care Utilization Services family of criteria. Some of these
commenters also suggested outcomes data be reported separately for both
mental health and substance use disorder services. Another commenter
also suggested that relevant data include the number and percentage of
drugs subject to prior authorization and step therapy (as an
alternative to claims denials for the prescription drug
classification), turnaround time for prior authorization, and inter-
rater reliability. One commenter suggested using, as a parity
indicator, a ratio of mental health utilization to primary care (for
both initial and follow-up services) using data from the Medical
Expenditure Panel Survey. Some commenters requested that, for fully
insured coverage, the relevant data evaluation requirements apply at
the issuer or ``product'' level instead of the ``plan'' level (as those
terms are defined in 45 CFR 144.103),\78\ while others sought
clarification regarding whether the data to be analyzed should be
group-specific or aggregate-level, as well as any differences in the
level of data needed for fully insured and self-funded plans.
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\78\ 45 CFR 144.103 states ``[p]roduct'' means ``a discrete
package of health insurance coverage benefits that are offered using
a particular product network type (such as health maintenance
organization, preferred provider organization, exclusive provider
organization, point of service, or indemnity) within a service
area'' and ``[p]lan'' means, ``with respect to a product, the
pairing of the health insurance coverage benefits under the product
with a particular cost-sharing structure, provider network, and
service area.''
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Some commenters objected to the proposal to require the collection
and evaluation of out-of-network utilization data for NQTLs related to
network composition, stating that high out-of-network utilization of
mental health and substance use disorder services alone does not
necessarily indicate a network access deficiency and could instead be
the product of other factors, such as a patient's preference to use a
particular provider. One commenter suggested requiring the collection
and evaluation of provider-to-enrollee ratio data, and another
commenter expressed support for requiring the collection and evaluation
of data on whether in-network providers are accepting new patients.
Some commenters expressed support for the collection and evaluation of
data on appointment wait times, time and distance data, types and
numbers of mental health and substance
[[Page 77612]]
use disorder providers that are available in a network, and telehealth.
Some commenters suggested collection and evaluation of provider
reimbursement rates, stating that those rates have an impact on whether
providers are able to join a network, how many patients they treat, and
whether they can provide wages to attract and retain staff. Other
commenters objected to the requirement to collect and evaluate provider
reimbursement data, arguing that reimbursement rates are not equivalent
data when comparing between medical/surgical and mental health and
substance use disorder benefits because of the nature of mental health
and substance use disorder treatment and the associated time and cost.
Other commenters objected to the inclusion of billed charges, arguing
that these are arbitrary amounts not necessarily tied to any
independent standard or benchmark of what is a reasonable charge and
that Medicare rates should be used instead.
After review of the comments, the Departments decline to provide a
list of all relevant outcomes data required to be collected and
evaluated by plans and issuers at this time; however, the Departments
intend to issue in future guidance the type, form, and manner of
collection and evaluation for the data required and the lists of
examples of data that are relevant across the majority of NQTLs,\79\ as
well as additional relevant data for NQTLs related to network
composition. As part of this guidance, the Departments intend to update
the MHPAEA Self-Compliance Tool to provide a robust framework and
roadmap for plans and issuers to determine which data to collect and
evaluate.
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\79\ As explained later in this preamble, these final rules
provide additional provisions on how to comply with the relevant
data evaluation requirements for an NQTL newly imposed by a plan or
issuer or an NQTL where no data exist that can reasonably assess any
relevant impact of the NQTL on access. The provisions of these final
rules with respect to these types of NQTLs shall only apply in very
limited circumstances.
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While, as discussed earlier in this preamble, commenters provided
various suggestions for relevant outcomes data to be collected and
evaluated, many comments also suggested that what data are considered
relevant depends on the nature of an NQTL. The Departments agree and
intend to issue future guidance to help ensure that the data required
to be collected and evaluated under the relevant data evaluation
requirements of these final rules provide a meaningful representation
of whether a plan or issuer is improperly applying an NQTL under
MHPAEA. In developing this guidance, the Departments intend to take
into consideration the feedback received regarding relevant data
elements.
Until additional guidance is provided, the Departments expect a
plan or issuer with a typical plan or coverage design will collect and
evaluate certain data that are likely to be relevant for the majority
of NQTLs under the relevant data evaluation requirements. As the
relevant data for any given NQTL will depend on the facts and
circumstances of the NQTL at issue and the circumstances under which
the NQTL was designed and applied, these final rules provide some
flexibility for plans and issuers to determine what relevant data
should be collected and evaluated, as appropriate.
Under these final rules, relevant data for the majority of NQTLs
could include, as appropriate, but are not limited to, the number and
percentage of claims denials in a classification of benefits and any
other data relevant to the NQTL required by State law or private
accreditation standards. However, the Departments note that these final
rules do not mandate that plans or issuers use private accreditation
standards or evaluate data under State laws to which they are not
subject. In addition, relevant data for a typical plan or coverage
might include utilization data for mental health and substance use
disorder services and medical/surgical services. For NQTLs such as
prior authorization, relevant data could include rates of approvals and
denials of prior authorization requests, rates of denials of post-
service claims, application of penalties for a failure to obtain prior
authorization, and turnaround times for prior authorization requests.
Such information could be provided for benefits subject to prior
authorization in each benefit classification in which the NQTL is
imposed on mental health and substance use disorder benefits and
medical/surgical benefits. All such examples of relevant data are non-
exhaustive and whether any particular type of data is relevant for a
plan or coverage is based on each plan's or coverage's unique design.
Relevant data for NQTLs related to network composition standards
could include, as appropriate, but are 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 (for comparable services and as
benchmarked to a reference standard). The Departments modified this
illustrative list of relevant data for NQTLs related to network
composition by specifying that provider reimbursement rates should be
analyzed for comparable services and as benchmarked to a reference
standard, to better ensure that comparisons between access to mental
health and substance use disorder benefits and medical/surgical
benefits will be informative. Thus, for example, the Departments expect
a plan or issuer with a typical plan or coverage design could look at
the ratio of inpatient, in-network and outpatient, in-network mental
health and substance use disorder and medical/surgical claims, as
compared to inpatient, out-of-network and outpatient, out-of-network
mental health and substance use disorder and medical/surgical claims.
Plans and issuers could also look at the number of providers (or
facilities) within specified mental health and substance use disorder
and medical/surgical provider categories (or categories of facilities)
per 1,000 participants and beneficiaries who have actively submitted
claims within the past 6 months, which would reflect the experience of
a plan's or issuer's participants and beneficiaries within a recent
period of time, controlled for plan or issuer size. Additionally, a
plan or issuer could look at the turnaround time for applications to be
approved for a provider to join the plan's or issuer's network and the
approval and denial rates for applications submitted by mental health
and substance use disorder providers as compared to medical/surgical
providers. The Departments recognize that providers may differ in
education, training, and specialization, and the categories of mental
health and substance use disorder and medical/surgical providers for
which data is compared should take this into account. Additionally,
relevant data could include the percentage of participants and
beneficiaries who can access, within a specified time and distance by
county-type designation, one (or more) in-network providers who are
available to accept new patients for mental health and substance use
disorder and medical/surgical provider categories. Relevant data for
NQTLs related to network composition could also include median in-
network reimbursement rates for services with the same CPT codes, as
well as median in-network reimbursement rates for inpatient mental
health and substance use disorder benefits and medical/surgical
benefits, as compared to Medicare rates; and median in-network
reimbursement rates for outpatient mental health and substance use
[[Page 77613]]
disorder benefits, and medical/surgical benefits, as compared to
Medicare rates.
The Departments have the authority to request data--in addition to
what a plan or issuer determines to be relevant data for any particular
NQTL and includes in its comparative analyses--to sufficiently analyze
the plan's or issuer's assertions, pursuant to the applicable
enforcement statutes and as permitted by the amendments made by the
CAA, 2021 to the Code, ERISA, and the PHS Act.\80\ Similarly, nothing
in these final rules would prohibit an applicable State authority from
requesting additional data with regard to an issuer's comparative
analysis. Accordingly, plans and issuers may be required to take
reasonable action if the additional data requested by the Departments
or an applicable State authority reveal material differences in access
to mental health and substance use disorder benefits as compared to
medical/surgical benefits.
---------------------------------------------------------------------------
\80\ See Code section 9812(a)(8)(B)(ii), ERISA sections 504 and
712(a)(8)(B)(ii), and PHS Act sections 2723 and 2726(a)(8)(B)(ii).
---------------------------------------------------------------------------
The Departments understand that many plans and issuers rely on TPAs
and other service providers to administer a group health plan or health
insurance coverage and acknowledge that several commenters highlighted
the difficulty plans and issuers sometimes face obtaining the necessary
information from their service providers to perform and document their
comparative analyses. However, other commenters highlighted categories
of data that TPAs and other service providers are able to provide for
purposes of the relevant data evaluation requirements. Plans and
issuers remain responsible for compliance with MHPAEA, and for ERISA-
covered group health plans, fiduciaries, including TPAs or other
service providers who are acting as fiduciaries, must work with plan
sponsors and issuers to ensure that the plans and coverage they help
establish and administer comply with the law. In the preamble to the
proposed rules, the Departments highlighted that, under ERISA, TPAs may
be fiduciaries with respect to private sector, employment-based group
health plans. To the extent these TPAs are fiduciaries for those 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 also noted their commitment to using
all available authority to ensure compliance by plans and issuers with
MHPAEA and requested specific 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.
Some commenters requested that the Departments require that plan
sponsors include MHPAEA compliance provisions in their contracts with
TPAs, likening such a requirement to actions taken by HHS to require
that covered entities include provisions in their contracts with
outside entities related to obligations under the Health Insurance
Portability and Accountability Act (HIPAA) Privacy Rule. Others
suggested focusing on compliance at the service provider level and
working with Congress to obtain the ability to issue civil monetary
penalties for violations of MHPAEA.
The Departments decline to make any changes in these final rules to
specifically address these issues after consideration of the
suggestions contained in the comments. These proposals, including
requiring the inclusion of contracting provisions similar to HIPAA
``business associate agreements,'' would go beyond the scope of this
rulemaking. However, these types of contract provisions are a best
practice that could be helpful to many plans and issuers in complying
with their obligations to perform and document comparative analyses of
NQTLs applied to mental health or substance use disorder benefits and
medical/surgical benefits.
Additionally, DOL also underscores its commitment to holding
fiduciaries of ERISA-covered group health plans liable through existing
means and working with all relevant entities, including service
providers, to effectuate MHPAEA compliance. DOL remains committed to
its current enforcement approach, which prioritizes potential
violations that affect not just one plan or coverage, but hundreds or
thousands of plans that provide coverage for thousands or millions of
individuals. Where NQTL violations are identified in a plan or
coverage, DOL generally examines the role that each of the plan's or
issuer's service providers have in the design and administration of
each NQTL to ascertain whether any of the service providers play a
similar role serving other plans or issuers that might have the same
violations, and seeks to bring them into compliance. Where necessary,
DOL determines who is a fiduciary under ERISA and what additional
enforcement actions are necessary. DOL notes that determinations of
fiduciary liability are often based on the facts and circumstances
specific to individual cases, but to the extent a TPA exercises
discretionary authority or discretionary responsibility in the
administration of an ERISA-covered health plan, DOL generally considers
them to be fiduciaries.\81\
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\81\ ERISA section 3(21)(A). See, e.g., Mertens v. Hewitt
Assocs., 508 U.S. 248, 262 (1993) (stating that a fiduciary is
defined ``not in terms of formal trusteeship, but in functional
terms of control and authority over the plan''); Hamilton v. Allen-
Bradley Co., Inc. 244 F.3d 819, 824 (11th Cir. 2001) (stating a
person is a fiduciary ``to the extent'' that ``he has any
discretionary authority or discretionary responsibility in the
administration of such plan'').
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The Departments acknowledge both the challenges, cost, and
complexity of collecting and evaluating data and the importance of data
to measure the impact of an NQTL on access. The Departments also
understand the importance of performing and documenting comparative
analyses consistent with the statute. Therefore, these final rules
provide additional provisions on how to comply with the relevant data
evaluation requirements for an NQTL newly imposed by a plan or issuer
or an NQTL where no data exist that can reasonably assess any relevant
impact of the NQTL on access. A rule of construction at 26 CFR 54.9812-
1(c)(4)(iii)(A)(3)(iii), 29 CFR 2590.712(c)(4)(iii)(A)(3)(iii), and 45
CFR 146.136(c)(4)(iii)(A)(3)(iii) in these final rules explains that
the provisions of these final rules with respect to these types of
NQTLs shall only apply in very limited circumstances and, where
applicable, shall be construed narrowly, consistent with the
fundamental purpose of MHPAEA. The Departments are of the view that
relevant data can be collected and evaluated for nearly all NQTLs, and
note that, when designing a new NQTL, or making changes to an existing
NQTL, plans and issuers must consider what data is relevant and how it
will be collected and evaluated.
The Departments recognize that there may be a lag between when an
NQTL is newly designed and applied and when relevant data are available
if there are no data available initially to assess the NQTL's impact on
access to mental health and substance use disorder benefits and
medical/surgical benefits. Under these final rules, if a plan or issuer
newly imposes an NQTL (including because the plan or coverage itself is
newly offered) for which data are initially and temporarily
unavailable, and the plan or issuer therefore cannot comply with the
relevant data evaluation requirements for the NQTL, a plan or issuer
must include in its comparative analysis a detailed explanation of the
lack of relevant data, the basis for the plan's or
[[Page 77614]]
issuer's conclusion that there is a lack of relevant data, and when and
how the data will become available and be collected and analyzed.
Additionally, the plan or issuer must comply with the relevant data
evaluation requirements as soon as practicable once relevant data
becomes available. These additional provisions are intended to be
applicable only in very limited circumstances where a plan or issuer
newly imposes an NQTL for which no relevant data is available for a
limited time after it is first imposed, and will not be available for a
new NQTL where data is available but not evaluated due to lack of
collection. The Departments note that a change in an NQTL's design or
application is generally not considered a new NQTL for which there is
no data initially available. In the very limited situations where a
data lag exists for a new NQTL, the Departments expect a plan or issuer
to comply with the relevant data evaluation requirements and include
data in its comparative analyses within a limited amount of time (as
soon as practicable, but no later than the end of the second plan year
that follows the imposition of a new NQTL).
These final rules also acknowledge that some limited circumstances
may exist in which no data exists that can reasonably assess any
relevant impact of an NQTL on access to mental health and substance use
disorder benefits as compared to medical/surgical benefits. Such NQTLs
might include, in certain circumstances, for example, some exclusions
based on whether a treatment is experimental or investigative. As
commenters have highlighted, these NQTLs are not generally attached to
claims, so plans and issuers may not have reliable data on the impact
of these excluded services with respect to participants and
beneficiaries. In the limited circumstances where no relevant data
exist relating to an NQTL, these final rules require the plan or issuer
to include in its comparative analysis a reasoned justification as to
the basis for its conclusion that there are no data that can reasonably
assess the NQTL's impact, why the nature of the NQTL prevents the plan
or issuer from reasonably measuring its impact, an explanation of what
data was considered and rejected, and documentation of any additional
safeguards or protocols used to ensure that the NQTL complies with
MHPAEA. A plan or issuer also must comply with the relevant data
evaluation requirements as soon as practicable if the plan or issuer
becomes aware (or reasonably should become aware) of data that can
reasonably assess any relevant impact of the NQTL.
The Departments also note that the unavailability of data for
purposes of the relevant data evaluation requirements of these final
rules does not affect the plan's or issuer's obligation to comply with
the design and application requirements.
Material Differences in Access
Under the proposed rules, to the extent the relevant data evaluated
show 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 has violated the proposed no more restrictive requirements or
the design and application requirements. In such instances, the
proposed rules would require plans and issuers to take reasonable
action to address the material differences in access as necessary to
ensure compliance, in operation, with the proposed no more restrictive
requirement and design and application requirements, and document the
action that has been or is being taken by the plan or issuer to address
any material differences in access to mental health and substance use
disorder benefits as compared to medical/surgical benefits. The
Departments stated in the preamble to the proposed rules that material
differences alone would not automatically result in a finding of
noncompliance, except where related to network composition, as
discussed in more detail later in this preamble.
Some commenters supported the proposal that material differences in
access would constitute a strong indicator of noncompliance, stating
that such approach is a reasonable method to identify potential
instances of noncompliance while allowing for instances where
disparities in access are due to factors beyond the plan's or issuer's
control. Several commenters opposed the proposal that material
differences would constitute a strong indicator of noncompliance,
stating that this would be inconsistent with the Departments' previous
statements in the 2020 MHPAEA Self-Compliance Tool that negative
outcomes data is a red flag, but not determinative of compliance. One
commenter stressed that it was important to provide clarity on how the
Departments would impose this standard.
Several commenters requested that the Departments define the term
``material differences,'' and many commenters provided suggested
meanings for the term. A number of commenters requested that the term
be defined as a serious or significant variation, or one that would
have a major effect on access to care. One commenter suggested that the
definition of material differences should set a high standard to
identify clear outliers and major differences in access rather than
moderate variations. Some commenters stated that any definition of
material differences in access should be based only on statistical
significance. One commenter suggested a 10-percent difference as the
definition of a material difference. Other commenters requested that
the Departments adopt a ``de minimis'' standard, rather than a material
differences in access standard. Additionally, some commenters suggested
that material differences in access should mean that a substantial
number of members could not access mental health and substance use
disorder benefits. Several other commenters suggested that material
differences be defined to allow an acceptable level of difference in
access to mental health and substance use disorder benefits as compared
to medical/surgical benefits, accounting for participant behavior as a
driver of accessibility, with consideration of data credibility and the
amount of available data. Another commenter highlighted that relevant
factors should include the size of the data pool, variability over
time, availability of complementary measures, and the degree of
control.
Some commenters suggested that differences in data outcomes might
result from a wide variety of reasons that do not indicate
noncompliance, including random variability, provider or member
behavior, changes to unrelated Federal or State laws, or other factors
that are outside of the plan's or issuer's control. One commenter
requested that plans and issuers be permitted to take into account
relevant context (for example, there are many more drugs that are
considered medical/surgical benefits than mental health and substance
use disorder benefits, so the percentage of mental health and substance
use disorder drugs to which NQTLs apply may be higher).
The Departments are finalizing language specifying that, to the
extent the relevant data evaluated suggest that the NQTL contributes to
material differences in access to mental health and substance use
disorder benefits as compared to medical/surgical benefits in a
classification, such differences will be considered a strong indicator
that the plan or issuer is in violation of MHPAEA. The material
differences standard reflects an interpretation of the
[[Page 77615]]
statutory terms ``substantially all'' and ``predominant'' in a manner
that takes into account the multifaceted nature of NQTLs, as well as
the complexity of analyzing such NQTLs. The material differences
standard is intended to set forth a principle-based approach to
determining whether relevant data suggest that an NQTL applied to
mental health or substance use disorder benefits is more restrictive
than the predominant NQTL applied to substantially all medical/surgical
benefits in a classification. The standard also allows plans and
issuers, when applying an outcomes-based analysis, the flexibility to
assess comparability in a way that can be tailored to a variety of
different types of NQTLs, and to account for outliers or claims
experience that may not be reflective of a difference in access
resulting from the NQTL itself.
The Departments emphasize that the material differences standard
works together with the other requirements contained in these final
rules. A plan or issuer cannot determine whether an NQTL applied to
mental health or substance use disorder benefits is more restrictive
than the predominant NQTL applied to substantially all medical/surgical
benefits without evaluating the effect of imposing the NQTL on access
to mental health and substance use disorder benefits as compared to
medical/surgical benefits. Additionally, when the plan or issuer knows
or should know that one or more of its NQTLs is contributing to
material differences in access, it cannot simply disregard or avoid
ascertaining that information, and continue its current practices, but
instead must act consistent with its obligation to ensure that NQTLs
applied to mental health and substance use disorder benefits generally
are no more restrictive than those applied to medical/surgical
benefits.
While the preamble to the 2013 final regulations stated that
``[d]isparate results alone do not mean that the NQTLs in use do not
comply with these requirements,'' \82\ the Departments have
consistently stressed in subregulatory guidance that disparate results
are a red flag or a warning sign of noncompliance, including in the
2020 MHPAEA Self-Compliance Tool, which states that ``. . . while
outcomes are not determinative of a MHPAEA violation, they can often
serve as red flags or warning signs to alert the plan or issuer that a
particular provision may warrant further review.'' \83\ The experience
of the Departments in enforcing MHPAEA, moreover, has shown that plans
and issuers are commonly unprepared to explain material differences in
outcomes data, and in some cases, have mistakenly considered the 2013
final regulations as granting freedom to ignore potentially problematic
or significant differences, even where such differences appear to have
a direct causal link to the plan's practices and limitations.
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\82\ 78 FR 68240, 68245 (Nov. 13, 2013).
\83\ Final FAQs About Mental Health and Substance Use Disorder
Parity Implementation and the 21st Century Cures Act Part 39, Q 7
(Sept. 5, 2019), 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); EBSA, Self-
Compliance Tool for the Mental Health Parity and Addiction Equity
Act (MHPAEA) (2020), pg. 27, https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
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These final rules, as discussed later in this preamble, make clear
that plans and issuers must consider whether such material differences
exist, and whether the differences are attributable to the NQTL. In
instances where the relevant data suggest that the NQTL contributes to
material differences, these final rules require plans and issuers to
take reasonable action, as necessary, to address the material
differences and to document that such action has or will be taken to
ensure compliance, in operation, with the requirements for NQTLs under
these final rules.
This increased emphasis on outcomes data and the material
differences standard will help ensure that more restrictive NQTLs are
not imposed on mental health and substance use disorder benefits as
compared to the predominant NQTLs applied to substantially all medical/
surgical benefits in the same classification by identifying when an
NQTL results in differences in access that are likely to have a
negative impact on access to mental health or substance use disorder
benefits as compared to medical/surgical benefits. This standard
generally would not include a de minimis difference in access or a
difference driven by an outlier, such as a single plan participant's
claims experience or a single claim. The Departments also note that the
existence of material differences in access do not automatically result
in a finding of noncompliance, and that plans and issuers will continue
to have the opportunity provide additional information as part of the
NQTL comparative analysis process, as well as to respond to the
Departments in any enforcement actions, by submitting additional data,
the sources of the data, explanatory material, related documents,
evidence of reasonable actions that have been or are being taken by the
plan or issuer to address such differences, and other material and
information to demonstrate compliance with MHPAEA.
The Departments acknowledge comments from plans and issuers asking
for guidance on how to determine whether a difference is material for
purposes of the relevant data evaluation requirements, as well as those
asking for a principle-based approach rather than specific thresholds
for each outcome measure, because what is material will likely vary by
NQTL, market, plan, and benefit classification for each item or
service, as well as the number of participants and beneficiaries
affected. In these final rules, the Departments set forth a standard
that takes into account the range of commenters' suggestions and
incorporates them into a single standard, while helping to ensure that
participants' and beneficiaries' access to mental health and substance
use disorder benefits is in parity with their access to medical/
surgical benefits.
Specifically, under these final rules, relevant data are considered
to suggest that the NQTL contributes to material differences in access
to mental health or substance use disorder benefits as compared to
medical/surgical benefits if, based on all relevant facts and
circumstances, and taking into account specific considerations,\84\ the
difference in the data suggests that the NQTL is likely to have a
negative impact on access to mental health or substance use disorder
benefits as compared to medical/surgical benefits. For this purpose,
these final rules specify that relevant facts and circumstances may
include, but are not limited to, the terms of the NQTL at issue, the
quality or limitations of the data, causal explanations and analyses,
evidence as to the recurring or non-recurring nature of the results,
and the magnitude of any disparities. The Departments note that plans
and issuers may consider other
[[Page 77616]]
relevant facts and circumstances that are not specifically listed in
these final rules, as appropriate, and that differences in access to
mental health or substance use disorder benefits attributable to
independent professional medical or clinical standards or fraud and
abuse measures are not considered to be material, as discussed later in
this preamble.
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\84\ The considerations outlined in these final rules refer to
differences in access to mental health or substance use disorder
benefits attributable to generally recognized independent
professional medical or clinical standards or carefully
circumscribed measures reasonably and appropriately designed to
detect or prevent and prove fraud and abuse that minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits. See 26 CFR 54.9812-1(c)(4)(iii)(B)(2)(ii), 29
CFR 2590.712(c)(4)(iii)(B)(2)(ii), and 45 CFR
146.136(c)(4)(iii)(B)(2)(ii). Differences solely attributable to
such standards or measures are not treated as material differences
for purposes of these final rules.
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The Departments are of the view that the quality or limitations of
the relevant data are a key consideration in determining whether a
difference in the data suggests that an NQTL contributes to a material
difference in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits. As discussed earlier
in this preamble, the Departments acknowledge the difficulty some plans
and issuers may face in obtaining the necessary information, including
data, from their service providers to perform and document their
comparative analyses. The Departments are also aware that plans and
issuers might not have direct control over the quality of the data they
receive from a service provider. Despite this, the Departments do not
intend for this consideration to create a loophole that allows plans
and issuers to avoid determining materiality when evaluating
differences in relevant data. Rather, the Departments expect plans and
issuers to consider the quality and limitations of any available
relevant data as just one of multiple potential facts and circumstances
when assessing the impact of an NQTL on access to mental health and
substance use disorder benefits and medical/surgical benefits.
When considering causal explanations and analyses in determining
whether a difference in the data suggests that an NQTL contributes to a
material difference in access, plans and issuers should consider
whether they are attributable to the NQTL, instead of being
attributable to other factors or considerations. As discussed in more
detail later in this preamble, a plan's or issuer's comparative
analysis for an NQTL applicable to mental health and substance use
disorder benefits and medical/surgical benefits must include a
discussion of the actions that have been or are being taken by the plan
or issuer to address any material differences in access. This
discussion must include, as applicable, a reasoned explanation of any
considerations beyond a plan's or issuer's control that contribute to
the existence of material differences in access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits, including those that result in the persistence of such
material differences despite reasonable actions that have been or are
being taken to address such differences by the plan or issuer.
For example, if a plan or issuer identifies, based on reliably
established indicia of fraud and abuse, that a particular provider or
facility has submitted fraudulent claims for mental health or substance
use disorder benefits, resulting in a higher percentage of denials of
claims for mental health or substance use disorder benefits than for
medical/surgical benefits in the same classification, the evidence of
fraud and abuse could be considered part of the relevant facts and
circumstances for purposes of determining whether a material difference
in access exists. Further, if a material difference in access exists,
the evidence of fraud and abuse could also be considered part of the
relevant facts and circumstances for purposes of determining whether
the difference is attributable to the NQTL. In such a case, the plan or
issuer might reasonably conclude that the difference in outcomes is
attributable to higher underlying levels of fraud for mental health and
substance use disorder benefits than for medical/surgical benefits in
the same classification (with the commission of the fraud being a
circumstance that is beyond the plan's or issuer's control), rather
than the application of a more restrictive NQTL to mental health or
substance use disorder benefits. As explained later in this preamble,
under these final rules, the plan or issuer must include in its
comparative analysis a reasoned explanation of the reliably established
indicia of fraud and abuse beyond the plan's or issuer's control that
contribute to the existence of material differences in access to mental
health or substance use disorder benefits as compared to medical/
surgical benefits.
The Departments note that a difference in access to mental health
or substance use disorder benefits as compared to medical/surgical
benefits that is driven by an outlier, such as a single plan
participant's claims experience or a single claim, will generally not
be considered material for this purpose because the nature of the
results of the evaluation of relevant data would not be considered
recurring. Therefore, such a difference would not trigger the
requirement to take reasonable action, as necessary, under these final
rules.
In the preamble to the proposed rules, the Departments solicited
comments on whether materiality should be defined in terms of the
results of statistical testing and requested feedback from interested
parties on the optimal method for assembling data and statistical
analysis. As highlighted earlier in this preamble, commenters requested
that the definition of material differences account for statistically
significant differences, and take into account the amount of available
data, while also excluding differences related to random variability.
The Departments are of the view that plans and issuers can explain in
their comparative analyses whether differences are or are not
statistically significant and why, based on the relevant facts and
circumstances, such differences are determined to be or not to be
material. However, the Departments also recognize that statistical
significance might not always be appropriate to consider, and that
there would be challenges with requiring plans and issuers to use a
statistical analysis in determining whether material differences in
access exist for all NQTLs, as well as whether and how those
differences are attributable to the NQTL or NQTLs in question.\85\
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\85\ The Departments also recognize that smaller plans may have
limited relevant data to evaluate, which could result in the plan
not having sufficient data to identify statistically significant
differences in the data. The Departments note that, because these
final rules do not require that a difference be statistically
significant to constitute a material difference, small sample size
does not amount to circumstances under which the provisions in 26
CFR 54.9812-1(c)(4)(iii)(A)(3), 29 CFR 2590.712(c)(4)(iii)(A)(3),
and 45 CFR 146.136(c)(4)(iii)(A)(3) would apply.
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Plans and issuers should carefully consider the magnitude of any
negative impact on access to mental health or substance use disorder
benefits as compared to medical/surgical benefits and whether the
relevant data therefore suggest an NQTL contributes to a material
difference in access that might require the plan or issuer to take
reasonable action, as necessary, to ensure compliance, in operation,
with the requirements for NQTLs under these final rules. As noted
earlier in this preamble, a difference in access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits that is de minimis will not be considered material for
purposes of the relevant data evaluation requirements. The size of any
negative impact on access, even if small, is part of the relevant facts
and circumstances that could determine whether a disparity in access is
material. These final rules do not require a plan or issuer to obtain a
statistical, actuarial, or other equivalent opinion to support a
conclusion as to whether a difference in access demonstrated by
relevant data is material, based on the relevant facts and
[[Page 77617]]
circumstances. However, a plan or issuer may obtain such an opinion,
and if relying on it as part of performing its comparative analysis,
the plan or issuer should document the relevance of that opinion to the
conclusion that a difference in data suggests or does not suggest
material difference in access, as part of the comparative analysis. For
plans and issuers that do use such an opinion to support a conclusion
as to the materiality of differences in access, the Departments would
expect these opinions or determinations to be made by a qualified and,
if applicable, licensed or otherwise accredited individual or
organization. Additionally, the individual's or organization's
qualifications must be documented as part of the comparative analysis,
along with a description of the extent to which the plan or issuer
ultimately relied upon the individual's or organization's evaluation in
performing and documenting the comparative analysis of the design and
application of the NQTL, as discussed in more detail later in this
preamble. The Departments note that a statistical, actuarial, or other
equivalent opinion obtained by a plan or issuer to support a conclusion
as to whether a difference in access based on relevant data is or is
not material is not dispositive simply because it is made by a
qualified, licensed or otherwise accredited individual or organization.
In the course of enforcement, the Departments and applicable State
authorities may review and assess the validity of the assertions, and
the factors upon which such assertions are based, contained in such an
opinion, as well as a plan's or issuer's determination as to whether
any particular difference in access to mental health or substance use
disorder benefits as compared to medical/surgical benefits is or is not
material.
In these final rules, the Departments decline to finalize the
proposed exception to the relevant data evaluation requirements for
independent professional medical or clinical standards, as discussed
later in this preamble. The Departments are of the view that plans and
issuers that impose NQTLs that utilize such standards as the basis for,
or as, factors or evidentiary standards, should collect and evaluate
relevant data, to determine the impact of NQTLs developed or applied
using these standards on access to mental health and substance use
disorder benefits as compared to medical/surgical benefits. However,
reliance on such standards can improve care and health outcomes for
participants and beneficiaries. The Departments also recognize that
clinical differences between mental health conditions, substance use
disorders, medical conditions, and surgical procedures may sometimes
drive apparent differences in data outcomes, even where plans and
issuers rely on independent professional medical or clinical standards.
Therefore, under these final rules, differences in access to mental
health or substance use disorder benefits attributable to generally
recognized independent professional medical or clinical standards that
are used as the basis for a factor or evidentiary standard used to
design or apply an NQTL are not considered to be material. To the
extent a plan or issuer attributes any differences in access to the
application of such standards, the plan or issuer must explain its
bases for that conclusion in the plan's or issuer's comparative
analysis, as discussed later in this preamble.
The Departments did not propose that NQTLs related to fraud, waste,
and abuse measures would be excepted from the relevant data evaluation
requirements. However, as discussed earlier in this preamble, reliably
established indicia of fraud and abuse could, if appropriate, be
considered relevant facts and circumstances taken into account by a
plan or issuer when determining whether a difference in access is
material. Indicia of fraud and abuse could also be relevant in
determining whether a material difference in access is attributable to
an NQTL or, instead, is attributable to the use of fraud and abuse
measures. Therefore, under these final rules, a difference in access to
mental health or substance use disorder benefits attributable to
carefully circumscribed measures reasonably and appropriately designed
to detect or prevent and prove fraud and abuse that minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits are not considered to be material. As discussed
later in this preamble, in such a case, a plan's or issuer's
comparative analysis must provide a thorough and reasoned explanation
that indicia for fraud and abuse have been reliably established through
objective and unbiased data, and that such measures are narrowly
designed to minimize the negative impact on access to appropriate
mental health and substance use disorder benefits as compared to
medical/surgical benefits in the same classification.
Reasonable Action, as Necessary, To Address Material Differences in
Access
The proposed rules provided that 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 the proposed no
more restrictive requirement and design and application requirements.
The preamble to the proposed rules noted that whether any particular
action would be considered reasonable in response to any 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 proposed that, in addition to taking
reasonable action to address material differences, a plan or issuer
would also be required to document in its comparative analyses any such
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. The Departments noted in the preamble to the proposed rules
that plans and issuers could use this documentation to explain why
material differences demonstrated by the relevant outcomes data should
not be considered a violation of the rules for NQTLs (other than NQTLs
related to network composition) and solicited comments on what
additional information is necessary to clarify what would constitute
reasonable action in response to relevant data that reveal material
differences in access.
Several commenters supported the requirement to take reasonable
action in response to relevant data that reveals material differences
in access. Some commenters suggested that ``reasonable action'' should
be defined and should mean actions, including, but not limited to,
internal reforms and modifications or elimination of the NQTL to
resolve the material differences. One commenter stated that requiring
reasonable action where there is no violation of the law and without an
opportunity to explain why material differences in access may not in
fact be a violation of MHPAEA is arbitrary and capricious and goes
beyond the authority of the Departments. Therefore, the commenter noted
reasonable action should be
[[Page 77618]]
required only after an opportunity to rebut a presumption of
noncompliance.
Under these final rules, when a plan or issuer knows or reasonably
should know that NQTLs may be contributing to material differences in
access, it must take reasonable action, as necessary, to ensure
compliance, in operation, with the requirements for NQTLs under these
final rules. The standard is not focused on inconsequential
differences, but rather only on those that are material, meaning those
that are likely to have a negative impact on access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits. If a plan or issuer is aware of information that suggests a
potential violation of MHPAEA, the statute requires the plan or issuer
to address such potential violations as necessary to satisfy its
obligation to ensure that the NQTLs comply with the substantive
requirements of the statute,\86\ and to be able to continue to impose
the NQTL. The requirement to take reasonable action, as necessary,
where material differences in access exist is consistent with the
statutory requirement that plans and issuers ensure that treatment
limitations (including NQTLs) applicable to mental health or substance
use disorder benefits are no more restrictive than the predominant
treatment limitations applied to substantially all medical/surgical
benefits. If the relevant data suggest that an NQTL contributes to
material differences in access, a plan or issuer generally is not able
to ensure compliance with MHPAEA, in operation, unless the plan or
issuer takes action that is reasonably designed to try to close the gap
and address those differences.
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\86\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and
PHS Act section 2726(a)(3)(A).
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The proposed rules would have required plans and issuers to take
reasonable action to address material differences in access as
necessary to ensure compliance, in operation, with the proposed no more
restrictive requirement and design and application requirements.
However, as discussed earlier in this preamble, these final rules do
not retain the proposed mathematical substantially all and predominant
tests and instead retain language that incorporates the statutory
requirements of Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A),
and PHS Act section 2726(a)(3)(A), as the general rule for NQTLs.
Therefore, these final rules make technical changes to replace the
cross-references in the material differences standard to the proposed
no more restrictive requirement and design and application
requirements, and replace them with a cross-reference to the general
rule for NQTLs.
The Departments acknowledge commenters' requests for guidance on
what constitutes reasonable action for this purpose. The Departments
anticipate that, in many cases, the reasonable actions that plans and
issuers might take, as necessary, to address material differences in
access will be similar to actions they might have taken independent of
the requirements contained in these final rules. For example, some
plans and issuers may already take certain action in response to
changes in demand for services, needs of patients, or requests from
plan sponsors, which could be considered reasonable action for this
purpose, depending on the relevant facts and circumstances. Commenters
highlighted that, since the enactment of MHPAEA, plans and issuers have
increased spending and raised reimbursement rates for mental health and
substance use disorder services, and invested in programs to help
members identify mental health and substance use disorder care needs
and to connect them to the appropriate services as early as possible.
Commenters also highlighted that plans and issuers have also developed
mental health assessment screening tools for youth populations to
detect those at risk. Depending on the facts and circumstances, all of
these actions could be examples of reasonable actions that plans and
issuers can take, as necessary, where the relevant data suggest that an
NQTL contributes to material differences, as required under these final
rules. However, plans and issuers will ultimately be responsible for
assessing the nature of a material difference in access to determine
what reasonable action should be taken, as necessary, to address those
differences.
In addition, a plan or issuer must document the actions that have
been or are being taken in the plan's or issuer's comparative analysis
and include a reasoned explanation of any material differences in
access that persist despite reasonable actions that have been or are
being taken. For a plan or issuer designing and applying one or more
NQTLs related to network composition standards, the comparative
analysis must include a discussion of the actions that have been or are
being taken to address material differences in access to in-network
mental health and substance use disorder benefits as compared to in-
network medical/surgical benefits.
Special Rule for NQTLs Related to Network Composition
In the preamble to the proposed rules, the Departments noted a
growing disparity between in-network reimbursement rates for mental
health and substance use disorder providers and medical/surgical
providers, as well 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. The Departments also
expressed their specific concerns about standards related to network
composition and other related NQTLs, because these standards are
critical to ensuring parity in access to mental health and substance
use disorder benefits for participants and beneficiaries. Therefore,
the Departments included in the proposed rules a requirement that, in
addition to the relevant data required for all NQTLs, plans and issuers
would also be required to collect and evaluate relevant data for NQTLs
related to network composition. For this purpose, the proposed rules
stated that network composition NQTLs 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. Under the proposed special rule, when designing and applying
one or more NQTLs related to network composition standards, a plan or
issuer would fail to meet the requirements of the proposed no more
restrictive requirement and design and application requirements, 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. This
standard proposed to set a higher bar for NQTLs related to network
composition than for other NQTLs by treating material differences in
access to in-network mental health or substance use disorder benefits
as compared to in-network medical/surgical benefits as a failure to
meet the requirements of MHPAEA, instead of as a strong indicator of a
violation of MHPAEA.
The Departments proposed that plans and issuers be required to take
action to
[[Page 77619]]
address material differences in access for NQTLs related to network
composition or no longer impose the relevant NQTLs to avoid a violation
of MHPAEA. Examples of such actions listed by the Departments in the
preamble to the proposed rules for NQTLs related to network composition
include ensuring that plans and issuers 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 plan's or issuer's 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 also recognized that shortages of mental health and
substance use disorder providers could pose challenges to issuers,
plans, and their service providers. The preamble to the proposed rules
noted that, if, despite taking appropriate action, relevant data
collected and evaluated for NQTLs related to network composition
continue to reveal material differences due to, for example, 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 the proposed relevant data evaluation
requirements with respect to NQTLs related to network composition if
the plan or issuer otherwise complied with other applicable MHPAEA
requirements. However, the Departments noted that plans and issuers
should be prepared 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.
Several commenters supported the special rule for NQTLs related to
network composition, stating that it would address significant barriers
to accessing mental health and substance use disorder services, and
requested that the heightened requirement for such NQTLs be maintained
in the final rules. Some commenters questioned the justification for
treating standards for network composition differently than all other
NQTLs. Several commenters stated that the Departments misrepresented
several of the key studies they relied on to support the proposed
special rule. Some commenters highlighted that analyzing outcomes data
related to network composition is a long-recognized and widely accepted
tool in population health management but stated that the proposed rules
would turn this tool into a compliance standard that would be virtually
impossible to satisfy. One commenter highlighted that MHPAEA requires
equity in treatment, not equity in outcomes, and that the special rule
would go beyond what is required by statute, as well as the
Departments' own admission that parity across mental health and
substance use disorder and medical/surgical networks does not
necessarily mean an equal number of providers in a classification.
Another commenter stressed that the special rule was inappropriate
without clarity about what the definition of a material difference
would be. This commenter stated that the Departments should finalize,
following additional public comment, an NQTL definition, a specific set
of measures with technical specifications, and a benchmark for what
they will consider to be ``material difference'' for each NQTL type.
Other commenters suggested that the Departments not finalize this
proposed provision.
Some commenters noted that there can be many reasons why outcomes
might be different for mental health and substance use disorder
benefits than medical/surgical benefits when evaluating relevant data,
particularly with respect to network composition. Some of these
commenters highlighted reasons that are outside the control of plans
and issuers, such as shortages of mental health and substance use
disorder providers or specialists. Some commenters requested that the
final rules address situations where material differences in access are
due to a lack of mental health and substance use disorder providers,
while other commenters stated that general citations to provider
shortages as the only cause of material differences in access should be
rejected as inadequate, especially without evidence that those
shortages drove disparities, rather than plan or issuer choices. One
commenter argued that plans and issuers should have the opportunity to
address any apparent gaps in network access and explain long-term
initiatives to address those gaps.
Several commenters expressed concern that the special rule as
proposed would have adverse consequences for patient outcomes and
safety because it would encourage plans and issuers to accept lower
quality providers into their networks. One commenter noted that
behavioral health care is commonly provided by primary care providers,
and without including those providers in relevant data, a significant
percentage of mental health treatment would not be captured when
determining whether material differences in access exist. Other
commenters expressed the importance of taking into account telehealth
providers when analyzing relevant data for purposes of NQTLs related to
network composition.
The Departments acknowledge the concerns raised by commenters on
this aspect of the proposed rules; namely, the fact that a variety of
metrics could be consulted as a plan or issuer evaluates its parity
compliance regarding NQTLs related to network composition, and that
parity for mental health and substance use disorder benefits as
compared to medical/surgical benefits does not necessarily mean an
equal number of mental health or substance use disorder and medical/
surgical network providers. The Departments also understand the value
of a consistent approach with regard to all NQTLs, while recognizing
the impact of NQTLs related to network composition on access to care.
Additionally, the Departments acknowledge the questions some commenters
raised requesting more specific details on how to account for material
differences in access for network composition NQTLs, including those
due to provider shortages, which plans and issuers may not be able to
effectively address through no fault of their own despite taking
reasonable action. The Departments also note that certain outcomes
measures, such as high out-of-network utilization for mental health or
substance use disorder benefits as compared to medical/surgical
benefits, may not necessarily represent a per se violation of MHPAEA.
The Departments agree with commenters that it is important to allow
plans and issuers to address apparent gaps in relevant data, and that
it is also important that the regulatory standard for NQTLs related to
network composition is one that plans and issuers are able to satisfy.
However, as stated in the preamble to the proposed rules, the
Departments also recognize that network composition and access to
mental health and substance use disorder benefits are the product of
myriad NQTLs; processes, strategies, evidentiary standards, and other
factors
[[Page 77620]]
used to design and apply NQTLs; and information, evidence, sources, and
standards on which factors and evidentiary standards are based. As a
result, the Departments remain concerned that plans and issuers could
too readily evade their obligations under MHPAEA, if they were not
obligated to diligently collect and evaluate relevant data, perform a
careful analysis to determine whether material differences in access to
mental health and substance use disorder benefits exist as a result of
the cumulative impact of NQTLs related to network composition, and take
reasonable actions that meaningfully address such differences in
access.
After consideration of the comments, the Departments are not
finalizing the proposed special rule for NQTLs related to network
composition, and are instead including language in these final rules to
explain how plans and issuers are expected to comply with the relevant
data evaluation requirements with respect to those NQTLs. Specifically,
these final rules require that a plan or issuer must collect and
evaluate data in a manner reasonably designed to assess the aggregate
impact of all such NQTLs on access to mental health and substance use
disorder benefits and medical/surgical benefits, instead of evaluating
relevant data for each NQTL separately (which is generally required
under these final rules for NQTLs other than those related to network
composition), to determine if there is a material difference in access.
Furthermore, the final rules provide examples of possible actions that
a plan or issuer could take to comply with the requirement to take
reasonable action, as necessary, to address any material differences in
access with respect to network composition NQTLs. While under these
final rules, material differences in access related to network
composition NQTLs are not automatically treated as a violation of
MHPAEA (and instead are treated as a strong indicator of a violation,
the same as all other NQTLs), the Departments emphasize that plans and
issuers must engage in, and document in their comparative analyses, all
reasonable actions, as necessary, to address any material differences
in access.
While the approach to material differences for NQTLs related to
network composition is different than that set forth in the proposed
rules, these final rules will achieve the same goal of ensuring access
to mental health and substance use disorder benefits in parity with
access to medical/surgical benefits, by requiring plans and issuers to
take reasonable action, as necessary, to address material differences
in access for in-network mental health and substance use disorder
benefits as compared to in-network medical/surgical benefits.
Furthermore, the approach for NQTLs related to network composition in
these final rules will ensure that participants and beneficiaries are
not subject to NQTLs with respect to mental health and substance use
disorder benefits that are more restrictive than the predominant NQTLs
applied to substantially all medical/surgical benefits under the plan
or coverage.
The Departments stress the importance of the requirement under
these final rules that plans and issuers take reasonable action, as
necessary, where relevant data suggest that NQTLs related to network
composition contribute to a material difference in access to in-network
mental health and substance use disorder benefits as compared to in-
network medical/surgical benefits in a classification, to ensure
compliance with MHPAEA. These final rules provide an illustrative list
of possible actions the Departments expect plans and issuers, working
with their service providers, to take, as necessary, to address any
material differences in access with respect to NQTLs related to network
composition under the relevant data evaluation requirements. This
includes plans and issuers working with their service providers, as
applicable, to strengthen efforts to recruit and encourage a broad
range of available mental health and substance use disorder providers
and facilities to join the plan's or issuer's network of providers,
including taking actions to increase compensation or other inducements,
streamline credentialing processes, or contact providers reimbursed for
items and services provided on an out-of-network basis to offer
participation in the network, and expand the availability of telehealth
arrangements to mitigate overall mental health and substance use
disorder provider shortages in a geographic area. Additionally, plans
and issuers should provide additional outreach and assistance to
participants and beneficiaries enrolled in the plan or coverage to
assist them in finding available in-network mental health and substance
use disorder providers and facilities, and ensure that provider
directories are accurate and reliable (including in accordance with
Code section 9820(a), ERISA section 720(a), PHS Act section 2799A-5(a),
and future implementing regulations and guidance). The Departments also
expect plans and issuers to take other reasonable actions, as
necessary, that are intended to mitigate any material differences (even
if not enumerated in these final rules).
As with other types of NQTLs, these final rules require plans and
issuers to explain in their comparative analyses for NQTLs related to
network composition the circumstances of any material differences in
access and the actions that have been or are being taken to address
these differences. If such actions do not fully resolve the material
differences, a plan or issuer must provide a reasoned explanation in
its comparative analysis of any material differences that persist
despite reasonable actions that have been or are being taken. The
Departments stress that a comparative analysis making only a cursory
reference to provider shortages with little or no explanation of
reasonable actions taken to address material differences in access will
likely result in a finding by the relevant Secretary that the
comparative analysis is insufficient and, without additional
comparative analyses in response to an insufficiency notice or initial
determination of noncompliance from the Secretary, may result in a
final determination of noncompliance. As noted elsewhere in this
preamble, the Departments expect that, if a plan or issuer intends to
rely on an explanation of existing circumstances that cannot
effectively be addressed through reasonable action, the explanation
should include significant detail as to the circumstances resulting in
material differences in access that are outside the plan's or issuer's
control, and a robust discussion of the reasonable actions the plan or
issuer has taken or is taking in an attempt to address such material
differences.
Exception for Independent Professional Medical or Clinical Standards
The proposed rules specified a narrow exception under which plans
and issuers would not be required to comply with the relevant data
evaluation requirements for NQTLs that impartially apply independent
professional medical or clinical standards.\87\ As discussed in the
following section of the preamble to these final rules, the Departments
are not finalizing this proposed exception.
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\87\ The proposed rules did not include a similar exception from
the relevant data evaluation requirements for standards related to
fraud, waste, and abuse.
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e. Independent Professional Medical or Clinical Standards and Fraud and
Abuse Measures
In the preamble to the proposed rules, the Departments acknowledged
that the application of independent professional
[[Page 77621]]
medical or clinical standards and fraud, waste, and abuse measures
generally improve and help to ensure appropriate care for participants
and beneficiaries, rather than restrict access to needed benefits. The
Departments stated that NQTLs that reflect independent professional
medical or clinical standards or guard against fraud, waste, and abuse
(while minimizing the negative impact on access to appropriate
benefits) are premised on standards that generally provide an
independent and less suspect basis for determining access to mental
health and substance use disorder treatment. Accordingly, the
Departments proposed two narrow exceptions; one for NQTLs that
impartially apply independent professional medical or clinical
standards, and one for NQTLs reasonably designed to detect or prevent
and prove fraud, waste, and abuse. Under those proposed exceptions, an
NQTL that, with respect to mental health or substance use disorder
benefits in any classification, impartially applies independent
professional medical or clinical standards (consistent with generally
accepted standards of care) would not be considered under the proposed
rules to violate the proposed no more restrictive requirements, the
prohibition on discriminatory factors and evidentiary standards, and
the relevant data evaluation requirements. An NQTL that applies fraud,
waste, and abuse measures would not be considered under the proposed
rules to violate the proposed no more restrictive requirements or the
prohibition on discriminatory factors and evidentiary standards.
The Departments noted in the preamble to the proposed rules that
they do not intend to interfere with a plan's or issuer's ability to
ensure that coverage for benefits for the treatment of mental health
conditions and substance use disorders is consistent with independent
professional medical or clinical standards or fraud, waste, and abuse
measures. The Departments also recognized that there are instances in
which the application of independent professional medical or clinical
standards or fraud, waste, and abuse measures might result in
differences in the design or application of NQTLs to mental health or
substance use disorder benefits as compared to medical/surgical
benefits due to clinical differences between mental health conditions
and substance use disorders and medical/surgical conditions, as well as
differences in the model of care, in a manner that could otherwise
violate certain aspects of the requirements for NQTLs in the proposed
rules.
Several commenters opposed the proposed exceptions because they
stated that plans and issuers would exploit them to improperly limit
access to mental health and substance use disorder services. Some of
these commenters stated that the Departments lack authority or a legal
basis to implement the proposed exceptions because, in their view, the
statute does not provide authority to establish exceptions to MHPAEA's
requirements. Commenters also stated that the proposed exceptions could
significantly undermine the other provisions of the proposed rules that
would otherwise strengthen MHPAEA protections by creating opportunities
for misuse or exploitation. Conversely, some commenters generally
supported the proposed exceptions, but highlighted ambiguities related
to how the exceptions would operate under the proposed rules to allow
NQTLs to be applied with respect to mental health and substance use
disorder benefits. These commenters also stated that the exceptions may
be too narrow as proposed and that it is unclear how and what a plan or
issuer must demonstrate to confidently rely on the proposed exceptions.
The Departments acknowledge these comments, as well as the comments
received on each of the two proposed exceptions, which are addressed in
more detail in this section of the preamble. After considering the
comments, and for the reasons discussed later in this preamble, the
Departments are not finalizing the proposed exceptions for independent
professional medical or clinical standards or fraud, waste, and abuse
measures, but explain how plans and issuers can account for such
standards and fraud and abuse measures in implementing the provisions
of these final rules.
Exception for Independent Professional Medical or Clinical Standards
To qualify for the exception for independent professional medical
or clinical standards under the proposed rules, an NQTL would have to
impartially apply those standards (consistent with generally accepted
standards of care) to medical/surgical benefits and mental health or
substance use disorder benefits. The NQTL could not deviate from those
standards in any way, such as by modifying or otherwise imposing
additional or different requirements. Under the proposed rules, an NQTL
qualifying for this exception would not be required to satisfy the
proposed no more restrictive requirement or the proposed relevant data
evaluation requirements. In addition, the independent professional
medical or clinical standards would not be considered a discriminatory
factor or evidentiary standard. The Departments noted that, under the
proposed rules, the plan or issuer would still be required to ensure
that such an NQTL complies with the rest of the design and application
requirements. Additionally, the plan or issuer would be required to
perform and document comparative analyses for NQTLs that impartially
apply independent professional medical or clinical standards.
Some commenters stated that the exception for NQTLs that
impartially apply independent professional medical or clinical
standards should not be finalized, because the Departments rejected a
similar exception in previous rulemaking. Specifically, these
commenters highlighted that the Departments included an exception to
the NQTL requirements for ``recognized clinically appropriate standards
of care'' in the 2010 MHPAEA interim final regulations, which was later
deleted in the 2013 final regulations. The preamble to the 2013 final
regulations supported the decision to eliminate the exception by
pointing to commenters' concern about abuse and the use of this
exception by plans and issuers to try to justify stricter application
of NQTLs.\88\ These commenters highlighted that MHPAEA's statutory
standard, as amended by the CAA, 2021 does not contain such exceptions
to the NQTL requirements.
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\88\ 78 FR 68240, 68245 (Nov. 13, 2013).
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Some commenters urged the Departments to not finalize the proposed
exception for NQTLs that impartially apply independent professional
medical or clinical standards and instead require those standards to be
considered as a factor in the NQTL comparative analysis, subject to all
applicable requirements for NQTLs under the proposed rules.
Alternatively, commenters requested that plans and issuers be required
to document in their comparative analyses the ways in which the
clinical standards and practices used to design and apply NQTLs deviate
from independent professional medical or clinical standards, which
should be tied to criteria or guidelines from relevant nonprofit
clinical specialty associations. These commenters also stated that they
support analogous State definitions of ``generally accepted standards
of care'' instead of the proposed ``generally recognized independent
professional
[[Page 77622]]
medical or clinical standards.'' \89\ Additionally, they suggested
support for tying the definition to the criteria or guidelines from the
relevant nonprofit clinical specialty associations.
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\89\ 215 Ill. Comp. Stat. 5/370c, https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=021500050K370c; Cal. Health &
Saf. Code section 1374.72, https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB855; Ga. Code section 33-1-
27 https://www.legis.ga.gov/api/legislation/document/20212022/211212; and N.M. Stat. section 59A-23-22, https://www.nmlegis.gov/Sessions/23%20Regular/final/SB0273.pdf.
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Some commenters highlighted that the proposed exception appears to
presume that there is a single set or ``gold standard'' of independent
professional medical or clinical standards, when in practice, these
standards can vary greatly, and consensus may not always exist for a
particular condition. The commenters noted that medical and clinical
standards are generally designed to guide health care providers and
facilities in determining appropriate care for a given diagnosis or
stage of treatment, not to determine how the standards should best be
utilized for other purposes, so plans and issuers may need to adapt
clinical standards to apply them in the context of health coverage.
Therefore, they stated, it is unclear that the exception for
independent professional medical or clinical standards as proposed
could be relied on by plans and issuers as they design and apply NQTLs
as it is unclear if this necessary adaptation would cause a plan or
issuer to fail to impartially apply such standards.
Other commenters, who generally supported this proposed exception,
stated that they found it to be generally vague and undefined. These
commenters urged the Departments to define more clearly what
constitutes independent professional medical or clinical standards for
purposes of the proposed exception, and many commenters suggested
language for the Departments to consider providing as additional
clarifications. Some commenters noted that to ``apply'' such standards
should be understood to mean to primarily rely on these resources when
developing NQTLs and claimed that these standards lack the precision
and detail necessary for the exception to be useful. Additionally,
commenters requested that the Departments provide examples of standards
that would qualify for the proposed exception and descriptions of their
application.
After considering the comments, the Departments are not finalizing
the exception for independent professional medical or clinical
standards as proposed. In light of the modifications to the
requirements made in the final rules, the Departments agree with
commenters that it is more appropriate for plans and issuers to include
independent professional medical or clinical standards under the
framework of the existing NQTL parity analysis than to provide an
exception from the requirements of the final rules. Therefore, instead
of finalizing the exception, the Departments are instead providing
clarifications for how independent professional medical and clinical
standards will be treated under these final rules. Specifically, NQTLs
that are designed or applied, are based on, or are related to
independent professional medical or clinical standards are subject to
the design and application requirements and the relevant data
evaluation requirements. As noted earlier in this preamble, such
medical or clinical standards are not information, evidence, sources,
or standards that are biased or not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits. Additionally, for purposes of
the relevant data evaluation requirements, differences in access to
mental health or substance use disorder benefits that are attributable
to the use of independent professional medical or clinical standards as
the basis for a factor or evidentiary standard used to design or apply
an NQTL are not considered to be material. To the extent the plan or
issuer attributes any differences in access to the application of such
standards, the plan or issuer must explain the bases for that
conclusion in their comparative analysis.
Exception for Measures To Detect or Prevent and Prove Fraud and Abuse
The Departments also proposed an exception for NQTLs reasonably
designed to detect or prevent and prove fraud, waste, and abuse. To
qualify for the exception under the proposed rules, fraud, waste, and
abuse measures would have to be reasonably designed to detect or
prevent and prove fraud, waste, and abuse, based on indicia that have
been reliably established through objective and unbiased data. The
proposed rules also required that such standards be narrowly designed
to minimize the negative impact on access to appropriate mental health
and substance use disorder benefits. Under the proposed rules, an NQTL
qualifying for this exception would not be required to satisfy the
proposed no more restrictive requirement. In addition, fraud, waste,
and abuse measures would not be considered a discriminatory factor or
evidentiary standard. The Departments noted that, under the proposed
rules, the plan or issuer would still be required to ensure that such
an NQTL complies with the rest of the design and application
requirements. The proposed rules would also apply the relevant data
evaluation requirements to these NQTLs, as the Departments stated that
these tools, while important, are more likely than independent
professional medical or clinical standards to result in NQTLs that may
improperly restrict access to mental health and substance use disorder
benefits because these NQTLs are largely both designed by, and applied
within the control of, the plan or issuer. Additionally, the plan or
issuer would be required to perform and document comparative analyses
for NQTLs that are fraud, waste, and abuse measures.
Many commenters opposed the exception for NQTLs that are fraud,
waste, and abuse measures. Similar to the objections to the exception
for independent professional medical or clinical standards, these
commenters highlighted that MHPAEA's statutory language, as amended by
the CAA, 2021 does not contain exceptions for any NQTLs. These
commenters voiced concern that the two proposed exceptions, together,
could allow plans and issuers to avoid compliance with the strengthened
requirements of MHPAEA set forth in the proposed rules. Commenters
opposing the fraud, waste, and abuse exception generally recommended
that the Departments remove it altogether; however, some commenters
recommended that, if retained, the exception should include stronger
language limiting plans' and issuers' ability to invoke the exception.
These commenters also recommended that the Departments eliminate
references to ``waste,'' as this is arguably targeted by all forms of
utilization management. Commenters requested that, alternatively, plans
and issuers be required to document in their comparative analyses how
their efforts to combat fraud, waste, and abuse comply with MHPAEA
(including as a factor used to design or apply an NQTL).
Other commenters were generally supportive of the exception but
expressed concerns that the Departments would interpret it too
narrowly. They generally recommended that the Departments add
definitional clarity to allow for flexibility and account for the use
of a range of NQTLs that are fraud, waste, and abuse measures and
provide examples. Some commenters also sought clarification
[[Page 77623]]
about the documentation or evidence required for a plan or issuer to
prove its qualification for the exception.
The Departments acknowledge that many NQTLs consider the potential
for fraud, waste, and abuse as a factor in their design and application
and have concluded that it is appropriate for plans and issuers to be
required to treat these types of factors and NQTLs following the same
framework as other NQTLs, subject to all applicable requirements. The
Departments also agree that the term ``waste'' is too broad and could
arguably include all forms of utilization management. Therefore,
instead of finalizing the exception as proposed, the Departments are
providing clarifications on how fraud and abuse measures will be
treated under these final rules. Specifically, NQTLs that are designed
or applied, are based on, or are related to fraud and abuse measures
are subject to the design and application requirements and the relevant
data evaluation requirements. However, for purposes of the prohibition
on discriminatory factors and evidentiary standards, the final rules
provide that fraud and abuse measures are not information, evidence,
sources, or standards that are biased or not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits. Additionally, for purposes of
the relevant data evaluation requirements, a difference in access to
mental health and substance use disorder benefits attributable to the
use of fraud and abuse measures as the basis for a factor or
evidentiary standard used to design or apply an NQTL is not considered
to be material. To the extent that a plan or issuer attributes any
differences in access to the application of such measures, the plan or
issuer must explain the bases for that conclusion in their comparative
analyses.
Requests for Additional Exceptions
Some commenters suggested additional exceptions to the requirements
for NQTLs that the Departments should consider adding to the final
rules. Specifically, some commenters requested an exception for NQTLs
related to the quality and safety of mental health and substance use
disorder services. Similarly, another commenter recommended the
Departments include an exception for practices to ensure high-quality
care, based on the view that the two exceptions (for independent
professional medical or clinical standards and fraud, waste, and abuse
measures) in the proposed rules are not sufficient to curb substandard
and ineffective treatment that does not reach the level of fraud,
waste, and abuse. Other commenters suggested exceptions for compliance
with Federal and State law, an exception to ensure the quality and
safety of mental health and substance use disorder benefits, an
exception to the quantitative testing and discriminatory factor
analysis for Network NQTLs, and an exception for when no outcomes data
are reasonably available.
The Departments have considered whether additional exceptions
beyond those included in the proposed rules should be included in these
final rules. As discussed earlier in this preamble, there are a very
limited number of NQTLs where no data exist that can reasonably assess
the NQTL's impact on access. Such NQTLs might include, for example,
exclusions based on whether the treatment is experimental or
investigative. Therefore, the Departments have provided guidance in
these final rules on how plans and issuers must comply with the
relevant data evaluation requirements for such NQTLs. However, as noted
earlier in this preamble, such plans and issuers must still consider
whether data can be used to reasonably assess the impact of the NQTL on
relevant outcomes related to mental health and substance use disorder
benefits and medical/surgical benefits. Consistent with the reasons
described earlier in this preamble as to why the Departments declined
to finalize the exceptions contained in the proposed rules, these final
rules do not contain any additional exceptions.
f. Effect of Final Determination of Noncompliance--26 CFR 54.9812-
1(c)(4)(v), 29 CFR 2590.712(c)(4)(v), and 45 CFR 146.136(c)(4)(v)
The proposed rules provided that if a plan or issuer receives a
final determination from the relevant Secretary that it is not in
compliance with the comparative analysis requirements with respect to
an NQTL, the NQTL would violate the substantive requirements for
NQTLs,\90\ 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 proposed 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
the 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.
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\90\ See 88 FR 51552, 51579 (Aug. 3, 2023).
---------------------------------------------------------------------------
The Departments noted in the proposed rules that MHPAEA requires
that ``such plan or coverage shall ensure that'' the treatment
limitations comply with the substantive requirements of the
statute.\91\ The Departments also noted that the statute further
requires that the plan or issuer perform and document adequate
comparative analyses for NQTLs to ensure compliance.\92\ Therefore, to
comply with MHPAEA, plans and issuers must comply with both the
substantive MHPAEA requirements and the documentation requirements.
Under the proposed rules, plans and issuers would be required to ensure
both that they are complying with MHPAEA's substantive requirements at
all times an NQTL is imposed with respect to mental health or substance
use disorder benefits, and that they have properly performed and
documented comparative analyses for the NQTLs imposed on mental health
or substance use disorder benefits (regardless of the timing of any
request for such documentation).
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\91\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and
PHS Act section 2726(a)(3)(A).
\92\ Code section 9812(a)(8), ERISA section 712(a)(8), and PHS
Act section 2726(a)(8).
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Under the proposed rules, when a plan or issuer receives a final
determination from the Departments with respect to an NQTL that it has
failed to demonstrate compliance with the NQTL comparative analysis
documentation requirements under proposed 26 CFR 54.9812-2, 29 CFR
2590.712-1, or 45 CFR 146.137, including because the plan or issuer has
not submitted a sufficient comparative analysis to demonstrate
compliance, the failure would be treated 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 acknowledged that immediate cessation of the application of
an NQTL may not be feasible for all NQTLs. Therefore, under the
proposed rules, a determination by the Departments of whether to
require immediate cessation would be based on the evaluation of facts
and
[[Page 77624]]
circumstances involved in the specific violation and nature of the
underlying NQTL. The Departments provided examples of such facts and
circumstances, including 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 needed to cease or modify the NQTL. Additionally, the Departments
noted that this kind of determination would take into account feedback
from the plan or issuer. The Departments provided that 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 solicited comments on this proposed provision,
including whether there are specific challenges or considerations the
Departments should be aware of regarding ceasing application of
particular NQTLs.
Several commenters supported a provision that would give the
Secretaries the ability to direct a plan or issuer to not impose an
NQTL after a final determination of noncompliance and stated that
meaningful consequences are important to incentivize plans and issuers
to comply with MHPAEA. Some commenters urged the Departments to change
the proposed language stating that ``the relevant Secretary may direct
the plan or issuer not to impose the NQTL'' to ``the relevant Secretary
shall direct the plan or issuer not to impose the NQTL'' to indicate
that a plan or issuer will not be permitted to apply a noncompliant
NQTL. Several commenters recommended extending this provision to States
with primary enforcement authority for MHPAEA with respect to issuers.
Some commenters opposed the proposed provision, stating that in their
view there is no legal authority under MHPAEA or the CAA, 2021 to
demand immediate cessation of an NQTL without intervention of a court
of law. Some commenters raised concerns about the ability of plans and
issuers to immediately stop imposing an NQTL, particularly mid-year,
and with regard to NQTLs related to network composition. Several
commenters suggested that, in light of the significant potential
consequences of a final determination of noncompliance, the Departments
should provide some type of appeals process modeled on the process for
appeals of civil money penalties for Medicare Advantage Organizations
or require review by EBSA's national office or the director of the
Center for Consumer Information and Insurance Oversight (CCIIO) within
CMS before taking such action when there is a final determination of
noncompliance.
The Departments are finalizing the provision governing the effect
of a final determination of noncompliance, with modifications. The
language contained in proposed 26 CFR 54.9812-1(c)(4)(vii), 29 CFR
2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii) is being finalized
at 26 CFR 54.9812-1(c)(4)(v)(A), 29 CFR 2590.712(c)(4)(v)(A), and 45
CFR 146.136(c)(4)(v)(A). These final rules add references to the
relevant statutory citation,\93\ to make clear that the effect of the
final determination of noncompliance provision of these final rules,
including the evaluation of the relevant facts and circumstances used
to determine whether cessation of an NQTL is appropriate, is only
applicable with respect to a plan's or issuer's violation of the
comparative analysis requirements, as set forth in Code section
9812(a)(8), ERISA section 712(a)(8), and PHS Act section 2726(a)(8).
If, however, the plan or issuer violates MHPAEA's substantive
requirements, as set forth in Code section 9812(a)(3), ERISA section
712(a)(3), and PHS Act section 2726(a)(3), and 26 CFR 54.9812-1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4), by imposing an NQTL
that violates the ``no more restrictive'' standard, the statute clearly
contemplates that the plan or issuer not apply the NQTL, and the
Departments have full authority to prohibit the plan or issuer from
continuing to impose the unlawful NQTL.\94\
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\93\ Code section 9812(a)(8), ERISA section 712(a)(8), and PHS
Act section 2726(a)(8).
\94\ Specifically, Code section 9812(a)(3)(A), ERISA section
712(a)(3)(A), and PHS Act section 2726(a)(3)(A) state that a plan or
coverage ``shall ensure that . . . the treatment limitations
applicable to such 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). If a plan or coverage does not ensure
compliance with these statutory requirements, the Departments may
require the plan or issuer to no longer impose the NQTL or to
otherwise come into compliance. Similarly, 26 CFR 54.9812-1(c)(4),
29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) of these final rules
state that a plan (or coverage) may not impose any NQTL unless it
complies with the statutory requirement in Code section
9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act section
2726(a)(3)(A).
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The HHS final rules at 45 CFR 146.136(c)(4)(v)(A) also add
references to an applicable State authority, as requested by
commenters, so that the regulations are clear that, like the
Departments, States with enforcement authority with respect to MHPAEA
\95\ are also permitted to direct issuers not to impose an NQTL when
there is a final determination of noncompliance, unless and until the
issuer demonstrates compliance or takes appropriate action to remedy
the violation. These final rules also provide additional specificity by
clarifying that this provision allows the Departments (and an
applicable State authority) to direct a plan or issuer not to impose an
NQTL with respect to mental health or substance use disorder benefits
in the relevant classification.
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\95\ PHS Act section 2723(a)(1).
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Additionally, these final rules add new paragraph (c)(4)(v)(B) to
make clear that a determination of whether the Departments will require
cessation of the application of an NQTL will be based on an evaluation
of the relevant facts and circumstances involved in the specific final
determination and the nature of the underlying NQTL. For this purpose,
the Departments expect that such facts and circumstances may include,
but are not limited to, 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 of continuing or
ceasing to apply the NQTL, and the likely time needed to cease or
modify the NQTL. Under these final rules, such a determination will
also take into account the interest of plan participants and
beneficiaries and feedback from the plan or issuer. States that are the
primary enforcers of MHPAEA may take into account these or other facts
and circumstances when determining whether the State will require
cessation of application of an NQTL.
The Departments decline to modify the proposed language to provide
that the Secretary ``shall'' direct the plan or issuer not to impose
the NQTL after a final determination of noncompliance with the
comparative analysis requirements. In the preamble to the proposed
rules and in these final rules, the Departments acknowledged that
immediate cessation of the application of an NQTL may not be feasible
for all NQTLs and that feedback from the plan or issuer would be taken
into account. The Departments understand that not requiring immediate
cessation of a noncompliant NQTL in every situation that involves a
final determination of noncompliance with the comparative analysis
requirements may allow participants and beneficiaries to be subject to
noncompliant NQTLs. As these commenters noted, meaningful
[[Page 77625]]
consequences are important to incentivize plans and issuers to comply
with MHPAEA. However, the Departments are of the view that the
potential negative impacts for participants and beneficiaries of
continuing to apply the NQTL should be balanced with the operational
feasibility of immediately modifying business practices, particularly
for NQTLs that are inherent to the plan design and may require time to
reform. Such potential negative impacts for participants and
beneficiaries may be better evaluated after the Departments review the
specific facts and circumstances of the relevant determination of
noncompliance with the comparative analysis requirements. Therefore,
these final rules specify that, when determining the effect of a final
determination of noncompliance with the comparative analysis
requirements, each specific violation will have its own analysis of the
applicable facts and circumstances that will be taken into account.
The Departments stress that MHPAEA requires plans and issuers to
ensure that the treatment limitations, including NQTLs imposed on
mental health or substance use disorder benefits in a classification,
are not more restrictive than those applied to medical/surgical
benefits in the same classification. In many cases, a failure to submit
a sufficient or compliant comparative analysis is evidence that a plan
or issuer cannot substantiate an NQTL's compliance with these
applicable requirements, and therefore is violating MHPAEA's
substantive parity requirements. Therefore, where the Departments have
come to a final conclusion that a comparative analysis is not compliant
and are issuing a final determination of noncompliance, including
because the plan or issuer has not submitted a sufficient comparative
analysis to demonstrate compliance, the required corrective action may
include the removal of such NQTL. The CAA, 2021 also requires the
Departments to specify the actions a plan or issuer must take to
address the violation, and include the required actions in the annual
report to Congress.\96\ This provision makes clear the Departments have
broad authority to determine the appropriate remedy where a plan's or
issuer's comparative analysis is not compliant, and this authority
allows the Departments, depending on the relevant facts and
circumstances, to specify removal of the NQTL as the appropriate remedy
to address a determination of noncompliance. Nothing, however, prevents
the Departments or applicable State authorities from specifying other
or additional corrective actions or from taking enforcement action
within their respective authorities.
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\96\ Code section 9812(a)(8)(B)(iv)(V), ERISA section
712(a)(8)(B)(iv)(V), and PHS Act section 2726(a)(8)(B)(iv)(V).
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As stressed in the Departments' reports to Congress, the
Departments generally engage plans and issuers in repeated exchanges--
asking follow-up questions, seeking additional documentation,
performing further assessments, and affording opportunities for
explanation--before making a final determination of noncompliance.\97\
The Departments note that plans and issuers are given multiple
opportunities to engage with the Departments after an initial request
for comparative analysis and before a final determination of
noncompliance. As described later in this preamble, after an initial
request for a comparative analysis, if the Department concludes that a
plan or issuer has not submitted sufficient information to review the
requested comparative analyses, the plan or issuer will be provided
with another opportunity to respond to the Department's initial
request. If the Department reviews the comparative analyses (and any
additional information submitted upon request) and makes an initial
determination that the plan or issuer is not in compliance, the plan or
issuer is provided another opportunity to respond to the Department.
Because of the multiple opportunities to engage with the Departments
prior to a final determination of noncompliance, the Departments
decline to add any additional formal appeal or review requirements
beyond that required under the statute. Any direction not to impose an
NQTL provided to a plan or issuer by the relevant Department will take
into account all correspondence and discussions with the plan or
issuer.
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\97\ See, e.g., 2023 MHPAEA Comparative Analysis Report to
Congress (July 2023), pg. 52, https://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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g. NQTL Examples--26 CFR 54.9812-1(c)(4)(vi), 29 CFR
2590.712(c)(4)(vi), and 45 CFR 146.136(c)(4)(vi)
The proposed rules contained thirteen examples illustrating the
NQTL requirements, including revised versions of some examples included
in the 2013 final regulations and several new examples. Additionally,
the proposed rules proposed to eliminate some examples that were
included in the 2013 final regulations, in light of the additional
proposed requirements.
The Departments received comments on each of the proposed examples
and comments recommending additional examples be added. Some commenters
suggested the Departments use different data elements in the examples
related to the relevant data evaluation requirements that in their view
would better evaluate compliance with MHPAEA. Other commenters
expressed concerns regarding how the proposed exceptions to the NQTL
requirements discussed earlier in this preamble would apply and
requested that the examples address what a plan or issuer would be
required to document to rely on these exceptions. One of these
commenters also requested an example showing analysis of an NQTL that
is developed based on multiple standards, some of which qualify for the
proposed exception for independent professional medical or clinical
standards and some of which do not. Some commenters expressed concern
regarding whether the proposed mathematical substantially all and
predominant tests could be performed on all NQTLs and requested more
detailed examples of how to apply such tests.
As noted earlier in this preamble, the Departments are declining to
finalize the proposed mathematical substantially all and predominant
tests, as well as the proposed exceptions for NQTLs that impartially
apply independent professional medical or clinical standards or fraud,
waste, and abuse measures. Therefore, rather than providing examples to
address these provisions, the examples address the substantive
provisions the Departments are finalizing in these final rules,
including the general requirement that NQTLs for mental health and
substance use disorder benefits not be more restrictive, as written or
in operation, than the predominant NQTL that applies to substantially
all medical/surgical benefits in the same classification, the design
and application requirements, and the relevant data evaluation
requirements (including potential data elements that plans and issuers
may consider to be relevant data with respect to an NQTL).
The Departments are adapting some of the fact patterns used in the
examples in the proposed rules related to provisions that are not being
finalized to instead illustrate concepts applicable in these final
rules, but these final rules do not include all of the examples
included in the proposed rules (or all of the examples included in the
2013 final regulations). The Departments note that the exclusion in
these final rules of any
[[Page 77626]]
particular fact pattern that was previously addressed in examples in
the proposed rules or the 2013 final regulations is not intended to
indicate that any particular set of facts is permissible or prohibited
under these final rules. Rather, the examples in these final rules are
included to illustrate the application of the various provisions
included in these final rules. Thus, plans and issuers are expected to
apply the requirements in paragraph (c)(4) of these final rules to the
specific facts and circumstances of the benefit design of their
respective plans and coverage options with respect to all NQTLs
applicable to mental health and substance use disorder benefits, as
well as the processes, strategies, evidentiary standards, and other
factors used to design or apply them, and any information, evidence,
sources, or standards on which a factor or evidentiary standard is
based. Additionally, as in the proposed rules, any example that
concludes that the plan violates or complies with a requirement of
these final rules for NQTLs should not be read to imply compliance with
any other requirements of these final rules for NQTLs.
Example 1--Not comparable and more stringent factors for
reimbursement rate methodology, in operation. In the proposed rules,
Example 4 illustrated how plans and issuers would be required to ensure
compliance in operation with the proposed design and application
requirements for a plan's reimbursement rate methodology NQTL.\98\
These final rules redesignate proposed Example 4 as Example 1 and
illustrate the application of the general rule of the design and
application requirements of these final rules with respect to a plan's
reimbursement rate methodology NQTL. The language in the facts and
conclusion of proposed Example 4 referencing an assumption that the
plan's methods for determining reimbursement rates for mental health
and substance use disorder benefits satisfy the no more restrictive
requirement has been eliminated to reflect, as discussed earlier in
this preamble, that the Departments decline to finalize the proposed
mathematical substantially all and predominant tests in these final
rules.
---------------------------------------------------------------------------
\98\ As stated in the preamble to the proposed rules, Example 4
was based in part on guidance in FAQs Part 39, Q6, 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.
---------------------------------------------------------------------------
Accordingly, the facts of Example 1 in these final rules assume a
plan's reimbursement rate methodology for outpatient, in-network
providers is based on a variety of factors. As written, for mental
health, substance use disorder, and medical/surgical benefits, all
reimbursement rates for physicians and non-physician practitioners for
the same CPT code are based on a combination of factors, such as the
nature of the service, duration of the service, intensity and
specialization of training, provider licensure and type, number of
providers qualified to provide the service in a given geographic area,
and market need (demand). In operation, the plan utilizes an additional
strategy to further reduce reimbursement rates for mental health and
substance use disorder non-physician providers from those 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.
Example 1 concludes that the plan violates the rules of paragraph
(c)(4). The plan reimburses non-physician providers of mental health
and substance use disorder services by reducing their reimbursement
rates from the rates for physician providers of such services by the
same percentage for every CPT code but does not apply the same
reduction to non-physician providers of medical/surgical services from
the rate for physician providers of medical/surgical services.
Therefore, in operation, the factors used in designing and applying the
NQTL to mental health and substance use disorder benefits in the
outpatient, in-network classification are not comparable to, and are
applied more stringently than, the factors used in designing and
applying the NQTL with respect to medical/surgical benefits in the same
classification. As a result, the NQTL with respect to mental health or
substance use disorder benefits in the outpatient, in-network
classification is more restrictive than the predominant NQTL that
applies to substantially all medical/surgical benefits in the same
classification, in violation of 26 CFR 54.9812-1(c)(4), 29 CFR
2590.712(c)(4), and 45 CFR 146.136(c)(4) of these final rules. This
example illustrates that the plan violates the design and application
requirements and does not address whether the plan complies with the
relevant data evaluation requirements.
Example 2--Strategy for exclusion for experimental or investigative
treatment more stringently applied to Applied Behavior Analysis (ABA)
therapy in operation. These final rules redesignate proposed Example 10
as Example 2 with modifications to the conclusion. Proposed Example 10
concluded that the plan violates the proposed no more restrictive
requirements because, in operation, the plan's exclusion for
experimental or investigative treatment imposed on ABA therapy 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. As discussed earlier in this preamble, the
Departments declined to finalize the proposed mathematical
substantially all and predominant tests. However, multiple commenters
in response to the proposed rules expressed support for including an
example that specifically addresses the exclusion of benefits to treat
ASD. Therefore, in Example 2 of these final rules, the Departments are
adapting proposed Example 10 to demonstrate how a strategy for a plan's
exclusion of benefits for experimental or investigative treatment that
applies more stringently to ABA therapy, in operation, violates the
design and application requirements, and therefore violates the
requirements for NQTLs under these final rules.
In Example 2, the facts of proposed Example 10 are generally
unchanged. A plan, as written, generally excludes coverage for all
treatments that are experimental or investigative for medical/surgical
benefits and mental health and substance use disorder benefits in the
outpatient, in-network classification. As a result, the plan generally
excludes, as experimental, a treatment or procedure when no
professionally recognized treatment guidelines include the treatment or
procedure as a clinically appropriate standard 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. As written, the plan provides benefits for the
treatment of ASD, which is a mental health condition, but, in
operation, 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 as including ABA therapy and more than two randomized
controlled trials are available to support the use of ABA therapy as
one intervention to treat certain children with ASD.
Example 2 concludes that the plan violates the design and
application requirements with respect to the exclusion of ABA therapy
because, in operation, the plan deviates from its strategy to exclude
coverage of experimental treatment of medical
[[Page 77627]]
conditions and surgical procedures, mental health conditions, and
substance use disorders because more than one professionally recognized
treatment guideline defines clinically appropriate standards of care
for ASD as including ABA therapy to treat certain children with ASD and
more than two randomized controlled trials are available to support the
use of ABA therapy as one intervention to treat certain children with
ASD. Therefore, in operation, the strategy used to design the NQTL for
benefits for the treatment of ASD, which is a mental health condition
for purposes of MHPAEA, in the outpatient, in-network classification is
not comparable to, and is applied more stringently than, the strategy
used to design and apply the NQTL for medical/surgical benefits in the
same classification. As a result, the example concludes that the NQTL
is more restrictive and therefore violates MHPAEA. This example
illustrates that the plan violates the design and application
requirements and does not address whether the plan complies with the
relevant data evaluation requirements.
Example 3--Step therapy protocol with exception for severe or
irreversible consequences, discriminatory factor. The Departments
received several comments asking the Departments to provide additional
clarification on what would be considered discriminatory factors and
evidentiary standards for purposes of determining compliance with the
design and application requirements. Accordingly, the Departments are
including in these final rules a new Example 3 to provide an example of
circumstances under which a plan or issuer would violate the
prohibition against discriminatory factors and evidentiary standards in
the context of step therapy with exceptions for severe or irreversible
consequences.
The facts of Example 3 assume a plan has a step therapy protocol
that requires participants and beneficiaries who are prescribed certain
drugs to try and fail a generic or preferred brand name drug before the
plan will cover the treatment or medication originally prescribed by a
provider. The plan has an exception to this protocol that was developed
solely by relying on a methodology developed by an external third-party
organization. The third-party organization's methodology, which is not
based on an independent professional medical or clinical standard,
identifies instances in which a delay in treatment with a drug
prescribed for a medical condition or surgical procedure could result
in either severe or irreversible consequences. However, with respect to
a drug prescribed for a mental health condition or a substance use
disorder, the third-party organization's methodology only identifies
instances in which a delay in treatment could result in both severe and
irreversible consequences. The plan does not take any steps to correct,
cure, or supplement the methodology.
The conclusion to Example 3 explains that the plan violates the
prohibition on discriminatory factors and evidentiary standards under
26 CFR 54.9812-1(c)(4)(i)(B), 29 CFR 2590.712(c)(4)(i)(B), and 45 CFR
146.136 (c)(4)(i)(B). The source upon which the factor used to apply
the step therapy protocol is based is biased or not objective in a
manner that discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits because it
addresses instances in which a delay in treatment with a drug
prescribed for a medical condition or surgical procedure could result
in either severe or irreversible consequences, but only addresses
instances in which a delay in treatment with a drug prescribed for a
mental health condition or substance use disorder could result in both
severe and irreversible consequences, and the plan fails to take the
steps necessary to correct, cure, or supplement the methodology so that
it is not biased and is objective. Based on the relevant facts and
circumstances, this source systematically disfavors access or is
specifically designed to disfavor access to mental health or substance
use disorder benefits as compared to medical/surgical benefits.
Therefore, the factor used to design exceptions to the step therapy
protocol is discriminatory, for purposes of determining comparability
and stringency under the design and application requirements, and it
may not be relied upon by the plan unless the plan takes the steps
necessary to correct, cure, or supplement it (by, for example, taking
into account instances in which a delay in treatment with a drug
prescribed for a mental health condition or a substance use disorder
could result in severe or irreversible consequences).
Example 4--Use of historical plan data and steps the plan or issuer
can take to correct, cure, or supplement. The Departments are including
as Example 4 of these final rules a revised example illustrating how
plans and issuers can correct, cure or supplement the use of historical
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 so that the information is not considered to be biased or
not objective and can be used as the basis for a factor or evidentiary
standard that is not discriminatory. The Departments stated in the
preamble to the proposed rules that the proposed rules would prohibit
reliance 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) and provided an example addressing
calculation of reimbursement rates based on historical data on total
plan spending. Example 4 of these final rules references the fact
pattern from Example 4 in the proposed rules but provides additional
detail and analysis to illustrate the application of the prohibition on
discriminatory factors and evidentiary standards under these final
rules, including how a plan or issuer could correct, cure, or
supplement the use of such data so that the information is not
considered to be biased or not objective.
Specifically, the facts of Example 4 assume a plan's methodology
for calculating provider reimbursement rates relies only on historical
plan data on total plan spending for each specialty, divided between
mental health and substance use disorder providers and medical/surgical
providers from a time where the plan was not subject to MHPAEA. The
plan used these historical plan data for many years to establish base
reimbursement rates in all provider specialties for which it provides
medical/surgical, mental health, and substance use disorder benefits in
the inpatient, in-network classification. In evaluating the use of
these historical plan data in the design of the methodology for
calculating provider reimbursement rates, the plan determined, based on
all the relevant facts and circumstances, that the historical plan data
systematically disfavor access or are specifically designed to disfavor
access to mental health or substance use disorder benefits as compared
to medical/surgical benefits. To ensure this information about
historical reimbursement rates is not biased and is objective, the plan
supplements its methodology to develop the base reimbursement rates for
mental health and substance use disorder providers in accordance with
additional information, evidence, sources, and standards that reflect
the increased demand for mental health and substance use disorder
benefits in the inpatient, in-network classification and to attract
sufficient mental health and substance use disorder providers to the
network. The relevant facts and circumstances indicate that the
supplemented
[[Page 77628]]
information, evidence, sources, or standards do not systematically
disfavor access and are not specifically designed to disfavor access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits.
Example 4 of these final rules concludes that the plan does not
violate the prohibition on discriminatory factors and evidentiary
standards with respect to the plan's methodology for calculating
provider reimbursement rates in the inpatient, in-network
classification. The relevant facts and circumstances indicate that the
plan's use of only historical plan data to design its methodology for
calculating its provider reimbursement rates in the inpatient, in-
network classification would otherwise be considered to be biased or
not objective in a manner that discriminates against mental health or
substance use disorder benefits as compared to medical/surgical
benefits since the historical data systematically disfavor access or
are specifically designed to disfavor access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits. However, the plan took the steps necessary to supplement the
information, evidence, sources, and standards to reasonably reflect the
increased demand for mental health and substance use disorder benefits
in the inpatient, in-network classification, and adjusted the
methodology to increase reimbursement rates for those benefits, thereby
ensuring that the information, evidence, sources, and standards relied
upon by the plan for this purpose are not biased and are objective.
Therefore, the factors and evidentiary standards used to design the
plan's methodology for calculating provider reimbursement rates in the
inpatient, in-network classification are not considered discriminatory
factors and evidentiary standards.
Example 5--Generally recognized independent professional medical or
clinical standards and more stringent prior authorization requirement
in operation. In the proposed rules, the Departments proposed Example 6
to illustrate the exception for impartially applied independent
professional medical or clinical standards and when a plan fails to
satisfy the exception. The Departments received comments requesting
examples to provide further clarity on how a plan or issuer may
properly rely on independent professional medical or clinical standards
in the design and application of NQTLs. As described earlier in this
preamble, the Departments are not finalizing this exception as
proposed. Instead, these final rules specify that the use of
independent professional medical or clinical standards generally will
not be considered to be biased and not objective under these final
rules. The Departments note that, under these final rules, the use of
such standards must also comply with the other provisions of these
final rules, including the general rule in the design and application
requirements and the relevant data evaluation requirements. Therefore,
the Departments are modifying proposed Example 6 and redesignating it
as Example 5 in these final rules, to illustrate a violation of the
design and application requirements of these final rules when a plan
relies on independent professional medical or clinical standards to
inform a factor used to design an NQTL with respect to mental health
and substance use disorder benefits that, in operation, is not
comparable to, and is applied more stringently than, the same factor
used to design the NQTL for medical/surgical benefits in the same
classification.
In Example 5 of these final rules, the provisions of a plan state
that it relies on, and does not deviate from, independent professional
medical or clinical standards to inform the factor used to design prior
authorization requirements for both medical/surgical and mental health
and substance use disorder benefits in the prescription drug
classification. In this example, the plan uses the ASAM national
practice guidelines as the independent professional medical or clinical
standard to inform the factors used to design and apply the prior
authorization requirement for treatment of OUD. The ASAM practice
guidelines do not support prior authorization every 30 days for
buprenorphine/naloxone combination for treatment of OUD. However, in
operation, the plan requires prior authorization for buprenorphine/
naloxone combination for treatment of OUD every 30 days, which is
inconsistent with independent professional medical standards on which
the factor used to design the limitation is based. The plan's factor
used to design and apply prior authorization requirements for medical/
surgical benefits in the prescription drug classification relies on,
and does not deviate from, independent professional medical or clinical
standards.
The conclusion to Example 5 in these final rules states that the
plan violates the requirements for NQTLs. The ASAM national practice
guidelines on which the factor used to design prior authorization
requirements for substance use disorder benefits is based are
independent professional medical or clinical standards that are not
considered to be biased or not objective in a manner that discriminates
against mental health and substance use disorder benefits under these
final rules. However, the plan must comply with other requirements in
these final rules for NQTLs, as applicable, with respect to such
standards or measures that are used as the basis for a factor or
evidentiary standard used to design or apply an NQTL. In operation, the
plan's factor used to design and apply prior authorization requirements
with respect to substance use disorder benefits is not comparable to,
and is applied more stringently than, the same factor used to design
and apply prior authorization requirements for medical/surgical
benefits, because the factor relies on, and does not deviate from,
independent professional medical or clinical standards for medical/
surgical benefits, but deviates from the relevant guidelines for
substance use disorder benefits. As a result, the NQTL with respect to
substance use disorder benefits in the prescription drug classification
is more restrictive than the predominant NQTL that applies to
substantially all medical/surgical benefits in the same classification.
Example 6--Plan claims no data exist to reasonably measure impact
of NQTL on access; medical necessity criteria. As described earlier in
this preamble, these final rules require plans and issuers to collect
and evaluate relevant data in a manner reasonably designed to assess
the impact of an NQTL on relevant outcomes related to access to mental
health and substance use disorder benefits as compared to medical/
surgical benefits. Additionally, these final rules provide guidance for
plans and issuers to comply with the relevant data evaluation
requirements when data are initially temporarily unavailable for a
newly imposed NQTL or no data exist that can reasonably measure any
relevant impact of an NQTL on access.\99\
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\99\ As explained earlier in this preamble, these final rules
state that the provisions with respect to these types of NQTLs shall
only apply in very limited circumstances and, where applicable,
shall be construed narrowly, consistent with the fundamental purpose
of MHPAEA. The Departments are of the view that data can be
collected and evaluated for nearly all NQTLs.
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Under the facts of new Example 6, a plan approves or denies claims
for mental health and substance use disorder benefits and for medical/
surgical benefits in the inpatient, in-network and outpatient, in-
network classifications based on medical necessity criteria. The plan
states in its comparative analysis that no data exist that can
reasonably measure any
[[Page 77629]]
relevant impact of the medical necessity criteria NQTL on access to
mental health or substance use disorder benefits as compared to the
NQTL's impact on access to medical/surgical benefits in the relevant
classifications, without further explanation.
The example concludes that the plan violates the requirements of
these final rules. The plan does not comply with the requirements under
these final rules for NQTLs where no data exist that can reasonably
measure any relevant impact of the NQTL on access because the plan did
not include in its comparative analysis a reasoned justification as to
the basis for its conclusion that there are no data that can reasonably
measure the NQTL's impact, an explanation of why the nature of the NQTL
prevents the plan from reasonably measuring its impact, an explanation
of what data was considered and rejected, and documentation of any
additional safeguards or protocols used to ensure the NQTL complies
with the requirements of MHPAEA. For example, data the plan could have
considered that could reasonably assess the NQTL's impact might include
the number and percentage of claims denials, or the number and
percentage of claims that were approved for a lower level of care than
the level requested on the initial claim. The plan has violated the
relevant data evaluation requirements, as it has not collected and
evaluated relevant data in a manner reasonably designed to assess the
impact of the NQTL on relevant outcomes related to access nor did it
include sufficient information it its comparative analysis with respect
to the lack of relevant data.
Example 7--Concurrent review data collection; no material
difference in access. Example 7 in these final rules illustrates the
application of the relevant data evaluation requirements to a
concurrent review NQTL. This example is based on similar facts from
Example 2 in the proposed rules, but language in the facts and
conclusion of proposed Example 2 referencing the no more restrictive
requirement have been eliminated to reflect, as discussed earlier in
this preamble, that the Departments decline to finalize the proposed
mathematical substantially all and predominant tests in these final
rules (that would prohibit any NQTL that is more restrictive than the
most common or most frequent variation of the NQTL applied to at least
two-third of medical/surgical benefits in a classification).
In this example as modified in these final rules, a plan follows a
written process to apply a concurrent review NQTL to all medical/
surgical benefits and mental health and substance use disorder benefits
within the inpatient, in-network classification. Under this 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. The plan collects
relevant data, including the number of referrals to second-level
review, and the number of denials of concurrent review claims as
compared to the total number of concurrent review claims in the
inpatient, in-network classification. The plan also collects the number
of denied claims that are overturned on appeal, separately for mental
health and substance use disorder benefits and medical/surgical
benefits in the inpatient, in-network classification. The plan
evaluates the relevant data and determines that, based on the facts and
circumstances, the data do not suggest that the concurrent review NQTL
contributes to material differences in access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits in the inpatient, in-network classification. Upon requesting
the plan's comparative analysis for the concurrent review NQTL and
reviewing the relevant data, the Secretary does not request additional
data and agrees that the data do not suggest material differences in
access.
In Example 7 of these final rules, the conclusion explains that the
plan does not violate the relevant data evaluation requirements as it
collected and evaluated relevant data in a manner reasonably designed
to assess the impact of the NQTL on relevant outcomes related to access
to mental health and substance use disorder benefits and medical/
surgical benefits and considered the impact as part of its evaluation.
Because the relevant data do not suggest that the NQTL contributes to
material differences in access to mental health and substance use
disorder benefits as compared to medical/surgical benefits in the
inpatient, in-network classification, there is no strong indicator that
the plan violates the requirements for NQTLs under these final rules.
However, the plan is still required to comply with the design and
application requirements under these final rules, including the
prohibition on discriminatory factors and evidentiary standards.
Example 8--Material difference in access for prior authorization
requirement with reasonable action. In the proposed rules, Example 1
illustrates the effect of a disparity in the routine approval of
benefits for mental health conditions and substance use disorders
compared to benefits for medical/surgical conditions in a
classification under the no more restrictive requirement in the
proposed rules. However, as discussed earlier in this preamble, the
Departments have declined to finalize the proposed mathematical
substantially all and predominant tests. Therefore, the Departments are
adapting proposed Example 1 for use as Example 8 of these final rules
to illustrate how a plan or issuer can satisfy the requirement to take
reasonable action to address any material differences in access as
necessary to ensure compliance with the relevant data evaluation
requirements, in the context of material differences in access in the
routine approval of benefits for mental health conditions and substance
use disorders compared to medical/surgical benefits in a
classification.
In Example 8 of these final rules, a plan requires prior
authorization 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. The plan
collects and evaluates relevant data in a manner reasonably designed to
assess the impact of the prior authorization requirement on relevant
outcomes related to access to mental health and substance use disorder
benefits and medical/surgical benefits in the inpatient, in-network
classification. The plan's written process for prior authorization
states that the plan approves inpatient, in-network benefits for
medical conditions and surgical procedures and mental health and
substance use disorder benefits 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. Approvals for mental health and
substance use disorder benefits are most commonly given only for 1 day,
after which a treatment plan must be submitted by the patient's
attending provider and approved by the plan. The relevant data show
that approvals for 7 days are most common for medical conditions and
surgical procedures under this plan. Based on all the relevant facts
and
[[Page 77630]]
circumstances, the difference in the data suggests that the NQTL is
likely to have a negative impact on access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits. Therefore, the differences in the data suggest that the NQTL
contributes to material differences in access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits. To address these material differences, the plan consults more
recent medical guidelines to update the factors that inform its medical
necessity NQTLs and modifies the prior authorization NQTL so that
inpatient, in-network prior authorization requests for mental health or
substance use disorder benefits are approved for similar periods to
what is approved for medical/surgical benefits. The plan includes
documentation of this action as part of its comparative analysis.
The conclusion to Example 8 provides that, while relevant data for
the plan's prior authorization requirements suggested that the NQTL
contributes to material differences in access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits in the classification, the plan has taken reasonable action,
as necessary, to ensure compliance, in operation, with the requirements
for NQTLs under these final rules by updating the factors that inform
its prior authorization NQTL for inpatient, in-network mental health
and substance use disorder benefits, so that such benefits are approved
for similar periods to what is approved for medical/surgical benefits,
and documenting its action taken to address material differences in
access to inpatient, in-network benefits, as required under these final
rules.
Example 9--Differences attributable to the use of independent
professional medical or clinical standards. In the proposed rules, the
Departments proposed to add new Example 5 to illustrate how a plan may
satisfy the proposed exception for independent professional medical or
clinical standards. As noted earlier in this preamble, the Departments
are not finalizing that exception, and instead, under these final
rules, the use of independent professional medical or clinical
standards are not considered to be information, evidence, sources, or
standards that are biased and not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits, as long as the use of these
standards to design or apply an NQTL complies with other applicable
requirements. Furthermore, under these final rules, differences in
access attributable to the use of independent professional medical or
clinical standards for both medical/surgical benefits and mental health
and substance use disorder benefits are not considered to be material.
However, to the extent a plan or issuer attributes any differences in
access to the application of such standards, the plan or issuer must
explain its bases for reaching that conclusion in its comparative
analysis. Therefore, the Departments are adapting Example 5 of the
proposed rules for use as Example 9 of these final rules to illustrate
the treatment of the use of independent professional medical or
clinical standards.
In Example 9 of these final rules, a 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
factors and evidentiary standards used to design and apply the medical
management requirement rely on independent professional medical or
clinical standards that are generally recognized by health care
providers and facilities in relevant clinical specialties. 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. The plan
collects and evaluates relevant data in a manner reasonably designed to
assess the impact of the medical management NQTL on relevant outcomes
related to access to mental health and substance use disorder benefits
and medical/surgical benefits, and considers the impact as part of the
plan's evaluation. 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. The plan correctly determines that
these differences in access are attributable to the independent
professional medical or clinical standards that are used as the basis
for the factors and evidentiary standards used to design or apply the
NQTL and adequately explains the bases for that conclusion as part of
its comparative analysis.
Example 9 concludes that the plan does not violate the requirements
under these final rules for its medical management NQTL. Independent
professional medical or clinical standards are not considered to be
information, evidence, sources, or standards that are biased and not
objective in a manner that discriminates against mental health or
substance use disorder benefits as compared to medical/surgical
benefits and the plan otherwise complies with the design and
application requirements. Additionally, the plan does not violate the
relevant data evaluation requirements because it has collected and
evaluated relevant data, the differences in access are attributable to
the independent professional medical or clinical standards that are
used as the basis for the factors and evidentiary standards used to
design or apply the medical management NQTL, and the plan explains the
bases for this conclusion in its comparative analysis. As a result, the
NQTL with respect to mental health or substance use disorder benefits
in the inpatient, out-of-network classification is no more restrictive
than the predominant NQTL that applies to substantially all medical/
surgical benefits in the same classification.
Example 10--Material difference in access for standards for
provider admission to a network with reasonable action. In the proposed
rules, the Departments proposed new Example 13 to illustrate how plans
and issuers may comply with the proposed relevant data evaluation
requirements with respect to NQTLs related to network composition,
including NQTLs 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. These final rules largely adopt Example 13 as proposed, with
some modifications to reflect the standards included in these final
rules, and redesignate it as Example 10.
In Example 10 of these final rules, a plan applies NQTLs related to
network composition in the inpatient, in-network and outpatient, 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 also assume
[[Page 77631]]
that the processes, strategies, evidentiary standards, and other
factors used in designing and applying the NQTLs related to network
composition for mental health or substance use disorder benefits in the
inpatient, in-network and outpatient, 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 NQTLs with respect to medical/surgical benefits in the
same classifications. In order to ensure, in operation, that the NQTLs
are no more restrictive than the predominant NQTLs applied to
substantially all medical/surgical benefits in the classification, the
plan collects and evaluates relevant data in a manner reasonably
designed to assess the aggregate impact of all the NQTLs related to
network composition on relevant outcomes related to access to mental
health and substance use disorder benefits as compared with medical/
surgical benefits and considers the impact as part of the plan's
evaluation. The plan considers relevant data that is known, or
reasonably should be known, including 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 (for comparable services and benchmarked
to a reference standard, as appropriate); and in-network and out-of-
network utilization rates (including data related to the dollar value
and number of provider claims submissions). The plan determines that
the relevant data suggest that the NQTLs in the aggregate contribute to
material differences in access to mental health and substance use
disorder benefits as compared to medical/surgical benefits in the
classifications because, based on all the relevant facts and
circumstances, the differences in the data suggest that the plan's
NQTLs related to network composition are likely to have a negative
impact on access to mental health or substance use disorder benefits as
compared to medical/surgical benefits in the same classifications. The
plan takes reasonable actions, as necessary, to address the material
differences in access, to ensure compliance, in operation, with the
requirements for NQTLs under these final rules, by strengthening its
efforts to recruit and encourage a broad range of available providers
and facilities to join the plan's network of providers, including by
taking actions to increase compensation and other inducements,
streamline credentialing processes, contact providers reimbursed for
items and services provided on an out-of-network basis to offer
participation in the network, and develop a process to monitor the
effects of such efforts; expanding the availability of telehealth
arrangements to mitigate overall provider shortages in certain
geographic areas; providing additional outreach and assistance to
participants and beneficiaries enrolled in the plan to assist them in
finding available in-network providers and facilities; and ensuring
that the plan's provider directories are accurate and reliable. The
plan documents the efforts that it has taken to address the material
differences in access that the data revealed, and also documents the
reasons beyond the plan's control that the plan believes may contribute
to the material differences in access, and the plan includes the
documentation as part of its comparative analysis submission.
Example 10 concludes that the plan does not violate the
requirements for NQTLs under these final rules. The plan complies with
the design and application requirements, and also collects and
evaluates relevant data, as required under these final rules, in a
manner reasonably designed to assess the aggregate impact of all such
NQTLs on relevant outcomes related to access to mental health and
substance use disorder benefits and medical/surgical benefits. While
the data suggest that the NQTLs contribute to material differences in
access to mental health and substance use disorder benefits as compared
to medical/surgical benefits, the plan takes reasonable action, as
necessary, to ensure compliance with these final rules. The plan also
documents the actions that have been and are being taken by the plan to
address material differences in access and documents the reasons beyond
the plan's control that the plan believes may contribute to the
material differences in access. As a result, the network composition
NQTLs with respect to mental health or substance use disorder benefits
in the inpatient, in-network and outpatient, in-network classifications
are no more restrictive than the predominant NQTLs that apply to
substantially all medical/surgical benefits in the same
classifications.
Example 11--Separate employee assistance program (EAP) exhaustion
treatment limitation applicable only to mental health or substance use
disorder benefits. Example 11 in the proposed rules amended Example 6
of the 2013 final regulations. These final rules retain this example as
proposed with minor, non-substantive changes.
Specifically, in Example 11, an employer maintains both a major
medical plan and an EAP. The EAP provides, among other benefits, a
limited number of mental health or substance use disorder counseling
sessions. These sessions, 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, and no similar exhaustion
requirement applies with respect to medical/surgical benefits provided
under the major medical plan.
Example 11 concludes that the requirement that limits eligibility
for mental health and substance use disorder benefits under the major
medical plan until benefits under an EAP are exhausted is an NQTL
subject to MHPAEA. Because the limitation does not apply to medical/
surgical benefits, it violates the prohibition on a separate NQTL
applicable only to mental health or substance use disorder benefits.
The Departments have also included language to note that under other
Departmental regulations,\100\ the EAP does not qualify as excepted
benefits because participants in the major medical plan are required to
use and exhaust benefits under the EAP (making the EAP a gatekeeper)
before they are eligible for benefits under the plan.
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\100\ 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).
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Example 12--Separate exclusion for treatment in a residential
facility applicable only to mental health and substance use disorder
benefits. Under Example 12 of these final rules, which is substantively
identical to Example 12 in the proposed rules and only includes minor,
non-substantive changes, a plan generally covers inpatient, in-network
and inpatient, out-of-network treatment without any limitations on
setting, including skilled nursing facilities and rehabilitation
hospitals, provided other medical necessity standards are satisfied.
The plan has an exclusion for treatment at residential facilities,
which the plan defines as an inpatient benefit for mental health and
substance use disorder benefits. This exclusion was
[[Page 77632]]
not generated through any broader NQTL (such as medical necessity or
other clinical guideline).
Example 12 concludes that the plan violates these final rules. 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 because the
plan does not apply a comparable exclusion with respect to any medical/
surgical benefits in the same benefit classification.
Example 13--Impermissible NQTL imposed following a final
determination of noncompliance and direction by the Secretary. In the
proposed rules, Example 7 provides that a plan that continues to impose
an NQTL after the Secretary issues a final determination of
noncompliance with the NQTL comparative analysis documentation
requirements and directs the plan not to impose the NQTL by a certain
date, would not comply with the requirements applicable to NQTLs. These
final rules retain this example with modifications to add specificity
and reflect the substantive provisions of the final rule and
redesignate it as Example 13.
In this example, following an initial request by the Secretary for
a plan's comparative analysis of the plan's exclusion of mental health
and substance use disorder benefits for failure to complete a course of
treatment in the inpatient, in-network classification, the plan submits
a comparative analysis for the NQTL. The comparative analysis included
insufficient information to conduct an appropriate comparison of the
NQTL. After review of the comparative analysis, as well as additional
information submitted by the plan after the Secretary determines that
the plan has not submitted sufficient information to be responsive to
the request, 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 exclusion to mental health or substance use disorder
benefits in the inpatient, in-network classification are comparable to,
and applied no more stringently than, those used in designing and
applying the NQTL to medical/surgical benefits in the classification.
Although the plan submits a corrective action plan and additional
comparative analyses within 45 calendar days after the initial
determination, it does not eliminate or alter the exclusion or alter
the processes, strategies, evidentiary standards, and other factors
used in designing and applying the exclusion. Moreover, the additional
comparative analysis still does not include sufficient information. The
Secretary determines that the additional comparative analyses do not
demonstrate compliance with the requirements for NQTLs under MHPAEA.
Accordingly, the plan receives a final determination of noncompliance
with the statutory comparative analysis documentation requirements from
the Secretary, which concludes that the plan did not demonstrate
compliance through the comparative analysis process. After considering
the relevant facts and circumstances, and considering the interests of
plan participants and beneficiaries, as well as feedback from the plan,
the Secretary directs the plan not to impose the NQTL 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 exclusion of benefits for failure to complete a course of treatment
in the inpatient, in-network classification.
This Example 13 concludes that, by continuing to impose the
exclusion of mental health and substance use disorder benefits for
failure to complete a course of treatment in the inpatient, in-network
classification after the Secretary directs the plan not to impose this
NQTL, the plan violates the requirements of these final rules related
to the effect of a final determination of noncompliance.
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)(iv), 29 CFR 2590.712(c)(2)(i) and
(c)(4)(iv), and 45 CFR 146.136(c)(2)(i) and (c)(4)(iv)
The Departments proposed 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 preamble to the
proposed rules noted that the 2013 final regulations do not explicitly
incorporate the statutory prohibitions on separate financial
requirements and treatment limitations that are imposed only with
respect to mental health or substance use disorders in Code sections
9812(a)(3)(A)(i) and (ii), ERISA sections 712(a)(3)(A)(i) and (ii), and
PHS Act sections 2726(a)(3)(A)(i) and (ii), respectively, but noted
that financial requirements and quantitative treatment limitations
imposed only with respect to mental health or substance use disorder
benefits generally could not comply with the parity requirements
contained in paragraph (c)(3) of 26 CFR 54.9812-1, 29 CFR 2590.712, and
45 CFR 146.136. Additionally, the Departments referred to an example in
the 2013 final regulations that demonstrates and affirms that an NQTL
applied only to mental health or substance use disorder benefits would
not be permissible.\101\ The Departments noted in the proposed rules
that these amendments would directly incorporate the statutory
prohibitions by expressly stating that plans and issuers are not
permitted to impose any type 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.
---------------------------------------------------------------------------
\101\ See 26 CFR 54.9812-1(c)(4)(iii), Example 6, 29 CFR
2590.712(c)(4)(iii), Example 6, and 45 CFR 146.136(c)(4)(iii),
Example 6.
---------------------------------------------------------------------------
Additionally, since the 2013 final regulations state that the
application of paragraph (c)(2) to NQTLs is addressed in paragraph
(c)(4) of the regulations, the Departments also proposed to add similar
language to the 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-
reference the language proposed to be added to 26 CFR 54.9812-
1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 CFR 146.136(c)(2)(i). The
Departments proposed 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. The Departments noted that 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. As a result, such an NQTL
would be evaluated to determine whether such NQTL complies with all
applicable requirements of these final rules.
[[Page 77633]]
Many commenters supported reiterating the statutory requirement
that a plan or issuer must not impose a financial requirement or
treatment limitation that is applicable only to mental health or
substance use disorder benefits and specifying that if an exclusion of
a mental health or substance use disorder treatment or service is not
due to the application of another NQTL to both mental health or
substance use disorder benefits and medical/surgical benefits in a
classification, such exclusion would be subject to this prohibition.
Commenters also agreed with the Departments that, if an exclusion of
benefits for a mental health condition or substance use disorder is not
generated through a process, strategy, or factor, or informed by an
evidentiary standard of a broader NQTL like medical necessity, such an
exclusion would need to be evaluated for parity compliance (and would
therefore be prohibited, provided it does not apply to medical/surgical
benefits). One commenter requested the Departments clarify that a
specific NQTL need not be applicable to medical/surgical benefits in
the same classification to overcome the notion that the limitation is
separately applicable.
The Departments agree with commenters that the proposed prohibition
on NQTLs applicable only to mental health or substance use disorder
benefits is consistent with the statute, and that an exclusion of
benefits for a mental health condition or substance use disorder
otherwise covered under the plan or coverage not generated through a
process, strategy, or factor, or informed by an evidentiary standard of
a broader NQTL like medical necessity should be evaluated for MHPAEA
compliance. This exclusion is prohibited as an impermissible separate
treatment limitation if a comparable exclusion does not apply to
medical/surgical benefits in the classification. Additionally, as
evaluation of a plan's or issuer's compliance with MHPAEA is generally
assessed within a classification of benefits, the prohibition on
separately applicable financial requirements or treatment limitations
applies with respect to benefits in the same benefit classification.
Therefore, the Departments are finalizing these amendments as proposed
at 26 CFR 54.9812-1(c)(2)(i) and (c)(4)(iv), 29 CFR 2590.712(c)(2)(i)
and (c)(4)(iv), and 45 CFR 146.136(c)(2)(i) and (c)(4)(iv) 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 with respect to any
medical/surgical benefits in the same benefit classification.
5. Other Amendments
a. Meaningful Benefits
The Departments proposed to amend 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) to specify
that, if a plan (or health insurance coverage) 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. The proposed rules
proposed that for purposes of this provision, if a plan (or health
insurance coverage) 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 conditions and surgical procedures in
such classification. The Departments noted in the preamble to the
proposed rules that 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 requested comments on this provision of the proposed rules,
including whether and how to define ``meaningful benefits'' and other
potential alternatives.
Many commenters expressed support for this provision of the
proposed rules. Several of these commenters noted that this requirement
is essential to ensure that plans and issuers are no longer able to
deny reimbursement of fundamental evidence-based services for the
treatment of mental health conditions and substance use disorders in a
way that similar services would never be excluded for medical/surgical
care.
Conversely, some commenters opposed adopting any ``meaningful
benefit'' or similar standard in these final rules. Several commenters
argued that this proposed requirement exceeds the Departments'
statutory authority, and that by requiring ``meaningful benefits,'' the
Departments would convert MHPAEA into a mandate to cover mental health
and substance use disorder benefits. Other commenters stated that the
approach would require plans and issuers to compare specific
treatments, which is inconsistent with congressional intent to preserve
the ability of a plan or issuer to determine whether a specific
treatment is medically necessary or appropriate, instead of comparing
coverage for medical/surgical benefits and mental health or substance
use disorder benefits more generally. Additionally, one commenter
stated this provision would significantly broaden the scope and
complexity of a plan's or issuer's compliance analysis and limit
flexibility in benefit design. Some commenters noted that the
meaningful benefits standard, as proposed, might adversely affect the
operation of closed panel plans, as the provision of any services
outside the network could require such plans to evaluate and expand the
scope of covered mental health and substance use disorder benefits, or
alternatively, restrict out-of-network benefits.
Commenters also expressed concern that the term ``meaningful
benefits'' may not include services such as coordinated specialty care
for first episode psychosis, and without a clear definition of the
term, such services would not be covered for privately insured
individuals. Another commenter stated that the proposed meaningful
benefit standard may overlook and devalue the mental health and
substance use disorder services provided by primary care physicians and
pediatricians, who are generally considered to be medical/surgical
providers.
The Departments received many comments on how to define the term
``meaningful benefits,'' as well as potential alternatives, including
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.
Many commenters generally recommended defining ``meaningful benefits''
based on independent medical and clinical guidelines or primary
evidence-based treatment based on independent standards of current
medical practice. Some commenters recommended that ``meaningful
benefits'' be defined as the
[[Page 77634]]
full continuum of services that are consistent with independent
professional medical or clinical standards (or, equivalently, the term
``generally accepted standards of care''). Other commenters recommended
that these final rules require coverage of at least one primary
treatment for a mental health condition or substance use disorder in a
classification or coverage that aligns with coverage under the State's
designated EHB-benchmark plan. A few commenters recommended that the
definition of ``meaningful benefits'' or primary treatment be further
developed through additional notice and comment rulemaking or a request
for information.
The Departments recognize, as commenters stated, that additional
clarifications are warranted regarding the definition of the term
``meaningful benefits.'' With regard to comments stating that this
provision of the proposed rules is a benefit mandate that would require
plans and issuers to cover specific treatments, as well as comments
that raised concerns about specific mental health and substance use
disorder services not being considered meaningful benefits (and
therefore not being covered by plans and issuers), the Departments
reiterate that this requirement does not require plans and issuers to
cover mental health and substance use disorder benefits independently
or irrespective of what is provided with respect to medical/surgical
benefits.
After considering comments received, the Departments are finalizing
the proposed meaningful benefits standard, with modifications and
clarifications. These final rules require that, if a plan (or health
insurance coverage) provides any benefits for a mental health condition
or substance use disorder in any classification of benefits, it must
provide meaningful benefits for that mental health condition or
substance use disorder in every classification in which medical/
surgical benefits are provided. For this purpose, whether the benefits
provided are meaningful benefits is determined in comparison to the
benefits provided for medical conditions and surgical procedures in the
classification, and requires, at a minimum, coverage of benefits for
that condition or disorder in each classification in which the plan (or
coverage) provides benefits for one or more medical conditions or
surgical procedures. Additionally, a plan (or coverage) does not
provide meaningful benefits under these final rules unless it also
provides benefits for a core treatment for that condition or disorder
in each classification in which the plan (or coverage) provides
benefits for a core treatment for one or more medical conditions or
surgical procedures.
The Departments note that, while these final rules only require
plans and issuers to cover a minimum of one core treatment for a
covered mental health condition or substance use disorder in every
classification of benefits in which the plan (or coverage) provides
benefits for a core treatment for one or more medical conditions or
surgical procedures, plans and issuers are strongly encouraged to
provide more robust coverage to ensure that participants and
beneficiaries have access to the mental health and substance disorder
care they need. The Departments incorporate this requirement in 26 CFR
54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR
146.136(c)(2)(ii) of these final rules, as suggested by commenters, to
ensure that plans and issuers offering mental health or substance use
disorder benefits do not provide coverage for the full range of
medical/surgical benefits in a classification, yet cover only one or a
few isolated ancillary benefits for a covered mental health condition
or substance use disorder in the same classification. As noted earlier
in this preamble, a commenter expressed the concern that this
requirement would broaden the scope and complexity of analyzing MHPAEA
NQTL compliance and limit benefit design. However, as noted above, this
provision amends the general requirement and limits the ability of a
plan or issuer to implement a benefit design that provides robust
benefits for medical conditions and surgical procedures while offering
minimal benefits for mental health conditions and substance use
disorders. This requirement, in combination with the other amendments
to these final rules, will help to better ensure equitable access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits.
For purposes of these final rules, a core treatment for a condition
or disorder is a standard treatment or course of treatment, therapy,
service, or intervention indicated by generally recognized independent
standards of current medical practice. This definition of ``meaningful
benefits'' takes an approach that is similar to the suggestion made by
multiple commenters, as noted earlier in this preamble, that meaningful
benefits be defined as the primary treatment for a condition or
disorder based on generally recognized independent standards of current
medical practice. However, instead of defining ``meaningful benefits''
as coverage for the primary treatment for a condition or disorder in a
classification, these final rules require the coverage of a core
treatment because, from a medical or clinical perspective, there may
not be a single primary treatment in many cases for a given condition
or disorder (even where there are evidence-based treatments, services,
therapies, and standards of care).
These final rules do not set forth specific requirements for plans
and issuers to determine what constitutes a core treatment for any
particular condition or disorder, but plans and issuers, in determining
a core treatment for a condition or disorder in this context, should
rely on current evidence-based medical and clinical information. The
Departments note that a core treatment for a particular condition or
disorder may not necessarily refer to a single item or service but may
instead encompass a suite of items and services that together
constitute a core treatment, depending on the relevant generally
recognized independent standards of current medical practice. In such a
case, the Departments expect that under this provision, plans and
issuers will cover all components of at least one core treatment if the
items and services provided as part of the treatment span a number of
classifications, provided the plan or coverage provides benefits for
one or more core treatments for any medical conditions or surgical
procedures in those classifications. For example, one core treatment
for major depressive disorder generally includes prescription drugs and
psychotherapy. However, a core treatment may also include only
prescription drugs or only psychotherapy (and in cases of severe
depression, may also include inpatient hospitalization or other types
of residential or outpatient treatment). The Departments note that a
core treatment, with respect to a classification, may include the same
item or service in other benefit classifications. For example, for
major depressive disorder, psychotherapy could be a core treatment with
respect to both the outpatient, in-network and outpatient, out-of-
network classifications. In response to commenter requests for examples
of meaningful benefits, the Departments have modified proposed Examples
5 and 6, and added examples that further illustrate the application of
the meaningful benefit standard, as discussed in more detail later in
this preamble.
The Departments also recognize the workability concerns raised by
commenters with respect to the proposed meaningful benefits standard
[[Page 77635]]
in the proposed rules. In response to these comments, the Departments
include language in these final rules to provide that, if there is no
core treatment for a mental health condition or substance use disorder
with respect to a classification, the plan (or coverage) is not
required to provide benefits for a core treatment for such condition or
disorder in that classification. Instead, the plan (or coverage) must
provide benefits for such condition or disorder in every classification
in which medical/surgical benefits are provided. Additionally, under
these final rules, if the plan (or coverage) does not provide
meaningful benefits for any medical condition or surgical procedure in
a classification, the plan (or coverage) is not required to provide
meaningful benefits for any mental health conditions or substance use
disorders in the classification. This language further makes clear that
the requirement to provide coverage of meaningful benefits for a
condition or disorder is not a coverage mandate, but rather another
approach to ensuring parity between mental health or substance use
disorder benefits and medical/surgical benefits in a classification.
The Departments also stated in the preamble to the proposed rules
that they recognize that the meaningful benefits proposal is related to
an issue characterized as ``scope of services'' or ``continuum of
care,'' as addressed in the preamble to the 2013 final
regulations.\102\ ``Scope of services,'' when used in this context,
generally refers to the types of treatment and treatment settings that
are covered by a plan or coverage. The Departments requested comments
on whether additional guidance is needed regarding how the proposed
meaningful benefits standard would interact with the approach related
to scope of services adopted under the 2013 final regulations.
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\102\ See 78 FR 68240, 68246-68247 (Nov. 13, 2013).
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Commenters suggested the Departments add ``scope of services'' or
``scope of covered services'' to the illustrative, non-exhaustive list
of NQTLs. These commenters noted the importance of psychiatric care
being fully integrated with the rest of medicine in primary care
settings and in hospitals. Despite the language in the 2013 final
regulations on intermediate services,\103\ these commenters highlighted
that plans and issuers sometimes exclude fundamental services and do
not assess those exclusions as NQTLs. These commenters noted that
identifying ``scope of services'' or ``scope of covered services'' as a
covered NQTL would remove ambiguity and require plans and issuers to
determine whether an exclusion of mental health or substance use
disorder benefits met the NQTL comparability and stringency test.
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\103\ Ibid. In the preamble to the 2013 final regulations, the
Departments stated that plans and issuers must assign covered
intermediate mental health and substance use disorder benefits to
the existing six benefit classifications in the same way that they
assign comparable intermediate medical/surgical benefits to these
classifications. The 2013 final regulations also included additional
examples illustrating the application of the NQTL rules to plan
exclusions affecting the scope of services and clarified that plan
or coverage restrictions based on geographic location, facility
type, provider specialty, and other criteria that limit the scope or
duration of treatment must comply with the NQTL parity standard
under the final rules.
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The Departments acknowledge these comments and the importance of
psychiatric care being fully integrated in primary care settings and in
hospitals but decline to add scope of services as an NQTL in the
illustrative list in these final rules. Like the 2013 final
regulations, these final rules are not intended to mandate coverage of
any particular benefits. These final rules continue to require mental
health and substance use disorder benefits and medical/surgical
benefits to be assigned to the six classifications set forth in the
regulations. For intermediate services like residential treatment,
partial hospitalization, and intensive outpatient treatment, the
Departments continue to require plans and issuers to assign covered
intermediate mental health and substance use disorder benefits to the
existing six benefit classifications in the same way that they assign
comparable intermediate medical/surgical benefits to these
classifications.\104\ The Departments point to the examples in these
final rules that address coverage restrictions based on geographic
location, facility types, provider specialty, and other criteria that
limit the scope or duration of benefits. Plans and issuers are required
to comply with the NQTL requirements with respect to these types of
restrictions. Further, the Departments note that exclusions of services
to treat a condition or disorder otherwise covered by the plan or
coverage are NQTLs that must comply with the provisions applicable to
NQTLs under the final rules (including that there are no separate NQTLs
that apply only to mental health or substance use disorder benefits in
a classification).
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\104\ Id. at 68247. For example, as described in the preamble to
the 2013 final regulations, 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 use 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.
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In response to questions about whether the No Surprises Act's
requirements that certain out-of-network items and services be covered
by plans and issuers might adversely affect the operation of closed
panel plans by effectively requiring the coverage of out-of-network
mental health or substance use disorder benefits (including in the
context of the meaningful benefits standard in these final rules), the
Departments note that nothing in these final rules requires a plan or
coverage that provides coverage for medical/surgical benefits in the
inpatient, out-of-network and outpatient, out-of-network
classifications only to the extent required under Code sections 9816
and 9817, ERISA sections 716 and 717, and PHS Act sections 2799A-1 and
2799A-2 to provide additional mental health or substance use disorder
benefits in the inpatient, out-of-network and outpatient, out-of-
network classifications in accordance with this section. This approach
is consistent with language in the 2013 final regulations which stated
that compliance with PHS Act section 2713 (requiring coverage for
recommended preventive services without any cost-sharing requirements)
should not require that the full range of benefits for a mental health
condition or substance use disorder be provided under MHPAEA. 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 make
explicit the Departments' interpretation that the requirement to
provide coverage for mental health and substance use disorder benefits
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 2010 interim final rules implementing
MHPAEA.\105\
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\105\ 75 FR 5410, 5413 (Feb. 2, 2010).
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The Departments solicited comments on the provisions of the
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 received very few comments on this issue. Most of the
comments received related to the classification of certain
[[Page 77636]]
benefits as medical/surgical instead of mental health or substance use
disorder. One comment suggested that a new classification of ``urgent/
crisis care'' should be added to encompass both medical/surgical urgent
care and mental health or substance use disorder crisis services.
Because additional classifications are not required or necessary, the
Departments are finalizing these amendments as proposed. Plans and
issuers are reminded that the list of the current classifications in
these final rules is exhaustive. Classification of benefits as medical/
surgical benefits instead of mental health or substance use disorder
benefits is discussed in more detail earlier in this preamble. The
Departments will consider whether and to what extent additional
guidance may be needed to address the application of MHPAEA to urgent/
crisis care.
In the proposed rules, the Departments proposed to add two 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. The Departments are finalizing these examples with
modifications to align with these final rules and are providing
additional clarity on the application of the meaningful benefits
standard to plans and issuers by redesignating proposed Example 6 as
Example 7 and adding new Examples 6 and 8.
In proposed Example 5, a plan generally covers treatment for ASD, a
mental health condition,\106\ 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. The preamble of the proposed rules stated
that, based on generally recognized independent standards of current
medical practice consulted, ABA therapy is the primary treatment for
ASD in children. In this proposed example, the plan generally covers
the full range of outpatient treatments and treatment settings,
including primary treatments, for medical conditions and surgical
procedures when provided on an out-of-network basis. The proposed
example concluded that the plan violates the proposed meaningful
benefits standard because, by not providing benefits for ABA therapy,
it fails to provide meaningful benefits for ASD in the outpatient, out-
of-network classification, but generally covers the full range of
medical/surgical benefits in the classification.
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\106\ As stated earlier in this preamble, the proposed rules
stated, and these final rules continue to state, that for purposes
of MHPAEA, ASD is a mental health condition under generally
recognized independent standards of current medical practice.
Therefore, benefits for this condition are considered mental health
benefits, and are subject to the protections of MHPAEA and its
implementing regulations.
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In 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. The
example in the proposed rules noted that nutrition counseling is the
primary treatment for eating disorders in the outpatient, in-network
classification and stated that the plan generally provides benefits for
the primary treatments for medical conditions and surgical procedures
in the outpatient, in-network classification. The proposed example
concluded that the plan violates the proposed meaningful benefits
standard because, by not providing benefits for nutrition counseling,
it fails 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. The Departments noted that, if the plan covers
medical/surgical benefits for nutrition counseling, the plan would also
violate the prohibition on separate NQTLs applicable only to mental
health or substance use disorder benefits.
Several commenters generally expressed support for the proposed
Examples 5 and 6, which illustrated clear instances where exclusions of
key services for ASD and eating disorders violate MHPAEA, noting that
these examples remove any ambiguity whether such exclusions are
inconsistent with MHPAEA's requirements. One commenter expressed
concerns about references to ABA therapy specifically because referring
to a specific treatment may be limiting as evidence evolves regarding
ASD. This commenter also cited a relatively weak evidence base for ABA
therapy as a reason why the example should not specifically reference
ABA therapy. Another commenter requested that Example 6 define
``primary treatments'' and ``meaningful benefits'' based on independent
medical and clinical guidelines. A few commenters suggested that the
Departments use the term ``medical nutrition therapy'' instead of
nutrition counseling, to better reflect the clinical term used in
treatment codes. Another commenter suggested providing an additional
example related to the treatment of OUD, to reinforce the clear
requirement to cover opioid treatment program services as part of the
``meaningful'' coverage of substance use disorder benefits in all
classifications in which meaningful medical/surgical services are
covered.
After considering comments, the Departments are finalizing Examples
5 and 6 in the proposed rules with modifications, to make the examples
consistent with the clarifications described earlier in this preamble
stating that a plan or issuer will be required to provide meaningful
benefits for a mental health condition or substance use disorder in a
classification if it provides meaningful benefits for one or more
medical conditions or surgical procedures in the same classification.
These final rules also make minor clarifying changes to reflect more
appropriate clinical terminology and introduce two new, additional
examples. In each example in these final rules that illustrates the
meaningful benefits standard, the group health plan is subject to the
requirements of MHPAEA and provides both medical/surgical benefits and
mental health and substance use disorder benefits. Additionally, these
final rules note that references in these examples to any particular
core treatment are included for illustrative purposes only and are not
intended to limit coverage in any way. The Departments remind plans and
issuers that they must consult generally recognized independent
standards of current medical practice to determine the applicable core
treatment, therapy, service, or intervention for any covered condition
or disorder, and note that, as medical evidence evolves, the core
treatment options for any condition or disorder may change.
In Example 5 of these final rules, a plan covers treatment for ASD.
As explained earlier in this preamble and in the proposed rules, for
purposes of MHPAEA, ASD is a mental health condition under generally
recognized independent standards of current medical practice.\107\
Specifically, the plan covers outpatient, out-of-network developmental
screenings for ASD, but excludes all other benefits for outpatient
treatment for ASD, including ABA therapy, when provided on an out-of-
network basis. The plan generally covers the full range of outpatient
treatments (including core treatments)
[[Page 77637]]
and treatment settings for medical conditions and surgical procedures
when provided on an out-of-network basis. Under the generally
recognized independent standards of current medical practice consulted
by the plan, developmental screenings alone that are covered for
diagnostic purposes, without any coverage for a therapeutic
intervention, do not constitute a core treatment for ASD. Example 5
concludes that the plan violates these final rules. Although the plan
covers benefits for ASD, in the outpatient, out-of-network
classification, it only covers developmental screenings, so it does not
cover a core treatment for ASD in the classification. Since the plan
generally covers the full range of medical/surgical benefits including
a core treatment for one or more medical conditions or surgical
procedures in the classification, it fails to provide meaningful
benefits for treatment of ASD in the classification, as required under
these final rules.
---------------------------------------------------------------------------
\107\ DSM (5th ed.), Section II: Diagnostic Criteria and Codes,
Autism Spectrum Disorder.
---------------------------------------------------------------------------
New Example 6 of these final rules starts with the same facts as
Example 5 and illustrates how these final rules apply where a plan or
issuer does not cover a core treatment for any medical conditions or
surgical procedures in a classification. The facts of new Example 6
state that the plan is a health maintenance organization (HMO) that
does not cover the full range of medical/surgical benefits, including a
core treatment for any medical conditions or surgical procedures in the
outpatient, out-of-network classification (except as required under
Code sections 9816 and 9817, ERISA sections 716 and 717, and PHS Act
sections 2799A-1 and 2799A-2), but covers benefits for medical
conditions and surgical procedures in the inpatient, in-network;
outpatient, in-network; emergency care, and prescription drug
classifications. Example 6 concludes that the plan does not violate the
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 the plan does not provide meaningful
benefits including a core treatment for any medical condition or
surgical procedure in the outpatient, out-of-network classification
(except as required under Code sections 9816 and 9817, ERISA sections
716 and 717, and PHS Act sections 2799A-1 and 2799A-2), the plan is not
required to provide meaningful benefits, for any mental health
conditions or substance use disorders in that classification.\108\ The
Departments note that, nevertheless, the plan must provide meaningful
benefits for each mental health condition and substance use disorder
for which the plan provides benefits in every classification in which
meaningful medical/surgical benefits are provided. Additionally, the
Departments note that plans and issuers must comply with other
requirements of these final rules, as applicable, including the
prohibition on NQTLs applicable only to mental health and substance use
disorder benefits.\109\
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\108\ As discussed earlier in this preamble, the Departments
note that this conclusion would hold if the plan provides benefits
for a core treatment for a medical/surgical condition in the
outpatient, out-of-network classification, solely to meet
requirements under the provisions of the No Surprises Act.
\109\ For example, if the plan excludes coverage for ABA therapy
and the exclusion does not comply with the provisions applicable to
NQTLs under the final rules--including the design and application
requirements and the relevant data evaluation requirements (if the
exclusion was generated through a broader NQTL such as medical
necessity or other clinical guideline that also applies to medical/
surgical benefits in the relevant classification), or the
requirement that there are no separate NQTLs that apply only to
mental health or substance use disorder benefits in a
classification--the plan violates the rules of 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4).
---------------------------------------------------------------------------
In Example 7 of these final rules, which was redesignated from
Example 6 in the proposed rules, a plan provides extensive benefits,
including for core treatments for many medical conditions and surgical
procedures in the outpatient, in-network classification, including
nutrition counseling for diabetes and obesity. The plan also generally
covers diagnosis and treatment for eating disorders, which are mental
health conditions, including coverage for nutrition counseling \110\ to
treat eating disorders in the outpatient, in-network classification.
Under this example, nutrition counseling is a core treatment for eating
disorders, in accordance with generally recognized independent
standards of current medical practice consulted by the plan. Example 7
concludes that the plan does not violate the meaningful benefits
standard in these final rules. The coverage of diagnosis and treatment
for eating disorders, including nutrition counseling, in the
outpatient, in-network classification results in the plan providing
meaningful benefits for the treatment of eating disorders in the
classification, as determined in comparison to the benefits provided
for medical conditions and surgical procedures in the classification.
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\110\ The proposed rules and these final rules refer to benefits
for ``nutrition counseling.'' The Departments acknowledge several
commenters who noted that other terminology may be more appropriate,
such as ``medical nutrition therapy'' or ``medical nutrition therapy
provided by a dietitian'' using specific CPT codes. The Departments
intend that references to nutritional counseling for eating
disorders be interpreted broadly to include these and other
appropriate types of treatment for eating disorders.
---------------------------------------------------------------------------
In response to commenters who requested an additional example
illustrating what plans and issuers must do to provide meaningful
benefits for the treatment of OUD, the Departments are also finalizing
new Example 8. In this new example, a plan provides extensive benefits
for the core treatments for many medical conditions and surgical
procedures in the outpatient, in-network and prescription drug
classifications. The plan provides coverage for diagnosis and treatment
for OUD, a substance use disorder, in the outpatient, in-network
classification, by covering counseling and behavioral therapies, also
referred to as psychosocial treatments. Additionally, the plan provides
coverage for diagnosis and treatment for OUD, in the prescription drug
classification, by covering medications to treat opioid use disorder
(MOUD). Under this example, counseling and behavioral therapies and
MOUD, in combination, are one of the core treatments for OUD, in
accordance with generally recognized independent standards of current
medical practice consulted by the plan.
Example 8 concludes that the plan does not violate these final
rules. The coverage of counseling and behavioral therapies and MOUD, in
combination, in the outpatient, in-network classification and
prescription drug classification, respectively, results in the plan
providing meaningful benefits for the treatment of OUD in the
outpatient, in-network and prescription drug classifications.
b. Classification of 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. The Departments proposed to reiterate 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 a plan or issuer may not divide benefits into
any sub-classifications other than those specifically permitted under
the regulations. The Departments did not propose any substantive
changes to the existing sub-classifications or to permit any new sub-
classifications. The Departments also proposed non-substantive changes
to 26 CFR 54.9812-1(c)(3)(iv), 29 CFR 2590.712(c)(3)(iv), and 45 CFR
146.136(c)(3)(iv) to label the
[[Page 77638]]
tables in the examples, update references in the examples, and
redesignate the examples as paragraphs.
A few commenters expressed concerns about the classification of
certain types of benefits and providers into existing classifications
and sub-classifications, including intensive outpatient treatment,
partial hospitalization programs, and other team-based models of care.
Some commenters requested additional clarification, including a
standard definition for the outpatient sub-classifications, citing the
fact that some plans and issuers use differing variations to define the
outpatient, office visit sub-classification. One commenter requested
that the Departments indicate that the sub-classifications applicable
to financial requirements and quantitative treatment limitations under
paragraph (c)(3)(iii) of the 2013 final regulations may also be used
for NQTLs.
As discussed earlier in this preamble, plans and issuers must
assign covered intermediate mental health and substance use disorder
benefits to the existing six benefit classifications in the same way
that they assign comparable intermediate medical/surgical benefits to
these classifications. Additionally, plans and issuers that opt to use
sub-classifications for outpatient benefits must assign covered
outpatient benefits to the permissible outpatient sub-classifications
for mental health and substance use disorder benefits in the same way
they assign comparable medical/surgical benefits. The Departments are
finalizing the clarification that a plan or issuer is not permitted to
divide benefits into any sub-classifications other than those
specifically permitted under the regulations,\111\ as well as the
clarification 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.\112\ Consistent with the proposed rules, the
Departments are not making any substantive changes to the existing sub-
classifications or to permit any new sub-classifications of benefits in
these final rules. The Departments are also finalizing the non-
substantive changes to 26 CFR 54.9812-1(c)(3)(iv), 29 CFR
2590.712(c)(3)(iv), and 45 CFR 146.136(c)(3)(iv), for which no comments
were received.
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\111\ 26 CFR 54.9812-1(c)(3)(iii), 29 CFR 2590.712(c)(3)(iii),
and 45 CFR 146.136(c)(3)(iii).
\112\ 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).
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The Departments noted in the preamble to the proposed rules that
they have received questions and requests for guidance on how to comply
with MHPAEA's requirements with respect to telehealth benefits,
including where telehealth fits into the existing classifications and
sub-classifications of benefits and whether changes are necessary to
account for telehealth benefits. The Departments did not propose any
changes in the proposed rules with respect to telehealth benefits and
instead stated that they expected plans and issuers to treat telehealth
benefits the same way they treat those benefits when provided in person
in determining the classification or sub-classifications in which a
particular benefit belongs. The Departments requested comments on
whether changes to the framework and existing regulations implementing
MHPAEA were necessary to account for telehealth benefits.
Several commenters stated that the expansion of telehealth services
can supplement a plan's or issuer's network where there are in-person
provider shortages and expressed support for treating telehealth
benefits the same way those benefits are treated when provided in
person. Some commenters discussed the growth and sustained usage of
telehealth services since the start of the COVID-19 pandemic,
particularly for mental health and substance use disorder services.
Commenters stressed that telehealth is particularly valuable in rural
and medically underserved areas. However, commenters stressed that
telehealth may not be appropriate for all patients and does not fully
replace in-person mental health and substance use disorder care. The
Departments reiterate that plans and issuers are expected to treat
telehealth benefits the same way they treat those benefits when
provided in person in determining the classification or sub-
classifications in which a particular benefit belongs.
As discussed earlier in the preamble, several commenters requested
the Departments take into account telehealth in the relevant data
evaluation requirements, as well as the requirements for standards
related to network composition; however, the Departments are not
addressing any specific data metrics for telehealth in these final
rules. After reviewing the comments received on this issue, the
Departments are not making changes in these final rules to address how
to classify telehealth benefits. The Departments understand that
telehealth plays a vital role in the provision of health care,
particularly following the COVID-19 pandemic, and may support access to
services for those with transportation barriers. When evaluating MHPAEA
compliance, plans and issuers must include any covered telehealth
benefits in the six classifications used to apply the parity
requirements. The Departments also understand that telehealth can be
used by plans and issuers as a tool to address provider shortages.
These final rules also acknowledge telehealth can be leveraged to
mitigate provider shortages in a geographic area and that leveraging
telehealth is a potential reasonable action that can be used to address
material differences in in-network access.
c. Availability of Plan Information
Treasury and DOL proposed 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 to clarify that 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 proposed 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 the 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. The Departments noted that this
clarification is consistent with proposed 26 CFR 54.9812-2(e)(2), 29
CFR 2590.712-1(e)(2), and 45 CFR 146.137(e)(2), 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
when requested by 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. The
Departments noted in the preamble to the proposed rules that
participants and beneficiaries in ERISA plans should be able to request
copies of comparative analyses to ensure they
[[Page 77639]]
are informed about their health plans or group health insurance
coverage. Additionally, the Departments noted that 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.
The Departments received several comments on this aspect of the
proposed rules. A few commenters recommended that the Departments add
language to the end of paragraph (d)(3) of 26 CFR 54.9812-1, 29 CFR
2590.712, and 45 CFR 146.136 making clear that no part of the
comparative analyses or other applicable information required by 26 CFR
54.9812-2, 29 CFR 2590.712-1, or 45 CFR 146.137 may be withheld when
requested, including because the information is proprietary, has
commercial value, or is commercially protected. One of these commenters
also urged the Departments to conform this provision with the standard
proposed in 26 CFR 54.9812-2(e), 29 CFR 2590.712-1(e), and 45 CFR
146.137(e), so that individuals can have information at the time of the
denial, which is needed to assess whether to raise a parity compliance
claim in an internal grievance or appeal.
After considering comments, the Departments are finalizing the
amendments to 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR
146.136(d)(3) as proposed, with a correction. The final rules remove
the phrase ``upon appeal of an adverse benefit determination'' and
replace it with ``who have received an adverse benefit determination''
in the third sentence of 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3),
and 45 CFR 146.136(d)(3) to conform with the requirements under the DOL
claims procedure rule at 29 CFR 2560.503-1 and rules issued by the
Departments at 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR
147.136, which set forth rules regarding claims and appeals. The
Departments also decline to exempt plans and issuers from providing
certain types of information as part of their comparative analyses, to
ensure transparency when an individual (or their authorized
representative) requests a comparative analysis. As stated earlier in
this preamble, this information is relevant to a claimant's claim for
benefits and should therefore be made available.
d. Other Provisions
The proposed rules included proposed amendments to 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). The preamble to the proposed rules noted that 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 EHB. The preamble further stated that HHS
has updated 45 CFR 156.115(a)(3) to state that provision of EHB 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.'' \113\ The Departments did not
receive comments on this provision. 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 are finalizing this change as proposed with minor edits for
precision, and to reflect that the requirement would only apply to a
health insurance issuer offering non-grandfathered health insurance
coverage in the individual or small group market that is required to
provide mental health and substance use disorder services, including
behavioral health treatment services, as part of EHB required under 45
CFR 156.110(a)(5) and 156.115(a).
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\113\ 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 (Sept. 27, 2021), 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 proposed rules also included several technical edits to update
paragraph (c)(3)(i) of the 2013 final regulations to add citations,
include additional specificity in citations, and strike an outdated
reference to limitations on annual deductibles for non-grandfathered
health plans in the small group market at PHS Act section 2707(b) and
ACA section 1302(c). The Departments did not receive any comments on
these provisions and are finalizing as proposed.
The Departments are finalizing proposed technical amendments to 26
CFR 54.9812-1(c)(3)(iii)(A) and (B), 29 CFR 2590.712(c)(3)(iii)(A) and
(B), and 45 CFR 146.136(c)(3)(iii)(A) and (B) to update citations. No
comments were received on these technical amendments. In finalizing
these provisions, the Departments are also restoring parenthetical
references to health insurance coverage. Re-insertion of the phrase
``health insurance coverage'' is not intended to be a substantive
change from the proposed rules, but rather corrects this omission and
is consistent with the text of the 2013 final regulations.
B. New Regulations at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR
146.137
The CAA, 2021 amended MHPAEA, in part, to expressly require plans
and issuers that offer coverage that provides 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 comparative analyses of the design and application
of NQTLs, and make their comparative analyses and certain information
available to the Departments or applicable State authorities upon
request. The Departments proposed to codify this requirement.
Many commenters expressed support for codification of this
requirement with several of these commenters noting that such detailed
requirements are necessary to clarify what plans' or issuers' analyses
must contain, as well as to hold plans and issuers accountable in
following such requirements.
Many other commenters criticized the proposed content elements and
requested specific changes to the rules as proposed to assist plans and
issuers in complying with the requirement to perform and document
comparative analyses. Several commenters requested examples of a
compliant comparative analysis to assist in understanding what
documentation, in the Departments' view, is required to meet the
standards. Another commenter stated that critical components of the
terms, such as what a test comprises, the standards for
[[Page 77640]]
meeting that test, and compiling the proper information are subject to
interpretation, which can lead to regulators and auditors having
different perspectives on the requirements, creating substantial
uncertainty for plans and issuers that are attempting to comply.
Several commenters also expressed a desire for additional clarification
regarding the proposed content elements with respect to specific NQTLs.
One commenter was concerned that the proposed rules did not provide
clarity on how to apply the new comparative analysis requirements to
complex NQTLs, such as those related to network administration.
After reviewing comments, the Departments are finalizing the
codification of the new statutory requirement that plans and issuers
that offer coverage that provides both medical/surgical benefits and
mental health or substance use disorder benefits and impose NQTLs on
mental health or substance use disorder benefits must perform and
document a comparative analysis of the design and application of each
such NQTL, with modifications in response to comments as noted. This
finalized provision aligns the regulations with the statutory
requirements under MHPAEA, as amended by the CAA, 2021. In response to
commenter concerns that the proposed rules did not clarify how a plan
or issuer should apply the new comparative analysis requirements to
factors and evidentiary standards used to design and apply NQTLs that
are especially complex (including those related to network
composition), the Departments disagree that the proposed rules and
these final rules do not rationally relate to factors and evidentiary
standards used to design and apply NQTLs like standards related to
network composition or methods for determining out-of-network rates.
Using the definitions of the terms ``processes,'' ``strategies,''
``evidentiary standards,'' and ``factors'' under these final rules to
inform the content elements required in a comparative analysis, these
final rules provide sufficient guidance for plans and issuers to
perform and document their comparative analyses of all NQTLs.
Additionally, these final rules also provide additional guidance on
how a plan or issuer with a typical plan or coverage design should
collect and evaluate data for NQTLs related to network composition
(which must be included in the comparative analysis) under the relevant
data evaluation requirements, and provides examples of reasonable
actions that plans and issuers may take (and document in the
comparative analysis) if such data suggest that NQTLs related to
network composition contribute to material differences in access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits in a classification. The Departments
acknowledge that a plan or issuer imposing a complex NQTL with respect
to mental health and substance use disorder benefits by relying on a
large number of complicated factors and evidentiary standards will
likely require more resources to perform and document their comparative
analysis in a manner that is compliant with these final rules. The
Departments also appreciate that some of the required content for
comparative analyses are described broadly and therefore could lead to
the Departments and applicable State authorities taking different
approaches in determining what constitutes a sufficient comparative
analysis. However, these broad descriptions are necessary to ensure
that these final rules set forth a single set of content elements that
are flexible enough to apply to the wide variety of different NQTLs
imposed by plans and issuers with respect to mental health and
substance use disorder benefits.
The Departments are not providing an example of a comparative
analysis that complies with these final rules, but continue to consider
what additional resources and guidance are necessary to assist the
regulated community in complying with MHPAEA and these final rules. A
plan or issuer that analyzes the design and application of an NQTL
along with the relevant data and considers it in the manner described
earlier in this preamble will be well positioned to perform and
document a comparative analysis in a manner consistent with these final
rules. The Departments also note, as stated earlier in this preamble,
that they intend to update the MHPAEA Self-Compliance Tool for plans
and issuers to determine which data to collect and evaluate. The
Departments note that what constitutes a compliant comparative analysis
will depend on all the relevant facts and circumstances, including the
provisions of the plan or coverage and the relevant NQTL. The
Departments remain committed to providing additional guidance to assist
with the implementation of these final rules.
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 proposed 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). Specifically, the
Departments proposed that each comparative analysis would include, at a
minimum, with respect to each NQTL imposed under the plan or coverage
on mental health and substance use disorder benefits, six 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.
In addition to proposing to require the inclusion of specific
elements in each comparative analysis, the proposed rules would require
each plan or issuer to prepare and make available to the Departments,
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.
Several commenters expressed general support for the proposed
elements that plans and issuers would be required to include in their
comparative analyses under the proposed rules. Some commenters
highlighted that the clarity the proposed rules provided would help to
reduce confusion as to how plans and issuers should perform and
document their comparative analyses, and others reasoned that, by
clarifying the comparative analysis content requirements under the
proposed rules, regulators will be able to better determine compliance
with MHPAEA.
Some commenters, however, stated that the proposed rules did not
provide enough clarity, which they stated may make complying with the
requirements more challenging. These commenters stated that providing a
list of all NQTLs imposed under a plan or coverage would be challenging
without either a definitive list of all NQTLs or requiring that plans
and issuers perform and document comparative analyses only for NQTL
types that the Departments define through regulations or guidance. As
discussed earlier in the preamble, several commenters requested that
the Departments provide an exhaustive list of NQTLs for which a
comparative analysis would be required.
[[Page 77641]]
Commenters also expressed concerns about whether plans and issuers
would be able to access the information and data necessary to perform
and document a sufficient comparative analysis that includes all of the
proposed content requirements. Several of these commenters mentioned
difficulty acquiring the necessary information and data from their
service providers and business partners, while other commenters stated
that the proposed content requirements for comparative analyses are
superfluous, unhelpful, or unreasonably burdensome. Some commenters
described concerns related to cost and feasibility of preparing
comparative analyses that would comply with the proposed content
requirements.
After reviewing comments, the Departments are finalizing the
requirement that a comparative analysis include, at a minimum, the six
content elements listed in the proposed rules, consistent with the
statute, with several modifications. This section of the preamble to
these final rules discusses the comments received with respect to each
content element in the proposed rules and the modifications made to
each content element in these final rules.
With respect to the requirement to prepare and make available, upon
request, a written list of all NQTLs imposed under the plan or coverage
and commenters who noted that this requirement would be challenging to
meet without a definitive list of all NQTLs, as stated earlier in this
preamble, the Departments decline to provide an exhaustive list of
NQTLs in these final rules or separate guidance. The Departments also
note that, like the substantive requirements for NQTLs, the comparative
analysis requirements of MHPAEA are not limited to a list of specific
NQTLs, but apply to all NQTLs that limit the scope or duration of
treatment under a plan or coverage. As a result, these final rules
require that, in addition to the comparative analysis for each NQTL,
each plan or issuer must prepare and make available to the Secretary,
upon request, a written list of all NQTLs imposed under the plan or
coverage.
Additionally, for ERISA-covered plans, the written list must be
provided to the named fiduciaries of the plan who are required to
include a certification as part of each comparative analysis, as
discussed later in this preamble. However, because the Departments
recognize that a sufficient comparative analysis will include
descriptions of the information, evidence, sources, and standards, as
well as factors and evidentiary standards, that the plan or issuer
considered or relied upon as part of the content elements, these final
rules eliminate the separate requirement that proposed to require plans
and issuers to provide a general description of any information
considered or relied upon by the plan or issuer in preparing a
comparative analysis for an NQTL.
The Departments are aware of reports that some self-insured plans
have been unsuccessful in receiving comparative analyses (or the
information required to perform and document comparative analyses)
requested from their TPAs or other service providers. The Departments
emphasize that, as of the date of the publication of these final rules,
the statutory requirement to perform and document comparative analyses
has been applicable to plans and issuers for over 3 years. The
Departments have previously stated that TPAs and other service
providers are expected to work closely with plans and issuers to
support their needs by providing data and other information about the
design and application of NQTLs applicable to mental health and
substance use disorder benefits and to medical/surgical benefits so
that comparative analyses can be performed and documented (regardless
of whether the Departments or an applicable State authority have
requested them). Because plans and issuers are the entities required by
statute to perform and document comparative analyses and there is no
exception to the requirement when necessary information cannot be
obtained from another entity, plans and issuers must work with their
TPAs and service providers to obtain the information they need for
their comparative analyses. Any ERISA-governed group health plans that
contract with service providers refusing or otherwise failing to
provide the requisite information should notify DOL.
Additionally, as noted earlier in this preamble, the Departments
acknowledge the challenges, cost, and complexity of collecting and
evaluating data, but are of the view that it is important to include
specific content requirements in these final rules, including those
related to relevant data to measure the impact of an NQTL on access to
mental health and substance use disorder benefits. However, in
recognition of these challenges and to align with other changes made in
these final rules the Departments have modified certain specific
provisions within some of the listed content elements as described in
the following paragraphs.
a. Description of the NQTL
For each comparative analysis, the proposed rules would require a
plan or issuer 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 the
statute. This would include the documents that contain the specific
language of the NQTL that the plan or issuer imposes. The plan or
issuer would also be required to identify all mental health or
substance use disorder benefits and medical/surgical benefits to which
the NQTL applies, including a list identifying which of those 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. Finally, under the proposed rules, 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 and how the plan
identified the variations of the NQTL.
The Departments received few comments on this proposed first
content element. One commenter suggested an alternative approach,
arguing that, instead of requiring that plans and issuers provide all
policies, guidelines, provider contracts, and any other documents where
the NQTL ``appears or is described,'' plans and issuers should be
required under these final rules to provide only the documents,
policies, or procedures that govern the NQTL.
After reviewing comments, the Departments are finalizing the
requirement that a comparative analysis include a description that
identifies the NQTL, identifies all mental health or substance use
disorder benefits and medical/surgical benefits to which the NQTL
applies, and describes which benefits are included in each
classification. The Departments emphasize that these final rules still
require a plan or issuer to identify the specific terms of the plan or
coverage or other relevant terms regarding the
[[Page 77642]]
NQTL, including 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. Under these final rules, the entire policy, guideline, or
document is not required to be included in a comparative analysis, but
could be requested by the Departments in the course of reviewing a
comparative analysis. The Departments decline to require the inclusion
of only the documents that govern the NQTL, because that might not
include all the policies or guidelines that determine how the NQTL is
designed or applied with respect to mental health or substance use
disorder benefits.
Additionally, as noted earlier in these final rules, the
Departments are not finalizing the proposed mathematical substantially
all and predominant tests. Therefore, these final rules do not finalize
the proposed content requirement that the description of the NQTL in a
comparative analysis 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 and how the plan or issuer identified
the variations of the NQTL.\114\
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\114\ However, as discussed earlier in this preamble, the
Departments are of the view that the concept of material differences
in access helps to give meaning to the concepts of ``substantially
all'' and ``predominant'' from the statutory language in the context
of NQTLs.
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b. Identification and Definition of the Factors and Evidentiary
Standards Used To Design or Apply the NQTL
Under the second proposed content element, 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 also be required to define each
factor, by including a detailed description of the factor, and
providing a description of each evidentiary standard (and the source of
each evidentiary standard) identified. The Departments stressed in the
preamble to the proposed rules that when identifying the evidence or
sources from which an evidentiary standard is derived, a 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 Departments received few comments on this content element. One
commenter noted that the requirement to provide detailed descriptions
of each factor, including evidence and sources relied upon with data
and relevant citations, may be challenging for plans and issuers to
operationalize. One commenter highlighted that it may be difficult to
identify evidence and sources for factors that are processes, such as
provider referral requirements, requirements to submit information for
clinical review, or the development and approval of a treatment plan,
and that processes used to apply the NQTL ``in operation'' should be
analyzed under a separate step of the comparative analysis. Another
commenter stated that the requirement to do a historical analysis of
the factors utilized by plans and issuers, including dating and
providing citations for sources (from the time they decided to impose
the NQTL), would be burdensome, and recommended such a requirement be
eliminated or that the Departments accept references to factors that
are generally accepted business standards without the need for specific
dates and citations.
After reviewing comments, the Departments are finalizing the
requirement that the comparative analysis identify and define all of
the factors considered or relied upon to design or apply the NQTL to
mental health or substance use disorder benefits and medical/surgical
benefits as proposed, with minor non-substantive changes and a
modification to align with changes made in these final rules to the
prohibition on discriminatory factors and evidentiary standards.
Specifically, these final rules clarify that a plan or issuer must
identify every factor and the evidentiary standards considered or
relied upon to design or apply each factor, instead of all of the
factors considered, consistent with other provisions of these final
rules. These final rules also add new 26 CFR 54.9812-2(c)(2)(ii)(C), 29
CFR 2590.712-1(c)(2)(ii)(C), and 45 CFR 146.137(c)(2)(ii)(C) to make
clear that plans and issuers must describe any steps taken to correct,
cure, or supplement any information, evidence, sources, or standards
that are the basis for a factor or evidentiary standard and that would
otherwise have been considered biased or not objective in the absence
of such steps. Additionally, as discussed earlier in this preamble,
these final rules also make minor modifications to better distinguish
evidentiary standards from factors within the definitions of those
terms, and clarify that, while this content element requires a plan or
issuer to include a description of each evidentiary standard used to
design or apply each factor, this information is part of the required
detailed description of each factor.
While the Departments acknowledge that identifying and defining all
factors takes time for a plan or issuer to complete (for newly applied
and existing NQTLs), the Departments note that this requirement was not
new when it was included in the proposed rules. The CAA, 2021
specifically requires the identification and definition of factors
relied upon to design and apply the NQTL,\115\ and has been applicable
to plans and issuers since February 10, 2021. Identification and
definition of the factors considered in the design and application of
an NQTL was also previously addressed in FAQs Part 45.\116\ It is
important for comparative analyses to include detailed information
about factors, evidentiary standards, and their sources when a plan or
issuer starts to perform and document its comparative analysis, to
support the plan's or issuer's analysis of how factors and evidentiary
standards are used to design and apply NQTLs. Such analysis should
include support for the factors utilized from the time a plan or issuer
decided to impose, or continues to impose, an NQTL on the relevant
mental health and substance use disorder benefits, as well as medical/
surgical benefits. To the extent a plan or issuer cannot support its
use of factors and evidentiary standards, including by providing
information on the sources of the factors and evidentiary standards
considered and relied on by plans and issuers (from the time they
decided to impose the NQTL), it is unclear how
[[Page 77643]]
such plan or issuer can ensure that the factors and evidentiary
standards are comparable and no more stringently designed and applied
for mental health and substance use disorder benefits, than for
medical/surgical benefits, as required under the statute (and the
fourth and fifth content elements of a comparative analysis under these
final rules).
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\115\ Code section 9812(a)(8)(A)(iii), ERISA section
712(a)(8)(A)(iii), and PHS Act section 2726(a)(8)(A)(iii).
\116\ 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. Additionally, the 2020 MHPAEA Self-Compliance Tool
includes robust guidance related to requirements for NQTLs. Step two
of the analysis outlined in the 2020 MHPAEA Self-Compliance Tool for
NQTLs suggests identifying the factors considered in the design of
the NQTL. See EBSA, Self-Compliance Tool for the Mental Health
Parity and Addiction Equity Act (MHPAEA) (2020), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
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Without such information, a comparative analysis likely would not
accurately describe factors and their sources and would not demonstrate
that, when factors are used to design or apply an NQTL to mental health
or substance use disorder benefits, they are comparable to, and not
more stringently applied, than they are when used to design or apply an
NQTL to medical/surgical benefits. The absence of this information
would also make it difficult for the Departments and applicable State
authorities to confirm compliance with MHPAEA. The Departments stress
that to the extent a plan or issuer applies factors that are processes,
such as provider referral requirements, requirements to submit
information for clinical review, or the development and approval of a
treatment plan, such processes include both as written and in operation
components. In addition, for these processes, a plan or issuer should
be prepared to identify any sources utilized in determining the
appropriateness of such requirements. To properly evaluate the
comparability and stringency of such factors, it is important that any
sources utilized be specifically identified in a comparative analysis.
As stated earlier in this preamble, if a plan's or issuer's comparative
analysis is requested by the Departments, the plan or issuer generally
has multiple opportunities to engage with the Departments on these
requirements.
c. Description of How Factors Are Used in the Design and Application of
the NQTL
Under the third proposed content element, a plan or issuer would be
required to provide a description of how each factor identified and
defined in the second content element of the comparative analysis is
used in the design or application of an NQTL to mental health and
substance use disorder benefits and medical/surgical benefits in a
classification. This would 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. The proposed rules further
provided 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. The Departments noted that the terms
``deviations'' or ``variations'' in this context referred to any
differences in how a factor is applied with respect to an NQTL.
The Departments received few comments on this content element. One
commenter requested that the Departments clarify the requirement to
document the qualifications of staff as well as for the professional
designations and qualifications of each decision maker involved in the
application of a given NQTL factor, requesting that the Departments
describe how the requirement to document the professional designations
and qualifications of each decision maker should be appropriately
applied to health plan operations, and specifically Pharmacy and
Therapeutics (P&T) committees.
After reviewing comments, the Departments are finalizing, with
minor non-substantive changes, the requirement that plans and issuers
provide a description of how each factor identified and defined in the
second content element of the comparative analysis is used in the
design or application of an NQTL to mental health and substance use
disorder benefits and medical/surgical benefits in a classification.
This includes the requirement to include a detailed explanation of how
each identified and defined factor is used to determine which benefits
are subject to the NQTL, and 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 benefits are subject to the NQTL. If the application of a factor
depends on specific decisions made in the administration of benefits,
the comparative analysis must also provide information on the nature
and timing of the decisions, and the professional designations and
qualifications of each decision maker. Additionally, if there is more
than one factor, the comparative analysis must explain how all of the
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. Finally, the comparative analysis must
address any deviations or variations 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 or substance use disorder benefits as
compared to medical/surgical benefits, and a description of how the
plan or issuer establishes such deviations or variations. As used in
this context, the terms ``deviations'' or ``variations'' in these final
rules refer to any differences in how a factor is applied with respect
to an NQTL.
In response to the request for how the requirement to document
professional designations and qualifications applies to health plan
operations, including P&T committees, the Departments emphasize that
these committees must have members with similar expertise for mental
health conditions and substance use disorders as for medical conditions
and surgical procedures. This may not necessarily require the same
number of members with expertise relevant to
[[Page 77644]]
mental health conditions and substance use disorders as it does for
medical conditions and surgical procedures, but plans and issuers
should ensure that members of a P&T committee include individuals with
similar expertise with respect to these conditions and disorders.
d. Demonstration of Comparability and Stringency, as Written
Under the fourth proposed content element, plans and issuers would
be required to 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 NQTL 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 NQTL with respect to medical/surgical
benefits. The proposed rules would require plans and issuers to include
in their comparative analyses, with respect to the NQTL and the factors
used in designing and 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 to determine that the NQTL would or would not apply. In
addition, such documentation would be required to 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 analyses, in each classification in which the NQTL applies,
a comparison of how the NQTL, 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 NQTL
or that address the application of the NQTL. Additionally, the plan or
issuer would be required to include documentation in its comparative
analysis 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. If there is any deviation(s) or
variation(s) in the application of a factor, the plan or issuer would
be required to include in its comparative analysis an explanation of
the reason(s) for such 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 in the same classification, 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. In the preamble to the proposed
rules, the Departments noted that the terms ``deviations'' or
``variations'' in this context refer to any differences in how a factor
is applied with respect to an NQTL.
Multiple commenters expressed support for the requirement to
demonstrate comparability and stringency as written through the
proposed requirements for the fourth content element. However, other
commenters raised concerns about the proposal, with some requesting
additional clarification or guidance to assist with achieving
compliance. For example, one commenter requested that the Departments
clarify the difference between the proposed requirement that plans and
issuers provide documentation that demonstrates how factors are
comparably applied in step 4 of the comparative analysis content
requirements, and the service-by-service documentation requirement for
each factor under step 3 of the analysis, which requires a description
of how factors are used in the design and application of the NQTL.
Another commenter expressed concerns about how this content element
may create operational challenges due to its breadth and how it would
require plans to also consider other factors that were considered and
not applied. Other commenters suggested ways that the Departments might
ease the burden of the proposed fourth content element requirements on
plans and issuers. One comment included a recommendation that the
Departments clarify that plans and issuers can document each factor
that was applied, including quantitative data, at the issuer level,
rather than at the plan or coverage level. Another commenter encouraged
the Departments to limit documentation requirements and enforcement to
apply only to the comparability of the NQTL, as written and in
operation; to acknowledge that subject matter experts may rely on
professional knowledge, experience, and judgment to evaluate the
evidentiary standard for identified factors; and to not require the use
of quantitative data, calculations, or other analyses. Another
commenter stated that the requirement to provide records documenting
the consideration and application of all factors and evidentiary
standards, as well as the results of their application, was
inconsistent with the descriptions elsewhere of requiring a ``general
description'' of the factors relied upon, and therefore urged the
Departments to eliminate the requirement to include the actual evidence
and related records in the comparative analysis itself.
The Departments note that, while the third content element requires
a plan or issuer to provide details on how each factor (and evidentiary
standards or other information or sources) is used in the design and
application of an NQTL, that content element does not require an
evaluation of whether the use of those factors complies with MHPAEA.
Instead, these final rules require a demonstration of comparability and
stringency, both as written and in operation, in the fourth and fifth
content requirements for a comparative analysis, respectively.
Additionally, the Departments are of the view that a plan or issuer
cannot effectively demonstrate comparability and stringency, as written
and in operation, without sufficiently identifying and defining each
factor (in the second content element), and explaining how each factor
is used to design and apply an NQTL (in the third content element).
After reviewing comments, these final rules retain all of the
proposed substantive features of the fourth content element
requirements, which require that plans and issuers 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 NQTL to mental
health or substance use disorder benefits are comparable to, and are
applied no more stringently than, the processes, strategies,
evidentiary standards, or
[[Page 77645]]
other factors used in designing and applying the NQTL with respect to
medical/surgical benefits. As finalized, this provision includes a
technical modification to a citation that accounts for the
reorganization of language in 26 CFR 54.9812-1(c)(4)(iii), 29 CFR
2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) and also now
specifies that the comparative analysis must include 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,
instead of only as applied.\117\ The requirements related to
demonstrating comparability and stringency as written under the fourth
content element are otherwise being finalized as proposed.
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\117\ As explained earlier in this preamble, these final rules
amend the general rule in the design and application requirements,
to align the language of the 2013 final regulations with the
Departments' interpretation that a plan or issuer must consider the
comparability and relative stringency of any processes, strategies,
evidentiary standards, or other factors, used in both designing and
applying NQTLs to mental health or substance use disorder benefits
as compared to medical/surgical benefits in a classification. These
final rules revise the regulatory text to make this requirement with
respect to designing the NQTL explicit and for consistency with the
statutory language added by the CAA, 2021.
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The Departments note that this content requirement does not require
the use of quantitative data, calculations, or other analyses, nor does
it prohibit plans from relying on professional knowledge, experience,
and judgment to evaluate the evidentiary standard for the identified
factors. Instead, this content element is meant to show how the factors
described in the third content element used in designing and applying
an NQTL to mental health and substance use disorder benefits are
comparable to, and applied no more stringently than, the factors used
in designing and applying the NQTL to medical/surgical benefits in the
same classification, as written. Despite the potential operational
challenges associated with the breadth of this content element, the
Departments are of the view that it is a vital component of comparative
analyses and is necessary to demonstrate compliance with MHPAEA as
written, consistent with the statute.\118\ The Departments note that,
as discussed earlier in this preamble, these final rules eliminate the
duplicative requirement from the proposed rules that plans and issuers
include a general description of any information considered or relied
upon in preparing the comparative analysis for each NQTL. The final
rules also eliminate a duplicative reference to the evaluation of
relevant data in the fourth content element for comparative analyses,
which is addressed as part of the fifth content element.
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\118\ 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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The Departments recognize that a factor may be considered, but not
used, to apply an NQTL to a specific benefit; however, to the extent
such factor is used to design or apply the NQTL to mental health and
substance use disorder benefits, it must be addressed in the plan's or
issuer's comparative analysis, including in this fourth content
element. The Departments are of the view that, to the extent an issuer
or TPA uses factors or evidentiary standards to design and apply an
NQTL consistently for multiple plans and coverage they administer,
nothing in these final rules specifically prohibits the issuer or TPA
from performing and documenting a comparative analysis at the level of
the issuer (or TPA). However, to the extent relevant data exists at the
level of the plan or coverage that measures access to mental health or
substance use disorder benefits in a manner that is different than data
at the level of the issuer or TPA, the Departments of are the view that
a plan's or issuer's comparative analysis must account for that data,
as described later in this preamble.
The Departments note that it is possible that the reasons for any
deviations or variations in the application of a factor used to apply
the NQTL, or the application of the NQTL, might include steps to
correct, cure, or supplement information, evidence, sources, or
standards that would otherwise be considered biased or not objective in
a manner that discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits. To the
extent a plan or issuer has adequately documented such steps as part of
its comparative analysis, as required in the second content element of
these final rules requiring the identification and definition of the
factors used to design or apply the NQTL, the plan or issuer is not
required to address such steps again in the fourth content element if
otherwise applicable, and instead may include references to the
description of such steps in the second content element, as
appropriate.
e. Demonstration of Comparability and Stringency, in Operation
The Departments proposed that plans and issuers be required to
evaluate in a comparative analysis 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 NQTL 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. A 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.
To comply with the proposed fifth content element, plans and
issuers would also be required to identify the relevant data collected
and evaluated in their comparative analyses and provide an evaluation
of the outcomes that resulted from the application of the NQTL to
mental health or substance use disorder benefits and medical/surgical
benefits to demonstrate compliance with the design and application
requirements. Additionally, 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. Finally, under this content element, 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 material differences in access with respect to mental
health or substance use disorder benefits as compared to medical/
surgical benefits.
Many commenters expressed support for the proposed requirement and
standards for the demonstration of comparability and stringency in
operation captured in the proposed fifth content element, especially
with respect to NQTLs related to network composition and the use and
application of clinical guidelines. Commenters supported the proposed
requirements for detailed comparative analyses because they reasoned
that these requirements would help
[[Page 77646]]
regulators understand participant and beneficiary access to mental
health and substance use disorder services under real conditions as
opposed to only looking to written plan terms and policies. Some
commenters also included recommendations for additional data
transparency requirements to ensure compliance and ease the burden on
the Departments in enforcing MHPAEA's requirements. Several commenters
also indicated a desire for additional clarification regarding this
proposed content element. For example, one commenter noted that the
fifth content element requires the demonstration of comparability and
stringency in operation to be comprehensive, without discussion of what
that term means.
After reviewing comments, the Departments are finalizing the
proposed requirements for the fifth content element with several
clarifications and modifications. The Departments are finalizing the
requirement that the comparative analysis must evaluate whether, in any
classification, 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 are comparable to, and
are applied no more stringently than those used with respect to
medical/surgical benefits. However, the Departments have removed the
references to the terms of the plan (or health insurance coverage) from
this requirement, in recognition of the fact that the operations of the
plan (or health insurance coverage) may not necessarily be reflected in
its terms.
The Departments are also finalizing the requirement that the
comparative analysis must include a comprehensive explanation
addressing the comparability and stringency of these processes,
strategies, evidentiary standards, and other factors. These final rules
require that this explanation address how the plan or issuer
``evaluates whether'' (instead of ``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, those used in designing and applying
the NQTL with respect to medical/surgical benefits.
In these final rules, the Departments finalize with additional
clarifications the proposal that, as part of the proposed fifth content
element, a comprehensive explanation of how the plan or issuer
evaluates in-operation compliance with the design and application
requirements of MHPAEA would include an explanation of the methodology
and underlying data used to demonstrate the application of the NQTL, as
well as 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. These final rules also include language to
align with changes made to address a lag between when an NQTL is newly
designed and applied and when relevant data are available, as well as
some limited circumstances in which no data exist that can reasonably
assess any relevant impact of an NQTL on access to benefits.
Specifically, with respect to an NQTL for which relevant data are
temporarily unavailable, the Departments clarify that the comparative
analysis must include a detailed explanation of the lack of relevant
data, the basis for the plan's or issuer's conclusion that there is a
lack of relevant data, and when and how the data will become available
and be collected and analyzed.
With respect to an NQTL for which no data exist that can reasonably
assess any relevant impact of the NQTL on relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits, the fifth content element requires the plan
or issuer to include as part of the comparative analysis a reasoned
justification as to the basis for the conclusion that there are no data
that can reasonably measure the NQTL's impact, an explanation of why
the nature of the NQTL prevents the plan or issuer from reasonably
measuring its impact, an explanation of what data was considered and
rejected, and documentation of any additional safeguards or protocols
used to ensure that the NQTL complies with all applicable requirements.
As noted earlier in this preamble, the Departments recognize that plans
and issuers may encounter difficulties when attempting to collect and
evaluate relevant data in certain circumstances, and, accordingly,
intend to review the explanation provided in a plan's or issuer's
comparative analysis to understand those difficulties in determining
whether the plan or issuer is in compliance with these final rules.
However, the Departments reiterate their intention that the provisions
of these final rules regarding the unavailability of data shall only
apply in very limited circumstances and, where applicable, shall be
construed narrowly.
The Departments are finalizing the proposed requirements for the
fifth content element that a comparative analysis must include
identification of the relevant data collected and evaluated, as well as
documentation of the outcomes that resulted from the application of the
NQTL to mental health or substance use disorder benefits and medical/
surgical benefits, including the evaluation of relevant data as
described earlier in this preamble. This also includes a reasoned
justification and analysis that explains whether, and if so, why the
plan or issuer concluded that differences in relevant data do or do not
suggest the NQTL contributes to material differences in access to
mental health or substance use disorder benefits as compared to
medical/surgical benefits.
The Departments recognize that, for NQTLs related to network
composition, under these final rules, a plan or issuer must collect and
evaluate relevant data in a manner reasonably designed to assess the
aggregate impact of all such NQTLs on access to mental health and
substance use disorder benefits and medical/surgical benefits.
Therefore, for NQTLs related to network composition, comparative
analyses should analyze their impact as a whole. Plans and issuers may
also, however, indicate in these comparative analyses where one
particular NQTL may affect differences in access.
Furthermore, in response to comments, these final rules provide
more specifics on the requirement for the fifth content element to
provide a detailed explanation of any material differences in access
demonstrated by the outcomes evaluated, by requiring a reasoned
explanation of any material differences in access that are not
attributable to differences in the comparability or relative stringency
of an NQTL as applied to mental health or substance use disorder
benefits and medical/surgical benefits. This explanation should include
a detailed discussion of any considerations beyond a plan's or issuer's
control that contribute to the existence of material differences, as
well as a detailed explanation of the bases for concluding that
material differences are not attributable to differences in the
comparability or relative stringency of the NQTL. The Departments note
that such an explanation should be comprehensive and include evidence
to support the conclusion that considerations beyond a plan's or
issuer's control contribute to the
[[Page 77647]]
existence of material differences in access.
Additionally, these final rules add that, to the extent differences
in access to mental health or substance use disorder benefits are
attributable to independent professional medical or clinical standards
or fraud and abuse measures, and such standards or measures are used as
the basis for a factor or evidentiary standard used to design or apply
an NQTL, comparative analyses must include documentation explaining how
any such differences in access are attributable to those standards or
measures. By requiring plans and issuers to analyze and explain
material differences in access as demonstrated by outcomes, the
Departments aim to encourage plans and issuers to examine closely and
critically the extent to which access to benefits is shaped by
particular NQTLs so that they can take effective, reasonable actions as
necessary to mitigate material differences.
Finally, these final rules specify that, in demonstrating
comparability and stringency in operation under the fifth content
element in these final rules, plans and issuers must discuss in their
comparative analyses the actions that have been or are being taken by
the plan or issuer, as necessary, to address any material differences
in access. Under these final rules, this discussion must include, as
applicable, a reasoned explanation of any material differences in
access to mental health or substance use disorder benefits as compared
to medical/surgical benefits that persist despite reasonable actions
that have been or are being taken. Additionally, for a plan or issuer
designing and applying one or more NQTLs related to network
composition, to comply with this aspect of the fifth content element,
the comparative analysis must include a discussion of the actions that
have been or are being taken, as necessary, to address material
differences in access to in-network mental health and substance use
disorder benefits as compared to in-network medical/surgical benefits,
including those listed in these final rules as examples of possible
actions that a plan or issuer could take to comply,\119\ if any such
material differences exist. The Departments recognize that plans and
issuers may already be aware of material differences in access to
mental health or substance use disorder benefits and, as a result, may
have taken actions to comply with MHPAEA's requirements. The
Departments are of the view that comparative analyses should address
any such actions taken to address material differences in access and
their effectiveness, to improve access to mental health and substance
use disorder care for participants and beneficiaries and demonstrate
compliance with MHPAEA.
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\119\ See 26 CFR 54.9812-1(c)(4)(iii)(C), 29 CFR
2590.712(c)(4)(iii)(C), and 45 CFR 146.136(c)(4)(iii)(C).
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f. Findings and Conclusions
Under the sixth and final proposed content element, a plan or
issuer would be required to include in its comparative analysis its
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. For this purpose, 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
the 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, the 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. 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 the proposed rules.
With respect to the requirements regarding reliance on an
evaluation by an expert, one commenter was supportive of the rule as
proposed, and another recommended that the Departments not require that
the comparative analyses include the name of the expert so that experts
would not be dissuaded from providing their expertise to avoid public
identification.
Some commenters were supportive of the fiduciary certification
requirement for plans subject to ERISA, with one stating that this
would help to ensure that plan fiduciaries meet their obligations to
review comparative analyses and monitor their plans for compliance.
Many other commenters expressed concern, with some reasoning that
requiring a named fiduciary to review and certify that a comparative
analysis complies with the content requirements of the proposed rules
would put an unrealistic expectation on that fiduciary to understand
the required nuance and complexity of the proposed rules. Other
commenters opined that the requirement would create an unnecessary
burden. These commenters stressed that the requirement would increase
compliance costs (as fiduciaries would have to contract with additional
service providers to assess compliance) without increasing access to
benefits. Other commenters highlighted that Congress knew how to
provide for a certification or attestation requirement but refrained
from doing so for the MHPAEA comparative analysis. These comments urged
against including the fiduciary certification requirement.
The Departments are of the view that requiring plans and issuers to
address the findings and conclusions of both comparability and
stringency of processes, strategies, evidentiary standards and other
factors in their comparative analysis is necessary and appropriate to
increase and ensure compliance with MHPAEA. The Departments' experience
enforcing the current regulatory framework has shown that, too often,
plans and issuers design and apply NQTLs without considering the impact
those NQTLs have on access to mental health and substance use disorder
benefits as compared to medical/surgical benefits for participants and
beneficiaries. In practice, the Departments have encountered many NQTLs
that often impose a greater burden on access to mental health and
substance use disorder benefits than medical/surgical benefits.
Therefore, the Departments are finalizing, with modifications, the
requirements for the sixth content element that requires plans and
issuers
[[Page 77648]]
to address the findings and conclusions as to the comparability and
relative stringency of the processes, strategies, evidentiary
standards, and other factors used in designing and applying NQTLs in
their comparative analyses. The requirement under these final rules
that plans and issuers must include any findings and conclusions is
consistent with the statutory text, and these final rules also specify
that these findings and conclusions must be included whether or not the
plan or coverage is or is not (or might or might not be) in compliance.
The Departments stress that, while these final rules require an
assessment of each expert's qualifications and the extent to which the
plan or issuer ultimately relied on their evaluation (if at all), these
final rules do not require the name of the expert in the comparative
analysis. These final rules also make additional minor technical edits
to the sixth content requirement, for clarity.
In response to comments expressing concern with the named fiduciary
certification requirement for plans subject to ERISA in the proposed
rules, DOL is modifying this requirement. These final rules continue to
require, for plans subject to ERISA, the comparative analysis to
include a certification by one or more named fiduciaries. However,
instead of requiring noted fiduciaries to state whether they found the
comparative analysis to be in compliance with the content requirements,
these final rules require certification confirming the fiduciary's
engagement in a prudent process to select one or more qualified service
providers to perform and document a comparative analysis in connection
with the imposition of any NQTLs that apply to mental health and
substance use disorder benefits under the plan in accordance with
MHPAEA and its implementing regulations, as well as satisfaction of the
duty to monitor those service providers. For this purpose, DOL expects
that a plan fiduciary making such a certification will, at a minimum,
review the comparative analysis prepared by or on behalf of the plan
with respect to an NQTL applicable to mental health and substance use
disorder benefits and medical/surgical benefits; ask questions about
the analysis and discuss it with service providers, as necessary, to
understand the findings and conclusions documented in the analysis; and
ensure that a service provider responsible (in whole or in part) for
performing and documenting a comparative analysis provides assurance
that, to the best of its ability, the NQTL and associated comparative
analysis complies with the requirements of MHPAEA and its implementing
regulations. While not required, a plan fiduciary may alternatively
provide a certification that each comparative analysis is in compliance
with the content requirements, consistent with the proposed
certification requirement in the proposed rules.\120\ Because the
statute expressly places the obligation on the plan (or issuer) to
ensure compliance with MHPAEA, these final rules align with the duties
ERISA imposes on plan fiduciaries under part 4 of ERISA.
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\120\ See 88 FR 51552, 51651 (Aug. 3, 2023), setting forth the
proposed requirement that one or more named fiduciaries who have
reviewed a comparative analysis provide a certification stating
whether they found the comparative analysis to be in compliance with
the content requirements of the regulations.
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2. Requirement To Provide Comparative Analyses and Notices to the
Department 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)
Effective February 10, 2021, plans and issuers have been required,
consistent with the statute, to perform and document comparative
analyses and make them available to the Departments or applicable State
authorities upon request.\121\ The proposed rules would require that
plans and issuers make a comparative analysis available and submit it
upon request to the relevant Secretary (as well as applicable State
authorities and participants and beneficiaries in certain
circumstances), explain that additional information may be required to
be provided after a comparative analysis is deemed insufficient, and
outline requirements for plans and issuers after an initial
determination of noncompliance and a final determination of
noncompliance. Some commenters were supportive of the proposed
requirements, though others offered suggestions for improving the
various elements, as described later in this preamble.
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\121\ Code section 9812(a)(8), ERISA section 712(a)(8), and PHS
Act section 2726(a)(8). This requirement was reiterated in FAQs Part
45, 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.
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Once a comparative analysis is requested, plans and issuers would
be required 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). Some commenters
remarked that 10 business days is not sufficient to provide a
comparative analysis upon request. While a few commenters requested
that the Departments allow plans and issuers at least 30 days to
provide the requested information, others requested a 60-day period to
provide an updated comparative analysis. Several commenters highlighted
that plans and issuers might not anticipate what is regarded as an NQTL
by the Departments and requested that the Departments provide
additional time to respond to a request for a comparative analysis for
an NQTL that was not on an illustrative list of NQTLs provided by the
Departments.
After reviewing comments, the Departments are finalizing, as
proposed, the requirement that plans and issuers make available a
comparative analysis and submit it to the relevant Secretary within 10
business days of receipt of a request from the relevant Secretary (or
an additional period of time specified by the relevant Secretary).
Plans and issuers are statutorily obligated to perform and document
their NQTL comparative analyses, and to be ready to make them available
in response to a request, regardless of whether the plan or issuer has
actually received a request from the Departments or an applicable State
authority, and have been since February 10, 2021. While these final
rules specify content elements that comparative analyses must contain,
the Departments have expected, and will continue to expect, that plans
and issuers perform and document their NQTL comparative analyses
without waiting for a request from the Departments or an applicable
State authority. Where plans and issuers have performed and documented
their NQTL comparative analyses, additional time will not generally be
required to respond to an initial request. The language allowing an
additional period of time specified by the Secretary for a plan or
issuer to submit a comparative analysis to the Secretary provides
sufficient flexibility to plans and issuers where the Departments
determine it to be appropriate.
Under the proposed rules, in instances in which the Secretary
determines that the plan or issuer has not submitted sufficient
information for the Secretary to review the requested comparative
analysis, 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. 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
[[Page 77649]]
additional information to be submitted (or an additional period of time
specified by the relevant Secretary). The Departments noted in the
preamble to the proposed rules that 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 data required by the
Departments to be collected and evaluated under the relevant data
evaluation requirements. A few commenters stated that 10 business days
was not enough time to respond with supplemental information, calling
the timeframe overly restrictive and unrealistically short. One
requested 60 days to respond to such a request instead of 10 business
days as proposed.
After reviewing comments, the Departments are finalizing with minor
technical edits the requirement that plans and issuers furnish the
additional requested 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). The Departments acknowledge that in some,
but not all, cases, 10 business days may not be enough time to respond
with supplemental information and recognize that not all requests for
supplemental information are equal in terms of the volume and
complexity of the information requested, which is why these final rules
allow for additional time to be specified by the relevant Secretary
(for example, where the volume or complexity of the additional
information requested would take more time to collect and provide). The
Departments emphasize that additional information must be provided
within 10 business days, rather than calendar days, and are of the view
that, in the majority of cases, 10 business days should be sufficient.
However, unless otherwise specified, the other timelines associated
with the comparative analysis requirements generally refer to calendar
days.
In instances where the relevant Secretary 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, the
Departments proposed to require the plan or issuer to respond to the
relevant Secretary, specifying the actions it will take to come into
compliance. The plan or issuer would also be required to provide to the
relevant Secretary additional comparative analyses meeting the
requirements of the proposed rules that demonstrate compliance with
MHPAEA. The plan or issuer would be required to submit these responses
to the relevant Secretary not later than 45 calendar days after the
relevant Secretary's initial determination that the plan or issuer is
not in compliance.
One commenter stated that the proposed penalties for noncompliance
are not strict enough to discourage noncompliant issuer behavior and
stated that, without strict enforcement penalties, issuers will
continue to attempt to skirt the law. Additionally, as discussed
earlier in the preamble, other commenters urged the Departments to
provide procedural guardrails and due process protections for plans and
issuers prior to the final determination of noncompliance, suggesting
that the plan or issuer should have an opportunity to meet with the DOL
or HHS national office, review the determination, and work together to
achieve compliance.
After reviewing comments, the Departments are finalizing this
requirement with minor edits. These final rules clarify, however, that
the plan or issuer must respond to the initial determination by the
Secretary, instead of more generally requiring the plan or issuer to
respond to the Secretary, as proposed, to better match the statutory
text. In response to the commenter who criticized the penalties for
noncompliance, the Departments note that they do not have the statutory
authority to increase penalties for violations of MHPAEA, but, as
discussed earlier in this preamble, have stepped up enforcement efforts
and anticipate continuing to prioritize enforcement of these
requirements.
As discussed earlier in the preamble, the statute establishes the
comparative analysis request process, as well as the penalties for
failing to comply, and, working within this process, the Departments
have worked with many plans and issuers to achieve compliance, often
without issuing a final determination of noncompliance, as described at
length in our MHPAEA Reports to Congress.\122\ The Departments expect
that this approach will continue to work after the issuance of these
final rules. To the extent possible, the Departments expect to continue
to work with plans and issuers to ensure compliance, without need of
issuance of a final determination of noncompliance.
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\122\ See, e.g., 2023 MHPAEA Comparative Analysis Report to
Congress (July 2023), https://www.dol.gov/sites/dolgov/files/ebsa/
laws-and-regulations/laws/mental-health-parity/report-to-congress-
2023-mhpaea-comparative-analysis.pdf. Other reports are available at
https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/reports.
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If the relevant Department makes a final determination that the
plan or issuer is not in compliance with MHPAEA (after issuance of an
initial determination of noncompliance, a failure by the plan or issuer
to sufficiently respond to the initial determination and specify the
actions the plan or issuer will take to bring the plan or coverage into
compliance, and a failure to provide additional sufficient comparative
analyses within the 45-calendar-day corrective action period), the plan
or issuer must, within 7 calendar days of the receipt of the final
determination of noncompliance, 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 the
proposed rules. The plan or issuer would also be required to provide a
copy of the notice to the relevant Secretary, any service provider
involved in the claims process, and any fiduciary responsible for
deciding benefit claims within the same timeframe. The Departments
noted in the preamble to the proposed rules that this notice gives
participants and beneficiaries (or their authorized representatives)
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.
The proposed rules set forth requirements for the content of this
notice and the manner in which it would be required to be provided,
including that the notice be written in plain language and in a manner
calculated to be understood by the average plan participant. The notice
would also 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 proposed rules would also require the notice contain a summary
of
[[Page 77650]]
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, 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 concurred with those actions. Finally, the proposed rules
would require that 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 the proposed rules, a plan or issuer would be required to
make the notice available in paper form. The plan or issuer may
alternatively 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 participants and beneficiaries in paper form
(such as a postcard) or email that the documents are available on the
internet, provides the internet address, and notifies participants and
beneficiaries that the documents are available in paper form upon
request. The Departments noted that this approach is similar to
standards for when a plan or issuer is permitted to provide a copy of
its plan's or coverage's summary of benefits and coverage with respect
to participants and beneficiaries who are eligible but not enrolled for
coverage.\123\ 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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\123\ See 26 CFR 54.9815-2715(a)(4)(ii)(B), 29 CFR 2590.715-
2715(a)(4)(ii)(B), and 45 CFR 147.200(a)(4)(ii)(B).
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Multiple commenters recommended that the requirement for plans and
issuers to include information in the notice about any opportunity for
a participant or beneficiary to have claims reprocessed be revised to
instead place affirmative obligations on plans and issuers who receive
a final determination of noncompliance to identify affected
participants or beneficiaries, reprocess claims, and take other
necessary steps to rectify harms. One commenter further suggested that
plans or issuers be required to describe the process they will follow
and the time frames for reprocessing claims in the notice of
noncompliance. Another commenter opposed the requirement that a plan
deemed noncompliant send a notice to all beneficiaries, arguing that it
amounted to public shaming and that it was beyond the scope of the
authorizing statute.
Several commenters suggested that the notice should be provided to
participating providers, as such providers may have experienced issues
submitting claims to plans and issuers for reimbursement, including
improper denials, and stopped submitting further claims. One commenter
requested that these final rules be accompanied by guidance and online
compliance resources developed by the Departments to help the affected
plans and issuers draft their notices of noncompliance.
Several commenters expressed concern that providing notice within 7
calendar days would not be feasible, particularly with the level of
information that a plan or issuer is required to compile and provide.
Some commenters requested a 30-day period to provide this notice and
others requested a 45-day period.
After reviewing comments, the Departments are finalizing with minor
clarifications the provision that a 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 MHPAEA if the Secretary makes a final determination of
noncompliance, as required by the statute. The Departments highlight
that the statute specifies the notice be provided within 7 days, and
the Departments lack the statutory authority to extend this timeframe,
such as to 30 or 45 days, as suggested by commenters. However, in
response to comments, these final rules provide that plans and issuers
have 7 business days instead of 7 calendar days to notify participants
and beneficiaries of a final determination of noncompliance, to provide
plans and issuers additional time to prepare the notice of final
determination as required under these final rules.
The Departments also note that the relevant statutory language
requires notice to be sent to ``all individuals enrolled in the plan or
applicable health insurance coverage offered by the issuer,'' which
includes participants and beneficiaries, rather than attending
providers. However, if a single notice is provided to a participant and
any beneficiaries at the participant's last known address, the
requirement to provide notice to participants and beneficiaries is
considered satisfied, unless the plan or issuer knows (or reasonably
should have known) that the beneficiary's last known address is
different, in which case a notice is required to be provided to the
beneficiary at the beneficiary's last known address.
The Departments are also finalizing the requirement for ERISA-
covered plans that the plan or issuer must provide a copy of the notice
to any service provider involved in the claims process, and any
fiduciary responsible for deciding benefit claims within 7 business
days of receipt of the final determination of noncompliance. DOL
recognizes that, depending on the nature of the NQTL and the final
determination of noncompliance, not all such determinations will impact
adjudicated claims, but is of the view that it is important for such
information to be disclosed to relevant service providers and
fiduciaries, so they can properly consider whether such changes are
required.
The Departments are finalizing the proposed notice content
requirements and stress that the notice must describe any other actions
the plan or issuer is taking to come into compliance with MHPAEA.
Generally, when noncompliance has been identified, the Departments will
require plans and issuers to take steps to identify affected
participants, reprocess claims, and take other necessary steps to
rectify harms; however, the specific steps a plan or issuer will be
required to take in response to a final determination of noncompliance
will depend on the facts and circumstances of the violations.
[[Page 77651]]
While these final rules generally require a plan or issuer to include
an explanation of any opportunity for a participant or beneficiary to
have a claim for benefits reprocessed (or, as explained below,
submitted) in a notice describing a final determination of
noncompliance, the Departments do not intend that provision to imply
that plans and issuers will not be obligated to take any other
particular actions intended to provide appropriate corrections to
affected individuals or otherwise remediate potential harms.
As noted throughout this preamble to these final rules, the
Departments are committed to ensuring that participants and
beneficiaries have access to the mental health and substance use
disorder benefits covered under their plan or coverage and are not
adversely affected by violations of MHPAEA. The Departments are,
however, modifying the requirement that plans and issuers must include
a clear and accurate statement as to whether the Secretary has
indicated that those actions, if completed, will result in compliance,
to reflect that the Secretary may not be able to know whether the
actions taken or being taken will bring the plan into compliance.
Instead, under these final rules, plans and issuers must indicate
whether the relevant Secretary has concurred with those actions. The
Departments are also modifying the requirement that the notice include
a description of any opportunity for a participant or beneficiary to
have a claim for benefits reprocessed to include any opportunity to
submit a new claim, to account for participants and beneficiaries who
did not initially file a claim for a mental health or substance use
disorder benefit that could have been covered.
In the proposed rules, the Departments solicited 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. One commenter suggested that to improve
transparency, all informational materials published to the public
following final agency determinations of noncompliance should clearly
state the name of the insurer who holds contracts with the TPA or MBHO
if a TPA or MBHO is found to be in violation of MHPAEA. The commenter
also recommended that the Departments require all States to make
notices of MHPAEA violations publicly available via State agency
websites and other avenues easily accessible by beneficiaries within a
reasonable timeframe after determinations of noncompliance with MHPAEA
are made. The Departments acknowledge these comments and will continue
to consider them.
In addition to making the comparative analyses available upon
request to the relevant Secretary, the Departments proposed to codify a
requirement that plans and issuers make available the comparative
analyses when requested by any applicable State authority, as well as
participants and beneficiaries (including 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, for ERISA-covered plans,
participants and beneficiaries at any time, under authority under ERISA
section 104. The Departments noted that, while the proposed rules would
codify the statutory requirement to make comparative analyses available
to the applicable State authority upon request, the proposed rules
would not otherwise apply the timeframes and processes regarding the
Secretarial request process to requests for comparative analyses made
by applicable State authorities. The Departments requested comments on
these proposals, including whether the proposed requirements should
apply to plans and issuers with respect to a request made by the
applicable State authority for an NQTL comparative analysis, including
the proposed notice requirement following a final determination of
noncompliance.
Some commenters recommended that the Departments emphasize that
health insurance issuers have an unambiguous duty to share their MHPAEA
comparative analyses with applicable State authorities upon request
even if the relevant Secretary has not also made the same request.
Commenters also recommended that the Departments work closely with
State insurance authorities to incentivize and facilitate the
implementation of comparable review and notice standards. Several other
commenters requested the Departments include applicable State
authorities in proposed 26 CFR 54.9812-2(b), 29 CFR 2590.712-1(b), and
45 CFR 146.137(b), to make clear that States have the authority to
request comparative analyses. Some commenters noted that some issuers
refuse to provide comparative analyses to the applicable State
authority upon request. Commenters requested guidance concerning
requests from participants, beneficiaries, and authorized
representatives who have received an adverse benefit determination
related to mental health and substance use disorder benefits, including
one commenter requesting guidance on how participants, beneficiaries,
and their authorized representatives may report potential violations of
MHPAEA, and another commenter that requested clear guidelines regarding
when the issuance of an adverse benefit determination triggers a
requirement by the plan to disclose its comparative analyses, upon
request.
After reviewing comments, the Departments are finalizing as
proposed the requirement that plans and issuers must make available a
copy of the comparative analysis when requested by any applicable State
authority, 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, for ERISA-covered
plans, participants and beneficiaries generally, who may request the
comparative analysis at any time under ERISA section 104. The
Departments are of the view that it is important that participants and
beneficiaries are able to access comparative analyses of NQTLs imposed
on mental health and substance use disorder benefits under their plan
or coverage. In implementing MHPAEA, the Departments have heard
repeated complaints that plans and issuers fail to disclose information
on the processes, strategies, evidentiary standards, and other factors
used to design and apply an NQTL, including the relevant comparative
analyses to participants and beneficiaries, despite clear statements by
the Departments regarding this requirement.\124\ The Departments are
concerned that limiting the ability of participants and beneficiaries
(or their authorized representatives) to request the
[[Page 77652]]
comparative analyses to only those situations where there is an adverse
benefit determination related to mental health or substance use
disorder benefits, would frustrate participants' and beneficiaries'
ability to get the information they need about their mental health and
substance use disorder benefits to effectuate their rights, including
in situations where they forgo submitting a claim for benefits. The
Departments remain committed to responding to inquiries and complaints
about compliance with MHPAEA, and participants, beneficiaries, and
enrollees, as well as their authorized representatives, may contact
EBSA at 1-866-444-3272 or https://www.dol.gov/agencies/ebsa/about-ebsa/ask-a-question/ask-ebsa or HHS at 1-800-985-3059 or https://www.cms.gov/medical-bill-rights/help/submit-a-complaint.
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\124\ See, e.g., 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3),
and 45 CFR 146.136(d)(3); FAQs About Affordable Care Act
Implementation Part V and Mental Health Parity Implementation (Dec.
22, 2010), 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 31,
Mental Health Parity Implementation and Women's Health and Cancer
Rights Action Implementation (Apr. 20, 2016), 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 Mental
Health Parity Implementation and the Consolidated Appropriations
Act, 2021 Part 45 (Apr. 2, 2021), 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.
---------------------------------------------------------------------------
As specified earlier in the preamble, the statute requires that
plans and issuers must provide a copy of the comparative analysis to
any applicable State authority upon request. The statute does not
require applicable State authorities to follow the same procedure to
review and request comparative analyses as that applicable to the
Departments, and, therefore, these final rules do not include
``applicable State authorities'' in the regulatory text that describes
this procedure. However, these final rules at 26 CFR 54.9812-2(e), 29
CFR 2590.712-1(e), and 45 CFR 146.137(e) provide that a health
insurance issuer in a State must provide the comparative analysis to
the applicable State authority (that is, the State insurance
commissioner or official or officials designated by the State to
enforce the requirements of title XXVII of the PHS Act for the State
involved with respect to such issuer) upon request. Additionally,
compliance with MHPAEA is not determinative of compliance with other
State or Federal laws. Applicable State authorities retain independent
authority over issuers of group and individual health insurance
coverage and may request or require additional information under their
own authorities. Issuers of group and individual health insurance
coverage must also comply with State insurance laws, to the extent they
do not prevent the application of the requirements 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)
The Departments proposed 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), the proposed rules applicable to group
health plans (and health insurance coverage offered by an issuer in
connection with such plans) \125\ would apply on the first day of the
first plan year beginning on or after January 1, 2025. The Departments
acknowledged in the preamble of the proposed rules that the proposed
requirements would take time for plans and issuers to implement.
Therefore, the Departments sought to strike an appropriate balance for
the date by which plans and issuers must comply with final rules. The
Departments noted that until the proposed applicability date, plans and
issuers would be required to continue to comply with the most recent
MHPAEA regulations codified in the CFR,\126\ as applicable. The
Departments similarly proposed that the requirements in 26 CFR 54.9812-
2, 29 CFR 2590.712-1, and 45 CFR 146.137 of the proposed rules,
governing the requirements for comparative analyses under MHPAEA, would
apply for plan years beginning on or after January 1, 2025. However,
the Departments reminded plans and issuers that the statutory
provisions added to MHPAEA by the CAA, 2021 are self-implementing and
took effect on February 10, 2021. As such, the proposed delayed
applicability date for the comparative analysis requirements in the
proposed rules would not alter a plan's or issuer's obligations under
the statute. The Departments solicited comments on the proposed
applicability dates.
---------------------------------------------------------------------------
\125\ Coverage offered by Medicaid managed care organizations,
CHIP, and Medicaid Alternative Benefit Programs are subject to
separate mental health parity regulations at codified at 42 CFR
parts 438, 440, 456, and 457. See Medicaid and Children's Health
Insurance Programs; Mental Health Parity and Addiction Equity Act of
2008; Application of Mental Health Parity Requirements to Coverage
Offered by Medicaid Managed Care Organizations, the Children's
Health Insurance Program (CHIP), and Alternative Benefit Plans;
Final Rule. 81 FR 18390 (Mar. 30, 2016), https://www.federalregister.gov/documents/2016/03/30/2016-06876/medicaid-and-childrens-health-insurance-programs-mental-health-parity-and-addiction-equity-act-of.
\126\ 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.
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Several commenters stated that the proposals put forward sweeping
changes to the existing rules. To allow time for implementation,
commenters requested that the applicability date of the final rules for
plans and issuers be for plan years beginning on or after January 1,
2026, or 2 years following publication of the final rules. Several
commenters requested an implementation period ranging from 1 to 2
years. Some of these commenters additionally requested a 1-year good
faith enforcement safe harbor to allow plans and issuers additional
time to comply with the new requirements. Another commenter requested
that the proposed rules be effective in 2024, in order to not delay
access to vital mental health and substance use disorder benefits.
In order to effectuate these final rules in a timely manner and to
ensure that participants and beneficiaries seeking benefits to treat
mental health conditions or substance use disorders do not face a
greater burden on access to mental health and substance use disorder
benefits than medical/surgical benefits, while acknowledging the
challenges to plans and issuers of implementing some of the
requirements in these final rules, the Departments are finalizing the
applicability provision, with some modifications. Accordingly, these
final rules apply to group health plans (and health insurance coverage
offered by an issuer in connection with a group health plan) on the
first day of the first plan year beginning on or after January 1, 2025,
except for the meaningful benefits standard, the prohibition on
discriminatory factors and evidentiary standards, the relevant data
evaluation requirements, and the related requirements in the provisions
for comparative analyses, which apply on the first day of the first
plan year beginning on or after January 1, 2026. Until these rules are
applicable, plans and issuers must continue to comply with the
regulations implementing MHPAEA as in effect prior to the effective
date of these final rules, and must comply with the statutory
provisions of MHPAEA, as amended by the CAA, 2021, both before and
after these final rules become applicable. The Departments remind plans
and issuers that guidance provided in FAQs Part 45 addresses what
information plans and issuers should make available under MHPAEA, as
amended by the CAA, 2021, in response to the Departments' request for
comparative analyses and can be relied on pending the applicability
dates of these final rules.
In response to the comments raising concerns about the magnitude of
the changes of the proposed requirements in the proposed rules,
particularly in relation to the amount of data collection and analysis
that would be required and the time needed by plans and issuers to
implement these changes, the Departments are delaying the applicability
date with respect to certain provisions in these final rules, as
[[Page 77653]]
discussed in this section of the preamble.
As part of the request to the Departments to extend the
applicability date of these final rules, several commenters raised
concerns regarding the amount of new documentation and the time
necessary to implement the relevant data evaluation requirements,
which, as noted earlier in this preamble, require plans and issuers to
collect and evaluate data in a manner that is not currently required.
The Departments acknowledge that the relevant data evaluation
requirements and the related requirements in the provisions requiring
the comparative analyses to demonstrate comparability and stringency,
in operation, impose specific new obligations that plans and issuers
must comply with in order to demonstrate that an NQTL with respect to
mental health or substance use disorder benefits in any classification
is no more restrictive in operation than the predominant NQTL that
applies to substantially all medical/surgical benefits in the same
classification. These final rules identify examples of relevant data
that a plan or issuer may be required to collect, but ultimately the
plan or issuer will need to determine which data must be collected and
analyzed to comply with these final rules, whether any differences
reflected in the data are material, and what reasonable actions to
take, as necessary, when there are material differences in access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits in the same classification. Similarly, the
Departments recognize that the meaningful benefits standard under these
final rules could impose new obligations for plans and issuers, which
may require changes to benefit design that may be difficult to
implement within a short period of time after the issuance of these
final rules. Additionally, the Departments acknowledge that the
prohibition on discriminatory factors may require plans and issuers to
evaluate their NQTLs to determine whether such limitations are based on
prohibited factors or evidentiary standards and whether changes need to
be made to such factors or evidentiary standards in order to comply
with these final rules.
The Departments agree with commenters that this process will take
time and that plans and issuers will face difficulty complying with
these requirements by the start of a plan year beginning on or after
January 1, 2025. Therefore, the Departments are delaying the
applicability date for the meaningful benefits standard under 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); the prohibition on discriminatory factors and
evidentiary standards under 26 CFR 54.9812-1(c)(4)(i)(B), 29 CFR
2590.712(c)(4)(i)(B), and 45 CFR 146.136(c)(4)(i)(B); the relevant data
evaluation requirements under 26 CFR 54.9812-1(c)(4)(iii), 29 CFR
2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii); and the related
requirements in the provisions for comparative analyses; \127\ to apply
on the first day of the first plan year beginning on or after January
1, 2026. The Departments emphasize that plans and issuers must continue
to comply with the 2013 final regulations until the respective
applicability dates in these final rules. For example, even though the
prohibition on discriminatory factors does not apply to plans and
issuers until plan years beginning on or after January 1, 2026, plans
and issuers should still be prepared to demonstrate that the factors
used to design or apply an NQTL to mental health and substance use
disorder benefits are comparable to and applied no more stringently
than the factors used to design and apply an NQTL to medical/surgical
benefits in the same classification in accordance with the 2013 final
regulations. The Departments expect that plans and issuers will utilize
the delayed applicability period to work in good faith to update
systems and processes to comply with the new requirements of these
final rules. Accordingly, the Departments encourage plans and issuers
to start working to ensure that they are in a position to comply with
all aspects of these final rules in a timely manner, including by
working to comply with the meaningful benefits standard, the
prohibition on discriminatory factors and evidentiary standards, and
the relevant data evaluation requirements, as well as the associated
comparative analysis requirements, no later than for plan years
beginning on or after January 1, 2026.
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\127\ 26 CFR 54.9812-2(c)(2)(ii)(C), (c)(5)(i)(C) and (D), and
(c)(5)(ii) through (v); 29 CFR 2590.712-1(c)(2)(ii)(C), (c)(5)(i)(C)
and (D), and (c)(5)(ii) through (v); and 45 CFR 137(c)(2)(ii)(C),
(c)(5)(i)(C) and (D), and (c)(5)(ii) through (v).
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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 proposed severability clauses in the proposed rules
to capture the Departments' intent that, to the extent a reviewing
court holds that any provision of the final rules 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 expressed their view that if the proposed rules were
finalized as proposed or as a substantially similar version, such rules
would provide comprehensive protections that implement MHPAEA's
requirements. The Departments noted that the aim of the 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 the proposed rules
would individually contribute to furthering that aim. Therefore, the
Departments proposed that if a court were to hold that any provisions
were invalid or unenforceable, any affected provisions would be
severable from the rest of the proposed rules, if finalized, and would
not affect any other provisions or their application to persons not
similarly situated or to dissimilar circumstances.
The Departments did not receive any comments relating to the
proposed severability provisions and are finalizing these provisions
without change. The Departments note that, while the requirements under
26 CFR 54.9812-1(c)(4)(i) and (iii), 29 CFR 2590.712(c)(4)(i) and
(iii), and 45 CFR 146.136(c)(4)(i) and (iii) are part of a
comprehensive regulatory scheme, the provisions are separate aspects of
the parity analysis and can continue to apply independently if other
provisions of these final rules are invalidated. While the Departments
have made some changes from the proposed rules in these final rules, as
discussed earlier in this preamble, the Departments are not of the view
that these changes affect the severability of the provisions of these
final rules.
E. Request for Information
In the preamble to the proposed rules, the Departments requested
information on ways to improve the coverage of mental health and
substance use disorder benefits through other consumer protection laws,
including the ACA. The Departments requested comments on ways to
incentivize TPAs to facilitate compliance with MHPAEA on behalf of the
plans that they design and administer and methods to enhance access to
mental health and substance use disorder benefits through the
Departments' implementation of PHS Act section 2706(a), the provider
nondiscrimination requirements. The Departments also requested comments
[[Page 77654]]
on ways that they could improve the coverage of and enhance access to
mental health and substance use disorder benefits through their
implementation of the provider directory requirements under Code
section 9820(a) and (b), ERISA section 720(a) and (b), and PHS Act
section 2799A-5(a) and (b), the requirements for telehealth, and the
ways in which the Departments could leverage ERISA's and the ACA's
existing claims procedure requirements to help facilitate access to
mental health and substance use disorder benefits. Finally, the
Departments requested information on whether HHS and the Treasury
should consider potential amendments to the minimum value rule and on
how behavioral health crisis services fit within the existing MHPAEA
classifications or the EHB categories.
The Departments appreciate the many comments received in response
to the request for information and will use the comments to inform
potential future rulemaking and guidance.
III. Overview of the Final Rules--Department of HHS
A. Sunset of MHPAEA Opt-Out for Self-Funded Non-Federal Governmental
Plans
Prior to the enactment of the CAA, 2023 on December 29, 2022,
sponsors of self-funded non-Federal governmental plans were permitted
to elect to exempt those plans from (opt out of) compliance with the
MHPAEA requirements, among other specified requirement categories, in
title XXVII of the PHS Act.\128\
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\128\ PHS Act section 2722(a)(2); 45 CFR 146.180.
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The CAA, 2023 included a provision that sunsets the election option
with respect to MHPAEA.\129\ Specifically, that provision amended PHS
Act section 2722(a)(2) to specify that no MHPAEA opt-out election may
be made on or after the date of the enactment of the CAA, 2023, and
that, subject to certain exceptions, no MHPAEA opt-out election
expiring on or after the date that is 180 days after the date of such
enactment may be renewed.\130\
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\129\ Division FF, Title I, Subtitle C, Chapter 3, section 1321,
Public Law 117-328, 136 Stat. 4459 (Dec. 29, 2022).
\130\ PHS Act section 2722(a)(2)(F)(i).
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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 self-funded non-Federal governmental 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.\131\
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\131\ PHS Act section 2722(a)(2)(F)(ii).
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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 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).
In the proposed rules, HHS proposed to amend 45 CFR 146.180 to
align with the CAA, 2023 amendments to PHS Act section 2722(a)(2).
Specifically, HHS proposed 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 plans 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 proposed to add new paragraph (f)(4)(iii) specifying 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 proposed to make conforming edits to
paragraph (a)(2), paragraphs (a)(5)(i) and (ii) and (a)(6)(ii), as
proposed to be redesignated, and paragraph (f)(1). HHS proposed that
the amendments to 45 CFR 146.180 would apply on the effective date of
the final rule.\132\ HHS sought comments on these proposed amendments,
including whether additional guidance or clarifications were necessary
to implement the sunset of the MHPAEA opt-out election provision.
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\132\ The statutory provisions implemented by 45 CFR 146.180
became effective December 29, 2022 (the date of enactment of the
CAA, 2023).
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Several commenters expressed support for the proposal to codify the
sunset for sponsors of self-funded non-Federal governmental plans to
opt out of compliance with the MHPAEA requirements. Many of these
commenters recommended prioritizing MHPAEA compliance reviews of these
plans as soon as their respective opt-outs are no longer valid.
Furthermore, some commenters suggested these plans should immediately
be requested to submit the NQTL comparative analyses required under PHS
Act section 2726(a)(8)(A) to ensure compliance with MHPAEA. One
commenter encouraged HHS to oversee self-funded non-Federal
governmental plans to ensure full MHPAEA compliance by such plans that
previously opted out of compliance with the MHPAEA requirements.
HHS appreciates the support for the proposed amendments to codify
the sunset of the option for self-funded non-Federal governmental plans
to elect to opt out of compliance with the MHPAEA requirements. HHS did
not receive any comments objecting to the proposed amendments to 45 CFR
146.180 and is finalizing those amendments as proposed in these final
rules. HHS is committed to ensuring that self-funded non-Federal
governmental plans that previously opted out of compliance with MHPAEA
come into compliance with MHPAEA requirements. In determining the
degree to which HHS will prioritize compliance reviews, NQTL
comparative analysis reviews, and enforcement of MHPAEA with respect to
self-funded non-Federal governmental plans once the plans' respective
opt-outs sunset, HHS will weigh all relevant considerations, such as
the number of complaints of MHPAEA noncompliance with respect to such
plans.
One commenter suggested HHS implement a tiered approach to penalty
assessment for compliance with MHPAEA that employs varying levels of
penalties which consider the severity of and frequency of violations.
This approach, according to the commenter, would encourage greater
compliance as non-Federal governmental entities diligently work to
modify their health plans, and would mitigate detrimental fiscal
impacts that would reduce the ability of non-Federal governmental
entities to both recruit and retain a strong workforce and continue to
provide necessary services to residents.
With respect to penalties for violations of MHPAEA and other PHS
Act requirements, HHS has determined that the enforcement processes and
[[Page 77655]]
procedures set forth in existing regulations are sufficient to address
the tiered approach to penalty assessment recommended by the commenter.
The HHS enforcement processes and procedures applicable to self-funded
non-Federal governmental plans are set forth at 45 CFR 150.301 through
150.347. Rather than specifying a specific set penalty amount for any
and all violations, the regulations at 45 CFR 150.317, 150.319,
150.321, and 150.323 specify the factors HHS uses in determining the
amount of any penalty, including the entity's previous record of
compliance and the gravity of the violation; mitigating circumstances;
aggravating circumstances; and other matters as justice may
require.\133\ These factors allow HHS to structure penalties in a
manner that encourages compliance while taking into account the
relevant facts and circumstances.
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\133\ HHS proposed amendments to the provisions in 45 CFR part
150 related to enforcement processes and procedures and penalties
for noncompliance. 86 FR 51730 (Sept. 16, 2021).
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One commenter requested that HHS provide guidance on how self-
funded non-Federal governmental plans can leverage the expertise of
TPAs to comply with MHPAEA.
HHS acknowledges that most self-funded group health plans contract
with one or more TPAs to administer, and in some cases, to design plan
benefits. To the extent a self-funded non-Federal governmental plan
that contracts with a TPA has previously elected to opt out of MHPAEA
compliance, HHS urges the sponsors of such plans to work with their
TPAs to ensure that, under the plan's contract with the administrator,
if the TPA is required to administer benefits, it collects and analyzes
data, and provides data to the sponsor in such a way that will enable
the sponsor to comply with all the requirements of MHPAEA. HHS also
notes that Federal regulations at 45 CFR 150.305 identify the entity
liable for civil money penalties for noncompliance with applicable PHS
Act requirements, including MHPAEA. Under the regulations, if a non-
Federal governmental plan is sponsored by two or more employers and
fails to comply with an applicable PHS Act requirement, the plan is
subject to a civil money penalty, irrespective of whether the plan is
administered by a health insurance issuer, an employer sponsoring the
plan, or a TPA.\134\ If a non-Federal governmental plan is sponsored by
a single employer and fails to comply with an applicable PHS Act
requirement, the employer is subject to a civil money penalty,
irrespective of whether the plan is administered by a health insurance
issuer, the employer, or a TPA.\135\
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\134\ 45 CFR 150.305(b).
\135\ 45 CFR 150.305(c).
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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 would apply in the same manner to health insurance issuers
offering individual health insurance coverage. Further, HHS proposed to
include a cross reference in 45 CFR 147.160 to the comparative analysis
requirements that were proposed in 45 CFR 146.137. 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. HHS proposed that these provisions would apply to health
insurance issuers offering individual health insurance coverage for
policy years beginning on or after January 1, 2026. Finally, for
greater clarity and precision and to align with the statutory
terminology, HHS proposed 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.''
Commenters expressed support for HHS' proposal to apply the
proposed amendments to 45 CFR 146.136 in the same manner to individual
health insurance coverage. HHS is finalizing this proposal as proposed.
HHS received one comment supporting its proposal to include a cross
reference in 45 CFR 147.160 to the comparative analysis requirements
that were proposed in 45 CFR 146.137 to 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, and did not receive
any comments opposing that proposal. HHS did not receive any comments
on its proposal 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.'' HHS is finalizing these proposals as proposed.
With respect to HHS' proposal that these provisions would apply to
individual health insurance coverage for policy years beginning on or
after January 1, 2026, one commenter stated that this applicability
date should align with the applicability date for self-funded non-
Federal governmental plans to come into compliance with MHPAEA's
requirements under PHS Act section 2726 and its implementing
regulations, while other commenters requested that the applicability
date for individual health insurance coverage be delayed until January
1, 2027. As stated in the proposed rules, 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, which precludes alignment with the
applicability date for self-funded non-Federal governmental plans, and
prior to when rates and benefits must be finalized and approved for the
following calendar year. In addition, HHS declines to delay the
applicability date until January 1, 2027, in order to ensure the
protections of these final rules apply in a timely manner. Therefore,
with respect to its proposal that these provisions would apply to
individual health insurance coverage, HHS is finalizing the
applicability date of January 1, 2026, as proposed.
Until the applicability date, issuers are required to continue to
comply with the most recent MHPAEA regulations codified in the CFR
\136\ and must comply with the statutory provisions of MHPAEA, as
amended by the CAA, 2021, both before and after these final
[[Page 77656]]
rules become applicable. HHS reminds issuers that the guidance in FAQs
Part 45 addresses what information plans and issuers should make
available under MHPAEA, as amended by the CAA, 2021, in response to the
Departments' request for comparative analyses and can be relied on
pending the applicability date of these final rules.
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\136\ Specifically, issuers must continue to comply with 45 CFR
147.160, incorporating 45 CFR 146.136, each revised as of October 1,
2023.
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IV. Regulatory Impact Analysis
Summary--Departments of Health and Human Services and Labor
The Departments \137\ have examined the impacts of these final
rules as required by Executive Order 12866,\138\ Executive Order
13563,\139\ Executive Order 14094,\140\ the Paperwork Reduction Act of
1995,\141\ the Regulatory Flexibility Act,\142\ section 202 of the
Unfunded Mandates Reform Act of 1995,\143\ Executive Order 13132,\144\
and the Congressional Review Act.\145\
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\137\ The Department of the Treasury is not included as part of
the Departments in the regulatory impact analysis.
\138\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4,
1993).
\139\ Improving Regulation and Regulatory Review, 76 FR 3821
(Jan. 18, 2011).
\140\ Modernizing Regulatory Review, 88 FR 21879 (Apr. 6, 2023).
\141\ 44 U.S.C. 3506(c)(2)(A) (1995).
\142\ 5 U.S.C. 601 et seq. (1980).
\143\ 2 U.S.C. 1501 et seq. (1995).
\144\ Federalism, 64 FR 153 (Aug. 4, 1999).
\145\ 5 U.S.C. 801 et seq. (1996).
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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,\146\ 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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\146\ Modernizing Regulatory Review, 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.
Based on the Departments' estimates, OMB's OIRA has determined this
rulemaking is significant per section 3(f)(1) as measured by the $200
million or more in any one year. Therefore, the Departments have
provided an assessment of the potential costs, benefits, transfers, and
alternatives associated with these final rules, and OMB has reviewed
these final rules.
2. Introduction and Need for Regulations
Mental health is crucial to a person's overall well-being, and
access to quality mental health and substance use disorder treatment is
as essential for health as access to medical/surgical treatment.\147\
According to the NSDUH, in 2022, 50.6 percent of adults in the United
States with any mental illness had received treatment within the past
year; 66.7 percent of adults with a serious mental illness had received
treatment.\148\
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\147\ Commonwealth Fund, Behavioral Health Care in the United
States: How It Works and Where It Falls Short (Sept. 7, 2022),
https://www.commonwealthfund.org/publications/explainer/2022/sep/behavioral-health-care-us-how-it-works-where-it-falls-short.
\148\ SAMHSA, Center for Behavioral Health Statistics and
Quality, National Survey on Drug Use and Health, Table 6.21B (2022),
https://www.samhsa.gov/data/sites/default/files/reports/rpt42728/NSDUHDetailedTabs2022/NSDUHDetailedTabs2022/NSDUHDetTabsSect6pe2022.htm.
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Failure to treat mental health conditions or substance use
disorders can be costly. For example, depression is associated with
increased risk of cardiovascular disease, diabetes, stroke, Alzheimer's
disease, suicidality, and osteoporosis, and an untreated substance use
disorder may result in hospital emergency room care for a drug
overdose.\149\ One study examined the costs and benefits of 58 grants
provided through the Garrett Lee Smith Memorial Suicide Prevention
Program (GPP) between 2005 and 2009, which provides Federal funding to
States, Tribes, and colleges for community-based suicide prevention
programs. The study estimated that the programs resulting from GPP
funding prevented 79,379 suicide attempts and resulted in $4.50 in
medical cost savings for each dollar invested.\150\
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\149\ Government Accountability Office (GAO), Behavioral Health:
Research on Health Care Costs of Untreated Conditions is Limited,
GAO-19-274 (Feb. 2019), https://www.gao.gov/assets/gao-19-274.pdf.
\150\ Lucas Godoy Garraza, Christine Walrath, Simone Peart
Boyce, & David Goldston, An Economic Evaluation of the Garrett Lee
Smith Memorial Suicide Prevention Programs, 48(1) Suicide and Life-
Threatening Behavior (2018), https://onlinelibrary.wiley.com/doi/10.1111/sltb.12321.
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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 2022, approximately 27 percent
of adults 18 and older with any mental illness in the past year who did
not receive mental health treatment reported a perceived unmet need for
treatment.\151\ Individuals reported a variety of reasons for not
receiving treatment: 59 percent thought it would cost too much; 26
percent were concerned their information would not be kept private; 20
percent were unable to get an opening in the treatment program or with
the health care professional they wanted to see; 16 percent thought it
may cause their community to have a negative opinion about them; and 15
percent thought it might impact their job, parental rights or
housing.\152\
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\151\ SAMHSA, Center for Behavioral Health Statistics and
Quality, National Survey on Drug Use and Health, Figure 64 (2022),
https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
\152\ SAMHSA, Center for Behavioral Health Statistics and
Quality, National Survey on Drug Use and Health, Table A.47B (2022),
https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf. Respondents could indicate multiple reasons for
not receiving treatment and so response categories are not mutually
exclusive.
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The Departments are particularly concerned with access barriers 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
[[Page 77657]]
past year and 28 percent of those with unmet substance use disorder
care needs in the past year reported that their inability to get an
immediate appointment had prevented them from getting needed care.\153\
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\153\ 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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Obtaining appointments with primary care physicians instead of
behavioral health specialists can be significantly easier. According to
the 2023 KFF Employer Health Benefits Survey, 91 percent of firms that
offer physical health benefits believe there is a sufficient number of
primary care providers in the plans' network, whereas only 67 percent
and 59 percent, respectively, believe there is a sufficient number of
mental health providers and substance use disorder providers.\154\
However, while up to 70 percent of all primary care visits include a
behavioral health component,\155\ research suggests that primary care
providers face significant barriers to delivering these services,
including insufficient resources, inadequate related knowledge, and
limited time with patients.\156\
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\154\ KFF, 2023 Employer Health Benefits Survey (Oct. 18, 2023),
https://www.kff.org/report-section/ehbs-2023-section-13-employer-practices-telehealth-provider-networks-coverage-limits-and-coverage-for-abortion/.
\155\ Health Affairs, Combating a Crisis by Integrating Mental
Health Services and Primary Care, Health Affairs Forefront (July 8,
2022), https://www.healthaffairs.org/do/10.1377/forefront.20220706.603540.
\156\ Danielle F. Loeb, Elizabeth A. Bayliss, Ingrid A.
Binswanger, Carey Candrian, & Frank V. Degruy, Primary Care
Physician Perceptions on Caring for Complex Patients with Medical
and Mental Illness, 27(8) Journal of General Internal Medicine pp.
945-952 (2012), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3403152/; Lusine Poghosyan, Allison A. Norful, Affan Ghaffari,
Maureen George, Shruti Chhabra, Mark Olfson, Mental Health Delivery
in Primary Care: The Perspectives of Primary Care Providers, 33(5)
Archives of Psychiatric Nursing pp. 63-67 (Oct. 2019), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7077950.
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In seeking out specialists, individuals tend to face less adequate
mental health provider networks than medical/surgical provider networks
through their plan or coverage. A 2024 study of 2019-2021 claims and
enrollment data for employer-sponsored health plans reported that
office visits with psychiatrists and psychologists occurred out-of-
network 8.9 and 10.6 times more, respectively, than those with medical/
surgical specialist physicians.\157\ According to a 2021 study, which
compared the experiences of patients receiving both specialty mental
health and medical/surgical care, patients who were receiving mental
health treatment from only a mental health practitioner were more
likely to rate their plan's mental health network as inadequate
compared with their plan's medical/surgical provider network.\158\ The
study referenced research that found specialty mental health networks
tend to be narrower due to a growing workforce shortage of mental
health providers, a high demand for mental health services, and
specialty mental health practitioners opting out of participating in
provider networks due to low reimbursements for mental health services
compared with other specialties. These factors have consequentially
resulted in higher out-of-network utilization rates for mental health
care services.\159\ \160\ \161\
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\157\ Tami L. Mark & William Parish, Behavioral Health Parity--
Pervasive Disparities in Access to In-Network Care Continue, RTI
International (2024), https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf.
\158\ Susan H. Busch & Kelly Kyanko, Assessment of Perceptions
of Mental Health vs Medical Health Plan Networks Among US Adults
with Private Insurance, 4(10) JAMA Network Open (2021).
\159\ Davenport, Stoddard, Travis Gray, & Stephen P. Melek,
Addiction and Mental Health vs. Physical Health: Widening
Disparities in Network Use and Provider Reimbursement, Milliman
(Nov. 20, 2019), https://www.milliman.com/en/insight/addiction-and-mental-health-vs-physical-health-widening-disparities-in-network-use-and-p/.
\160\ Tara F. Bishop, Joanna K. Seirup, Harold Alan Pincus, &
Joseph S. Ross, Population of US Practicing Psychiatrists Declined,
2003-13, Which May Help Explain Poor Access to Mental Health Care,
35(7) Health Affairs (Millwood) (2016) pp. 1271-1277.
\161\ Daria Pelech & Tamara Hayford. Medicare Advantage and
Commercial Prices for Mental Health Services, 38(2) Health Affairs
(Millwood) (2019) pp. 262-267.
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Use of out-of-network providers can place additional burdens on
families seeking mental health and substance use disorder treatments. A
2022 study of families experiencing out-of-network behavioral health
expenditures in their employer-sponsored insurance claims found that
roughly half of the families were subject to ``balance billing,'' with
the yearly mean total for those families being $861. This study,
however, focused on out-of-network claims submitted by providers to
insurers, which suggests that, for individuals seeking treatment from
behavioral health care from providers not accepting insurance, the out-
of-pocket costs could be even greater.\162\
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\162\ Sarah A. Friedman, Haiyong Xu, Francisca Azocar, & Susan
L. Ettner, Quantifying Balance Billing for Out-of-Network Behavioral
Health Care in Employer-Sponsored Insurance, 73(9) Psychiatric
Services pp. 1019-1026 (2022).
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Despite access barriers to seeking mental health and substance use
disorder treatment, the need for these services has only increased. An
estimated 37 percent of U.S. adults reported being diagnosed with a
mental health condition in 2023, a 5-percentage-point increase from
pre-pandemic levels in 2019.\163\ Research suggests that the need for
mental health services has also increased among children and
adolescents. For instance, a 2022 study using 2009 to 2019 data from
the NSDUH found that the prevalence of a major depressive episode among
adolescents aged 12 to 17 increased by 7.7 percentage points, from
approximately 8.1 percent in 2009 to 15.8 percent in 2019. The study
found that the increase in prevalence of major depressive episodes was
even higher among female adolescents, finding a 12.0-percentage-point
increase.\164\
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\163\ American Psychological Association, Stress in America
2023: A Nation Recovering from Collective Trauma (Nov. 2023),
https://www.apa.org/news/press/releases/stress/2023/collective-trauma-recovery.
\164\ Michael Daly, Prevalence of Depression Among Adolescents
in the US from 2009 to 2019: Analysis of Trends by Sex, Race/
Ethnicity, and Income, 70 Journal of Adolescent Health 3 pp. 496-499
(2022). Additional information regarding these trends in mental
health services among children and adolescents is addressed earlier
in this preamble.
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The enactment of MHPAEA, as well as the CAA, 2021 \165\ and
associated regulations and guidance issued by the Departments, were
intended to assist plans and issuers in improving their policies and
procedures to ensure parity between mental health and substance use
disorder benefits and medical/surgical benefits, particularly with
regards to applying NQTLs.\166\ However, as documented in the past two
Reports to Congress 167 168 and discussed later in this
regulatory impact analysis, the Departments have found from their
initial reviews that plans and issuers failed to comply with these
requirements.
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\165\ Public Law 116-260 (Dec. 27, 2020).
\166\ NQTLs consist of any limitations on the scope and duration
of benefits that are not expressed numerically. Because they are
non-quantitative, it can be difficult to measure their impact on
restricting access and whether they are applied in parity across
mental health and substance use disorder benefits and medical/
surgical benefits.
\167\ 2022 MHPAEA Report to Congress, 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.
\168\ 2023 MHPAEA Comparative Analysis Report to Congress,
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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In order to address these issues and improve the health and well-
being of both individuals and their communities, the Departments are
committed to promoting equal access to treatment for
[[Page 77658]]
mental health conditions and substance use disorders. These final
rules, by clarifying requirements for comparative analyses and setting
forth additional requirements for how NQTLs must be designed and
applied for group health plans and health insurance coverage, will
serve to improve compliance with MHPAEA by plans and issuers. This will
in turn promote more equitable access to affordable and comprehensive
care for individuals with mental health conditions and substance use
disorders and reduce barriers to mental health and substance use
disorder treatments, resulting in greater access and utilization of
these services as well as better patient outcomes.
2.1. History of MHPAEA Related Government Actions
To implement the requirements of MHPAEA, the Departments published
a request for information soliciting comments on issues under MHPAEA in
2009 \169\ and interim final regulations in 2010.\170\ After
considering the comments and other feedback received from interested
parties, the Departments published the 2013 final regulations.\171\ In
subsequent years, the Departments 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, including the 2020 MHPAEA
Self-Compliance Tool, which provided a basic framework for plans and
issuers to assess whether their NQTLs satisfy MHPAEA's parity
requirements. The Departments also have provided materials to educate
consumers, their family members, and policymakers about parity for
mental health and substance use disorder benefits,\172\ and may develop
new materials and undertake additional educational efforts as necessary
after the publication of these final rules.
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\169\ 74 FR 19155 (Apr. 28, 2009).
\170\ 75 FR 5410 (Feb. 2, 2010).
\171\ 78 FR 68240 (Nov. 13, 2013).
\172\ SAMHSA, Know Your Rights: Parity for Mental Health and
Substance Use Disorder Benefits (2022), https://store.samhsa.gov/product/know-your-rights-parity-mental-health-and-substance-use-disorder-benefits/pep21-05-00-003; SAMHSA, The Essential Aspects of
Parity: A Training Tool for Policymakers (2022), https://store.samhsa.gov/product/essential-aspects-parity-training-tool-policymakers/pep21-05-00-001; DOL, Understanding Your Mental Health
and Substance Use Disorder Benefits, https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/publications/understanding-your-mental-health-and-substance-use-disorder-benefits.
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The CAA, 2021 amended MHPAEA, in part, by expressly requiring group
health plans and health insurance issuers that provide both medical and
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. Plans and issuers must provide those analyses to
the Departments or applicable State authorities, upon request.
Moreover, the CAA, 2021 compels the Departments to request and evaluate
no fewer than 20 NQTL comparative analyses per year and submit to
Congress and make available to the public an annual report summarizing
the Departments' review process and findings. Shortly after the
enactment of the amendments to MHPAEA made by the CAA, 2021, the
Departments issued FAQs Part 45 to help plans and issuers comply with
the comparative analysis requirements.\173\
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\173\ FAQs about Mental Health and Substance Use Disorder Parity
Implementation and the Consolidated Appropriations Act, 2021 Part 45
(Apr. 2, 2021), 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.
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As documented in the 2022 MHPAEA Report to Congress,\174\ the
Departments found that under the first year of the CAA, 2021, none of
the NQTL comparative analyses they reviewed contained sufficient
information and documentation from plans and issuers upon initial
receipt. Similarly, the 2023 MHPAEA Comparative Analysis Report to
Congress \175\ notes that nearly all the comparative analyses reviewed
by the Departments contained insufficient information upon initial
receipt and identified common deficiencies in the comparative analyses
prepared by plans and issuers. Moreover, despite plans' and issuers'
longstanding obligations under MHPAEA to ensure that the processes,
strategies, evidentiary standards, and other factors used to apply
NQTLs are equitable, it was apparent upon review of the analyses, that
plans and issuers had not carefully designed and implemented their
NQTLs to be compliant with MHPAEA prior to the enactment of the CAA,
2021. Many 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. Consequently, the comparative
analyses appeared to focus on finding after-the-fact rationales for
decisions and designs involving NQTLs, rather than reflecting proper
attention to MHPAEA compliance in the first place.
---------------------------------------------------------------------------
\174\ 2022 MHPAEA Report to Congress, 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.
\175\ 2023 MHPAEA Comparative Analysis Report to Congress,
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 are committed to ensuring parity in access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits. By issuing these final rules, the
Departments will provide additional guidance to affected parties to
facilitate compliance with MHPAEA and to help ensure that individuals
with mental health conditions and substance use disorders benefit from
the full protections required by law consistent with the fundamental
purpose of MHPAEA.
2.2. Current Regulatory Actions
These final rules amend existing regulatory definitions and add new
definitions of key terms, including ``factors,'' ``processes,''
``strategies,'' and ``evidentiary standards.'' They also add more
specificity as to what conditions or disorders plans and issuers must
treat as mental health conditions and substance use disorders for
purposes of MHPAEA to be consistent with generally recognized
independent standards of current medical practice. These final rules
also clarify the way the parity requirements apply to NQTLs, including
by prohibiting discriminatory factors and evidentiary standards, and
provide additional examples of the application of MHPAEA to NQTLs to
improve the understanding and ability of the regulated community to
comply with the law. Additionally, these final rules require that plans
and issuers provide meaningful benefits for covered mental health
conditions and substance use disorders in each classification in which
meaningful medical/surgical benefits are provided.
Under these final rules, plans and issuers are required to collect
and evaluate relevant data in a manner reasonably designed to assess
the impact of the NQTL on relevant outcomes related to access to mental
health and substance use disorder benefits and medical/surgical
benefits. These final rules provide guidance for how to comply with the
relevant data evaluation requirements in limited circumstances where
data is initially and temporarily unavailable for new and newly imposed
NQTLs and where no data exists that can reasonably measure any relevant
impact of the NQTL on relevant outcomes related to access to mental
health and substance use disorder benefits and medical/
[[Page 77659]]
surgical benefits. In those instances, the plan or issuer must include
specific information in their comparative analyses, as explained
earlier in this preamble.
These final rules also set forth 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.
Additionally, in these final rules, HHS finalizes regulatory amendments
to implement a provision in the CAA, 2023 that sunsets the election
option for sponsors of self-funded non-Federal governmental plans to
opt out of requirements under MHPAEA.
In their reviews of plans' and issuers' comparative analyses under
the requirements of the CAA, 2021, the Departments identified
exclusions related to treatment for ASD with ABA therapy and OUD with
medication assisted treatment, as well as gatekeeping provisions for
treatment applied with respect to mental health or substance use
disorder benefits but not to medical/surgical benefits, such as
requiring referrals for appointments and prior authorization for mental
health and substance use disorder outpatient services, resulting in
corrections by the plans and issuers.\176\ However, the comparative
analyses alone are often less effective in identifying substantive
parity violations for more complex NQTLs, such as those related to
network composition. The Departments expect that these additional
requirements will 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. As such, these final rules will
help plans and issuers comply with these requirements, increase the
ability of plans and issuers to provide compliant comparative analyses
during future reviews or investigations, and result in improved access
to treatment and coverage of mental health conditions and substance use
disorders, as intended by MHPAEA.
---------------------------------------------------------------------------
\176\ 2023 MHPAEA Comparative Analysis Report to Congress,
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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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 final 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 were
required to make their comparative analyses available to the
Departments or an applicable State authority upon request. Plans and
issuers are further required to make these comparative analyses and
other applicable information required by the CAA, 2021 available upon
request to participants, beneficiaries, and enrollees in all non-
grandfathered group health plans and non-grandfathered group or
individual health insurance coverage (including a provider or other
person acting as a participant's, beneficiary's, or enrollee's
authorized representative) in connection with an adverse benefit
determination, as well as to participants and beneficiaries in plans
subject to ERISA.\177\
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\177\ FAQs Part 45, Q6.
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The 2022 and 2023 MHPAEA Reports to Congress documented that many
comparative analyses prepared by plans and issuers prior to these final
rules were deficient even after multiple requests for correction by the
Departments.178 179 In addition, at least some plans and
issuers failed to conduct the required comparative analyses until after
the Departments requested them, rather than performing and documenting
them prospectively within 45 days following the enactment of the CAA,
2021.
---------------------------------------------------------------------------
\178\ 2022 MHPAEA Report to Congress, 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.
\179\ 2023 MHPAEA Comparative Analysis Report to Congress,
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' view is that plans and issuers that were already
timely fulfilling the comparative analysis requirements outlined in
CAA, 2021 will incur only incremental costs to comply with these final
rules. Plans and issuers not already meeting those requirements may, on
the other hand, face significant costs to come into compliance with the
CAA, 2021 comparative analysis requirements and these final rules.
However, because those actions to comply with the CAA, 2021 comparative
analysis requirements would need to occur absent these final rules,
those costs are included in the baseline.
Therefore, this regulatory impact analysis does not include
benefits or costs for performing and documenting comparative analyses
for NQTLs applicable to mental health and substance use disorder
benefits and medical/surgical benefits, or making them available upon
request, as these are already required by the provisions of the CAA,
2021 and are in the baseline. However, this regulatory impact analysis
does take into account the expected impacts of these final rules on the
preparation of plans' and issuers' comparative analyses, how these
final rules will impact plans' and issuers' compliance and, in turn,
access for participants, beneficiaries, and enrollees needing mental
health and substance use disorder treatments, and whether plans and
issuers need to change their policies and procedures to provide
benefits in parity.
Some commenters stated that the proposal would require plans and
issuers to substantially revise their comparative analyses, arguing the
significance of those revisions makes the Departments' approach of
conducting an incremental analysis of the additional requirements of
this rulemaking inappropriate. In particular, one commenter stated that
the imposition of the new ``substantially all'' test would require all
comparative analyses to be redone, thereby imposing the full cost of
performing these analyses under the proposed rules. In response, the
Departments note that, as discussed earlier in this preamble, they are
not finalizing the proposed mathematical tests for applying the
substantially all and predominant tests, which would have based these
determinations on the dollar amount of all plan payments for medical/
surgical benefits expected to be paid. Instead, these final rules
provide that an NQTL with respect to mental health or substance use
disorder benefits is more restrictive, as written or in operation, than
the predominant NQTL that applies to substantially all medical/surgical
benefits in the same classification if the plan or issuer fails to
satisfy the design and application requirements or the relevant data
evaluation requirements. Additionally, the material differences
standard in the relevant data evaluation requirements reflects an
interpretation of the statutory terms ``substantially all'' and
``predominant'' in a manner that takes into account the multi-faceted
nature of NQTLs, as well as the complexity of analyzing such NQTLs.
Because the CAA, 2021 requires that comparative analyses be
performed and documented, the fact that plans and issuers were not
adequately conducting the required analyses and documenting
[[Page 77660]]
how they determined NQTLs were being applied in parity, is not a
justification for why these final rules should account for the full
cost of those actions. Rather, these final rules consider as the
baseline what plans and issuers should have done given the relevant
statute and guidance irrespective of these final rules. Therefore, for
this category of cost, the effect of these final rules is limited to
those additional requirements included by the Departments in the final
rules. Estimates are made based on the impact from the baseline on
plans and issuers affected by these final rules, and assuming full
compliance with the new requirements.
4. Summary of Impacts
These final rules define certain terms associated with MHPAEA's
requirements for NQTLs and require that plans and issuers provide
meaningful benefits for covered mental health conditions and substance
use disorders in each classification in which meaningful medical/
surgical benefits are provided. These final rules also provide that a
group health plan (or health insurance coverage offered by an issuer in
connection with a group health plan) may not impose any NQTL with
respect to mental health or substance use disorder benefits in any
classification that is more restrictive, as written and in operation,
than the predominant NQTL that applies to substantially all medical/
surgical benefits in the same classification. For this purpose, the
plan and issuer must ensure that the NQTL satisfies both the design and
application requirements and the relevant data evaluation requirements.
Specifically, under these final rules, plans and issuers must continue
to satisfy the design and application requirements from the 2013 final
regulations, which require an analysis of the processes, strategies,
evidentiary standards, and other factors used to design and apply NQTLs
to mental health and substance use disorder benefits as compared to
medical/surgical benefits. Plans and issuers have struggled with these
requirements, as detailed in the Departments' 2022 MHPAEA Report to
Congress \180\ and the 2023 MHPAEA Comparative Analysis Report to
Congress.\181\ Additionally, plans and issuers are not permitted to use
any discriminatory factors or evidentiary standards to design or apply
an NQTL, and they must satisfy new relevant data evaluation
requirements as well as new requirements related to the elements and
documentation of their comparative analyses.
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\180\ 2022 MHPAEA Report to Congress, 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.
\181\ 2023 MHPAEA Comparative Analysis Report to Congress,
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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In particular, to comply with the required content elements for a
comparative analysis, plans and issuers must describe each NQTL and
identify and define all the factors and evidentiary standards used to
design or apply the NQTL. The plan or issuer must also describe how the
factors identified are used in the design and application of the NQTL,
and evaluate whether 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 with respect to medical/
surgical benefits, both as written and in operation. Finally, plans and
issuers 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 NQTLs within each
classification, and the relative stringency of their application, both
as written and in operation.
Accordingly, these final rules will increase plan and issuer
compliance with the requirements for imposing NQTLs under MHPAEA and
help ensure that NQTLs applicable to mental health and substance use
disorder benefits are no more restrictive than the predominant NQTLs
applicable to substantially all medical/surgical benefits in the same
classification. The Departments acknowledge that past parity
implementation has lacked consistency and thus had varied results,
particularly for laws limiting management of behavioral health benefits
or NQTLs. A 2012 study on the implementation of Oregon's 2007
comprehensive parity law, which mandated benefits for substance use
disorders and restricted the use of behavioral health management for
fully insured commercial group plans, compared their expenditures for
treatments to those of self-funded plans not covered by Oregon's law.
The study found that while plan expenditures for alcohol treatment
services increased, other substance use treatments were not associated
with a statistically significant increase in expenditures and that
overall, the impact of parity on spending was not significantly
different from zero.\182\ However, a broader study conducted in 2013
looked at treatment counts at specialty substance use disorder
facilities between 2000 and 2008 across the United States to assess the
impact of State-level substance use disorder parity laws on State
aggregate treatment rates. While the study was not able to control for
the source of insurance and employment status of those receiving
treatment, the study did find that the implementation of any State
substance use disorder parity laws was associated with increased access
to specialty substance use disorder treatments--by 9 percent in all
specialty substance use disorder treatment facilities and 15 percent in
facilities accepting private insurance.\183\
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\182\ K. John McConnell, M. Susan Ridgely, & Dennis McCarty,
What Oregon's Parity Law Can Tell Us About the Federal Mental Health
Parity and Addiction Equity Act and Spending on Substance Abuse
Treatment Services, 124(3) Drug and Alcohol Dependence pp. 340-346
(2012).
\183\ Hefei Wen, Janet R. Cummings, Jason M. Hockenberry, Laura
M. Gaydos, & Benjamin G. Druss, State Parity Laws and Access to
Treatment for Substance Use Disorder in the United States:
Implications for Federal Parity Legislation, 70 (12) JAMA Psychiatry
pp. 1355-1362 (2013).
---------------------------------------------------------------------------
The Departments are of the view that, by finalizing these rules and
requiring better documentation related to how plans and issuers design
and apply NQTLs, the Departments and applicable State authorities will
be better able to enforce existing parity requirements. In doing so,
access to in-network, medically necessary treatments will increase for
a significant segment of individuals whose health coverage will be
affected by these final rules, resulting in better 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 will incur costs to comply with the requirements
in these final rules. However, the Departments have determined that the
benefits of these final 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 final 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 final
rules.
[[Page 77661]]
Table 1--Accounting Statement
------------------------------------------------------------------------
-------------------------------------------------------------------------
Benefits:
Improved understanding of and compliance with MHPAEA by
plans and issuers, resulting in better frameworks for determining
whether plans and issuers are complying with MHPAEA with respect to
NQTLs applicable to mental health and substance use disorder
benefits and medical/surgical benefits.
Greater access and utilization of mental health and
substance use disorder services by reducing barriers to coverage of
mental health and substance use disorder treatment, which will
result in better health outcomes for those with mental health
conditions or substance use disorders.
Reduction in the negative impacts on families, friends,
caregivers, and coworkers of those with untreated or poorly managed
mental health conditions or substance use disorders based on their
improved access to treatment.
------------------------------------------------------------------------
Costs:
Increased costs to plans and issuers to implement changes
associated with the revision of plan provisions, which would result
in increased costs from expanded coverage of mental health and
substance use disorder services.
Costs to plans and issuers from collecting and evaluating
outcomes data and documenting NQTL comparative analyses consistent
with the requirements of these final rules of approximately $656.2
million in the first year and approximately $131.2 million in
subsequent years or between 0.07 percent and 0.01 percent of total
health insurance premiums in the group and individual markets.
Costs to plans and issuers for preparing and mailing the
comparative analyses upon request to participants, beneficiaries,
and enrollees of approximately $14.8 million annually.
Cost to plan and issuers for providing comparative analyses
for audits is approximately $23,800.
First-year regulatory review costs to plans and issuers for
familiarizing themselves with these final rules of approximately
$10.8 million.
Cost to plan and issuers to maintain recordkeeping is
approximately $12.2 million.
Potential increase in cost-sharing requirements and/or
treatment limitations for medical/surgical benefits for
participants, beneficiaries, and enrollees, if plans and issuers
try to achieve parity by imposing new restrictions on medical/
surgical benefits, 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 opted out of MHPAEA to come into compliance with
requirements under MHPAEA.
Cost savings to self-funded non-Federal governmental plans
of approximately $11,783 annually in total from no longer sending
opt-out notices regarding a plan's MHPAEA opt-out election.
Cost savings for the Federal Government of approximately
$5,200 annually from fewer opt-out notices being submitted by self-
funded non-Federal governmental plans.
------------------------------------------------------------------------
Discount rate Period
Costs Estimate Year dollar (percent) covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($million/Year).................... $217.35 2024 7 2024-2033
207.04 2024 3 2024-2033
----------------------------------------------------------------------------------------------------------------
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 or contributions associated with 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 conditions and substance use disorders as a result of an increased number of in-network
mental health and substance use disorder providers and decisions by participants, beneficiaries, and
enrollees to obtain treatment from those providers instead of a primary care provider......................
----------------------------------------------------------------------------------------------------------------
5. Affected Entities
The following table summarizes the number of plans, issuers,\184\
TPAs, and multiple employer welfare arrangement (MEWAs) that would be
affected by the final rules.\185\ These estimates are discussed in
greater detail later in this regulatory impact analysis.
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\184\ For purposes of this regulatory impact analysis, health
insurance company refers to a single entity that offers health
insurance coverage in one or multiple States, which might own or be
affiliated with one or multiple entities that are separately
required to be licensed to engage in the business of insurance in
each such State. Health insurance issuer or issuer means an
insurance company, insurance service, or insurance organization
(including an HMO) that is required to be licensed to engage in the
business of insurance in a State and that is subject to State law
that regulates insurance. PHS Act section 2791(b)(2) and 45 CFR
144.103.
\185\ The Departments note that the number of issuers may be
underestimated, since some managed behavioral health organizations
may not be included in the issuer count.
Table 2--Affected Entities
----------------------------------------------------------------------------------------------------------------
Self-funded Mixed insured
plan count plan count Total
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance company/State combinations)................... ............ ............... 1,467
TPAs.................................................................... ............ ............... 205
Plan MEWAs that are not fully insured................................... ............ ............... 132
Non-plan MEWAs that are not fully insured............................... ............ ............... 21
Plans (total) 186 187................................................... 46,080 4,501 50,581
Under 100 participants.............................................. 25,150 176 25,326
100 to 199 participants............................................. 5,209 402 5,611
200 to 499 participants............................................. 6,861 755 7,616
[[Page 77662]]
500 to 999 participants............................................. 3,812 671 4,483
1,000 to 2,499 participants......................................... 2,880 948 3,828
2,500 to 4,999 participants......................................... 1,119 561 1,680
5,000 and above participants........................................ 1,049 988 2,037
Plans with less than 500 participants that will seek assistance with the 37,220 1,333 38,553
comparative analyses from TPAs, MEWAs, or service providers............
Plans with more than 500 participants that will conduct the comparative 709 253 962
analysis themselves....................................................
Plans with more than 500 participants that will receive generic 4,076 1,458 5,534
comparative analyses from TPAs or service providers and will then
customize it...........................................................
Non-Federal governmental plans with less than 500 participants that will 26,584 ............... 26,584
seek assistance with the comparative analyses from TPAs or service
providers..............................................................
Non-Federal governmental plans with more than 500 participants that will 505 ............... 505
conduct the comparative analysis themselves............................
Non-Federal governmental plans with more than 500 participants that will 2,906 ............... 2,906
initially receive generic comparative analyses from TPAs or service
providers and will then customize it...................................
----------------------------------------------------------------------------------------------------------------
5.1. Issuers, TPAs, and MEWAs
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\186\ The Departments note that the final rules will affect
approximately 106,000 fully insured plans with 50 to 100
participants. (Note: The Departments estimate that there are 140,998
ERISA-covered group health plans with 50 to 100 participants based
on the Medical Expenditure Panel Survey Insurance Component (MEPS-
IC) and the 2020 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 these same data. Thus, the Departments have
calculated the number of fully insured plans with 50 to 100
participants in the following manner: 140,998 ERISA-covered group
health plans with 50 to 100 participants x 75 percent = 105,749.)
\187\ The Departments also note that the final rules will affect
approximately 1,719,000 fully insured, non-grandfathered plans with
less than 50 participants. (Note: The Departments estimate that
there are 2,465,483 ERISA-covered group health plans with less than
50 participants based on data from the 2022 MEPS-IC and the 2020
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 2022 MEPS-
IC. The 2020 KFF 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 percent (100 percent - 16 percent). KFF, 2020 Employer Health
Benefits Survey (Oct. 8, 2020), 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: 2,465,483 small ERISA-covered group health plans x 83
percent x 84 percent = 1,718,935.)
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Under the Departments' final rules, issuers are responsible for
providing data and comparatives analyses for individual market plans.
For small and large group market fully insured, employer-sponsored
plans, including non-Federal governmental plans, both employer-
sponsored health plans and health insurance issuers are responsible for
providing data and comparative analyses, though for those plans,
underlying data and analyses will likely be provided by issuers that
design and market the plans. Self-funded group health plans, while
responsible for complying with these rules, will likely seek assistance
from their TPAs, MEWA administrators, and other service providers for
collecting and analyzing the data, and generating the comparative
analyses.
The Departments estimate that the final rules will affect 479
health insurance companies nationwide that provide coverage, including
mental health and substance use disorder benefits, in the group and
individual health insurance markets, with 1,467 issuers (health
insurance company/State combinations).\188\ In addition, there are an
estimated 205 TPAs that provide services to group health plans,
particularly for self-funded plans where TPAs often establish provider
networks and adjudicate claims, which would be impacted by these final
rules.\189\ The Departments estimate that the final rules will affect
at least 40 managed behavioral health organizations providing mental
health and substance use disorder benefits to group health plans.\190\
Additionally, based on the Form M-1 filings, the Departments estimate
that there are 687 plan MEWAs, of which 132 are not fully insured, and
50 non-plan MEWAs, of which 21 are not fully insured.\191\ These MEWAs,
similar to issuers, are likely to provide support to employers or
plans.
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\188\ The Departments' estimate of the number of health
insurance issuers is based on medical loss ratio (MLR) reports
submitted by issuers for the 2022 reporting year. CMS, Medical Loss
Ratio Data and System Resources (2022), https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
\189\ Non-issuer TPAs based on data derived from the 2016
benefit year reinsurance program contributions.
\190\ The Departments' estimate of the number of managed
behavioral health organizations is based on industry trade
association membership, including the National Behavioral Consortium
(https://www.nbcgroup.org/member-directory/) and ABHW (https://abhw.org/about/).
\191\ EBSA, 2020 Form M-1 Bulletin, Table 1, https://www.dol.gov/sites/dolgov/files/ebsa/researchers/statistics/health-and-welfare-bulletins/m-1/2020.pdf.
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Issuers, TPAs, and MEWAs provide key support for plan compliance
with laws and regulations for group health plans, including MHPAEA. The
Departments' understanding, based on discussions with the regulated
community and numerous direct investigations of plans, including the
review of comparative analyses, is that issuers of fully insured
coverage provide a menu of benefit combinations from which interested
parties select their coverage designs. These coverage designs may
include different features, such as varying deductibles, copayments,
and coverage for specific items and services, allowing interested
parties to choose the plan that best suits their health care needs.
While issuers of fully insured health plans are responsible for
overseeing the compliance framework and ensuring that plans comply with
legal and regulatory requirements, TPAs play a crucial role in
facilitating compliance for self-funded plans by providing
administrative support, including claims adjudication, member
enrollment, and customer service.
TPAs and insurance companies providing administrative services only
(ASO) to self-funded plans overwhelmingly design the plans, administer
the networks, manage claims, provide plan services, maintain and hold
the data relevant for the comparative analyses, and help ensure MHPAEA
compliance.\192\ Self-funded plans rarely build independent provider
networks and instead rely on those built
[[Page 77663]]
by TPAs (including those that are also health insurance companies).
According to the 2019 KFF Employer Health Benefits Survey, only 8
percent of large, self-funded plans with 200 or more employees reported
that they directly contracted with hospitals and health systems,
independent of the plan's TPA, to provide health care services separate
from the provider networks included in the plan network.\193\
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\192\ 85 FR 72158 (Jan 11, 2021).
\193\ KFF, 2019 Employer Health Benefits Survey, Table 14.15
(Sept. 25, 2019), https://www.kff.org/report-section/ehbs-2019-section-14-employer-practices-and-health-plan-networks/.
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While the requirement to comply with MHPAEA is directly applicable
to group health plans and health insurance issuers, the Departments
anticipate that issuers and TPAs are best situated to conduct
comparative analyses as required under the CAA, 2021 and these final
rules, and to provide the analyses in an efficient and cost-effective
manner, helping to reduce the compliance burden. Self-funded plans may,
however, incur some additional costs to complete the comparative
analysis initially prepared by the issuer or TPA to address unique plan
issues and include all the information necessary to perform comparative
analyses.
One commenter stated they are not aware of any TPA that has assumed
compliance obligations wholesale, though they acknowledged that TPAs
had cooperated and provided data in response to a government audit.
Another commenter reported that TPAs working on behalf of group health
plan sponsors struggle to obtain needed information to perform and
document comparative analyses, such as when claims expenditure data
collected by TPAs is not compatible for testing purposes and, moreover,
is not reported at the plan sponsor level. It should be noted that
these reported challenges are not unique to TPAs, but are the same
issues facing issuers and self-funded plans. However, TPAs are more
likely than plan sponsors to have expertise to navigate the challenges.
Other commenters supported the Departments' assumptions that
employer-sponsored plans rely on their services providers and TPAs to
conduct their comparative analyses. One commenter noted that only the
insurance carriers, TPAs, and service providers that play a role in
designing plans, administering networks, managing claims, providing
plan services, and maintaining and holding the data relevant for the
comparative analyses have the expertise to comply with and fulfill all
the requirements outlined in the proposed rules. Another commenter
noted that self-funded plan sponsors rely on TPAs and/or the owners of
provider networks to develop plan designs and develop and impose NQTLs,
arguing that if the TPA or owner of the provider networks do not share
claims data, then the TPA or owner of the provider networks should be
required to conduct analyses for the plans.
While the Departments acknowledge these concerns, based on their
own observations when reviewing comparative analyses, the Departments
expect that issuers, TPAs, and service providers will continue to
provide assistance to evaluate NQTLs and perform and document
comparative analyses, including data required under these final rules,
for their plan clients. The Departments emphasize that the requirement
to perform and document comparative analyses of the design and
application of NQTLs has been effective under the CAA, 2021 for more
than 3 years (since February 10, 2021) and is an independent statutory
obligation that is not dependent upon a request by the Secretaries or
an applicable State authority. Issuers and plans, in conjunction with
their TPAs for self-funded group health plans, have had ample time to
develop the internal structures required for analyzing NQTLs to ensure
that their plans and coverage comply with MHPAEA. Finally, while plans
could be charged for the services of issuers, TPAs, and other service
providers, 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 plan designs, and, in
combination with TPAs and other service providers, provide support for
other requirements.
5.2. Group Health Plans
Group health plans sponsored by employers with 50 or more employees
that offer mental health and substance use disorder benefits are
generally required to comply with MHPAEA. Although MHPAEA includes a
small employer exemption, group health plans sponsored by employers
with less than 50 employees who purchase non-grandfathered small group
coverage are required to comply with MHPAEA under the EHB requirements
of the ACA. In this analysis, plan size is used as a proxy for employer
size to determine if a plan is affected. Evidence suggests that most
large group plans offer mental health and substance use disorder
benefits and nearly all participants are covered.\194\
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\194\ DOL, Selected Medical Benefits: A Report from the
Department of Labor to the Department of Health and Human Services
(Apr. 15, 2011), https://www.bls.gov/ebs/additional-resources/selected-medical-benefits-a-report-from-dol-to-hhs.pdf.
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The Departments estimate that approximately 1,719,000 fully
insured, non-grandfathered ERISA-covered group health plans with less
than 50 participants and approximately 411,000 ERISA-covered group
health plans with 50 or more participants, of which approximately
246,000 are self-funded group health plans, will be affected by these
final rules.\195\ In addition, the Departments estimate that these
final rules will affect approximately 90,900 non-Federal governmental
plans,\196\ of which approximately 12,700 are plans with 50 or more
participants.\197\ The Departments requested comments on these
estimates in the proposal, but did not receive any.
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\195\ The Departments estimate that there are 2,465,483 ERISA-
covered group health plans with less than 50 participants and that
83 percent of group health plans with less than 50 participants are
fully insured based on data from the 2022 MEPS-IC and the 2020
County Business Patterns from the Census Bureau. The 2020 KFF
Employer Health Benefits Survey reported that in 2020, 16 percent of
firms offering health benefits offered at least one grandfathered
health plan. KFF, 2020 Employer Health Benefits Survey (Oct. 8,
2020), 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: 2,465,483 small
ERISA-covered group health plans x 83 percent x (100 percent - 16
percent) = 1,718,935. Based on the 2022 MEPS-IC and the 2020 County
Business Patterns from the Census Bureau, the Departments estimate
60 percent of ERISA-covered group health plans with 50 or more
participants are self-funded. Thus, the Departments calculate the
number of self-funded group health plans in the following manner:
410,581 ERISA-covered group health plans with 50 or more
participants x 60 percent = 246,349.
\196\ Based on data from the 2022 Census of Governments (https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html),
there are 90,887 State and local entities. The Departments assume
there is one plan per entity on average. Therefore, the Departments
estimate that there are 90,887 non-Federal governmental plans.
\197\ MHPAEA applies to non-Federal governmental plans. Using
data from the 2022 MEPS-IC and the 2020 County Business Patterns
from the Census Bureau, the Departments estimate that 14 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 12,724 public, non-Federal
governmental plans with 50 or more participants that offer mental
health or substance use disorder benefits (90,887 non-Federal
governmental plans x 14 percent of plans with 50 or more employees =
12,724).
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The estimated compliance costs associated with these final rules
are
[[Page 77664]]
impacted by whether a plan is fully insured or self-funded. The
Departments anticipate that fully insured plans will receive compliance
support in the form of comparative analyses and data analyses prepared
by the issuer. For these plans, the burden is estimated as a cost for
the issuer to prepare the analyses and analyze the data. Self-funded
plans may rely on issuers or TPAs acting as service providers, receive
some support from their service providers that they supplement
themselves, or produce the required information themselves.
Most employer-sponsored health plans are exempt from filing a Form
5500 due to size and the absence of plan assets, the majority of which
are fully insured. Large health plans are required to file a Form 5500,
regardless of funding arrangement. For statistical year 2021, 81,800
health plans filed a Form 5500. Of these plans, 50,600 were self-funded
or mixed-insured,\198\ of which 38,600 had less than 500
participants.\199\ Additionally, the Departments estimate that there
are 26,600 self-funded non-Federal governmental plans with less than
500 participants.\200\ The Departments assume that self-funded plans
with less than 500 participants will receive assistance with the
comparative analyses and data requirements from TPAs or service
providers involved with the plans.
---------------------------------------------------------------------------
\198\ A mixed-insured plan is funded through a mixture of
insurance and self-insurance. EBSA, Self-Insured Health Benefit
Plans 2024: Based on Filings through 2021 (Sept. 30, 2023), Table 2,
https://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bulletins/annual-report-on-self-insured-group-health-plans-2024-appendix-b.pdf.
\199\ Estimates based on the 2021 Form 5500 data.
\200\ Based on the 2022 Census of Governments, there are 90,887
non-Federal governmental plans. Based on the 2022 MEPS-IC, the
Departments estimate that 36.2 percent of non-Federal governmental
plans are self-funded. Thus, 90,887 plans x 36.2 percent = 32,901
self-funded non-Federal governmental plans. Based on the 2021 Form
5500 data, the Departments estimate that 80.8 percent of self-funded
health plans with less than 500 participants have filed the Form
5500. The Departments use the percent of self-funded health plans
with less than 500 participants that have filed a Form 5500 as a
proxy for the percent of self-funded non-Federal governmental plans
with less than 500 participants. Thus, 32,901 self-funded non-
Federal governmental plans x 80.8 percent = 26,584 self-funded non-
Federal governmental plans with less than 500 participants.
---------------------------------------------------------------------------
The Departments assume that some of the largest plans will incur
the full cost of preparing the comparative analysis and conducting the
required data analyses. Commenters suggested that some large, self-
funded plans would conduct the comparative analyses themselves. To
account for these plans, the Departments estimate that 8 percent of
self-funded plans with 500 or more participants, or 962 ERISA covered
plans \201\ and 505 non-Federal governmental plans,\202\ will prepare
the comparative analysis and conduct the required data analyses
themselves. The Departments estimate that 50 percent of the remaining
self-funded plans with 500 or more participants, or 5,535 self-funded
plans,\203\ and 2,900 self-funded non-Federal governmental plans with
500 or more participants will receive a generic comparative analysis
from the TPA,\204\ which they will subsequently customize to suit their
specific needs. These plans will incur costs, but not at the same level
other entities preparing the comparative analysis and data for
themselves.
---------------------------------------------------------------------------
\201\ Based on the 2021 Form 5500 data, there are 12,028 self-
funded plans with 500 or more participants. According to the 2019
KFF Employer Health Benefits Survey, only 8 percent of large, self-
funded 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. KFF, 2019
Employer Health Benefits Survey (Sept. 25, 2019), Table 14.15,
https://www.kff.org/report-section/ehbs-2019-section-14-employer-practices-and-health-plan-networks/. Thus, 12,028 self-funded plans
with 500 or more participants x 8 percent = 962 self-funded plans
with more than 500 participants.
\202\ Based on the 2022 Census of Governments, there are 90,887
non-Federal governmental plans. Based on the 2022 MEPS-IC, the
Departments estimate that 36.2 percent of non-Federal governmental
plans are self-funded. Thus, 90,8888 plans x 36.2 percent = 32,901
self-funded non-Federal governmental plans. Based on the 2021 Form
5500 data, the Departments estimate that 19.2 percent of health
plans with more than 500 participants have filed the Form 5500. The
Departments use the percent of health plans with more than 500
participants that have filed a Form 5500 as a proxy for the percent
of non-Federal governmental plans with more than 500 participants.
According to the 2019 KFF Employer Health Benefits Survey, only 8
percent of large, self-funded 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. KFF, 2019 Employer Health Benefits Survey (Sept.
25, 2019), Table 14.15, https://www.kff.org/report-section/ehbs-2019-section-14-employer-practices-and-health-plan-networks/. Thus,
32,901 non-Federal governmental plans x 19.2 percent x 8 percent =
505 non-Federal governmental plans with more than 500 participants.
\203\ Based on the 2021 Form 5500 data, there are a total of
50,581 self-funded plans. Thus, (50,581 self-funded plans - 38,533
self-funded plans with less than 500 participants - 962 self-funded
plans with more than 500 participants) x 50 percent = 5,535 self-
funded plans with more than 500 participants.
\204\ Based on the 2022 Census of Governments, there are 90,887
non-Federal governmental plans. Based on the 2022 MEPS-IC, the
Departments estimate that 36.7 percent of non-Federal governmental
plans are self-funded. Thus, 90,888 plans x 36.2 percent = 32,901
self-funded non-Federal governmental plans. Thus, (32,901 non-
Federal governmental plans - 26,584 non-Federal governmental plans
with less than 500 participants - 505 self-funded plans with more
than 500 participants) x 50 percent = 2,906 non-Federal governmental
plans with more than 500 participants.
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Finally, HHS estimates that 230 self-funded non-Federal
governmental plans will be affected by the implementation of the CAA,
2023 provision that sunsets the MHPAEA opt-out election.\205\ HHS is
aware of at least 14 plans with collective bargaining agreements whose
sponsors' MHPAEA opt-out elections could be in effect beyond 2024. The
MHPAEA opt-out election of these plans with collective bargaining
agreements will remain in effect until the last of these plans'
respective collective bargaining agreements expires, all of which are
anticipated to expire by 2028. 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 261 participants, on average, in
each self-funded non-Federal governmental plan.\206\ HHS also estimates
that there is one beneficiary for each plan participant on average.
Therefore, approximately 120,000 participants and beneficiaries will be
affected by this final provision.\207\
---------------------------------------------------------------------------
\205\ CMS, HIPAA Opt-Out Elections for Self-Funded Non-Federal
Governmental Plans, as of January 6, 2023.
\206\ According to data from the 2022 MEPS-IC (https://meps.ahrq.gov/mepsweb/), there are 19,231,948 State and local
government employees, and 67.1 percent of these employees
(12,904,637) are enrolled in health coverage through their jobs. Of
these employees, 66.5 percent (8,581,584 employees) are participants
in self-funded plans. Based on data from the 2022 Census of
Governments (https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html), there are 90,887 State and local government
entities, and according to the 2022 MEPS-IC, 36.2 percent, or
32,901, 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 (8,581,584 / 32,901) =
260.8. Since HHS also estimates that there is one beneficiary for
each plan participant on average, the average number of participants
and beneficiaries per self-funded non-Federal governmental plan is
(260.8 x 2) = 521.7.
\207\ This estimate is calculated as follows: 230 self-funded
non-Federal governmental plans that have elected to opt out of the
requirements under MHPAEA x approximately 521.7 participants and
beneficiaries for each self-funded non-Federal governmental plan on
average = 119,991.
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HHS solicited 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. Although HHS did not receive comments on the estimated
[[Page 77665]]
number of self-funded non-Federal governmental plans or the estimated
number of plan participants and beneficiaries that would be affected by
the implementation of this provision, many commenters indicated that
hundreds of thousands of public employees and their family members have
been denied the critical MHPAEA protections due to the election option
for self-funded non-Federal governmental plans to opt out of
requirements under MHPAEA. Another commenter indicated that the ability
to opt out of requirements under MHPAEA has compromised the health and
well-being of State and local government employees, such as teachers,
firefighters, and civil servants across the country. HHS agrees that a
significant number of individuals will be impacted by the CAA, 2023
provision that sunsets the MHPAEA opt-out election and that these
regulatory amendments will ultimately increase access to mental health
and substance use disorder services by requiring self-funded non-
Federal governmental plans that had previously opted out to come into
compliance with the requirements under MHPAEA.
5.3. Participants, Beneficiaries, and Enrollees Receiving Mental Health
and Substance Use Disorder Treatment
There are approximately 56,984,000 participants and 50,407,000
beneficiaries in ERISA-covered group health plans with 50 or more
participants,\208\ approximately 17,483,000 participants and
approximately 14,854,000 beneficiaries in non-Federal governmental
plans with 50 or more participants,\209\ approximately 10,258,000
participants and 8,629,000 beneficiaries in ERISA covered, non-
grandfathered, fully insured health plans with less than 50
participants,\210\ and approximately 12,000,000 individual health
insurance coverage policyholders (with approximately 16,000,000 total
enrollees).\211\
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\208\ 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 56,983,874
participants and 50,407,439 beneficiaries in ERISA-covered group
health plans with 50 or more participants. Estimates are based on
the Departments' tabulations of the March 2022 Current Population
Survey (CPS) Auxiliary Data (https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data).
\209\ 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 17,482,879
participants in non-Federal governmental plans with 50 or more
participants. Estimates are based on the Departments' tabulations of
the March 2022 CPS Auxiliary Data (https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data).
\210\ The Departments estimate that there are 12,212,484
participants and 10,272,985 beneficiaries in fully insured, private-
sector health plans with less than 50 participants based on the
Departments' tabulations of the March 2022 CPS Auxiliary Data
(https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data).
Assuming, based on KFF assumptions that 84 percent of participant
and beneficiaries are in non-grandfathered plans (KFF, 2020 Employer
Health Benefits Survey (Oct. 8, 2020), https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf),
this will translate into an estimated 10,258,487 participants and
8,629,307 beneficiaries in fully insured, private-sector, non-
grandfathered plans with less than 50 participants.
\211\ Based on MLR reports submitted by issuers for the 2022
reporting year, the number of policyholders in individual health
insurance coverage offered in the individual market is approximately
12 million and the number of enrollees was approximately 16,000,000.
CMS, Medical Loss Ratio Data and System Resources (2022), https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
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Since the enactment of MHPAEA, participants have increasingly
utilized behavioral health services through their health coverage.
Between 2007 and 2017, private insurance claim lines for behavioral
health diagnoses increased by 320 percent.\212\ 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.\213\ In 2020, 41 million Americans who were 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.\214\ A
2022 survey by SAMHSA indicated that among adults aged 18 or older,
23.1 percent (or 59.3 million people) had any mental illness and 6.0
percent (or 15.4 million people) had serious mental illness in the past
year. The same survey also indicated that among individuals aged 12 or
older, 17.3 percent (or 48.7 million people) had a substance use
disorder in the past year, and of those only 14.9 percent (7.3 million
people) received treatment for substance use disorder in the past
year.\215\
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\212\ Robin Gelburd, 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.
\213\ Paul Fronstin & 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 (Mar. 10, 2022), https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_555_mentalhealth-10mar22.pdf?sfvrsn=aec3b2f_2.
\214\ AHIP, How Employer-Provided Coverage Improves Access to
Mental Health Support (May 2022), https://www.ahip.org/documents/202205-CaW_MentalHealth-v03.pdf.
\215\ SAMHSA, Key Substance Use and Mental Health Indicators in
the United States: Results from the 2022 National Survey on Drug Use
and Health, pp. 33, 51-52 (Nov. 2023), https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
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The COVID-19 public health emergency (PHE) exacerbated the need for
mental health and substance use disorder treatments. 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 in 2023, even as the pandemic receded from its
peak, approximately 3 in 10 adults were still reporting symptoms of
anxiety and depression.\216\ The pandemic likewise negatively impacted
the mental health of children and adolescents, worsening reported rates
of anxiety or depression which, in the 5 years preceding the pandemic,
had already increased by 29 percent and 27 percent, respectively.\217\
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\216\ Nirmita Panchal, Heather Saunders, Robin Rudowitz, &
Cynthia Cox, The Implications of COVID-19 for Mental Health and
Substance Use, KFF Issue Brief (Mar. 20, 2023), https://www.kff.org/coronavirus-covid-19/issue-brief/the-implications-of-covid-19-for-mental-health-and-substance-use/.
\217\ Kristen Figas, Theodoros V. Giannouchos, & Elizabeth
Crouch, Child and Adolescent Anxiety and Depression Prior to and
During the COVID-19 Pandemic in the United States, 24 Child
Psychiatry & Human Development pp. 1-11 (2023).
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The pandemic may have long-term effects on mental health and
substance use disorders, suggesting that the number of individuals
affected by expanding access through their health plans will only
continue to grow. 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.\218\ Another 2022 study examined the mental health outcomes
of COVID-19 survivors during the 12 months following their infection
and found that COVID-19 survivors reported a high prevalence of
depression, anxiety, and post-traumatic stress disorder at both the 6-
and 12-months follow-up, indicating that the pandemic has long-term
adverse mental health impacts on
[[Page 77666]]
COVID-19 survivors.\219\ 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.\220\
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\218\ Yan Xie, Evan Xu, & Ziyad Al-Aly, Risks of Mental Health
Outcomes in People with Covid-19: Cohort Study, 376 The BMJ (2022),
https://www.bmj.com/content/376/bmj-2021-068993.
\219\ Mario G. Mazza, Mariagrazia Palladini, Rebecca De Lorenzo,
Beatrice Bravi, Sara Poletti, Roberto Furlan, Fabio Ciceri, Patrizia
Rovere-Querini, & Francesco Benedetti, One-Year Mental Health
Outcomes in a Cohort of COVID-19 Survivors, 145 Journal of
Psychiatric Research pp. 118-124 (2022).
\220\ Sean Warwicker, Denise Sant, Adrian Richard, Jake Cutajar,
Annalise Bellizzi, Gertrude Micallef, Daniel Refalo, Liberato
Camilleri, & Anton Grech, A Retrospective Longitudinal Analysis of
Mental Health Admissions: Measuring the Fallout of the Pandemic,
20(2) International Journal of Environmental Research and Public
Health p. 1194 (2023).
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6. Studies Examining the Impact of MHPAEA and State Parity Laws
6.1. Research Examining the Impact of State Parity Laws
6.1.1. Research Finding State Parity Laws Increase the Utilization of
Mental Health and Substance Use Disorder Care
Research has found mixed evidence on the impact of State parity
laws prior to the implementation of MHPAEA. While the specifics of the
State-level programs might be different from MHPAEA, this research can
nonetheless provide important context and suggestive evidence for how
modifications to parity policies such as the MHPAEA program \221\ might
impact healthcare demand and quality. While some studies did not
identify a significant change in costs or usage of behavioral health
treatments following the passage of State parity laws, others found
that State parity laws increased the utilization of mental health care
and substance use disorder care among populations at risk.
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\221\ The ``MHPAEA program'' refers to the MHPAEA statute, as
amended, implementing regulations, and subsequent guidance, as
discussed in section IV.3.
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For example, a 2006 study evaluated changes in mental health care
utilization before and after States implemented parity laws, comparing
them with States that did not enact such laws in the same year
controlling for State and year fixed effects. Using data from the 2001,
2002, and 2003 NSDUH, the study categorized individuals with individual
or employer-sponsored health insurance by their level of mental and
emotional distress during their most challenging month in the past year
and found that State parity laws increased the likelihood of using any
mental health care in the past year by up to 1.2 percentage points for
individuals with lower distress levels and up to 1.8 percentage points
for those with moderate distress levels. However, it is important to
note that the study did not find a statistically significant effect on
the mental health care utilization for individuals with severe distress
levels. The authors noted that this group had already been more likely
to use mental health care even before the State parity laws were
implemented, suggesting they may have sought such care regardless of
these laws.\222\
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\222\ Katherine M. Harris, Christopher Carpenter, & Yuhua Bao,
The Effects of State Parity Laws on the Use of Mental Health Care,
44(6) Medical Care pp. 499-505 (2006).
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Similarly, a 2008 study examined whether State parity laws affect
mental health care utilization differently among low-income individuals
and those with poor mental health conditions. To examine these effects,
the study used pooled cross-sectional data from the National Survey of
America's Families conducted in 1997, 1999, and 2001 and found that
employees of small firms were more likely to use mental health and
substance use disorder care after the implementation of State parity
laws. While the study found no effect of parity for low-income adults
for all employers, when limiting the sample to small employers, the
study found that parity was associated with a 5-percentage-point
increase in the probability of low-income individuals using mental
health services. The study also found a large increase among those with
poor mental health conditions employed by small employers, although
this finding is only significant at a 10-percent significance level.
The study did not find an effect for individuals with poor mental
health for medium or large employers. The authors attributed these
inconclusive results to the small sample size; therefore, the findings
in this study should be interpreted with caution.\223\
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\223\ Susan H. Busch & Colleen L. Barry, New Evidence on the
Effects of State Mental Health Mandates, INQUIRY: The Journal of
Health Care Organization, 45(3) Provision, and Financing pp. 308-322
(2008).
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Additionally, a 2013 study examined the effect of State parity laws
on substance use disorder treatment using national survey data from
2000 to 2008 using State and year fixed effects to compare non-parity
States to parity States prior to the implementation of MHPAEA. The
authors reported that the baseline substance use disorder treatment
rate before State parity laws were enacted was 1.40 percentage points
in all specialty substance use disorder treatment facilities and 1.10
percentage points in facilities accepting private insurance. Relative
to these baseline rates, this study found that the implementation of
any parity law increased the treatment rate by 9 percent in all
specialty substance use disorder treatment facilities and by 15 percent
in all treatment facilities accepting private insurance. When
controlling for the comprehensiveness of the State parity law, the
study found that full parity \224\ and parity-if-offered \225\
increased the substance use disorder treatment rate in all facilities
by 13 percent and 8 percent, and by 21 percent and 10 percent in those
accepting private insurance, respectively; States with partial parity
\226\ did not have a significant effect on the substance use disorder
treatment rates. The study conducted sensitivity analyses for
facilities not accepting private insurance and found no difference in
the treatment rates attributable to parity, suggesting that the effect
of parity on the treatment rate is primarily driven by the increased
treatment rate among the target population.\227\
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\224\ The study defined ``full parity'' as ``requiring SUD
[substance use disorder] coverage to be offered and offered on par
with the comparable medical/surgical coverage in all aspects of cost
sharing and treatment limitations.''
\225\ The study defined ``parity-if-offered'' as ``not requiring
SUD coverage to be offered, but if offered, it should be on par with
the comparable medical/surgical coverage in all aspects of cost
sharing and treatment limitations.''
\226\ The study defined ``partial parity'' as ``requiring SUD
coverage to be offered, allows for discrepancies between SUD
coverage and comparable medical/surgical coverage in some aspects of
cost sharing and treatment limitations.''
\227\ Hefei Wen, Janet R. Cummings, Jason M. Hockenberry, Laura
M. Gaydos, & Benjamin G. Druss, State Parity Laws and Access to
Treatment for Substance Use Disorder in the United States:
Implications for Federal Parity Legislation, 70(12) JAMA Psychiatry
pp. 1355-1362 (2013).
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6.1.2. Research Finding State Parity Laws Have Other Positive Effects
Other studies have found that State parity laws have positive
effects that extend beyond the use of mental health care. For example,
a 2013 study comparing suicide rates in States with and without parity
laws during two distinct periods: 1990 to 1997 and 1998 to 2004, the
period when the majority of States (22 out of 29) had implemented
parity laws. The study found that State parity laws were associated
with a 5-percent decrease in suicide rates, even after subjecting the
analysis to several robustness checks.\228\
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\228\ Matthew Lang, The Impact of Mental Health Insurance Laws
on State Suicide Rates, 22(1) Health Economics pp. 73-88 (2013).
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Similarly, a 2022 study examined how State parity laws affected
suicide rates and educational outcomes among college-level students.
Utilizing survey
[[Page 77667]]
and administrative data spanning from 1998 to 2008, the study employed
a difference-in-differences model and found that State parity laws
reduced the suicide rates, increased college grade point averages, and
reduced the likelihood of college-level students reporting any poor
mental health days. However, the study did not find evidence that State
parity laws affect the likelihood of disenrolling from college. These
findings remain consistent even after subjecting the analysis to
several robustness checks. The authors acknowledged some limitations in
the study. Specifically, the reported number of poor mental health days
reported is based on self-assessment, rather than on clinical measures.
There is also a possibility of underreporting due to the stigma
associated with mental health.\229\
---------------------------------------------------------------------------
\229\ Keisha T. Solomon & Kabir Dasgupta, State Mental Health
Insurance Parity Laws and College Educational Outcomes, 86 Journal
of Health Economics (2022).
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Finally, a 2015 study examined the effect of State parity laws on
individuals aged 25 to 64 with moderate levels of distress.\230\ Using
individual-level data from the National Health Interview Survey (1997
to 2001) and the Medical Expenditure Panel Survey (1998 to 2003), the
study employed a triple-difference model and found a statistically
significant increase in employment, weekly wages, and the number of
hours worked following the passage of parity. The authors noted that
the results do not indicate a shift in the labor demand curve, but
rather an increase in the productivity of workers with moderate levels
of distress.\231\
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\230\ The author defines ``moderately distressed individuals''
based on their reported levels of distress in the National Health
Interview Survey. The authors categorized ``distress'' as follows:
scores below 1 indicate no distress, 1 to 5 indicate low distress, 6
to 11 indicate moderate distress, and 12 or above indicate severe
distress.
\231\ Martin Andersen, Heterogeneity and the Effect of Mental
Health Parity Mandates on the Labor Market, 43 Journal of Health
Economics (2015).
---------------------------------------------------------------------------
Although the previous three studies suggest mental health outcomes
may improve following the initiation of State parity policies, it is
not clear from this research the mechanism driving any outcome
improvements. Given a lack of data in both studies, the authors cannot
directly show that State parity laws increase mental healthcare
utilization. The causal impact of these policies, including whether
parity would increase mental healthcare utilization, which would in
turn improve health outcomes such as the suicide rate, can therefore
not be directly ascertained. Absent any utilization increases, it is
possible that parity policies could improve the quality of care itself
without additional demand, but further research is needed to answer how
specifically parity laws affect downstream health outcomes.
6.1.3. Research Finding State Parity Laws Have Statistically
Insignificant Effects
In contrast, some studies have found that State parity laws did not
significantly improve access to mental health and substance use
disorder care. For instance, a 2000 study focused on patients with
mental health needs examined the impact of State parity laws on their
insurance coverage, with varying specifications which defined this as
insurance status, insurance generosity, and perceived access to care.
Using national survey data from 1996 to 1998, the study found no
statistically significant impact on insurance coverage or access to
care for patients with mental health needs following the passage of
State parity laws. The authors attributed this finding to several
limitations of the study, including a relatively small sample size
which limited the narrowness of State parity laws in terms of impact
types of insurance coverage, and the significant number of individuals
with mental health or substance use disorders who do not have health
insurance coverage. Most significantly, while the study examined the
impact of parity laws on access to insurance and care, it was not
limited to behavioral health care and so the impact on those
interventions may not have been statistically significantly
captured.\232\
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\232\ Roland Sturm, State Parity Legislation and Changes in
Health Insurance and Perceived Access to Care Among Individuals with
Mental Illness: 1996-1998, 3(4) The Journal of Mental Health Policy
and Economics pp. 209-213 (2000).
---------------------------------------------------------------------------
Furthermore, a 2013 study examined how State parity laws affected
access to mental health care services for privately insured children
and youths aged three to 17 with ASD. Using national survey data from
2005 to 2006 and adjusting for potential selection bias of States that
enacted parity legislation, the study did not find evidence that State
parity laws increased the utilization of mental health services for
children with ASD. The authors suggested that differences in the
availability of services, therapies, and treatments across States could
explain this lack of impact, as these children may not benefit from the
same protections and service access afforded to children with other
mental health conditions under State parity laws. Additionally, the
authors acknowledged limitations in their analysis, noting that the
study did not provide information on the implementation of State parity
laws. They cautioned that measurement errors could arise due to the
potential delayed effects associated with varying implementation
timelines of the State parity laws.\233\
---------------------------------------------------------------------------
\233\ Lucy A. Bilaver & Neil Jordan, Impact of State Mental
Health Parity Laws on Access to Autism Services, 64(10) Psychiatric
Services pp. 967-973 (2013).
---------------------------------------------------------------------------
6.2. Research Examining the Impact of MHPAEA on Utilization
Several studies have investigated the effect MHPAEA had on
utilization of treatment for mental health conditions or substance use
disorders. In general, the studies have found either a small or no
effect on utilization after the implementation of MHPAEA.
For instance, a 2014 study analyzed pooled data from seven Federal
Employees Health Benefits (FEHB) plans, four of which contracted with
carve-out plans \234\ before and after parity implementation, two
implemented carve-out plans when parity took effect, and one was not a
carve-out plan. The authors looked at annual utilization, including
psychotherapy visits, medication management visits, inpatient mental
health or substance use disorder days, and mental health of substance
use disorder prescription fills, for three target diagnoses: bipolar
disorder, major depression, and adjustment disorder. Using a difference
in differences model, the authors found a 12-percent statistically
significant decrease in annual psychotherapy utilization for
individuals diagnosed with adjustment disorders, and a statistically
significant decrease in out-of-pocket spending for enrollees across all
three diagnostic categories (ranging from $78 to $86) following parity
implementation, and found no significant change for all other metrics.
The authors opine that the observed decline in psychotherapy
utilization may be related to the Office of Personnel Management's
encouragement that FEHB plans utilize benefit management techniques to
control spending increases following parity implementation.\235\
---------------------------------------------------------------------------
\234\ Carve-out plans are defined as plans that only administer
behavioral health benefits. (See Sarah A. Friedman, Francisca
Azocar, Haiyong Xu, & Susan L. Ettner, The Mental Health Parity and
Addiction Equity Act (MHPAEA) Evaluation Study: Did Parity
Differentially Affect Substance Use Disorder and Mental Health
Benefits Offered by Behavioral Healthcare Carve-Out and Carve-In
Plans, 190 Drug and Alcohol Dependence pp. 151-158 (2018).)
\235\ Alisa Busch, Frank Yoon, Colleen Barry, Banessa Azzone,
Sharone-Lisa Normand, Howard Goldman, & Haiden Huskamp, The Effects
of Parity on Mental Health and Substance Use Disorder Spending and
Utilization: Does Diagnosis Matter? 172(2) American Journal of
Psychiatry pp. 180-187 (Feb. 2013).
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[[Page 77668]]
Along the same lines, a 2016 study used an interrupted time series
model to investigate the effect of MHPAEA on the probability of
specialty behavioral health treatment, levels of utilization, and
expenditures for enrollees aged 27 to 64 in group health plans between
2008 and 2013, with Optum carve-outs. The authors focused on the
following outcomes: expenditures (insurer and patient), number of
outpatient visits (assessment/diagnostic evaluation, individual
psychotherapy, family psychotherapy, and medication management), and
number of days of care (structure outpatient, day treatment,
residential care, and acute inpatient care). In the post-parity period,
2011 to 2013, the effect of parity differed by type of care: the
probability of using any assessment/diagnostic evaluation, medication
management, of family psychotherapy visits decreased, while the
probability of using structure outpatient care and inpatient care
increased. Under multiple specifications and sensitivity tests, the
authors found that parity had ``modest to no effect on service use.''
Though they did find modest evidence that costs shifted from patient to
health plans.\236\
---------------------------------------------------------------------------
\236\ Susan Ettner, Jessica Harwood, Amber Thalmayer, Michael
Ong, Haiyong Xu, Michael Bresolin, Kenneth Wells, Chi-Hong Tseng, &
Francisca Azocar, The Mental Health Parity and Addiction Equity Act
Evaluation Study: Impact on Specialty Behavioral Health Utilization
and Expenditures Among ``Carve-Out'' Enrollees, 50 Journal of Health
Economics pp. 131-143 (2016).
---------------------------------------------------------------------------
Similarly, a 2019 study looked at insurance claims of enrollees
under age 65 with continuous enrollment in a large group, employer-
sponsored fully insured health plan between January 2005 and September
2015 to analyze whether parity implementation was associated with
utilization and spending changes in behavioral health services compared
to medical/surgical services. Parity had a positive but small,
statistically significant impact on the share of enrollees that used
any outpatient substance use disorder services. Specifically, parity
increased the percentage of enrollees that used any outpatient
substance use disorder services by 0.023 percentage points in the first
year following the implementation of MHPAEA and 0.068 percentage points
by the end of 2015 relative to pre-MHPAEA levels. The authors also
found that parity led to an increase in the average frequency of
monthly services per user for both mental health and substance use
disorder services, at a rate of 0.05 services per user for mental
health services and 0.054 services per user for substance use disorder
services. This implies that people receiving services received more
services, on average.\237\
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\237\ Noah Mulvaney-Day, Brent Gibbons, Shums Alikhan, & Mustafa
Karakus, Mental Health Parity and Addiction Equity Act and the Use
of Outpatient Behavioral Health Services in the United States, 2005-
2016, 109(3) American Journal of Public Health pp. 190-196 (2019).
---------------------------------------------------------------------------
6.3. Research Examining the Impact of MHPAEA on Spending
Research has found mixed evidence on the impact of MHPAEA on
spending. Some studies did not identify a change in out-of-pocket
spending following the passage of MHPAEA, whereas others found that
MHPAEA increased out-of-pocket spending on substance use disorder care.
For instance, a 2017 study examined whether MHPAEA increased
behavioral health expenditures and utilization among a population with
substance use disorders. Using Optum's claims and eligibility data from
2008 to 2013, the authors compared the utilization and expenditures for
adults with alcohol or drug use disorders across several periods: pre-
parity (2008 to 2009), transition period (2010),\238\ and post-parity
period (2011 to 2013). They found that for carve-out plans managed by
Optum, MHPAEA was associated with modest increases in total spending,
plan spending, and patient out-of-pocket spending, as well as
outpatient and inpatient utilization. Although the increases were
mostly small in magnitude, they were evident across different types of
care, potentially indicating small improvements in the accessibility to
various substance use disorder treatments.\239\ The authors note that
these results are similar to other studies, which used the same data
when examining adults in carve-in plans and carve-out plans.\240\
---------------------------------------------------------------------------
\238\ The study defined the ``transition'' period as ``when
good-faith efforts at compliance with respect to coinsurance,
copayments, combined medical-behavioral health deductibles, and
quantitative treatment limits went into effect for plans renewing on
a calendar-year basis.''
\239\ Sarah Friedman, Haiyong Xu, Jessica M. Harwood, Francisca
Azocar, Brian Hurley & Susan L. Ettner, The Mental Health Parity and
Addiction Equity Act Evaluation Study: Impact on Specialty
Behavioral Healthcare Utilization and Spending Among Enrollees with
Substance Use Disorders, 80 Journal of Substance Abuse Treatment pp.
67-78 (2017).
\240\ Harwood, Jessica M., Francisca Azocar, Amber Thalmayer,
Haiyong Xu, Michael K. Ong, Chi-Hong Tseng, Kenneth B. Wells, Sarah
Friedman, & Susan L. Ettner, The Mental Health Parity and Addiction
Equity Act Evaluation Study: Impact on Specialty Behavioral Health
Care Utilization And Spending Among Carve-In Enrollees, 55(2)
Medical Care pp. 164-172 (2017); and Susan L. Ettner, Jessica M.
Harwood, Amber Thalmayer, Michael K. Ong, Haiyong Xu, Michael J.
Bresolin, Kenneth B. Wells, Chi-Hong Tseng, & Francisca Azocar, The
Mental Health Parity and Addiction Equity Act Evaluation Study:
Impact on Specialty Behavioral Health Utilization and Expenditures
Among Carve-Out Enrollees, 50 Journal of Health Economics pp. 131-
143 (2016).
---------------------------------------------------------------------------
Additionally, a 2015 study examined whether MHPAEA was associated
with changes in the out-of-network services for substance use disorder
services. Using a 2007 to 2012 longitudinal, commercial claims database
and employing an interrupted time-series design to analyze these
effects, the study found that MHPAEA was associated with an increased
probability of using out-of-network services at a rate of 0.0024
service users per month, an increased number of out-of-network out-
patient visits at a rate of 0.0016 service users per month, and an
increased average total spending on out-of-network services by $49.81
per user per month, though it was found to have no effect on out-of-
pocket spending. This result would represent a shift in expenses borne
by the insurer, which might or might not be passed through to the
insured through higher premiums, but the study lacked the data to
assess this possibility. The authors acknowledged that the study was
not able to examine the adequacy of substance use disorder provider
networks, which may have influenced enrollees pursuit of out-of-network
care.\241\
---------------------------------------------------------------------------
\241\ Emma E. McGinty, Susan H. Busch, Elizabeth A. Stuart,
Haiden A. Huskamp, Teresa B. Gibson, Howard H. Goldman, & Colleen L.
Barry, Federal Parity Law Associated with Increased Probability of
Using Out-Of-Network Substance Use Disorder Treatment Services,
34(8) Health Affairs pp. 1331-1339 (2015).
---------------------------------------------------------------------------
Finally, a 2014 study examined the impact of MHPAEA on the
utilization and spending of substance use disorder treatments. Using
2009 to 2010 administrative claims data from Aetna insurance, the study
compared changes in outcomes among health plan enrollees one year
before (2009) and one year after (2010) the implementation of MHPAEA,
compared to enrollees covered by State parity laws in place prior to
MHPAEA. The study found the MHPAEA was associated with a modest
increase in spending on substance use disorder treatments ($9.99 per
health plan enrollee), but did not find significant changes in
treatment initiation,\242\ treatment engagement,\243\ or out-of-pocket
spending. The authors acknowledged that these findings may not be
generalizable to other insurance or population contexts, since the
study
[[Page 77669]]
evaluated the effects of parity on individuals insured by a single
health insurer in 10 States with pre-existing State parity laws.
Moreover, the study examined only the first year following MHPAEA's
effective date, which may not have fully captured its
implementation.\244\ As discussed in section IV.2.2, the Departments
have published regulations and extensive guidance to facilitate the
implementation and enforcement of MHPAEA.
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\242\ The study defined ``treatment initiation'' as the ``share
of enrollees with a new episode of SUD treatment who initiated
treatment within 14 days of their initial diagnosis.''
\243\ The study defined ``treatment engagement'' as the ``share
of enrollees with a new episode of SUD treatment who receive at
least two SUD services within 30 days of their initial diagnosis.''
\244\ Susan H. Busch, Andrew J. Epstein, Michael O. Harhay,
David A. Fiellin, Hyong Un, Deane Leader Jr, & Colleen L. Barry, The
Effects of Federal Parity on Substance Use Disorder Treatment, 20(1)
The American Journal of Managed Care (2014).
---------------------------------------------------------------------------
7. Benefits
The Departments expect that these final rules will improve the
quality of the comparative analyses performed and documented by plans
and issuers required by MHPAEA, as amended by the CAA, 2021; help plans
and issuers better understand and fulfill their obligations under
MHPAEA; and promote greater clarity regarding differences in access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits. By specifying more details on how to perform
and document NQTL comparative analyses, the Departments expect
improvements in plan and issuer compliance with the requirements for
imposing NQTLs under MHPAEA, and by doing so, increased access for
participants, beneficiaries and enrollees to mental health and
substance use disorder services.
Thus, these final rules will generate the following economic and
societal benefits for participants, beneficiaries, and enrollees:
improved understanding of and compliance with MHPAEA by
plans and issuers, resulting in better frameworks for regulators,
plans, and issuers to determine whether plans and issuers are complying
with MHPAEA with respect to NQTLs applicable to coverage of mental
health and substance use disorder benefits,
greater access and utilization of mental health and
substance use disorder services in response to a reduction in barriers
to mental health and substance use disorder coverage (the greater
utilization being a cost of the rule), resulting in better health
outcomes among those with mental health conditions or substance use
disorders, and
reduced adverse impacts on the families, friends,
caregivers, and coworkers of people who suffer from untreated or under
treated mental health conditions or substance use disorders based on
their improved access to treatment.
This analysis provides a mainly qualitative discussion of the
benefits associated with these final rules, as the Departments do not
have the data necessary to quantify the likely benefits associated with
the additional guidance and its impact on ensuring better compliance
with the rules related to NQTLs and access to mental health and
substance use disorder benefits. Where possible, however, the
Departments have provided estimates to illustrate some of the benefits
of these final rules. The illustrative calculations address overlapping
phenomena and thus are not summed due to the noteworthy potential for
double-counting (moreover, for only a subset of the illustrated
benefits have the associated treatment costs been quantified).
In addition, the Departments have identified several transfers that
will occur due to this rulemaking, such as decreases in out-of-pocket
spending and increases in premiums. These transfers are discussed in
section IV.9 of this regulatory impact analysis.
The Departments requested comments and data in the proposed rules
related to how the Departments might quantify these benefits. While one
commenter stated that the Departments had not quantified the benefits
of the proposal, they did not provide any data or recommendations on
how these benefits could be quantified. Another commenter suggested
that the Congressional Budget Office's (CBO) cost estimate \245\ of the
CAA, 2021 may help the Departments to quantify the benefits of the
proposal. However, the CBO report primarily focuses on the program cost
of CAA, 2021, rather than addressing the specific impact of the
additional requirements for documenting comparative analyses, and
therefore the Departments are not able to utilize it for quantifying
the benefits of these final rules.
---------------------------------------------------------------------------
\245\ See CBO, Summary Estimate for Divisions M Through FF, H.R.
133, Consolidated Appropriations Act, 2021 (Pub. L. 116-260), as
Enacted on December 27, 2020 (Jan. 14, 2021), https://www.cbo.gov/system/files/2021-01/PL_116-260_Summary.pdf.
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7.1. Improved Understanding of and Compliance With MHPAEA by Plans and
Issuers
As noted earlier, the 2022 MHPAEA Report to Congress \246\ found
that none of the comparative analyses reviewed by the Departments under
the first year of the CAA, 2021, contained sufficient information and
documentation from plans and issuers upon initial receipt and nearly
all were similarly deficient for the 2023 MHPAEA Comparative Analysis
Report to Congress.\247\ As a result, the Departments had to make
numerous requests for additional information. This process is costly
for plans, issuers, and the Departments, and undermines the
effectiveness of MHPAEA.
---------------------------------------------------------------------------
\246\ 2022 MHPAEA Report to Congress, 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.
\247\ 2023 MHPAEA Comparative Analysis Report to Congress,
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------
These final rules will clarify and strengthen the obligations of
plans and issuers under MHPAEA, thus promoting compliance, by:
placing renewed focus on the elimination of more
restrictive barriers to access to mental health and substance use
disorder benefits as compared to medical/surgical benefits,
standardizing the definitions associated with the parity
analysis for NQTLs applicable to 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 evaluation requirements
of the NQTL comparative analyses.
These final rules will help parties better understand what plans
and issuers need to do to comply with MHPAEA, reduce uncertainty about
compliance status, and help plans and issuers better identify areas
they need to improve upon as well as reduce the need to revise analyses
upon the Departments identifying non-compliance. In the course of
implementing these final rules, the Departments anticipate that parties
will adjust their policies and procedures in order to come into
compliance and offer better coverage of mental health and substance use
benefits to participants, beneficiaries, and enrollees.
Many commenters supported modifying existing definitions and adding
new ones to the MHPAEA regulations, particularly for terms such as
``medical/surgical benefits,'' ``mental health benefits,'' and
``substance use disorder benefits.'' Commenters stated that these
definitions would significantly improve clarity for plans and issuers.
One commenter stated the proposal would clearly specify how mental
health and substance use disorder benefits must be defined for MHPAEA
compliance purposes, minimize situations where
[[Page 77670]]
contradictions with State guidelines limit protections under MHPAEA,
and ensure that plans appropriately classify mental health and
substance use disorder benefits and medical/surgical benefits. The
Departments acknowledge the supportive comments and agree that
modifying and adding definitions, particularly for key terms like
``medical/surgical benefits,'' ``mental health benefits,'' and
``substance use disorder benefits,'' will enhance clarity and ensure
consistent application of the MHPAEA requirements across plans and
issuers, and have done so in these final rules.
Commenters also expressed support for clarifying the application of
MHPAEA's requirements to NQTLs. One commenter stated that the proposal
provides more specificity for plans and issuers to assess their NQTLs
applicable to mental health or substance use disorder benefits, and the
information that must be included in a comparative analysis of NQTLs
applicable to mental health and substance use disorder benefits and
medical/surgical benefits. The commenter further stated the proposal
reduces uncertainty for all parties, while providing greater clarity
for consumers and other stakeholders to assess whether an NQTL is
compliant with MHPAEA. Additionally, the commenter stated that the
proposal provides greater clarity for insurers and patients and helps
State insurance regulators better enforce existing regulations. The
Departments acknowledge the supportive comments and agree that the
final rules provide clarity to the statutory requirements for the
regulated community and other interested parties.
However, some commenters expressed concern regarding whether
certain policies and procedures would now be prohibited under MHPAEA,
as interpreted through the proposed rules, if finalized. One commenter,
in objecting to the proposed mathematical substantially all and
predominant tests, stated that the most significant cost is not in
conducting the comparative analysis, but rather in the additional
expenses incurred should plans and issuers no longer be able to utilize
common medical management techniques that improve cost and quality
outcomes, such as prior authorization and concurrent review.
As stated earlier in this preamble, the Departments are not
finalizing the proposed mathematical test for applying the
substantially all and predominant tests in these final rules. These
final rules also do not eliminate the use of prior authorization or
other medical management NQTLs applicable to both mental health and
substance use disorder benefits and medical/surgical benefits. However,
NQTLs applicable to mental health and substance use disorder benefits
and medical/surgical benefits must be designed and applied in
compliance with MHPAEA's parity requirements. Moreover, as discussed
earlier in this preamble, the Departments anticipate that these final
rules will promote changes in network composition and medical
management techniques that result in more robust mental health and
substance use disorder provider networks, as well as fewer and less
restrictive prior authorization requirements for individuals seeking
mental health and substance use disorder treatment. While this could
increase costs in some cases, there are potential offsetting benefits
in other cases for the reduction in the use of medical management
techniques.
7.2. Greater Access to Mental Health and Substance Use Disorder
Treatments
By improving plan and issuer understanding of the requirements
under MHPAEA and clarifying how comparative analyses must be performed
and documented, these final rules will improve compliance.
Specifically, this will ensure compliance with the design and
application requirements and the relevant data evaluation requirements
so that NQTLs applied to mental health and substance use disorder
benefits are no more restrictive than the predominant limitation
applicable to substantially all medical/surgical benefits. The
Departments are of the view that this will, in turn, expand access to
and utilization of mental health and substance use disorder services.
These final rules will have the greatest direct benefits for
individuals who currently forego treatments or cannot access
specialized care for a mental health condition or substance use
disorder because their plan or coverage imposes barriers to accessing
benefits for coverage of these services that are greater than the
barriers for accessing medical/surgical services.
The Departments do not have sufficient data to estimate how many
participants, beneficiaries, and enrollees will receive treatment, or
more appropriate treatment, as a result of these final rules. However,
research has demonstrated that participants, beneficiaries, and
enrollees experienced increased access to mental health and substance
use disorder treatments following the implementation of MHPAEA. Drawing
on these studies, the Departments expect that this rulemaking, in
further improving compliance with MHPAEA, will result in significant
improvements in access to mental health and substance use disorder
care.
For example, a 2018 study examined how MHPAEA affected the coverage
of commercial health plans in the United States. The study found that
between 2010 \248\ and 2014, 68 percent of insurance products had
expanded behavioral health coverage, and among plans that expanded
services, 96 percent reported it was in part because of parity
requirements.\249\ Further, a 2017 study examined the prevalence of
behavioral health quantitative treatment limitations in large group
health plans that utilized carve-out and carve-in services of a single
service provider. While prior to implementation of MHPAEA, quantitative
treatment limitations existed, following its implementation virtually
all of those plans had eliminated quantitative treatment
limitations.\250\ A 2019 study of claims data from both a pre-parity
(January 2005 through December 2010) and post-parity period (January
2011 through September 2015), found that while MHPAEA did not
appreciably increase the share of participants utilizing any outpatient
mental health services, it did increase the frequency of use and total
utilization of outpatient mental health and substance use disorder
services of participants already receiving these services.\251\
Moreover, a 2020 study of MHPAEA, using 2007 and 2011 to 2012 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\
---------------------------------------------------------------------------
\248\ The effective date for MHPAEA for calendar year plans is
January 1, 2010. See CMS, The Mental Health Parity and Addiction
Equity Act of 2008 (MHPAEA) (2010).
\249\ Dominic Hodgkin, Constance M. Horgan, Maureen T. Stewart,
Amity E. Quinn, Timothy B. Creedon, Sharon Reif, & Deborah W.
Garnick, Federal Parity and Access to Behavioral Health Care in
Private Health Plans, 69(4) Psychiatric Services pp. 396-402 (2018).
\250\ Thalmayer, Amber Gayle, Sarah A. Friedman, Francisca
Azocar, Jessica M. Harwood, & Susan L. Ettner, The Mental Health
Parity and Addiction Equity Act (MHPAEA) Evaluation Study: Impact on
Quantitative Treatment Limits, 68(5) Psychiatric Services pp. 435-
442 (2017).
\251\ Norah Mulvaney-Day, Brent J. Gibbons, Shums Alikhan, &
Mustafa Karakus, Mental Health Parity and Addiction Equity Act and
the Use of Outpatient Behavioral Health Services in the United
States, 2005-2016, 109(S3) American Journal of Public Health pp.
S190-S196 (2019).
\252\ Xiaoxue Li & 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), 47(1) The Journal of Behavioral Health Services & Research
pp. 38-53 (2020).
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[[Page 77671]]
These final rules will directly benefit individuals who are
currently enrolled in a plan with narrower networks, with regard to
mental health and substance use disorder benefits compared to the
networks for medical/surgical benefits, which prevent participants,
beneficiaries, and enrollees from being able to access care from in-
network providers and receive the benefits they need. A 2017 study of
ACA Marketplace provider networks 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.\253\ A 2023 secret shopper study conducted by the
Senate Committee on Finance contacted 10 providers from directories of
12 plans, making a total of 120 calls. The study found that more than
80 percent of mental health providers contacted were either
unreachable, not in-network, or not accepting new patients.\254\
---------------------------------------------------------------------------
\253\ Jane M. Zhu, Yuehan Zhang, & Daniel Polsky, Networks in
ACA Marketplaces are Narrower for Mental Health Care than for
Primary Care, 36(9) Health Affairs pp. 1624-1631 (Sept. 2017).
\254\ Senate Committee on Finance Majority, Majority Study
Findings: Medicare Advantage Plan Directories Haunted by Ghost
Networks (2023), https://www.finance.senate.gov/imo/media/doc/050323%20Ghost%20Network%20Hearing%20-%20Secret%20Shopper%20Study%20Report.pdf.
---------------------------------------------------------------------------
Ghost or phantom networks--collections of providers and facilities
that are listed as being within a plan's or issuer's network but, in
fact, are not available to participants, beneficiaries, and enrollees
for treatment on an in-network basis--make it difficult for
participants to find in-network providers.\255\ One 2020 national
survey of privately insured individuals that received mental health
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.\256\
---------------------------------------------------------------------------
\255\ GAO, Mental Health Care: Access Challenges for Covered
Consumers and Relevant Federal Efforts, GAO-22-104597 (Mar. 2022),
https://www.gao.gov/assets/gao-22-104597.pdf.
\256\ Susan H. Busch & Kelly A. Kyanko, Incorrect Provider
Directories Associated with Out-of-Network Mental Health Care and
Outpatient Surprise Bills, 39(6) Health Affairs pp. 975-983 (June
2020).
---------------------------------------------------------------------------
In response to the Departments' proposal, numerous commenters
stated that they believed the proposed rules would benefit patients,
specifically by improving access to mental health and substance use
disorder treatments. Several commenters stated the proposed rules would
ensure more equitable access to care by addressing burdensome
administrative practices, such as NQTLs and other utilization
management techniques, which negatively impact patient access to mental
health and substance use disorder benefits. Additionally, many other
commenters suggested that the enhanced clarity and transparency
provided by the proposed rules would alleviate administrative burdens
and, as such, help to streamline access to behavioral health care. The
Departments acknowledge these supportive comments and agree that the
final rules will increase access to mental health and substance use
disorder treatments.
Given those concerns highlighted by commenters regarding challenges
related to accessing mental health substance use disorder benefits, the
final rules particularly highlight parity in NQTLs related to network
composition as an area that requires improvement. By requiring plans
and issuers to collect and evaluate relevant data on provider networks,
including for network composition NQTLs, the final rules will help to
ensure that individuals have more equitable access to in-network
providers that are available to provide care for mental health
conditions and substance use disorders. Additionally, by ensuring that
plans and issuers collect and evaluate data related to NQTLs for
network composition for mental health and substance use disorder
benefits and medical/surgical benefits, and as necessary address
material differences in access between these benefits, the Departments
expect that the final rules will improve the ability of participants,
beneficiaries, and enrollees to access available in-network mental
health and substance use disorder providers. Thus, the final rules will
reduce barriers to accessing mental health and substance use disorder
care.
This discussion focuses on the benefits for participants,
beneficiaries, and enrollees who were previously prevented from
receiving mental health or substance use disorder treatment. For a
discussion of the effects on participants, beneficiaries, and enrollees
who were previously paying out-of-pocket for treatment, refer to
section IV.9.1 of this regulatory impact analysis pertaining to
transfers.
The implementation of the CAA, 2023 provision that sunsets the
MHPAEA opt-out election is expected to reduce financial and non-
financial barriers to accessing mental health and substance use
disorder treatment for participants and beneficiaries of self-funded
non-Federal governmental plans that elected to opt out of requirements
under MHPAEA. This is expected to result in increased access to mental
health and substance use disorder care and, as discussed in more detail
in the section IV.7.3, lead to better health outcomes for plan
participants and beneficiaries who need mental health or substance use
disorder services.
7.3. Better Health Outcomes Among Those With Mental Health Conditions
and Substance Use Disorders
The Departments are of the view that by ensuring parity in medical
management techniques and other NQTLs imposed by plans and issuers, the
final rules will reduce barriers for participants, beneficiaries, and
enrollees seeking mental health and substance use disorder care. As
discussed later in this regulatory impact analysis, the removal of
barriers preventing individuals from accessing mental health and
substance use disorder treatment on par with medical/surgical treatment
will in turn produce better patient outcomes, including potentially
lives saved.
Research has demonstrated that MHPAEA has already had a positive
effect on improving access to treatment. A 2016 study examining the
initial effects of MHPAEA found that following implementation, prior
authorization requirements were less common for behavioral health care
services than in previous years.\257\ Further, removal of treatment
limitations has had significant beneficial impacts in the mental health
and substance use disorder space. A 2013 study, which analyzed changes
in suicide rates by age groups before and after State parity laws were
enacted, found that, controlling for State-specific time trends,
enactment of parity laws was associated with a 5-percent decrease in
suicides.\258\ It is worth noting, however, that State parity laws do
not apply to most self-funded employer-sponsored health coverage, which
comprise a large portion of the population in States affected by these
final rules. As such, the impact of the laws in that study may have
been somewhat dampened. For a more detailed description of this study,
see section IV.6.1.
---------------------------------------------------------------------------
\257\ Constance M. Horgan, Dominic Hodgkin, Maureen T. Stewart,
Amity Quinn, Elizabeth L. Merrick, Sharon Reif, Deborah W. Garnick,
& Timothy B. Creedon, Health Plans' Early Response to Federal Parity
Legislation for Mental Health and Addiction Services, 67(2)
Psychiatric Services pp. 162-168 (2016).
\258\ Matthew Lang, The Impact of Mental Health Insurance Laws
on State Suicide Rates, 22(1) Health Economics, pp. 73-88 (2013).
---------------------------------------------------------------------------
If, as the Departments expect, these final rules similarly increase
access to mental health and substance use
[[Page 77672]]
disorder care, the potential benefits could be significant. Using the
suicide fatality rate for adults in 2021 from the Centers for Disease
Control and Prevention (CDC) of approximately 14.1 per 100,000 persons
\259\ and the 2020 Agency for Healthcare Research and Quality youth
suicide fatality rate of approximately 6.3 per 100,000,\260\ and
applying these rates to the numbers of individuals 12 years old and
older with private health insurance,\261\ suggests approximately 22,200
suicide deaths annually for adults \262\ and 979 suicide deaths
annually for children 12-17 years old.\263\ For illustrative purposes,
the Departments assume that these final rules would have roughly 40
percent of the impact of the Lang study, or a 2-percent reduction of
fatalities.\264\ As such, the Departments estimate that the final rules
could help prevent 444 adult \265\ and 20 youth \266\ fatalities from
suicide annually. Using the 2023 estimate of the value of a statistical
life (VSL) developed by the U.S. Department of Transportation (DOT),
$13.2 million,267 268 this would translate into benefits of
$6.11 billion annually.269 270 The Departments recognize the
uncertainty in the production of VSL benefit estimates. This
uncertainty arises from a variety of assumptions that are key to the
VSL estimate, such as the underlying demographic characteristics of the
affected population or the differential willingness-to-pay for
statistically equivalent but qualitatively different risks.\271\ To
account for potential sensitivity arising from such uncertainty, the
Departments have conducted a sensitivity analysis of these benefits
and, following guidance on VSL sensitivity analysis,\272\ produced a
lower and upper estimate of the VSL of approximately $5.3 million and
$18.5 million, respectively.\273\ Utilizing this range of estimates,
the Departments accordingly estimate the value of the benefits of
reduced mortality arising from increased mental health treatment
utilization at between $2.5 billion and $8.6 billion annually.\274\
---------------------------------------------------------------------------
\259\ CDC, National Center for Health Statistics, Provisional
Estimates of Suicide by Demographic Characteristics: United States,
2022, Report No. 34 (Nov. 2023), https://www.cdc.gov/nchs/data/vsrr/vsrr034.pdf.
\260\ Agency for Healthcare Research and Quality, 2022 National
Healthcare Quality and Disparities Report, Child and Adolescent
Mental Health (Oct. 2022), https://www.ncbi.nlm.nih.gov/books/NBK587174/.
\261\ Based on the Departments' tabulations of adults with non-
Federal employer-sponsored insurance (ESI) and/or private health
insurance (157.4 million) and the number of children 12-17 with non-
Federal ESI and/or private health insurance (15.5 million) off the
March 2022 CPS Auxiliary Data (https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data).
\262\ The estimate is calculated as follows: 157,443,601
participants with commercial health insurance x 0.014-percent adult
suicide fatality = 22,200 adult suicide fatalities.
\263\ The estimate is calculated as follows: 15,541,261 children
aged 12-17 with private health insurance x 0.0063-percent suicide
fatalities = 979 fatalities.
\264\ This estimate of a 2-percent reduction is based on the
estimate of 5 percent previously cited, revised downward by 60
percent to account for the indirect impact of the final rule on
access, compared to the initial introduction of mental health parity
laws. See Matthew Lang, The Impact of Mental Health Insurance Laws
on State Suicide Rates, 22(1) Health Economics, pp. 73-88 (2013).
\265\ The estimate is calculated as follows: 22,200 fatalities
from suicide x 2-percent reduction in suicides = 444 fatalities
prevented.
\266\ The estimate is calculated as follows: 979 fatalities from
suicide x 2-percent reduction in suicides = 20 fatalities prevented.
\267\ DOT, Departmental Guidance on Valuation of a Statistical
Life in Economic Analysis, effective May 7, 2024, https://www.transportation.gov/office-policy/transportation-policy/revised-departmental-guidance-on-valuation-of-a-statistical-life-in-economic-analysis.
\268\ The VSL utilized by the Departments in this analysis is
one of several VSLs estimated by Federal agencies, all of which vary
slightly in their estimated VSL. The HHS VSL in 2024 is $13.1
million. More information on the HHS VSL can be found in HHS
Standard Values for Regulatory Analysis, 2024 (Jan. 25, 2024) at
https://aspe.hhs.gov/sites/default/files/documents/cd2a1348ea0777b1aa918089e4965b8c/standard-ria-values.pdf.
\269\ This estimate is calculated as follows: 444 adult
fatalities prevented + 20 youth fatalities prevented x $13,200,000
VSL = $6,124,800,000.
\270\ Some methodological approaches to the VSL apply a
distinct, and often higher, value to children. While the Departments
do not utilize such an approach here, they recognize this estimate
may undervalue the true benefits as the final rules' effects include
a risk reduction of fatality to minor children.
\271\ Individuals express a different willingness to pay to
reduce the fatality risk of some deaths (those with a perceived
associated morbidity, such as cancer) more than others (such as car
accidents), though the risks may be equivalent. DOT guidance on the
VSL suggests utilizing a single, nationwide value that does not
adjust the VSL based on the nature of the risk or the underlying
characteristics of the affected population but encourages a
sensitivity analysis to reflect such uncertainty.
\272\ For more information on the VSL guidance utilized, see the
DOT's Revised Departmental Guidance on Valuation of a Statistical
Life in Economic Analysis, https://www.transportation.gov/office-policy/transportation-policy/revised-departmental-guidance-on-valuation-of-a-statistical-life-in-economic-analysis.
\273\ The lower and upper bounds are estimated as 40 percent
below and above the central estimate of $13,200,000, per DOT
guidance on conducting a sensitivity analysis for a VSL estimate.
\274\ These estimates are calculated as: The lower VSL estimate
of $5,280,000 x 464 fatalities prevented = $2,447,665,113. The lower
VSL estimate of $18,480,000 x 464 fatalities prevented =
$8,566,827,999.
---------------------------------------------------------------------------
These benefits further illustrate the value of receiving treatment
earlier and the harms of delaying treatment. While 75 percent of mental
illness onsets before age 25, individuals between age 18 and 25 have a
considerably higher prevalence of serious mental illness \275\ than any
other age group but the lowest rate of mental health
treatment.276 277 Moreover, research suggesting that early
symptom onset is associated with elevated risk for comorbid mental
health disorders, as well as worsening health outcomes, illustrates the
critical need for early mental health interventions and treatment
access.278 279 However, the majority of adolescents with a
mental health condition do not receive treatment.\280\ One review of
recent changes in mental health treatment noted that ``young people
typically demonstrate a need for care prior to reaching the threshold
for a traditional
[[Page 77673]]
major psychiatric diagnosis where distress, functional impairment and
warning signs . . . of mental illness are present, making early
intervention at this time point crucial to preventing or reducing the
severity of a full-threshold disorder.'' \281\ Further, this review
noted that early intervention is key for reducing ``premature death,
social isolation, poor functioning and reduced educational and
vocational productivity.'' In recent years, research has driven an
increased interest in early intervention services for younger
individuals.\282\
---------------------------------------------------------------------------
\275\ Serious mental illness is defined as a ``mental,
behavioral, or emotional disorder resulting in serious functional
impairment, which substantially interferes with or limits one or
more major life activities.'' (See National Institute of Health,
Mental Illness, https://www.nimh.nih.gov/health/statistics/mental-illness)
\276\ Peter J. Uhlhaas, Christopher G. Davey, Urvakhsh Meherwan
Mehta, Jai Shah, John Torous, Nicholas B. Allen, Shelli Avenevoli,
Tolulope Bella-Awusah, Andrew Chanen, Eric Y. H. Chen, Christoph U.
Correll, Kim Q. Do, Helen L. Fisher, Sophia Frangou, Ian B. Hickie,
Matcheri S. Keshavan, Kerstin Konrad, Francis S. Lee, Cindy H. Liu,
Beatriz Luna, Patrick D. McGorry, Andreas Meyer-Lindenberg, Merete
Nordentoft, Dost [Ouml]ng[uuml]r, George C. Patton,
Tom[aacute][scaron] Paus, Ulrich Reininghaus, Akira Sawa, Michael
Schoenbaum, Gunter Schumann, Vinod H. Srihari, Ezra Susser, Swapna
K. Verma, T. Wilson Woo, Lawrence H. Yang, Alison R. Yung & Stephen
J. Wood, Towards a Youth Mental Health Paradigm: A Perspective and
Roadmap, Molecular Psychiatry 28, 3171-3181 (2023).
\277\ SAMHSA, Key Substance Use and Mental Health Indicators in
the United States: Results from the 2022 National Survey on Drug Use
and Health (2023), https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
\278\ Ronald C. Kessler, Patricia Berglund, Olga Demler, Robert
Jin, Kathleen R. Merikangas, & Ellen E. Walters, Lifetime Prevalence
and Age-of-Onset Distributions of DSM-IV Disorders in the National
Comorbidity Survey Replication, 62(6) Arch Gen Psychiatry pp. 593-
602 (2005).
\279\ Peter J. Uhlhaas, Christopher G. Davey, Urvakhsh Meherwan
Mehta, Jai Shah, John Torous, Nicholas B. Allen, Shelli Avenevoli,
Tolulope Bella-Awusah, Andrew Chanen, Eric Y.H. Chen, Christoph U.
Correll, Kim Q. Do, Helen L. Fisher, Sophia Frangou, Ian B. Hickie,
Matcheri S. Keshavan, Kerstin Konrad, Francis S. Lee, Cindy H. Liu,
Beatriz Luna, Patrick D. McGorry, Andreas Meyer-Lindenberg, Merete
Nordentoft, Dost [Ouml]ng[uuml]r, George C. Patton,
Tom[aacute][scaron] Paus, Ulrich Reininghaus, Akira Sawa, Michael
Schoenbaum, Gunter Schumann, Vinod H. Srihari, Ezra Susser, Swapna
K. Verma, T. Wilson Woo, Lawrence H. Yang, Alison R. Yung & Stephen
J. Wood, Towards a Youth Mental Health Paradigm: A Perspective and
Roadmap, Molecular Psychiatry 28, 3171-3181 (2023).
\280\ Kathleen Ries Merikangas, Jian-ping He, Marcy E. Burstein,
Joel Swendsen, Shelli Avenevoli, Brady Case, Katholiki Georgiades,
Leanne Heaton, Sonja Swanson, & Mark Olfson, Service Utilization for
Lifetime Mental Disorders in U.S. Adolescents: Results of the
National Comorbidity Survey Adolescent Supplement, 50(1) Journal of
the American Academy of Child Adolescent Psychiatry, pp. 32-45
(2011), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4408275.
\281\ Patrick D. McGorry & Christina Mei, Early Intervention in
Youth Mental Health: Progress and Future Directions, 21(4) Evidence
Based Mental Health pp. 182-184 (2018).
\282\ Ibid.
---------------------------------------------------------------------------
Mental health research often evaluates the benefits of mental
health care in terms of a quality-adjusted life year (QALY), an
assessment metric that evaluates the changes to a person's quality of
life arising from an intervention. According to the National Institute
for Health and Care Excellence, one QALY ``is equal to 1 year of life
in perfect health.'' \283\ In 2015 New York City launched a program
called ThriveNYC, which included 54 initiatives to improve mental
health, including additional screening and collaborative care. The
study found that, on average, a 20-year-old who received these
interventions would see an increase of 0.38 QALYs (representing a
change in quality of life, with no estimation in this study of changes
to length of life) relative to those who did not receive these
interventions.\284\
---------------------------------------------------------------------------
\283\ National Institute of Health and Care Excellence,
Glossary, https://www.nice.org.uk/glossary.
\284\ Boshen Jiao, Zohn Rosen, Martine Bellanger, Gary Belkin, &
Peter Muennig, The Cost-Effectiveness of PHQ Screening and
Collaborative Care for Depression in New York City, PLoS One
12(8):e0184210 (Aug. 31, 2017), https://pubmed.ncbi.nlm.nih.gov/28859154/.
---------------------------------------------------------------------------
Another study compared the cost effectiveness of early intervention
to standard care for the treatment of first-episode psychosis, finding
that from a societal perspective (that is, quality of life, educational
attainment, and gainful employment), early intervention resulted in
higher discounted QALYs and lower costs than standard care. While
acknowledging that earlier interventions result in higher lifetime
costs than the standard care perspective, the authors still found early
intervention to be cost effective.\285\
---------------------------------------------------------------------------
\285\ Saadia Sediqzadah, Allison Portnoy, Jane J. Kim, Matcheri
Keshavan, & Ankur Pandya, Cost-Effectiveness of Early Intervention
in Psychosis: A Modeling Study, 73(9) Psychiatric Services pp. 961-
1080 (2022).
---------------------------------------------------------------------------
The Departments do not anticipate the benefits to be exclusive to
prevented suicides. The final rules are also expected to increase
access to and utilization of behavioral health services and substance
use disorder services.\286\ The 2022 NSDUH from SAMHSA indicates that
1.4 percent of adults with private health insurance reported having an
OUD in the past year, while only 29 percent of those individuals
indicated receiving treatment for OUD in the same year.\287\ A 2017
study utilizing claims and eligibility data from nearly 6 million
enrollees found that parity resulted in a 17 percent increase in use of
OUD treatment services, which illustrates a strong, positive
relationship between parity and the utilization of behavioral health
services.\288\ As discussed in section IV.6.1.3, there have been
findings of positive or no impact of MHPAEA on the utilization of
mental health and substance use disorder services. For illustrative
purposes, the Departments assume that these final rules would have
roughly 40 percent of the impact of the 2017 study, or an approximately
7 percent increase in OUD treatment service utilization.\289\ This
would result in approximately 43,000 additional individuals receiving
OUD treatment each year.\290\ Considerable research has demonstrated
the efficacy of treatment for
OUD,291 292 293 294 295 296 297 including several recent
studies that have observed the reduction of both fatal and non-fatal
overdoses for people diagnosed with OUD after receiving treatment. For
example, an 18-month observational study of multiple cohorts of people
receiving OUD treatments across the United States between 2017 and 2021
found that following outpatient treatment for OUD, the number of
patient overdoses, arrests, and drug-related hospitalizations were all
reduced by over 50 percent.\298\ Similarly, a 2024 retrospective study
of opioid overdose fatalities found that individuals who recently
received treatment for OUD experienced approximately 34 percent to 38
percent fewer overdose deaths compared to those who did not receive
treatment.\299\
[[Page 77674]]
A 2021 study funded by the National Institute on Drug Abuse (NIDA)
found that, across a nationally representative cohort of individuals
with OUD, common treatments for OUD were associated with a reduction in
the number of overdoses by 11 to 21 percent, with an average reduction
of 16 percent across all treatment types.\300\ This study assessed the
effects of all three FDA-approved medications for OUD in various
combinations with and without the most common treatments
(psychotherapy, contingency management, and overdose education and
naloxone distribution).\301\ Utilizing life tables, clinical data, and
relevant literature on treatment outcomes, the study produced a dynamic
compartmental model to analyze the effects of medications and
treatments on overdoses and mortality. While it is limited by the scope
and availability of relevant secondary data, the model employs
parameters, robustness checks, and sensitivity analysis that
sufficiently validate the empirical model.
---------------------------------------------------------------------------
\286\ Constance M. Horgan, Dominic Hodgkin, Maureen T. Stewart,
Amity Quinn, Elizabeth L. Merrick, Sharon Reif, Deborah W. Garnick,
& Timothy B. Creedon, Health Plans Early Response to Federal Parity
Legislation for Mental Health and Addiction Services, 62(2)
Psychiatric Services pp. 162-168 (2016).
\287\ SAMHSA, Center for Behavioral Health Statistics and
Quality, National Survey on Drug Use and Health, 2021 and 2022,
https://www.samhsa.gov/data/data-we-collect/nsduh-national-survey-drug-use-and-health.
\288\ Sarah Friedman, Haiyong Xu, Jessica M. Harwood, Francisca
Azocar, Brian Hurley, & Susan L. Ettner, The Mental Health Parity
and Addiction Equity Act Evaluation Study: Impact on Specialty
Behavioral Healthcare Utilization and Spending Among Enrollees with
Substance Use Disorders, 80 Journal of Substance Abuse Treatment pp.
67-78 (2017).
\289\ This estimate of a 7 percent reduction is based on the
estimate of 17 percent previously cited, revised downward by 60
percent to account for the indirect impact of expanded parity
associated with these final rules. See Sarah Friedman, Haiyong Xu,
Jessica M. Harwood, Francisca Azocar, Brian Hurley, & Susan L.
Ettner, The Mental Health Parity and Addiction Equity Act Evaluation
Study: Impact on Specialty Behavioral Healthcare Utilization and
Spending Among Enrollees with Substance Use Disorders, 80 Journal of
Substance Abuse Treatment pp. 67-78 (2017).
\290\ This estimate is calculated as follows: 157,443,601 adult
participants with private health insurance x 1.4 percent indicate
OUD in past year = 2,125,489 adults with private health insurance
and OUD. Then, 2,125,489 x 29 percent receiving treatment = 616,817
adults with OUD and private health insurance receiving treatment
annually. Lastly, 616,817 x 6.98 percent increase in adults with
private health insurance receiving treatment = 43,054 additional
adults receiving treatment for OUD annually.
\291\ SAMHSA, Medications for Opioid Use Disorder: For
Healthcare and Addiction Professionals, Policymakers, Patients, and
Families (2021), https://store.samhsa.gov/sites/default/files/pep21-02-01-002.pdf.
\292\ National Academies of Sciences, Engineering, and Medicine,
Medications for Opioid Use Disorder Save Lives (2019), Washington,
DC: The National Academies Press.
\293\ Nisha Nataraj, S. Michaela Rikard, Kun Zhang, Xinyi Jiang,
Gery P. Guy Jr, Ketra Rice, Christine L. Mattson, R. Matthew
Gladden, Desiree M. Mustaquim, Zachary N. Illg, Puja Seth, Rita K.
Noonan, & Jan L. Losby, Public Health Interventions and Overdose-
Related Outcomes Among Persons with Opioid Use Disorder, 7(4) JAMA
Network Open (2024).
\294\ Nora D. Volkow, Thomas R. Frieden, Pamela S. Hyde, &
Stephen S. Cha, Medication-Assisted Therapies--Tackling the Opioid
Overdose Epidemic, 370(22) New England Journal of Medicine (2014),
https://www.nejm.org/doi/full/10.1056/NEJMp1402780.
\295\ Robert P. Schwartz, Jan Gryczynski, Kevin E. O'Grady,
Joshua M. Sharfstein, Gregory Warren, Yngvild Olsen, Shannon G.
Mitchell, & Jerome H. Jaffe, Opioid Agonist Treatments and Heroin
Overdose Deaths in Baltimore, Maryland, 1995-2009, 103(5) American
Journal of Public Health pp. 917-922 (2013), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3670653.
\296\ SAMHSA, TIPS 63: Medications for Opioid Use Disorder
(2021), https://store.samhsa.gov/sites/default/files/pep21-02-01-002.pdf.
\297\ National Academies of Sciences, Engineering, and Medicine,
Medications for Opioid Use Disorder Save Lives, Washington, DC: The
National Academies Press (2019), https://doi.org/10.17226/25310.
\298\ Jill A. Dever, Marci F. Hertz, Laura J. Dunlap, John S.
Richardson, Sara Beth Wolicki, Bradley B. Biggers, Mark J. Edlund,
Michele K. Bohm, Didier Turcios, Xinyi Jiang, Hong Zhou, Mary E.
Evans, Gery P. Guy, Jr., The Medications for Opioid Use Disorder
Study: Methods and Initial Outcomes from an 18-Month Study of
Patients in Treatment for Opioid Use Disorder, Public Health Reports
pp. 1-10 (2024), https://pubmed.ncbi.nlm.nih.gov/38268479/.
\299\ Robert Heimer, Anne C. Black, Hsiuju Lin, Lauretta E.
Grau, David A. Fiellin, Benjamin A. Howell, Kathryn Hawk, Gail
D'Onofrio, & William C. Becker, Receipt of Opioid Use Disorder
Treatment Prior to Fatal Overdoses and Comparison to No Treatment in
Connecticut, 2016-2017, Drug and Alcohol Dependence (2024), https://pubmed.ncbi.nlm.nih.gov/38043226/.
\300\ The Departments averaged the reduction in overdoses
arising from four treatment outcomes against the baseline of no
treatment: Medicated-Assisted Treatment (MAT) only, MAT in addition
to Contingency Management (CM), MAT in addition to Psychotherapy
(PT), as well as MAT in addition to both CM and PT. (See Michael
Fairley, Keith Humphreys, Vilija R. Joyce, Mark Bounthavong, Jodie
Trafton, Ann Combs, Elizabeth M. Oliva, Jeremy D. Goldhaber-Fiebert,
Steven M. Asch, Margaret L. Brandeau, & Douglas K. Owens, Cost-
Effectiveness of Treatments for Opioid Use Disorder, 78(7) JAMA
Psychiatry pp. 767-777 (2021), https://pubmed.ncbi.nlm.nih.gov/33787832/.)
\301\ Outcomes related to overdose education and naloxone
distribution were not used in estimating the impacts of OUD
treatment in the final rule, as naloxone is a common over-the-
counter product not intended to treat OUD, but rather reverse an
opioid overdose. While it may help to reduce overdoses and OUD-
related fatalities, it is not a ``treatment'' per se and as such, is
not considered when estimating the benefits of treatment.
---------------------------------------------------------------------------
To illustrate the potential impact of these final rules, the
Departments employ this lower estimate of a 16 percent reduction in
overdoses following treatment, and estimate that increased treatment
for expanded OUD access and utilization could result in the prevention
of approximately 730 non-fatal overdoses each year.302 303
Utilizing data from the CDC estimating the average medical and non-
medical cost of non-fatal overdoses,\304\ the Departments estimate the
benefits of these reduced non-fatal overdoses at $16.4 million
annually.305 306 307
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\302\ This estimate is calculated as follows: 43,054 additional
adults receiving treatment for OUD x (10,860 per 100,000 non-fatal
overdose rate for those with OUD) = 4,676 non-fatal overdoses. 4,676
non-fatal overdoses x 15.6 percent reduction = 730 non-fatal
overdoses prevented.
\303\ The Departments utilized the nonfatal overdose rate
calculated for 2023 to produce these estimates. Specifically, this
calculation was derived from the data supplement, eTable 9, as
(1,927,706 non-fatal overdoses in 2023 / (16,072,360 individuals
with OUD in 2023 + 1,677,988 individuals receiving medication for
OUD)) x 100,000 = 10,860 per 100,000 non-fatal overdose rate for
those with OUD. (See Nisha S. Nataraj, Michaela Rikard, Kun Zhang,
Xinyi Jiang, Gery P. Guy, Ketra Rice, Christine L. Mattson, Matthew
Gladden, Desiree M. Mustaquim, Zachary N. Illg, Puja Seth, Rita K.
Noonan, & Jan L. Losby, Public Health Interventions and Overdose-
Related Outcomes Among Persons with Opioid Use Disorder, Supplement
1, eTable 9, 7(4) Substance Use and Addiction (2024).)
\304\ Non-medical costs of non-fatal overdoses are derived from
work loss costs and monetized quality-adjusted life loss per injury.
Medical costs of non-fatal overdoses are derived from healthcare
provider payments that include inpatient, outpatient, and outpatient
drug costs.
\305\ Cora Peterson, Ketra L. Rice, Dionne D. Williams, & Robert
Thomas, WISQARS Cost of Injury for Public Health Research and
Practice, 29(2) Injury Prevention (Nov. 2022).
\306\ The average cost of non-fatal overdose requiring
hospitalization = $19,256 average associated QALY non-medical cost
per hospitalization + $33,026 average associated medical cost per
hospitalization = $52,282 per non-fatal overdose hospitalization.
The average cost of non-fatal overdose requiring only treatment and
release = $3,254 average associated QALY non-medical cost per
treatment and release + $9,614 associated medical cost per treatment
and release = $12,868 per non-fatal overdose requiring only
treatment and release. (See Cora Peterson, Ketra L. Rice, Dionne D.
Williams, & Robert Thomas, WISQARS Cost of Injury for Public Health
Research and Practice, 29(2) Injury Prevention (Nov. 2022).
\307\ The estimate is calculated as follows: 730 non-fatal
overdoses prevented x 24.36 percent overdose hospitalization rate =
178 non-fatal overdose hospitalizations prevented. $52,282 per non-
fatal overdose hospitalization x 178 non-fatal overdose
hospitalizations prevented = $9,304,598. Additionally, 730 non-fatal
overdoses x 75.64 percent overdose treatment and release rate = 552
non-fatal overdose treatment and releases prevented. $12,868 per
non-fatal overdose requiring treatment and release x 552 non-fatal
overdoses requiring treatment and release = $7,109,073. As such, the
total benefit estimate related to non-fatal overdoses is calculated
as: $9,304,598 + $7,109,073 = $16,413,761.
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The benefits of individuals diagnosed with an OUD receiving
treatment may go beyond the benefit of reduced harms from overdoses.
Mortality data of individuals diagnosed with an OUD indicate overdoses
comprise approximately half of fatalities for such individuals, who are
increasingly at risk of death from infectious disease, common co-morbid
conditions such as liver or heart disease, accidental deaths, suicide,
and other physical traumas.\308\ Research indicates that individuals
with an OUD that are receiving treatment, while still at increased risk
from all-cause mortality compared to the general population, may
experience a reduced risk of mortality after receiving treatment for
their OUD condition.309 310 One study found that mortality
rates were 35 percent lower for individuals that received treatment for
OUD than for those who did not receive treatment.311 312
This retrospective cohort study used expansive, linked public health,
medical, and vital statistics data from a single State to establish a
robust population cohort of individuals with OUD for which mortality
was the observed outcome over approximately 45,000 person-years
following an initial detox episode. While a potential limitation of
observational studies is the presence of confounding variables
distorting measured outcomes, the breadth of the data being utilized,
which included data from insurance claims and extensive medical
histories, limit this concern. The findings of the study, indicating a
high all-cause and overdose-related mortality rate for individuals with
OUD and resultant decline following treatment, are consistent with
other research findings and, as an observational cohort study,
represent a high level of evidence.313 314
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\308\ Elizabeth Evans, Libo Li, Jeong Min, David Huang, Darren
Urada, Lei Liu, Yih-Ing Hser, & Bohdan Nosyk, Mortality Among
Individuals Accessing Pharmacological Treatment for Opioid
Dependence in California, 2006-2010, Addiction 110(6): 996-1005
(June 2015).
\309\ Marc Larochelle, Dana Bernson, Thomas Land, Thomas Stopka,
Na Wang, Ziming Xuan, Sarah Bagley, Jane Liebschutz, Alexander
Walley, Medication for Opioid Use Disorder After Nonfatal Opioid
Overdose and Association with Mortality: A Cohort Study, Ann Intern
Med 169(3): 137-145 (2018), https://pubmed.ncbi.nlm.nih.gov/29913516/ 29913516/.
\310\ Yih-Ing Hser, Larissa J. Mooney, Andrew J. Saxon, Karen
Miotto, Douglas S. Bell, Yuhui Zhu, Di Liang, and David Huang, High
Mortality among Patients with Opioid Use Disorder in a Large
Healthcare System, J Addict Med 11(4): 315-319 (2017), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5930020/.
\311\ The reduction in all-cause mortality was calculated as the
change in the crude mortality rate per 100 person-years from 1.94
(for those not receiving any treatment) to 1.27 (for those receiving
either MOUD treatment, inpatient treatment, or both). Thus, the
percentage change in the rates from 1.94 per 100 person-years to
1.27 per 100 person-years is approximately 35 percent.
\312\ Alexander Walley, Sara Lodi, Yijing Li, Dana Bernson,
Hermik Babakhanlou-Chase, Thomas Land, & Marc R. Larochelle,
Association Between Mortality Rates and Medication and Residential
Treatment After Inpatient Medically Managed Opioid Withdrawal: A
Cohort Analysis, 115(8) Addiction pp. 1496-1508 (Aug. 2020).
\313\ Marc Larochelle, Dana Bernson, Thomas Land, Thomas Stopka,
Na Wang, Ziming Xuan, Sarah Bagley, Jane Liebschutz, Alexander
Walley, Medication for Opioid Use Disorder After Nonfatal Opioid
Overdose and Association with Mortality: A Cohort Study, Ann Intern
Med 169(3): 137-145 (2018), https://pubmed.ncbi.nlm.nih.gov/29913516/ 29913516/.
\314\ Yih-Ing Hser, Larissa J. Mooney, Andrew J. Saxon, Karen
Miotto, Douglas S. Bell, Yuhui Zhu, Di Liang, and David Huang, High
Mortality among Patients with Opioid Use Disorder in a Large
Healthcare System, J Addict Med 11(4): 315-319 (2017), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5930020/.
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[[Page 77675]]
Employing this estimate of an approximately 35 percent reduction in
fatalities following treatment to illustrate the potential impact of
these final rules, the Departments estimate that increased treatment
for expanded OUD access and utilization could result in the prevention
of approximately 702 fatalities from all causes in persons receiving
treatment for OUD each year.\315\ The Departments have utilized the
VSL, as with their estimate of the value of prevented suicides, to
estimate the benefits of reduced mortality arising from increased OUD
treatment utilization at $9.3 billion annually.\316\ As discussed
earlier in this section, the Departments recognize some uncertainty in
the production of VSL benefit estimates.\317\ To account for potential
sensitivity arising from such uncertainty, the Departments have
conducted a sensitivity analysis of these benefits and, following
guidance on VSL sensitivity analysis,\318\ produced a lower and upper
estimate of the VSL of approximately $5.3 million and $18.5 million,
respectively.\319\ Utilizing this range of estimates, the Departments
accordingly estimate the value of the benefits of reduced mortality
arising from increased OUD treatment utilization at between $3.7
billion and $13.0 billion annually.\320\
---------------------------------------------------------------------------
\315\ This estimate is calculated as: 43,054 additional
beneficiaries receiving treatment for OUD x 4.70 crude mortality
rate per 100 person-years for OUD = 2,024 expected fatalities in the
absence of treatment. Adjusting the crude mortality rate downward
34.7 percent to 3.07 following treatment for this group, the
expected fatalities would be estimated as 43,054 additional
beneficiaries receiving treatment for OUD x 3.07 crude mortality
rate per 100 person-years for OUD = 1,322 expected fatalities
following treatment. As such, the Departments estimate the prevented
fatalities from all causes arising from OUD treatment to be: 2,024-
1,322 = 702 prevented fatalities.
\316\ This estimate is calculated as: the value of a statistical
life of $13,200,000 x 702 prevented fatalities = $9,269,545,489.
\317\ Individuals express a different willingness to pay to
reduce the fatality risk of some deaths (those with a perceived
associated morbidity, such as cancer) more than others (such as car
accidents), though the risks may be equivalent. DOT guidance on the
VSL suggests utilizing a single, nationwide value that does not
adjust the VSL based on the nature of the risk or the underlying
characteristics of the affected population but encourages a
sensitivity analysis to reflect such uncertainty.
\318\ For more information on the VSL guidance utilized, see The
DOT's Revised Departmental Guidance on Valuation of a Statistical
Life in Economic Analysis, https://www.transportation.gov/office-policy/transportation-policy/revised-departmental-guidance-on-valuation-of-a-statistical-life-in-economic-analysis.
\319\ The lower and upper bounds are estimated as 40 percent
below and above the central estimate of $13,200,000, per DOT
guidance on conducting a sensitivity analysis for a VSL estimate.
\320\ These estimates are calculated as: The lower VSL estimate
of $5,280,000 x 702 fatalities prevented = $3,707,818,196. The lower
VSL estimate of $18,480,000 x 702 fatalities prevented =
$12,977,363,685.
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Mental health and substance use disorders do not always occur in
isolation, but are commonly co-occurring conditions, as individuals
with substance use disorders are more likely to experience a mental
health condition than the general population and nearly half of adults
with serious mental illness also have a substance use disorder.\321\
Such co-occurring conditions can significantly exacerbate the severity
of symptoms as well as negative health outcomes related to these
conditions.\322\ Additionally, individuals with mental health
conditions and substance use disorders are known to commonly experience
physical co-morbidities that can significantly impact overall health
and quality of life. A 2011 study indicated that over 68 percent of
adults with a mental health disorder reported a comorbid medical
disorder while 29 percent indicated they had another comorbid mental
health condition.\323\ Human immunodeficiency virus (HIV), hepatitis,
and diabetes are all more prevalent among those with substance use
disorders or mental health conditions than the general population,
while such physical or other mental comorbid conditions are more likely
to be adversely impacted by poor disease management and treatment
adherence when co-occurring with a mental health condition or substance
use disorder.324 325 326 327 328 329 A 2022 study observing
the presence of comorbid conditions for inpatient hospitalizations
found that 81 percent of hospitalizations for a mental health condition
or substance use disorder had a co-morbid condition.\330\ The study
also found that co-morbid conditions were associated with a longer
hospitalization period, a higher cost per hospitalization, as well as
increased mortality during hospitalization.\331\
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\321\ SAMHSA, Key Substance Use and Mental Health Indicators in
the United States: Results from the 2022 National Survey on Drug Use
and Health (Nov. 2023), https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
\322\ Beth Han, Wilson Compton, Carlos Blanco, & Lisa Colpe,
Prevalence, Treatment, and Unmet Treatment Needs of US Adults with
Mental Health and Substance Use Disorders, 36(10) Health Affairs pp.
1739-1747 (2017), https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2017.0584.
\323\ Benjamin Druss & Elizabeth Walker, Mental Disorders and
Medical Comorbidity, Research Synthesis Report No. 21, Robert Wood
Johnson Foundation (Feb. 2011), https://up2riverside.org/wp-content/uploads/2024/04/medicalcomorbidity.pdf.
\324\ Elizabeth C. Verna, Aaron Schluger, & Robert S. Brown Jr.,
Opioid Epidemic and Liver Disease, 1(3) JHEP Report pp. 240-255
(Sept. 2019), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7001546/pdf/main.pdf.
\325\ T. Jake Liang & John W. Ward, Hepatitis C in Injection-
Drug Users--A Hidden Danger of the Opioid Epidemic, 378(13) New
England Journal of Medicine pp. 1169-1171 (Mar. 2018), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5993680/pdf/nihms972424.pdf.
\326\ Alain K. Koyama, A. Hora, Kai McKeever Bullard, Stephen R.
Benoit, Shichao Tang, & Pyone Cho, State-Specific Prevalence of
Depression Among Adults With and Without Diabetes--United States,
2011-2019, 20(70) Preventing Chronic Disease (Aug. 2023), https://www.cdc.gov/pcd/issues/2023/pdf/22_0407.pdf.
\327\ United Nations Office on Drugs and Crime, Comorbidities in
Drug Use Disorders (Mar. 2022), https://www.unodc.org/documents/drug-prevention-and-treatment/UNODC_Comorbidities_in_drug_use_disorders.pdf.
\328\ National Institute on Drug Abuse, Common Comorbidities
with Substance Use Disorders Research Report (Apr. 2020), https://www.ncbi.nlm.nih.gov/books/NBK571451/.
\329\ Stephen Magura, Andrew Rosenblum, & Chunki Fong, Factors
Associated with medication Adherence among Psychiatric Outpatients
at Substance Abuse Risk, Open Addict J. (4), 58-64 (Nov. 2011),
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3526017/.
\330\ Pamela Owens, Lan Liang, Marguerite Barrett, and Kathryn
Fingar, Comorbidities Associated with Adult Inpatient Stays, 2019.
Agency for Healthcare Research and Quality, Healthcare Cost and
Utilization Project, Statistical Brief #303 (Dec. 2022).
\331\ Pamela Owens, Lan Liang, Marguerite Barrett, and Kathryn
Fingar, Comorbidities Associated with Adult Inpatient Stays, 2019.
Agency for Healthcare Research and Quality, Healthcare Cost and
Utilization Project, Statistical Brief #303 (Dec. 2022).
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As mental health conditions and substance use disorders can make
preventing, managing, and treating physical comorbidities difficult,
improvements in mental health and substance use disorder outcomes may
also improve overall physical health outcomes and lower healthcare
costs for participants.332 333 Data from Evernorth Health
Services, a subsidiary of Cigna, indicates that accessing mental health
and substance use disorder services can result in considerable cost
savings for patients diagnosed with a mental health condition and
substance use disorder concern, producing a reported cost savings of
between $1,134 to $3,321 per person over the first 27 months
[[Page 77676]]
following diagnosis.\334\ Similarly, a 2012 study of patients with a
mental health condition and comorbid physical health condition found
that treating the underlying mental health condition yielded
significant improvements in the comorbid physical conditions, resulting
in increased positive health outcomes and lower long-term healthcare
costs.\335\ The Departments, in evaluating the impacts of these final
rules, anticipate that, by prohibiting inequitable barriers to
coverage, the estimated improvements in mental health conditions and
substance use disorders will help reduce the severity of comorbid
conditions, improve related health outcomes for participants,
beneficiaries, and enrollees, and as such, represent a substantial, but
potentially unquantified, benefit.
---------------------------------------------------------------------------
\332\ United Nations Office on Drugs and Crime, Comorbidities in
Drug Use Disorders (Mar. 2022), https://www.unodc.org/documents/drug-prevention-andtreatment/UNODC_Comorbidities_in_drug_use_disorders.pdf.
\333\ Wayne Katon, Joan Russo, Elizabeth H.B. Lin, Julie
Schmittdiel, Paul Ciechanowski, Evette Ludman, Do Peterson, Bessie
Young, & Michael Von Korff, Cost-Effectiveness of a Multi-Condition
Collaborative Care Intervention: A Randomized Controlled Trial,
69(5) Archives of General Psychiatry (May 2012), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3840955/pdf/nihms521136.pdf.
\334\ Evernorth Health Services, Behavioral Health Care
Significantly Lowers Medical Care Costs (Jan. 2023), https://www.evernorth.com/behavioral-health-study.
\335\ Wayne Katon, Joan Russo, Elizabeth H.B. Lin, Julie
Schmittdiel, Paul Ciechanowski, Evette Ludman, Do Peterson, Bessie
Young, & Michael Von Korff, Cost-Effectiveness of a Multi-Condition
Collaborative Care Intervention: A Randomized Controlled Trial,
69(5) Archives of General Psychiatry (May 2012), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3840955/pdf/nihms521136.pdf.
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7.4. Reduced Adverse Impacts on the Families, Friends, Caregivers, and
Coworkers of People Who Suffer From Untreated or Poorly Managed Mental
Health Conditions and Substance Use Disorders
These final rules will help employees, caregivers and their
families meet their mental health and substance use disorder care
needs, and thus, may improve the productivity and resulting earnings of
workers dealing with mental health conditions and substance use
disorder. Among adults with any mental health condition in 2022, only
50.6 percent received treatment.\336\ Moreover, while 19.4 percent of
NSDUH respondents 12 and older were classified as needing substance use
disorder treatment in 2022, only 4.6 percent of respondents 12 and
older indicated that they received treatment that year.\337\ One survey
found that more than 85 percent of individuals that did not receive
their needed mental health or substance use care reported negative
impacts, including personal relationship issues, job issues and
performing poorly or dropping out of school.\338\
---------------------------------------------------------------------------
\336\ SAMHSA, Key Substance Use and Mental Health Indicators in
the United States: Results from the 2022 National Survey on Drug Use
and Health, Figure 62, p. 61 (Nov. 2023), https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
\337\ SAMHSA, Key Substance Use and Mental Health Indicators in
the United States: Results from the 2022 National Survey on Drug Use
and Health, Figures 54 and 55, pp. 50-51 (Nov. 2023). https://www.samhsa.gov/data/sites/default/files/reports/rpt42731/2022-nsduh-nnr.pdf.
\338\ 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 conditions and
substance use disorders can be significant. A 2021 study of claims data
for large, self-funded health plans looked at the economic burden
attributable to major depressive disorder, including the direct costs
associated with treatment, suicide-related costs, and workplace costs,
between 2010 and 2018. During that period, overall economic burden of
adults with a major depressive disorder increased 37.9 percent (from
$236.6 billion to $326.2 billion). While part of the cost increase can
be attributed to a 12.9 percent increase in the number of adults with
major depressive disorders, direct costs became a smaller share of the
total costs, with workplaces costs, defined as missed work (due to
injury/illness, discretionary time off and disability) and lower
productivity while at work, constituting 61 percent of the costs in
2018 and increasing from $48.3 billion in 2010 to $70.8 billion in
2018.\339\ 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.\340\ A 2023 study critically reviewed 38 studies on the
relationship between mental health and lost productivity, and found
that poor mental health was associated with increased presenteeism
\341\ and absenteeism.\342\
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\339\ Paul E. Greenberg, Andree-Anne Fournier, Tammy Sisitsky,
Mark Simes, Richard Berman, Sarah H. Koenigsberg, & Ronald C.
Kessler, The Economic Burden of Adults with Major Depressive
Disorder in the United States (2010 and 2018), 39(6)
Pharmacoeconomics pp. 653-665 (2021).
\340\ Martin Andersen, Heterogeneity and the Effect of Mental
Health Parity Mandates on the Labor Market, 43 Journal of Health
Economics (2015).
\341\ The study defined ``presenteeism'' as ``decreased
productivity at work.''
\342\ Claire de Oliveira, Makeila Saka, Lauren Bone, & Rowena
Jacobs, The Role of Mental Health on Workplace Productivity: A
Critical Review of the Literature, 21(2) Applied Health Economics
and Health Policy pp. 167-193 (2023).
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These final rules will also have significant indirect impacts on
families, friends, caregivers, and coworkers with untreated or poorly
managed mental health conditions and substance use disorders, as well
as society at large. By prohibiting inequitable barriers to coverage
and thereby increasing access to mental health and substance use
disorder services, these final rules will lead to more people receiving
treatment, reducing the burden on family members and other support
systems. For example, this includes untreated maternal mental health
conditions, which can lead to a reduced ability to work, increased risk
of suicide, increased use of public services, and worse maternal and
child health. A 2022 study of the cost of maternal mental health
conditions to Texas women and their children projected costs for the
2019 birth cohort from the time of conception through 5 years
postpartum to total $2.2 billion.\343\ Untreated maternal mental health
conditions include untreated perinatal mood and anxiety disorders,
which have been found to account for approximately $48 million in
societal costs in Vermont for the average annual birth cohort from
conception through 5 years postpartum, including $12.5 million in
productivity loss and $9.4 million in non-obstetric health
expenditures.\344\
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\343\ Caroline Margiotta, Jessica Gao, So O'Neil, Divya Vohra, &
Kara Zivin, The Economic Impact of Untreated Maternal Mental Health
Conditions in Texas, 22(700) BMC Pregnancy Childbirth (2022).
\344\ Isabel Platt, Emma Pendl-Robinson, Eric Dehus, So O'Neil,
Divya Vohra, Kara Zivin, Michael Kenny & 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.
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The cost in missed productivity for workers with fair or poor
mental health due to unplanned absences was estimated as $47.6 billion
annually in 2022.\345\ 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.\346\
Finally, a 2021 study estimated that the societal costs of untreated
OUD was approximately $1.02 trillion in 2017, which includes $35
billion in health care costs and $92 billion in lost productivity.\347\
---------------------------------------------------------------------------
\345\ Dan Witters & Sangeeta Agrawal, The Economic Cost of Poor
Employee Mental Health, Gallup Workplace (Dec. 13, 2022), https://www.gallup.com/workplace/404174/economic-cost-poor-employee-mental-health.aspx?version=print.
\346\ Donghoon Lee, Yeonil Kim, & Beth Devine, Spillover Effects
of Mental Health Disorders on Family Members' Health-related Quality
of Life: Evidence from a US Sample, 42(1) Medical Decision Making
pp. 80-93 (2022).
\347\ Curtis Florence, Feijun Luo, & Ketra Rice, The Economic
Burden of Opioid Use Disorder and Fatal Opioid Overdose in the
United States, 2017, 218 Drug and Alcohol Dependence (2021).
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[[Page 77677]]
These final rules are expected to improve access to and utilization
of mental health and substance use disorder services by removing
barriers to access to mental health and substance use disorder benefits
caused by NQTLs. By enhancing treatment for these conditions and
disorders, these final rules will likely result in reduced productivity
loss or missed workdays for individuals suffering from mental health
conditions or substance use disorders. Furthermore, the improved
management and treatment of these conditions and disorders will
potentially lead to reduced adverse impacts on the families, friends,
and coworkers of those affected, as untreated or poorly managed mental
health conditions and substance use disorders can have significant
spillover effects on an individual's personal and professional lives.
8. Costs
These final rules aim to promote access to mental health and
substance use disorder benefits by clarifying how plans and issuers
must ensure that their plans and coverage are designed, as written and
in operation, to comply with MHPAEA's parity requirements for mental
health and substance use disorder benefits and medical/surgical
benefits, and allowing them to more easily identify changes needed to
bring their plans and coverage into compliance. The Departments
acknowledge that plans and issuers, in revising their approach to
performing and documenting their already required comparative analyses,
will incur additional costs. Moreover, by removing some of the barriers
to access to mental health and substance use disorder treatments caused
by existing NQTLs, the Departments expect increased utilization of
mental health and substance use disorder services, which will also
increase costs. This collection of costs would appropriately be
included in any comparison with the benefits described, and in some
cases illustratively quantified, elsewhere in this regulatory impact
analysis.
It is notable that the Departments are clarifying existing
requirements, and only the cost burden limited to those additional
content elements outlined in these final rules is a key topic discussed
in the following sections.
8.1. Comment Summary
In response to the proposal, many commenters expressed concern that
the Departments underestimated the burden of collecting the required
data, the burden required in conducting the proposed mathematical
substantially all and predominant tests, the number of NQTLs that would
need to be analyzed for each plan and issuer, and the amount of time
that it would take to conduct those analyses. Commenters stated that in
order to comply with the proposed rules, plans and issuers would need
to purchase new data systems and hire additional staff or contractors.
One commenter further stated that existing systems to provide mental
health and substance use disorder benefits, such as carve out plans,
would be eliminated under the proposed rule, as vendors would not be
able to build networks of mental health and substance use disorder
providers in alignment with networks of medical/surgical providers, as
required under the proposed special rule for network composition.
Several commenters questioned the Departments' assumptions related
to the number of NQTLs for which plans and issuers would need to
produce comparative analyses. While the Departments assumed that
issuers would impose twice as many NQTLs as plans, several commenters
did not think the number of NQTLs would vary between plans and issuers.
Commenters also argued that the number of NQTLs that plans and issuers
would need to analyze would be roughly twice the Departments' proposed
assumption for issuers, 16 NQTLs rather than 8, based on the
Departments' descriptions of types of NQTLs listed in the proposed
rule. Consistent with the explanation earlier in this preamble, the
Departments note that they do not intend to provide an exhaustive list
of NQTLs. Plans and issuers may be analyzing a fewer or greater number
of NQTLs than the number of NQTLs listed in the illustrative, non-
exhaustive list in these final rules.
Commenters also questioned the amount of time that it would take to
conduct the NQTL comparative analyses under the proposal. While the
Departments assumed that the plans and issuers preparing their own
comparative analyses would incur an incremental burden of 10 hours per
NQTL in the first year and 4 hours per NQTL in subsequent years,
several commenters thought this was an underestimate. For instance, one
commenter stated that it currently takes a team of subject matter
experts, compliance officials, a project manager, and attorneys or
consultants 60 hours in the first year and 12 hours in subsequent years
to produce NQTL comparative analyses as required under the CAA, 2021
and current guidance. The commenter suggested that the added
requirements for the comparative analysis under these final rules could
require at least an additional 60 hours per NQTL.
Another commenter estimated that the cost to issuers of fully
insured plans to conduct the comparative analyses for all NQTLs is
approximately between $200,000 and $300,000 (200 to 300 external
attorney or consultant hours in addition to several hundred in-house
staff hours). The commenter also reported that for large, self-funded
plans, while issuers and TPAs prepare and distribute baseline
comparative analysis, plans would still need to customize the
comparative analysis. The commenter estimated that the cost for large
self-funded plans to customize the comparative analysis and request
additional information and data for all NQTLs is approximately between
$50,000 and $150,000 (100 to 200 external attorney or consultant hours
in addition to in-house staff work). The Departments are not clear
whether these suggested costs represent current expenditures or
projections of the added requirements for the comparative analyses. The
commenter further stated that time and cost estimates for plans with
behavioral carve-out vendors should be higher.
In preparing these final rules, the Departments have considered
these comments and have clarified the requirements and reevaluated
their estimates as appropriate. The specific adjustments to the
estimates are discussed in section IV.8.4 of this regulatory impact
analysis.
8.2. Commenters' Cost Estimates
As discussed earlier in this regulatory impact analysis, commenters
questioned the Departments' assumptions related to the number of NQTLs
imposed by plans and issuers on mental health and substance use
disorder benefits and medical/surgical benefits, and the amount of time
that it would take to conduct the additional requirements for producing
comparative analyses and analyzing data, beyond what was required in
CAA, 2021. The Departments have reviewed these comments, which include
estimates made by those commenters, on the expected additional costs to
prepare NQTL comparative analyses under the proposed rules. While these
comments are helpful to understand the cost implications of the final
rules and how they differ from the proposal, the Departments disagree
with some of the inputs and underlying assumptions of these cost
estimates and use different assumptions in section IV.8.4 of this
regulatory impact analysis. The
[[Page 77678]]
commenters' cost estimates do, however, demonstrate a possible upper
bound on the costs associated with these final rules.
8.2.1. Association for Behavioral Health and Wellness
The Departments considered estimates and assumptions regarding the
costs to prepare the NQTL comparative analyses under the proposed rules
made by the Association for Behavioral Health and Wellness (ABHW). ABHW
reports that the amendments would require plans and issuers to analyze
15 NQTLs on average. They also reported that it currently takes a team
of subject matter experts, compliance officials, a project manager, and
attorneys or consultants 60 hours to prepare each comparative analysis
for a typical NQTL as required under the CAA, 2021 and current
guidance. Thus, ABHW estimates that a comparable burden (60 hours per
NQTL) is needed to review and revise the analyses under the updated
requirements in the first year. In addition, they also estimate it
would require 12 hours in each subsequent year to produce the
comparative analyses. For the purpose of this calculation, the
Departments have estimated a composite wage rate of $167.48, which
consist of attorneys, actuaries, and data analysts.\348\ Based on these
assumptions, and the Departments' estimates of affected entities, this
would result in a cost burden of $984.8 million in the first year and
$197 million in subsequent years, resulting in a 3-year average cost
burden of $459.6 million. See Table 3 for more details.
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\348\ The wage rate of an attorney, actuary, and data analyst
is, respectively, $165.71, $177.11, and $159.61. (Internal DOL
calculation based on 2024 labor cost data. For a description of
DOL's methodology for calculating wage rates, see EBSA, Labor Cost
Inputs Used in the Employee Benefits Security Administration, Office
of Policy and Research's Regulatory Impact Analyses and Paperwork
Reduction Act Burden Calculations (June 2019), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.) The composite wage rate is
estimated in the following manner: [$165.71 x (1 / 3) + $159.61 x (1
/ 3) + $177.61 x (1 / 3) = $167.48].
---------------------------------------------------------------------------
ABHW also suggested that issuers and plans would need to hire at
least three full-time equivalent new staff members to help with the
proposed relevant data evaluation requirements. This additional cost
was not included in their cost estimates.
Table 3--Incremental Cost To Prepare the Comparative Analyses Based on the Association for Behavioral Health and
Wellness's Assumptions
----------------------------------------------------------------------------------------------------------------
Number of Number of
Number of NQTLs per hours per Total hour Hourly Cost
entities entity NQTL burden wage
(A) (B) (C) (A x B x C) (D) (A x B x C x D)
----------------------------------------------------------------------------------------------------------------
First Year
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance 1,467 15 60 1,320,300 $167.48 $221,123,844
company/State combinations)..
TPAs.......................... 205 15 60 184,500 167.48 30,900,060
Self-funded plans with more 709 15 60 638,100 167.48 106,868,988
than 500 participants that
will conduct a comparative
analysis themselves..........
Self-funded plans with more 4,076 15 30 1,834,200 167.48 307,191,816
than 500 participants that
will receive a generic
comparative analysis from TPA
or service providers, and
will then customize it.......
Self-funded non-Federal 505 15 60 454,500 167.48 76,119,660
governmental plans with more
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded non-Federal 2,906 15 30 1,307,700 167.48 219,013,596
governmental plans with more
than 500 participants that
will initially receive
generic comparative analyses
from TPAs or service
providers, and will then
customize it.................
Plan MEWAs that are not fully 132 15 60 118,800 167.48 19,896,624
insured......................
Non-plan MEWAs that are not 21 15 60 18,900 167.48 3,165,372
fully insured................
---------------------------------------------------------------------------------
First-year Total.......... 10,021 15 ........... 5,877,000 ........ 984,279,960
----------------------------------------------------------------------------------------------------------------
Subsequent Years
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance 1,467 15 12 264,060 167.48 44,224,769
company/State combinations)..
TPAs.......................... 205 15 12 36,900 167.48 6,180,012
Self-funded plans with more 709 15 12 127,620 167.48 21,373,798
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded plans with more 4,076 15 6 366,840 167.48 61,438,363
than 500 participants that
will receive a generic
comparative analysis from
TPAs or service providers,
and will then customize it...
Self-funded non-Federal 505 15 12 90,900 167.48 15,223,932
governmental plans with more
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded non-Federal 2,906 15 6 261,540 167.48 43,802,719
governmental plans with more
than 500 participants that
will initially receive
generic comparative analyses
from TPAs or service
providers, and will then
customize it.................
Plan MEWAs that are not fully 132 15 12 23,760 167.48 3,979,325
insured......................
Non-plan MEWAs that are not 21 15 12 3,780 167.48 633,074
fully insured................
---------------------------------------------------------------------------------
Subsequent Years Total.... 10,021 15 ........... 1,175,400 ........ 196,855,992
---------------------------------------------------------------------------------
Total (3-year average) 10,021 15 ........... 2,742,600 ........ 459,330,648
----------------------------------------------------------------------------------------------------------------
The Departments conducted a sensitivity analysis of the assumption
that 50 percent of self-funded plans and another 50 percent of self-
funded non-Federal governmental plans with more than 500 participants
will receive a generic comparative analysis from TPAs or service
providers, which they will then need to customize. For every 10-
percentage-point increase or decrease in the number of self-funded
plans and self-funded non-Federal governmental
[[Page 77679]]
plans with more than 500 participants that need to customize
documentation received from TPAs or service providers, the cost would
increase or decrease by $24.6 million.\349\
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\349\ The Departments estimate the 10-percentage-point
incremental cost by adding the total cost of self-funded plans and
self-funded non-Federal governmental plans that will receive a
generic comparative analysis from issuers, TPAs, or service
providers and will then customize it (found in Table 3) in the first
year and subsequent years, creating a 3-year average cost, and then
multiplying the 3-year average cost by 10 percent.
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8.2.2. Blue Cross Blue Shield Association
The Blue Cross Blue Shield Association (BCBSA) asked the
Departments to specifically quantify the costs of preparing additional
comparative analysis beyond the four priority NQTLs outlined in FAQs
Part 45. BCBSA stated that based on the number of NQTLs identified in
the regulation, and the additional NQTLs identified in the preamble,
the proposed rules would require plans and issuers to prepare
comparative analyses for at least 17 NQTLs (7 from the preamble, and 10
from the regulation, counting those related to network composition as 3
separate NQTLs), all with the associated documentation and outcomes
data.
BCBSA estimated that the cost of issuers of fully insured plans to
conduct the comparative analyses for all NQTLs would range between
$200,000 and $300,000. BCBSA also estimated the cost for large self-
funded plans that receive a generic comparative analysis from the
issuer, which they then need to customize and request additional
information and data for all NQTLs referenced in the proposal, is
between $50,000 and $150,000. BCBSA did not explain if these cost
estimates were for all years or were applicable to just the first year.
Based on BCBSA's assumptions, and the Departments' estimates of
affected entities, this will result in a lower bound cost of $957.4
million and an upper bound cost of $2 billion. See Table 4 for more
details.
Table 4--Annual Costs To Conduct the Comparative Analyses for all NQTLs Based on Blue Cross Blue Shield
Association's Assumptions
----------------------------------------------------------------------------------------------------------------
Lower bound Upper bound
Number of cost per Total lower cost per Total upper
entities entity bound cost entity bound cost
(A) (B) (A x B) (C) (A x C)
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance company/ 1,467 $200,000 $293,400,000 $300,000 $440,100,000
State combinations)..............
TPAs.............................. 205 200,000 41,000,000 300,000 61,500,000
Self-funded plans with more than 709 200,000 141,800,000 300,000 212,700,000
500 participants that will
conduct the comparative analysis
themselves.......................
Self-funded plans with more than 4,076 50,000 203,800,000 150,000 611,400,000
500 participants that will
receive a generic comparative
analysis from TPAs or service
providers, and will then
customize it.....................
Self-funded non-Federal 505 200,000 101,000,000 300,000 151,500,000
governmental plans with more than
500 participants that will
conduct the comparative analysis
themselves.......................
Self-funded non-Federal 2,906 50,000 145,300,000 150,000 435,900,000
governmental plans with more than
500 participants that will
initially receive generic
comparative analyses from TPAs or
service providers, and will then
customize it.....................
Plan MEWAs that are not fully 132 200,000 26,400,000 300,000 39,600,000
insured..........................
Non-plan MEWAs that are not fully 21 200,000 4,200,000 300,000 6,300,000
insured..........................
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Total......................... 10,021 .............. 956,900,000 .............. 1,959,000,000
----------------------------------------------------------------------------------------------------------------
The Departments conducted a sensitivity analysis of the assumption
that 50 percent of self-funded plans and another 50 percent of self-
funded non-Federal governmental plans with more than 500 participants
will receive a generic comparative analysis from the issuer, and will
then customize it. For every 10-percentage-point increase or decrease
in the number of self-funded plans and self-funded non-Federal
governmental plans with more than 500 participants that need to
customize documentation received from TPAs or service providers, the
cost would increase or decrease by $34.9 million in the total lower
bound cost \350\ and $104.7 million in the total upper bound cost.\351\
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\350\ The Departments estimate the 10-percentage-point
incremental cost in the lower bound by adding the total lower bound
cost of self-funded plans and self-funded non-Federal governmental
plans that will initially receive a generic comparative analysis
from issuers, TPAs, or service providers and will then customize it
(found in Table 4) and then multiplying the sum by 10 percent.
\351\ The Departments estimate the 10-percentage-point
incremental cost in the upper bound adding the total upper bound
cost of self-funded plans and self-funded non-Federal governmental
plans that will initially receive a generic comparative analysis
from issuers, TPAs, or service providers and will then customize it
(found in Table 4) and then multiplying the sum by 10 percent.
---------------------------------------------------------------------------
8.3. Final Amendments to the Existing MHPAEA Regulations (26 CFR
54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136)
As part of these final rules, the Departments have added new
definitions, amended existing definitions, and clarified and added new
requirements for NQTLs imposed with respect to mental health or
substance use disorder benefits. For example, as discussed earlier in
this preamble, the final rules clarify that any condition or disorder
defined by the plan or coverage as being or as not being a mental
health condition or a substance use disorder must be defined consistent
with generally recognized independent standards of current medical
practice. To be consistent with those generally recognized independent
standards of current medical practice, these final rules state that 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 definition of ``substance use disorder benefits'' 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
[[Page 77680]]
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.
Under these final rules, plans and issuers are required to collect
and evaluate relevant data in a manner reasonably designed to assess
the impact of the NQTL on relevant outcomes related to access to mental
health and substance use disorder benefits and medical/surgical
benefits. In addition, these final rules require plans and issuers to
determine whether the relevant data reflect material differences in
access to mental health or substance use disorder benefits as compared
to medical/surgical benefits and take reasonable action, as necessary
to address such differences to ensure compliance, in operation, with 26
CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4).
Relevant data for all NQTLs could include, as appropriate, but are not
limited to, the number and percentage of claims denials and any other
data relevant to the NQTL required by State law or private
accreditation standards. Additionally, for NQTLs related to network
composition, relevant data could include, as appropriate, but are 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 (for comparable services
and as benchmarked to a reference standard).
The proposed rules would have required plans and issuers to apply
the proposed mathematical substantially all and predominant tests to
each NQTL applicable to mental health or substance use disorder
benefits and medical/surgical benefits. As discussed earlier in this
preamble, the Departments decline to finalize the proposed mathematical
tests for applying the substantially all and predominant tests in these
final rules. However, plans and issuers are required to collect and
evaluate relevant data for NQTLs applicable to mental health and
substance use disorder benefits and medical/surgical benefits under
these final rules. For NQTLs related to network composition, plans and
issuers must collect and evaluate relevant data in a manner reasonably
designed to assess the aggregate impact of all such NQTLs on relevant
outcomes related to access to mental health and substance use disorder
benefits and medical/surgical benefits. Under these final rules, the
Departments may specify the type, form, and manner for the relevant
data evaluation requirement in future guidance, but for some plans and
issuers already subject to existing data requirements under MHPAEA,
Federal transparency rules,\352\ and State law and private
accreditation standards, some of the additional data burden associated
with this rulemaking will be mitigated.
---------------------------------------------------------------------------
\352\ 85 FR 72158 (Nov. 12, 2020).
---------------------------------------------------------------------------
These final rules could cause plans and issuers to revise their
policies and procedures to remove or modify NQTLs in response to the
Departments' clarifications and examples. Requirements such as covering
meaningful benefits for mental health conditions and substance use
disorders (determined in comparison to the benefits provided for
medical conditions and surgical procedures); assessing whether the
relevant data evaluated suggest that the NQTL contributes to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits; and not using or
taking the steps necessary to correct, cure, or supplement the
information, evidence, sources, or standards used to inform a factor or
evidentiary standard that would have been biased or not objective in
the absence of such steps could also cause plans and issuers to revise
their policies and procedures.
For example, a 2016 study examined how private health plans
responded to the 2010 interim final rules implementing MHPAEA and found
that the majority of plans had eliminated quantitative treatment
limitations referred to as ``special annual limits'' related to
behavioral health treatments. The percentage of health insurance
products with such 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 such limits on substance
use disorder treatments (from 26 percent in 2009 to 3 percent in
2010).\353\ A 2019 study of claims data from both a pre-parity (January
2005 through December 2010) and post-parity period (January 2011
through September 2015), found that while MHPAEA did not appreciably
increase the share of participants utilizing any outpatient mental
health services, it did increase the frequency of use and total
utilization of outpatient mental health and substance use disorder
services of participants already receiving these services.\354\
---------------------------------------------------------------------------
\353\ Constance M. Horgan, Dominic Hodgkin, Maureen T. Stewart,
Amity Quinn, Elizabeth L. Merrick, Sharon Reif, Deborah W. Garnick,
& Timothy B. Creedon, Health Plans' Early Response to Federal Parity
Legislation for Mental Health and Addiction Services, 67(2)
Psychiatric Services pp. 162-168 (2016).
\354\ Norah Mulvaney-Day, Brent J. Gibbons, Shums Alikhan, &
Mustafa Karakus, Mental Health Parity and Addiction Equity Act and
the Use of Outpatient Behavioral Health Services in the United
States, 2005-2016, 109(S3) Am J Public Health pp. S190-S196 (2019).
---------------------------------------------------------------------------
Plans and issuers could incur costs to implement changes associated
with revising coverage and plan provisions to ensure that they comply
with the requirements of these final rules or ceasing the imposition of
an NQTL as directed by the Departments or an applicable State authority
after a final determination of noncompliance under Code section
9812(a)(8), ERISA section 712(a)(8), or PHS Act section 2726(a)(8), or
26 CFR 54.9812-2, 29 CFR 2590.712-1, or 45 CFR 146.137, which might
result in increased costs from expanded utilization of mental health
and substance use disorder services. Recent data suggests that mental
health and substance use disorder services account for a small portion
of total health care expenditures, representing just 8.4 percent of all
expenses in 2021 for individuals with private insurance.\355\ The
Departments face uncertainty in quantifying these costs and did not
receive public comments containing data or information to inform these
estimates. As such, the Departments cannot estimate the potential
increase in utilization and which services might see the largest
increase in utilization.
---------------------------------------------------------------------------
\355\ Agency for Healthcare Research and Quality, Medical
Expenditure Panel Survey, Total Expenditures ($) in Millions by
Condition, United States, 2016 to 2021, https://datatools.ahrq.gov/meps-hc?tab=medical-conditions&dash=17.
---------------------------------------------------------------------------
8.3.1. Mitigation in Utilization Costs From Telehealth Expansion
As discussed in section 2 of this regulatory impact analysis,
individuals seeking mental health or substance use disorder treatment
often face barriers preventing them from accessing care, such as
inadequate networks. Telehealth is one method of care that has the
potential to improve access to treatment for mental health conditions
or substance use disorders, particularly as research has documented
that it can be as effective as in-person treatment,\356\
[[Page 77681]]
particularly when the treatment is provided through video instead of
audio-only.\357\ These final rules require plans and issuers to collect
and evaluate relevant data and, where the relevant data suggest that
the NQTL contributes to material differences in access to mental health
and substance use disorder benefits as compared to medical/surgical
benefits in a classification, to take reasonable action, as necessary,
to address the material differences to ensure compliance, in operation,
with 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR
146.136(c)(4). One potential reasonable action a plan or issuer could
take to address material differences in access with respect to relevant
data for NQTLs related to network composition may include expanding the
availability of telehealth arrangements to mitigate any overall mental
health and substance use disorder provider shortages in a geographic
area.
---------------------------------------------------------------------------
\356\ For example, the following studies found that telehealth
treatment was as effective as in-person treatment:
David Turgoose, Rachel Ashwick, & Dominic Murphy, Systematic
Review of Lessons Learned from Delivering Tele-therapy to Veterans
with Post-traumatic Stress Disorder, 24(9) Journal of Telemedicine
and Telecare pp. 575-585 (2018); Nyssa Z. Bulkes, Kaley Davis, Brian
Kay, & Bradley C. Riemann, Comparing Efficacy of Telehealth to In-
Person Mental Health Care in Intensive-Treatment-Seeking Adults, 145
Journal of Psychiatric Research pp. 347-352 (2022); Jaime Moreno-
Chaparro, Eliana I. Parra Esquivel, Angy Lucia Santos Quintero,
Laura Paez, Sandra Martinez Quinto, Bayron Esteven Rojas Barrios,
Juan Felipe Samudio, & Karol Madeline Romero Villareal, Telehealth
Interventions Aimed at Parents and Caregivers of Children Living in
Rural Settings: A Systematic Review, Child Care in Practice pp. 1-24
(2022); Lori Uscher-Pines, Lauren E. Riedel, Ateev Mehrotra, Sherri
Rose, Alisa B. Busch, & Haiden A. Huskamp, Many Clinicians Implement
Digital Equity Strategies to Treat Opioid Use Disorder: Study
Examines Clinicians' Use of Telehealth and Digital Equity Strategies
to Treat Opioid Use Disorder, 42(2) Health Affairs pp. 182-186
(2023).
\357\ Some studies have found that a majority of clinicians and
patients do not prefer audio-only telehealth to in-person care,
implying that many of the benefits tied to telehealth are
specifically for telehealth with video. For example:
Lori Uscher-Pines, Lauren E. Riedel, Ateev Mehrotra, Sherri
Rose, Alisa B. Busch, & Haiden A. Huskamp, Many Clinicians Implement
Digital Equity Strategies to Treat Opioid Use Disorder: Study
Examines Clinicians' Use of Telehealth and Digital Equity Strategies
to Treat Opioid Use Disorder, 42(2) Health Affairs pp. 182-186
(2023); Gillian K. SteelFisher, Caitlin L. McMurtry, Hannah
Caporello, Keri M. Lubell, Lisa M. Koonin, Antonio J. Neri, Eran N.
Ben-Porath, Ateev Mehrotra, Ericka McGowan, Laura C. Espino, &
Michael L. Barnett, Video Telemedicine Experiences in COVID-19 Were
Positive, but Physicians and Patients Prefer In-Person Care for The
Future: Study Examines Patient and Physician Opinion of Telemedicine
Experiences During COVID-19, 42(4) Health Affairs pp. 575-584
(2023).
---------------------------------------------------------------------------
The COVID-19 pandemic sparked increased demand for health care
services, including behavioral health services delivered remotely.
While in February 2020 telehealth claims accounted for only around 1
percent of claims pertaining to mental health or substance use disorder
benefits, by April 2020 they accounted for over 50 percent of the
claims and still accounted for approximately 40 percent of claims at
the end of 2021.\358\ The expansion was significantly aided by the
Departments issuing guidance providing time-limited Federal
flexibilities for private health plans to expand access to telehealth,
which specifically included coverage of treatment for mental health
conditions and substance use disorders. These Federal flexibilities
included ``allowing midyear plan design changes to increase telehealth
coverage,'' ``allowing certain employers to offer coverage only for
services provided via telehealth and other remote care services,'' and
``allowing telehealth coverage pre-deductible'' for catastrophic plans
and for health savings account-qualified high deductible health
plans.\359\
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\358\ Norah Mulvaney-Day, David Dean, Jr., Kay Miller, & Jessica
Camacho-Cook, Trends in Use of Telehealth for Behavioral Health Care
During the COVID-19 Pandemic: Considerations for Payers and
Employers, 36(7) American Journal of Health Promotion pp. 1237-1241
(2022).
\359\ Congressional Research Service, Federal Telehealth
Flexibilities in Private Health Insurance During the COVID-19 Public
Health Emergency: In Brief (2023), https://crsreports.congress.gov/product/pdf/R/R47424.
---------------------------------------------------------------------------
While the COVID-19 PHE ended on May 11, 2023,\360\ many of the
telehealth flexibilities it allowed were extended under the CAA, 2023
through December 31, 2024.\361\ Additionally, Medicare has permanently
adopted policies allowing patients to receive behavioral and mental
care through telehealth within their homes,\362\ and a survey of States
indicated that, for Medicaid, ``all or most expansions of behavior
health providers and/or services allowed for telehealth would be
maintained after the public emergency.'' \363\ For private plans,
access to telehealth for mental health and substance use disorder care
will depend on plan design.
---------------------------------------------------------------------------
\360\ Executive Office of the President, Statement of
Administration Policy (Jan. 30, 2023), https://www.whitehouse.gov/wp-content/uploads/2023/01/SAP-H.R.-382-H.J.-Res.-7.pdf.
\361\ Public Law 117-328 (Dec. 29, 2022).
\362\ HHS, Telehealth Policy Changes After the COVID-19 Public
Health Emergency (Dec. 19, 2023), https://telehealth.hhs.gov/providers/telehealth-policy/policy-changes-after-the-covid-19-public-health-emergency#temporary-medicare-changes-through-december-31,-2024.
\363\ Madeline Guth, Telehealth Delivery of Behavioral Health
Care in Medicaid: Findings from a Survey of State Medicaid Programs,
KFF (Jan. 2023), https://www.kff.org/mental-health/issue-brief/telehealth-delivery-of-behavioral-health-care-in-medicaid-findings-from-a-survey-of-state-medicaid-programs/.
---------------------------------------------------------------------------
By nature, telehealth makes accessing treatment for mental health
conditions and substance use disorders more convenient for many
patients, particularly for those who do not have the ability, time, or
means to travel to an appointment or who need care from a provider that
specializes in a particular treatment that is not available in their
geographic area. Despite observing similar levels of mental illness and
psychiatric disorders in urban residents, one research paper remarked
that rural residents face ``challenges accessing care systems due to
geographic isolation, reduced access to and engagement with appropriate
providers, lower socioeconomic status, generally lower levels of
educational attainment, as well as reluctance to seek help due to
discrimination and stigma.'' \364\ An analysis of 2021 outpatient
visits reported that 55 percent of patients in rural areas relied on
telehealth for outpatient mental health and substance use services
compared to 35 percent in urban areas.\365\ Given that 73.3 million
people in the United States live in a geographic area designated as a
mental health professional shortage area, of which 24.4 million resided
in a rural area, telehealth is likely to continue to be a necessary
means to offset provider network limitations in these areas.\366\
---------------------------------------------------------------------------
\364\ Dawn A. Morales, Crystal L. Barksdale, & Andrea C. Beckel-
Mitchener, A Call to Action to Address Rural Mental Health
Disparities, 4 Journal of Clinical and Translational Science pp.
463-467 (2020).
\365\ Justin Lo, Matthew Rae, Krutika Amin, Cynthia Cox, Nirmita
Panchal, & Benjamin F. Miller, Telehealth Has Played an Outsized
Role Meeting Mental Health Needs During the COVID-19 Pandemic, KFF
Issue Brief (Mar. 15, 2022), https://www.kff.org/mental-health/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/.
\366\ HHS, Health Resources and Services Administration, Bureau
of Health Workforce, Designated Health Professional Shortage Areas:
Second Quarter of Fiscal year 2024 Designated HPSA Quarterly Summary
(Mar. 2024), https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport.
---------------------------------------------------------------------------
As with rural populations, many underserved racial, ethnic,
cultural minorities, and individuals with disabilities face barriers to
receiving treatment for mental health conditions and substance use
disorders. These barriers may include language, stigma, or finding a
therapist that understands their situation. While important in many
areas of health care, many underserved populations prefer to receive
treatment for mental health conditions and substance use disorders
specifically from a provider with an understanding of their cultural
background. A 2022 study found that there was an overall increase in
the use and willingness to use video telehealth during the pandemic,
with the highest levels of increase being seen among Black adults and
adults with lower educational attainment. Certain communities became
more willing to use telehealth, since many patients had their first
telehealth experience with their trusted health care provider during
the pandemic and their positive
[[Page 77682]]
experiences eliminated their concerns with telehealth, such as concerns
related to privacy or to the level of engagement of a provider through
telehealth.\367\
---------------------------------------------------------------------------
\367\ Shira H. Fischer, Zachary Predmore, Elizabeth Roth, Lori
Uscher-Pines, Matthew Baird, & Joshua Breslau, Use of and
Willingness to Use Video Telehealth Through the COVID-19 Pandemic:
Study Examines the Use of and the Willingness to Use Video
Telehealth During the COVID-19 Pandemic, 41(11) Health Affairs pp.
1645-1651 (2022).
---------------------------------------------------------------------------
In addition to expanding access, telehealth has also been found to
improve the retention of patients receiving mental health and substance
use disorder care. A 2023 retrospective cohort study of treatment-
seeking patients enrolled in a substance use disorder treatment program
in Ohio found that ``[p]atients who received services through
telehealth with video in the initial 14 days of diagnosis had a lower
hazard of dropout, compared to patients receiving solely in-person
services.'' Moreover, when compared to in-person care, patients
receiving services through either video or telephone were more likely
to have higher treatment engagement, which was defined as ``initiating
treatment and completing at least two treatment visits within 34 days
of the initiation visit.'' \368\
---------------------------------------------------------------------------
\368\ Danielle M. Gainer, Celeste Wong, Jared A. Embree, Nina
Sardesh, Amna Amin, & Natalie Lester, Effects of Telehealth on
Dropout and Retention in Care Among Treatment-Seeking Individuals
with Substance Use Disorder: A Retrospective Cohort Study, 58(4)
Substance Use & Misuse pp. 481-490 (2023).
---------------------------------------------------------------------------
Research has demonstrated that telehealth for medical appointments
saves patients time and money.\369\ A 2021 study focused specifically
on the travel cost savings associated with using tele-mental health
services in a pediatric outpatient psychology clinic. The study found
that patients experienced a median of 132 miles saved by not travelling
to an in-person session, which translated to a median 3.5 hours saved
not travelling to an in-person session and a median cost savings of $22
per session over the course of the telehealth treatment.\370\ The
benefits of telehealth are particularly relevant for mental health and
substance use disorder treatment because treatment often requires
frequent sessions or appointments.
---------------------------------------------------------------------------
\369\ Studies finding that telehealth has decreased travel
expenses include: Josephine C. Jacobs, Jiaqi Hu, Cindie Slightam,
Amy Gregory, & Donna M. Zulman, Virtual Savings: Patient-Reported
Time and Money Savings from a VA National Telehealth Tablet
Initiative, 26(8) Telemedicine and e-Health 1178-1183 (2020); Navjit
W. Dullet, Estella M. Geraghty, Taylor Kaufman, Jamie L. Kissee,
Jesse King, Madan Dharmar, Anthony C. Smith, & James P. Marci,
Impact of a University-Based Outpatient Telemedicine Program on Time
Savings, Travel Costs, and Environmental Pollutants, 20(4) Value in
Health pp. 542-546 (2017).
\370\ William S. Frye, Lauren Gardner, & Jazmine S. Mateus,
Utilising Telemental Health in a Paediatric Outpatient Psychology
Clinic: Therapeutic Alliance and Outcomes, 22(2) Counselling and
Psychotherapy Research pp. 322-330 (2022).
---------------------------------------------------------------------------
It is important to note that, while telehealth may improve access,
it is not a perfect solution. For instance, it has limitations in
certain segments of the population, such as individuals with limited
English proficiency \371\ or without access to computers or the
internet.\372\ Additionally, many individuals may prefer in-person care
over telehealth. A survey published in 2023 showed that while patients
have differing preferences for in-person care or telehealth, many are
not able to find care that fits their preferences. Of the respondents
receiving therapy, less than half were able to select whether they
received in-person care or telehealth.\373\ Further, interviews
conducted with respondents found that while many patients appreciate
the convenience of telehealth, others expressed concern about the
rapport between the patient and provider during telehealth. The authors
cautioned that while telehealth is an attractive way to expand access
to mental health care for much of the population, telehealth may not
alone be sufficient for all individuals or conditions.\374\ Therefore,
while telehealth may contribute significantly to the alleviation of
mental health and substance use disorder provider shortages, it may not
be a viable alternative for everyone.
---------------------------------------------------------------------------
\371\ Jorge A. Rodriguez, Altaf Saadi, Lee H. Schwamm, David W.
Bates, & Lipika Sama, Disparities in Telehealth Use Among California
Patients with Limited English Proficiency, 40(3) Health Affairs pp.
487-495 (2021).
\372\ United States Census Bureau, Computer and internet Use in
the United States: 2018 (2021), https://www.census.gov/newsroom/press-releases/2021/computer-internet-use.html.
\373\ The survey found that 30.6 percent of respondents were
working with providers who only offered in-person care or
telehealth, while 24.4 percent of respondents were working with
providers who offered both modalities but chose for the patient.
\374\ Jessica Sousa, Andrew Smith, Jessica Richard, Maya
Rabinowitz, Pushpa Raja, Ateev Mehrotra, Alisa B. Busch, Haiden A.
Huskamp, & Lori Uscher-Pines, Choosing or Losing in Behavioral
Health: A Study of Patients' Experiences Selecting Telehealth Versus
In-Person Care, 42(9) Health Affairs pp 1275-1282 (2023).
---------------------------------------------------------------------------
8.4. New Regulations (26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR
146.137 and 146.180)
These final rules set forth content 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 and applicable State authorities upon request. Under
these final rules, the Departments outlined the elements that a
comparative analysis must include for each NQTL (in addition to the
requirements to include a written list of all NQTLs imposed under the
plan or coverage). They include, as described in more detail earlier in
this preamble:
A description of the NQTL,
Identification and definition of the factors used to
design or apply the NQTL,
A description of how factors are used in the design and
application of the NQTL,
A demonstration of comparability and stringency, as
written,
A demonstration of comparability and stringency, in
operation, and
Findings and conclusions.
However, because these elements are already required under the CAA,
2021, the cost of these final rules is more limited than the full cost
of generating a comparative analysis. For instance, plans and issuers
are already required under the CAA, 2021 to provide a description of
the specific plan or coverage terms or other relevant terms regarding
the NQTLs that applies to such plan or coverage, and a description of
all the mental health and substance use disorder benefits and medical
or surgical benefits to which each such term applies in each respective
benefit classification.\375\ Similarly, plans and issuers are already
required to identify the factors used to determine that the NQTLs will
apply to mental health or substance use disorder benefits and medical
or surgical benefits,\376\ and the evidentiary standards used for the
factors identified, when applicable, provided that every 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 or surgical benefits.\377\
---------------------------------------------------------------------------
\375\ Code section 9812(a)(8)(A)(i), ERISA section
712(a)(8)(A)(i), and PHS Act section 2726(a)(8)(A)(i).
\376\ Code section 9812(a)(8)(A)(ii), ERISA section
712(a)(8)(A)(ii), and PHS Act section 2726(a)(8)(A)(ii).
\377\ Code section 9812(a)(8)(A)(iii), ERISA section
712(a)(8)(A)(iii), and PHS Act section 2726(a)(8)(A)(iii).
---------------------------------------------------------------------------
[[Page 77683]]
Moreover, the CAA, 2021 requires that the comparative analyses
demonstrate that the processes, strategies, evidentiary standards, and
other factors used to apply NQTLs to mental health and 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 or surgical benefits in the benefits classification,\378\ as
well as 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.\379\
---------------------------------------------------------------------------
\378\ Code section 9812(a)(8)(A)(iv), ERISA section
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
\379\ Code section 9812(a)(8)(A)(v), ERISA section
712(a)(8)(A)(v), and PHS Act section 2726(a)(8)(A)(v).
---------------------------------------------------------------------------
In their comparative analyses, plans and issuers must describe each
NQTL and identify and define all the factors and evidentiary standards
used to design or apply the NQTL. The plan or issuer also must describe
how the factors identified are used in the design and application of
the NQTL, and evaluate whether 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 with respect to medical/
surgical benefits, both as written and in operation. The explanation of
how the plan or issuer evaluates compliance, in operation, with MHPAEA
must identify the relevant data collected and evaluated, and document
the outcomes that resulted from the application of the NQTL to mental
health or substance use disorder benefits and medical/surgical
benefits. In limited circumstances where relevant data is temporarily
unavailable for a newly imposed NQTL, the comparative analysis must
include a detailed explanation of the lack of relevant data, the basis
for the plan's or issuer's conclusion that there is a lack of relevant
data, and when and how the data will become available and be collected
and analyzed. Additionally, in rare instances where no data exists that
can reasonably assess any relevant impact of an NQTL on relevant
outcomes related to access to mental health and substance use disorder
benefits and medical/surgical benefits, the plan or issuer must provide
a reasoned justification as to the basis for the conclusion that there
are no data that can reasonably assess the NQTL's impact, an
explanation of why the nature of the NQTL prevents the plan or issuer
from reasonably measuring its impact, an explanation of what data was
considered and rejected, and documentation of any additional safeguards
or protocols used to ensure that the NQTL complies with MHPAEA. In the
instances where there is a temporary data lag for a newly imposed NQTL
or no data exists that can reasonably assess any relevant impact of an
NQTL, providing this justification for the temporary data lag is likely
to be less expensive than the estimated burden for doing an analysis
when there is data. However, as explained earlier in this preamble, the
Departments are of the view that nearly all NQTLs will have some
relevant data to collect and evaluate; therefore, the Departments
estimate the burden as if every plan and issuer performs the data
analysis.
These final rules require additional specificity with regard to the
findings and conclusion of the comparative analysis. While these final
rules provide specificity for how a plan or issuer must comply with the
comparative analysis requirements, they are primarily providing
additional clarification and requirements with respect to the statutory
content elements of a comparative analysis outlined in the CAA, 2021,
so that plans and issuers can perform and document sufficient
comparative analyses.
Additionally, for ERISA plans, these final rules also require the
comparative analysis to include a certification by one or more named
fiduciaries that they have engaged in a prudent process to select one
or more qualified service providers to perform and document a
comparative analysis in connection with the imposition of any NQTLs
that apply to mental health and substance use disorder benefits under
the plan in accordance with applicable law and regulations, and have
satisfied their duty to monitor those service providers as required
under part 4 of ERISA with respect to the performance and documentation
of such comparative analysis. The cost to provide the certification is
included in the cost estimates to prepare the comparative analysis.
In the proposed rules, the Departments estimated that, on average,
plans would need to analyze four separate NQTLs and issuers would need
to analyze eight NQTLs to satisfy the comparative analysis
requirements.\380\ The Departments further estimated that 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.
Once the comparative analyses are performed and documented, the
Departments noted that plans and 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, as well as medical/surgical benefits.
In subsequent years, the Departments estimated that plans and issuers
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.
---------------------------------------------------------------------------
\380\ The Departments generally identify a unique NQTL based on
whether a specific plan or issuer has defined the NQTL using
different factors or evidentiary standards than other NQTLs. For
example, if a plan applies an identical prior authorization
requirement NQTL to four different benefit classifications, or to
four different benefit package options in the same plan, the
Departments would consider the NQTL as just one ``unique'' NQTL,
even though it is technically four separate NQTLs. When a
comparative analysis request is sent to an issuer with identical
NQTLs that apply to many fully insured plans, the Departments
similarly count the NQTL as one unique NQTL, even though there are
technically many separate NQTLs for the different plans. The
Departments acknowledge that if they instead counted each NQTL
separately by benefit classification, plan, and product,
irrespective of whether the NQTLs are administered in the same way
in these different contexts, then the number of NQTLs would be
substantially larger. This distinction may explain why the
Departments' estimate of NQTLs was lower than that of commenters.
---------------------------------------------------------------------------
In response to commenters' concerns that the Departments
underestimated the number of NQTLs that each plan or issuer would need
to provide comparative analyses for, and that plans and issuers would
on average have the same number of NQTLs, the Department have revised
their assumptions to 10 NQTLs for both plans and issuers. While one
commenter suggested the average number of NQTLs should be more than 15
at a minimum, and another commenter noted that the proposal and
guidance referenced at least 17 NQTLs, the Departments note that the
number of NQTLs vary by issuer and plans and that most will not
incorporate every NQTL listed in the proposal and the guidance (while
some plans and issuers might incorporate others not listed). Taking
into account the Departments' experience and comments received, the
Departments assume 10 NQTLs but present a sensitivity analysis using 15
NQTLs.
[[Page 77684]]
The Departments assume that the incremental costs to collect the
data and review and revise the comparative analyses will require 60
hours per NQTL in the first year and 12 hours per NQTL in subsequent
years. For plan sponsors that receive a generic comparative analysis
from a TPA that will require customizing to suit the plan's specific
needs, the Departments assume that it will take 30 hours per NQTL in
the first year and 6 hours per NQTL in subsequent years. While plans
and issuers can use other professionals to fulfill their requirements,
for purposes of developing the wage estimate, the Departments assume
that it will take a team of data analysts, actuaries, and attorneys to
collect the data and prepare the comparative analyses, and have
estimated a composite wage rate of $167.48.\381\ See Table 5 for
calculations and burden totals.
---------------------------------------------------------------------------
\381\ The wage rate of an attorney, actuary, and data analyst
is, respectively, $165.71, $177.11, and $159.61. (Internal DOL
calculation based on 2024 labor cost data. For a description of
DOL's methodology for calculating wage rates, see EBSA, Labor Cost
Inputs Used in the Employee Benefits Security Administration, Office
of Policy and Research's Regulatory Impact Analyses and Paperwork
Reduction Act Burden Calculations (June 2019), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.) The composite wage rate is
estimated in the following manner: [$165.71 x (1 / 3) + $159.61 x (1
/ 3) x $177.61 x (1 / 3) = $167.48].
---------------------------------------------------------------------------
The Departments conducted a sensitivity analysis of the assumption
that plans and issuers would each analyze 10 NQTLs. If the Departments
assume that plans and issuers analyze 15 NQTLs, the cost burden would
increase by $328.1 million in the first year and $65.6 million in the
subsequent years, resulting in a 3-year average cost increase of $153.1
million.
Table 5--Incremental Cost To Fulfill the Data Requirements and Prepare the Comparative Analyses
----------------------------------------------------------------------------------------------------------------
Number of
hours per
Number of Number of NQTL for Total hour Hourly
entities NQTLs per data and burden wage Cost
entity comparative
analysis
(A) (B) (C) (A x B x C) (D) (A x B x C x D)
----------------------------------------------------------------------------------------------------------------
First Year
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance 1,467 10 60 880,200 $167.48 $147,415,896
company/State combinations)..
TPAs.......................... 205 10 60 123,000 167.48 20,600,040
Self-funded plans with more 709 10 60 425,400 167.48 71,245,992
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded plans with more 4,076 10 30 1,222,800 167.48 204,794,544
than 500 participants that
will receive generic
comparative analyses from
TPAs or service providers,
and will then customize it...
Self-funded non-Federal 505 10 60 303,000 167.48 50,746,440
governmental plans with more
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded non-Federal 2,906 10 30 871,800 167.48 146,009,064
governmental plans with more
than 500 participants that
will initially receive
generic comparative analyses
from TPAs or service
providers, and will then
customize it.................
Plan MEWAs that are not fully 132 10 60 79,200 167.48 13,264,416
insured......................
Non-plan MEWAs that are not 21 10 60 12,600 167.48 2,110,248
fully insured................
---------------------------------------------------------------------------------
First-year Total.......... 10,021 ........... ........... 3,918,000 ........ 656,186,640
----------------------------------------------------------------------------------------------------------------
Subsequent Years
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance 1,467 10 12 176,040 167.48 29,483,179
company/State combinations)..
TPAs.......................... 205 10 12 24,600 167.48 4,120,008
Self-funded plans with more 709 10 12 85,080 167.48 14,249,198
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded plans with more 4,076 10 6 244,560 167.48 40,958,909
than 500 participants that
will receive generic
comparative analyses from
TPAs or service providers,
and will then customize it...
Self-funded non-Federal 505 10 12 60,600 167.48 10,149,288
governmental plans with more
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded non-Federal 2,906 10 6 174,360 167.48 29,201,813
governmental plans with more
than 500 participants that
will initially receive
generic comparative analyses
from TPAs or service
providers, and will then
customize it.................
Plan MEWAs that are not fully 132 10 12 15,840 167.48 2,652,883
insured......................
Non-plan MEWAs that are not 21 10 6 2,520 167.48 422,050
fully insured................
---------------------------------------------------------------------------------
Subsequent Years Total.... 10,021 ........... ........... 783,600 ........ 131,237,328
---------------------------------------------------------------------------------
Total (3-year average) 10,021 ........... ........... 1,828,400 ........ 306,220,432
----------------------------------------------------------------------------------------------------------------
Additionally, plans and issuers must make the comparative analyses
and other applicable information required by the CAA, 2021 available
upon request to participants, beneficiaries, and enrollees in all non-
grandfathered group health plans and non-grandfathered group or
individual health insurance coverage (including a provider or other
person acting as a participant's, beneficiary's, or enrollee's
authorized representative) in connection with an adverse benefit
determination, as well as to participants and beneficiaries in plans
subject to ERISA. The Departments estimate that on average each plan or
issuer will receive one request annually and that plans and issuers
will annually incur a burden of 5 minutes for a clerical worker to
prepare and send the comparative analyses to each requesting
participant or beneficiary. The Departments received comments
suggesting that this
[[Page 77685]]
underestimated the demand for these analyses as well as the cost to
produce them. However, after reviewing data on the number of appealed
mental health or substance use disorder claims per year, which serves
as a proxy for when participants or beneficiaries would request an
analysis, the Departments are of the view that this estimate is
appropriate. Moreover, because plans and issuers are already
responsible for preparing these analyses, the only cost associated with
providing them are the clerical ones outlined earlier in this preamble.
See Table 6 for calculations and burdens totaling the cost to prepare
the analysis.\382\
---------------------------------------------------------------------------
\382\ In Table 6, the number of ERISA-covered group health plans
is calculated in the following manner: 410,581 ERISA-covered group
health plans with 50 or more participants + 1,718,935 ERISA-covered
fully insured, non-grandfathered plans with less than 50
participants = 2,129,516.
Table 6--Costs To Prepare the Comparative Analysis Upon Participant Request
----------------------------------------------------------------------------------------------------------------
Number of Number of
Number of NQTLs per hours per Total hour Hourly Cost
entities entity NQTL burden wage
(A) (B) (C) (A x B x C) (D) (A x B x C x D)
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance 1,467 1 0.0833 122 $65.99 $8,051
company/State combinations)..
ERISA-covered group health 2,129,516 1 0.0833 177,460 65.99 11,710,585
plans........................
Non-Federal governmental plans 90,887 1 0.0833 7,574 65.99 499,808
Plan MEWAs that are not fully 132 1 0.0833 11 65.99 726
insured......................
Non-plan MEWAs that are not 21 1 0.0833 2 65.99 132
fully insured................
---------------------------------------------------------------------------------
Annual Total.............. 2,222,023 ........... ........... 185,169 ........ 12,219,302
----------------------------------------------------------------------------------------------------------------
The Departments further assume that 58.3 percent of requests will
be delivered electronically, resulting in a de minimis cost.\383\ The
remaining 41.7 percent of requests will be mailed, at a cost of $2.79
each.\384\ See Table 7 for calculations and burden totaling the cost to
distribute the analysis.
---------------------------------------------------------------------------
\383\ According to data from the National Telecommunications and
Information Agency (NTIA), 37.4 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 31.4 percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 44.1 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 26.9 percent receiving
electronic disclosure outside of work). Combining the 31.4 percent
who will receive electronic disclosure at work with the 26.9 percent
who will receive electronic disclosure outside of work produces a
total of 58.3 percent who will receive electronic disclosure
overall. See Quantria Strategies, Improving Outcomes with Electronic
Delivery of Retirement Plan Documents (June 2015), https://www.sparkinstitute.org/content-files/improving_outcomes_with_electronic_delivery_of_retirement_plan_documents.pdf. See also Pew Research Center, 51% of U.S. Adults Bank
Online (Aug. 2013), https://www.pewresearch.org/internet/wp-content/uploads/sites/9/media/Files/Reports/2013/PIP_OnlineBanking.pdf. See
also NTIA, NTIA Data Explorer (June 2024), https://www.ntia.gov/data/explorer.
\384\ The postage for a first-class mail large envelope is $2.04
and the material cost is $0.05 per page. Thus, $2.04 + ($0.05 x 15
pages) = $2.79.
Table 7--Costs To Distribute the Comparative Analysis Upon Participant or Beneficiary Request
----------------------------------------------------------------------------------------------------------------
Paper and
Number of Estimated printing cost Mailing Cost
entities page length (per page) cost
(A) (B) (C) (D) [(A x B x C) + (A x D)]
x 41.7 percent
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance company/ 1,467 15 $0.05 $2.04 $1,603
State combinations)..............
ERISA-covered Group Health Plans.. 2,129,516 15 0.05 2.04 2,326,581
Non-Federal Governmental Plans.... 90,887 15 0.05 2.04 105,741
Plan MEWAs that are not fully 132 15 0.05 2.04 144
insured..........................
Non-plan MEWAs that are not fully 21 15 0.05 2.04 23
insured..........................
-----------------------------------------------------------------------------
Annual Total.................. 2,222,023 ............ .............. ........ 2,585,169
----------------------------------------------------------------------------------------------------------------
[[Page 77686]]
Finally, these final rules require that group health plans and
health insurance issuers offering group or individual health insurance
coverage must make comparative analyses available upon request to the
Departments or an applicable State authority. The CAA, 2021 requires
the Departments to collect no fewer than 20 comparative analyses per
year, but it also provides that the Departments 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 Departments determine appropriate. Based on prior
experience and current funding, DOL and HHS expect to each request 20
comparative analyses each year. To provide the Departments with their
comparative analyses and associated documentation, the Departments
estimate, based on internal discussion, that it will take a total of 5
hours for plans, with 1 hour for a general or operations manager and 4
hours for a business operations specialist. See Table 8 for
calculations and burden totals.
Table 8--Costs of Providing Comparative Analyses for Audits
----------------------------------------------------------------------------------------------------------------
Number of Hour burden Total hour Hourly
entities per entity burden wage Cost
(A) (B) (A x B) (C) (A x B x C)
----------------------------------------------------------------------------------------------------------------
General Operations Manager (Requested by HHS).. 20 1 20 $137.67 $2,753
Business Operations Specialist (Requested by 20 4 80 114.36 9,149
HHS)..........................................
General Operations Manager (Requested by DOL).. 20 1 20 137.67 2,753
Business Operations Specialist (Requested by 20 4 80 114.36 9,149
DOL)..........................................
----------------------------------------------------------------
Total...................................... 40 ........... 200 ........ 23,804
----------------------------------------------------------------------------------------------------------------
In the first year, group health plans and issuers will need time to
familiarize themselves with these final rules to ensure that their
comparative analyses comply with all applicable requirements. The
Departments assume that on average it will require 6.5 hours for an
attorney to review these final rules.\385\ See Table 9 for calculations
and burden totals.
---------------------------------------------------------------------------
\385\ The reading time is calculated based on an average 250
words per minute reading rate.
Table 9--Costs for Rule Familiarization
----------------------------------------------------------------------------------------------------------------
Number of
Number of NQTLs per Hour burden Total hour Hourly Cost
entities entity per entity burden wage
(A) (B) (C) (A x B x C) (D) (A x B x C x D)
----------------------------------------------------------------------------------------------------------------
First Year
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance 1,467 1 6.5 9,536 $165.71 $1,580,211
company/State combinations).
TPAs......................... 205 1 6.5 1,333 165.71 220,891
Self-funded plans with more 709 1 6.5 4,609 165.71 763,757
than 500 participants that
will conduct the comparative
analysis themselves.........
Self-funded plans with more 4,076 1 6.5 26,494 165.71 4,390,321
than 500 participants that
will receive generic
comparative analyses from
TPAs or service providers,
and will then customize it..
Self-funded non-Federal 505 1 6.5 3,283 165.71 544,026
governmental plans with more
than 500 participants that
will conduct the comparative
analysis themselves.........
Self-funded non-Federal 2,906 1 6.5 18,889 165.71 3,130,096
governmental plans with more
than 500 participants that
will initially receive
generic comparative analyses
from TPAs or service
providers, and will then
customize it................
Plan MEWAs that are not fully 132 1 6.5 858 165.71 142,179
insured.....................
Non-plan MEWAs that are not 21 1 6.5 137 165.71 22,702
fully insured...............
----------------------------------------------------------------------------------
First-year Total......... 10,021 ........... ........... 65,139 ......... 10,794,184
----------------------------------------------------------------------------------------------------------------
According to the 2022 National Health Expenditure Data, the total
contribution of private employers to health insurance premiums is
$592.2 billion. The total contribution of State and local employers to
health insurance premiums is $194.5 billion.\386\ The total health
expenditure on the individual market is $93.9 billion.\387\ In the
first year, the cost to comply with these final rules is estimated to
be approximately $681.8 million,\388\ which represents 0.08 percent of
total premiums in these markets. In subsequent years, the cost to
comply with these final rules is estimated to be approximately $146.1
million,\389\ which represents 0.02
[[Page 77687]]
percent of total premiums in these markets.
---------------------------------------------------------------------------
\386\ CMS, National Health Expenditure Data, NHE Tables--Table
24, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalhealthaccountshistorical.
\387\ CMS, National Health Expenditure Data, NHE Tables--Table
21, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalhealthaccountshistorical.
\388\ The cost is estimated as follows: $656.2 million for
collecting the data and preparing the comparative analyses + $10.8
million for reviewing the final rules and amendments + $12.2 million
to prepare the comparative analyses upon request of participants and
beneficiaries + $2.6 million to distribute the comparative analyses
to participants and beneficiaries + $0.02 million for audit of
comparative analyses = $681.8 million.
\389\ The cost is estimated as follows: $131.2 million for
collecting the data and preparing the comparative analyses + $12.2
million for preparing the comparative analyses upon request of
participants and beneficiaries + $2.6 million to distribute the
comparative analyses to participants and beneficiaries + $0.02
million for audit of comparative analyses = $146.1 million.
---------------------------------------------------------------------------
In the proposed rules, HHS assumed 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 offered mental health and substance use disorder benefits,
but that many of these plans might not be complying with MHPAEA. HHS
assumed that plans would incur costs to come into compliance and noted
that, in particular, some plans might 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. HHS also noted that plans that have
opted out of requirements under MHPAEA would also need to conduct NQTL
comparative analyses if they were not already doing so. HHS solicited
comments on the potential costs to these plans to come into compliance
with MHPAEA. Although the Departments received comments on the
potential underestimation of costs related to NQTL comparative analysis
requirements (refer to section IV.8.1 of this regulatory impact
analysis for further discussion), HHS did not receive any comments
specific to the costs associated with coming into compliance for self-
funded non-Federal governmental plans. As such, HHS is unable to
estimate the 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 are expected to vary from plan to plan.
HHS estimates that the regulatory amendments to implement a
provision of the CAA, 2023 that sunsets the election option for
sponsors of self-funded non-Federal governmental plans to opt out of
requirements under MHPAEA eliminates the need for sponsors to submit a
notice to the Federal Government regarding their plan's opt-out
election, as long as the sponsors do not elect to permissibly opt out
of other requirements. HHS estimates that sponsors of 185 plans will no
longer submit a notice to the Federal Government regarding their plan's
opt-out election. This is estimated to generate a total cost savings of
approximately $11,783 for plans (as discussed later in section V.2.5 of
the Paperwork Reduction Act analysis for HHS), and cost savings of
approximately $5,200 for the Federal Government as HHS will no longer
have to process the opt-out notices previously submitted by these
plans.
8.5. Illustration of Cost Increases for Plans and Issuers
As discussed in the benefits section, the Departments estimate that
the final rules will increase access and subsequently the utilization
or frequency of use of behavioral health services. The Departments also
recognize that increased service utilization will likely increase costs
for plans. These costs will likely differ significantly by the type of
condition and the type of treatment. The analysis that follows provides
an illustration of potential increases in costs for plans associated
with depression and substance use disorder treatments.
Increasing access to mental health services is estimated to result
in a significant reduction in suicides, as enumerated in section
IV.7.2. While many mental health conditions and substance use disorders
may increase the risk of suicide, suicide itself is an outcome that may
or may not be tied directly to mental health conditions or substance
use disorders. As such, it is difficult to directly tie the decrease in
suicides discussed in section IV.7.2 to increased costs.
However, the most common mental health condition among those who
attempt suicide, as well as one of the most highly prevalent mental
health conditions in the United States, is depressive
disorder.390 391 Research indicates that individuals with
major depressive disorder are at an elevated risk of suicide and that
approximately two-thirds have contemplated suicide.\392\ Furthermore,
major depressive disorder was the most common comorbid condition in a
study of U.S. suicides, followed by substance use disorder.\393\
Individuals with major depressive disorder and another comorbid
condition (such as a substance use disorder or anxiety disorder) are at
even greater risk of suicide.\394\ Data from the 2022 NSDUH indicates
that approximately 8 percent of individuals who have private health
insurance experienced a major depressive episode in the past year, of
whom 64 percent received treatment for depression.\395\
---------------------------------------------------------------------------
\390\ Jan Fawcett, The Neurological Basis of Suicide (2012).
\391\ Ronald C. Kessler, Patricia Berglund, Olga Demler, Robert
Jin, Kathleen R. Merikangas, & Ellen E. Walters, Lifetime Prevalence
and Age-of-Onset Distributions of DSM-IV Disorders in the National
Comorbidity Survey Replication, 62(6) Arch Gen Psychiatry pp. 593-
602 (2005).
\392\ Navneet Bains & Sara Abdijadid, Major Depressive Disorder
(2023).
\393\ Ian Rockett, Rockett, Ian RH, Shuhui Wang, Yinjuan Lian, &
Steven Stack, Suicide[hyphen]Associated Comorbidity Among US Males
and Females: A Multiple Cause-of-Death Analysis, 13(5) Injury
Prevention pp. 311-315 (2007).
\394\ Navneet Bains & Sara Abdijadid, Major Depressive Disorder
(2023).
\395\ SAMHSA, 2022 National Survey on Drug Use and Health (Nov.
2023), https://www.samhsa.gov/data/report/2022-nsduh-detailed-tables.
Table 10--Number of People Diagnosed With a Major Depressive Episode in
the Past Year
------------------------------------------------------------------------
2021 2022
------------------------------------------------------------------------
Total:
All Ages...................... 21,553,000 22,475,000
With Private Health Insurance. 11,750,000 12,551,000
Receiving Treatment for
Depression:
All Ages...................... 12,932,000 14,088,000
With Private Health Insurance. 7,540,000 8,240,000
Not Receiving Treatment for
Depression:
All Ages...................... 8,621,000 8,387,000
With Private Health Insurance. 4,210,000 4,311,000
------------------------------------------------------------------------
SAMHSA, 2022 National Survey on Drug Use and Health (Nov. 2023), https://www.samhsa.gov/data/report/2022-nsduh-detailed-tables.
As discussed in Section 6.1.3, MHPAEA has been found to have mixed
effects on the utilization of mental health services. A 2019 study
found that, outside of substance use disorder, MHPAEA was not
associated with an
[[Page 77688]]
increase in new utilization of behavioral healthcare. However, the
authors did find an increase in the average frequency of monthly
outpatient services per user.\396\ Critically, increased frequency of
mental health and OUD treatment utilization have both been associated
with decreasing risks of mortality from suicide and
OUD.397 398
---------------------------------------------------------------------------
\396\ Noah Mulvaney-Day, Brent Gibbons, Shums Alikhan, & Mustafa
Karakus, Mental Health Parity and Addiction Equity Act and the Use
of Outpatient Behavioral Health Services in the United States, 2005-
2016, 109(3) American Journal of Public Health pp. 190-196 (2019).
\397\ Brian K. Ahmedani, Joslyn Westphal, Kirsti Autio, Farah
Elsiss, Edward L. Peterson, Arne Beck, Beth E. Waitzfelder, Rebecca
C. Rossom, Ashli A. Owen-Smith, Frances Lynch, Christine Y. Lu,
Cathrine Frank, Deepak Prabhakar, Jordan M. Braciszewski, Lisa R.
Miller-Matero, Hsueh-Han Yeh, Yong Hu, Riddhi Doshi, Stephen C.
Waring, & Gregory E. Simon, Variation in Patterns of Health Care
Before Suicide: A Population Case-Control Study, 127 Prev Med.
(2019), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6744956/.
\398\ Elizabeth Evans, Libo Li, Jeong Min, David Huang, Darren
Urada, Lei Liu, Yih-Ing Hser, & Bohdan Nosyk, Mortality Among
Individuals Accessing Pharmacological Treatment for Opioid
Dependence in California, 2006--2010, 110(6) Addiction pp. 996-1005
(2015), https://pubmed.ncbi.nlm.nih.gov/25644938/.
---------------------------------------------------------------------------
The 2019 study also found that the average insurer cost for members
receiving treatment increased following the passage of MHPAEA.
According to the study, in September 2015, the last month of data
considered, MHPAEA was associated with an average insurer cost increase
of $16.17 for each member receiving treatment for mental health per
month.\399\
---------------------------------------------------------------------------
\399\ This is calculated by applying the coefficient estimates
found in Table 2 of the study that denote the average monthly
insurer spending per service user. The study includes 129 months of
data, of which 57 are in the post-period. For month 57, the cost is
estimated to be $86.64 absent MHPAEA and $102.81 with the
implementation of MHPAEA. The study estimates that insurer spending
per service user will continue to increase over time. However, this
linear trend was established within the sample. The Department
hesitates to extrapolate the linear trend outside of the sample.
Additionally, the study does not include overall significant or
joint significant tests of this regression. (See Noah Mulvaney-Day,
Brent Gibbons, Shums Alikhan, & Mustafa Karakus, Mental Health
Parity and Addiction Equity Act and the Use of Outpatient Behavioral
Health Services in the United States, 2005-2016, 109(3) American
Journal of Public Health pp. 190-196 (2019).)
---------------------------------------------------------------------------
For the purposes of this analysis, it is helpful to consider this
measurement in terms of the increased cost per member with depression,
regardless of treatment status. To estimate a per-member cost,
regardless of treatment status, the Departments scaled the estimate by
the proportion of individuals who had a major depressive episode in
2015, with private insurance, and who received treatment for
depression. Applying these assumptions, the Departments estimate that
in 2015, MHPAEA was associated with a $11.15 increase in average
monthly insurer spending per member with depression.\400\
---------------------------------------------------------------------------
\400\ In 2015, 9,257,000 individuals with private insurance had
a major depressive episode, of which 6,381,000 received treatment
for depression. (See SAMHSA, Results from the 2015 National Survey
on Drug use and Health: Detailed Tables (Sept. 2016), https://www.samhsa.gov/data/sites/default/files/NSDUH-DetTabs-2015/NSDUH-DetTabs-2015/NSDUH-DetTabs-2015.pdf.) This represents approximately
69 percent. As such, the Departments estimate the per-member cost
increase as: $16.17 per member receiving treatment x 69 percent of
members with depression receiving treatment = $11.15 per member with
depression (regardless of treatment status).
---------------------------------------------------------------------------
The Departments do not have data on per-member per-month costs
associated with a major depressive illness alone. Based on a 2018
Milliman report, the Departments estimate that the 2015 per-member per-
month behavioral healthcare cost \401\--including behavioral inpatient,
outpatient, professional, and prescription drug costs--was $225.10 for
someone with a serious and persistent mental illness and $116.59 on
average for someone with any mental illness.\402\ Milliman defines a
serious and persistent mental illness as someone treated for bipolar
disorder, major depression, paranoid and other psychotic disorder, or
schizoaffective disorder. As costs to treat bipolar disorder, psychotic
disorder, and schizoaffective disorder are likely higher than costs to
treat major depression, on average, the Departments are of the view
that the per-member per-month costs represent an overestimate for costs
to treat major depression. Similarly, the Departments expect that the
per-member per-month costs to treatment someone with any mental illness
likely represent an underestimate due to factors such as
underdiagnosis, comorbidities, and delayed treatments. Additionally,
the per-member per-month costs may not fully capture indirect costs or
the cost of out-of-network care, further suggesting that the total
costs of adequately treating mental illness are likely higher. As such,
the Departments are of the view that these two measures create a
reasonable range with regard to major depression.
---------------------------------------------------------------------------
\401\ This cost estimate is calculated from costs incurred by
both the participant and the insurer, similar to expenditures used
elsewhere in this analysis, such as the Medical Expenditure Panel
Survey Household Component (MEPS-HC).
\402\ Melek (2018) uses 2015 claims data and apply annual cost
trends to estimate 2017 values. The report states that they use an
annual cost trend of 10 percent to behavioral health care and 12
percent to behavioral prescription costs. For someone with a serious
and persistent mental illness, the report estimates that the per-
member per-month cost was $119.00 for behavioral health care (i.e.
behavioral inpatient, outpatient, professional care) and $159.00 for
behavioral prescriptions, resulting in a total cost of $178.00. The
weighted average per-member per-month cost of having any mental
illness, the report estimates a cost of $55.08 for behavioral health
care and $89.14 for behavioral prescriptions, resulting in a total
of $142.22. Discounting the behavioral health care and behavioral
prescription costs by the respective annual cost trend, results in
an estimate of a per-member per-month cost of $225.10 for someone
with a serious and persistent mental illness and $116.59 on average
for someone with any mental illness. (See Stephen Melek, Douglas
Norris, Jordan Paulus, Katherine Matthews, Alexandra Weaver, &
Stoddard Davenport, Potential Economic Impact of Integrated Medical-
Behavioral Healthcare, Milliman Research Report (Jan. 2018))
---------------------------------------------------------------------------
Based on this analysis, the estimated $11.15 increase in monthly
insurer spending per-member with depression accounts for 5.0 percent of
the per-member per-month costs for someone with a serious and
persistent mental illness or 9.6 percent of the average cost for
someone with any mental illness. In 2021, total expenditures for
private insurance were $981.2 billion, while total expenditures for
private insurance for depression were $21.0 billion.\403\ For
illustrative purposes, if it is assumed that the increase in costs
associated with MHPAEA had accounted for between 5.0 percent and 9.6
percent of private insurance expenditures for depression in 2021, this
would account for between $1.0 billion and $2.0 billion of total
expenditures for private insurance for depression.\404\
---------------------------------------------------------------------------
\403\ Agency for Healthcare Research and Quality, Total
Expenditures ($) in Millions by Condition and Source of Payment,
United States, 2021, Medical Expenditure Panel Survey.
\404\ This is estimated as: $21.02 billion x 5.0 percent (9.6
percent) = $1.0 billion ($2.0 billion).
---------------------------------------------------------------------------
In their estimate of benefits associated with the prevention of
suicide fatalities and reduced mortality from the utilization of OUD
treatments, the Departments assumed that the effect of these final
rules would be approximately 40 percent of the initial impact from
MHPAEA. For consistency, applying this proportion to the estimated
costs, the Departments estimate that these final rules would be
associated with an increase cost for treatment related to depression
for private insurers of between $0.42 billion and $0.80 billion in 2021
dollars or $0.43 billion and $0.84 billion in 2023 dollars.\405\
---------------------------------------------------------------------------
\405\ The estimates in 2023 dollars are estimated using the
Consumer Price Index (CPI) medical care cost.
---------------------------------------------------------------------------
It is important to note that the benefits estimated in section
IV.7.2 and these cost estimates do not necessarily capture the same
segment. The benefits related to more frequent treatment of depression
are more expansive than the estimated benefits in section IV.7.2 that
only focus on suicide prevention. On the other hand, treatment for
other types
[[Page 77689]]
of mental health conditions or substance use disorders may also
contribute to the decreased prevalence of suicides, the cost of which
is not considered in this illustration.
Additionally, the Departments estimate that the final rules will
increase the utilization of substance use disorder services
(specifically, OUD), resulting in significant benefits arising from
decreased mortality related to substance use disorders. These benefits
would arise from approximately 40,000 additional individuals receiving
treatment each year. As recent research indicates that cost of
treatment for OUD is approximately $13,500, the Departments estimate
that the increased service utilization for OUD would result in an
additional cost of approximately $579 million
annually.406 407 408
---------------------------------------------------------------------------
\406\ Mengyao Li, Cora Peterson, Likang Xu, Christina A. Mikosz,
& Feijun Luo, Medical Costs of Substance Use Disorders in the US
Employer-Sponsored Insurance Population, 6(1) JAMA Netw Open (2023),
https://pubmed.ncbi.nlm.nih.gov/36692881/.
\407\ The OUD treatment cost estimate of $11,871 has been
adjusted using the CPI for medical care cost to 2023 dollars. See
Mengyao Li, Cora Peterson, Likang Xu, Christina A. Mikosz, & Feijun
Luo, Medical Costs of Substance Use Disorders in the US Employer-
Sponsored Insurance Population, 6(1) JAMA Netw Open (2023), https://pubmed.ncbi.nlm.nih.gov/36692881/.
\408\ $13,448 OUD treatment cost x 43,054 additional persons
receiving treatment = $578,990,192.
---------------------------------------------------------------------------
9. Transfers
Achieving parity in coverage of mental health and substance use
disorder benefits has the potential to change the spending patterns of
plans and issuers, increase premiums and contributions, 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 final rules will result in:
transfers from plans and issuers to participants,
beneficiaries, and enrollees caused by lower out-of-pocket spending;
transfers from participants, beneficiaries, and enrollees
to plans and issuers caused by higher premiums; and
transfers between primary care providers and mental health
and substance use disorder providers for the treatment of mental health
and substance use disorders resulting from the anticipated shift of
participants, beneficiaries, and enrollees choosing to obtain such
treatment from a specialist instead of a primary care provider.
The following sections are primarily qualitative discussions of
transfers that the Departments expect to occur due to these final
rules. Where possible, the Departments have referenced studies with
quantitative results that help indicate the potential magnitude of
these transfers. The Departments requested comment or data in the
proposal on how large these transfers might be but did not receive any
comments.
9.1. Transfers From Plans and Issuers to Participants, Beneficiaries,
and Enrollees Caused by Lower Out-of-Pocket Spending
As discussed in section IV.7.2 of this regulatory impact analysis,
these final rules are expected to increase access to mental health and
substance use disorder treatments by improving plan and issuer
compliance with the requirements under MHPAEA. This will help ensure
that NQTLs are no more restrictive for mental health and substance use
disorder benefits than the predominant limitations applicable to
substantially all medical/surgical benefits. For individuals who were
previously prevented from accessing care because it was not covered by
their plan or coverage in a manner that violated these final rules,
improved access to treatment is a benefit. However, for individuals who
previously resorted to out-of-network treatment, expanded coverage of
treatment--resulting in more access to in-network providers or
facilities--will result in a transfer from plans and issuers to
participants, beneficiaries, and enrollees.
Currently, it is more common for individuals to rely on out-of-
network care for mental health and substance use disorder treatment
than for medical/surgical treatment. One study found that patients
received out-of-network care 3.5 times more often for behavioral health
clinician office visits than for medical and surgical clinician office
visits (13.4 percent vs. 3.8 percent). Further, the study found that
when comparing specialist care, patients received out-of-network care
8.9 times more often for psychiatrist office visits (15.3 percent vs.
1.7 percent) and 10.6 times more often for psychologist office visits
(18.2 percent vs. 1.7 percent) than for medical and surgical specialist
physicians.\409\
---------------------------------------------------------------------------
\409\ Tami L. Mark & William Parish, Behavioral Health Parity--
Pervasive Disparities in Access to In-Network Care Continue, RTI
International (Apr. 2024), https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf.
---------------------------------------------------------------------------
Receiving out-of-network treatment is costly, and research has
found that mental health parity decreases out-of-pocket spending on
treatment. For example, a 2013 study that examined the impact of the
2001 parity directive in the FEHB Program found that annual out-of-
pocket spending for FEHB enrollees diagnosed with bipolar disorder,
major depression, or adjustment disorder decreased by between $78 and
$86, roughly between 11 percent and 18 percent of average total out-of-
pocket spending for enrollees with one of these diagnoses, as compared
to before the parity directive.\410\
---------------------------------------------------------------------------
\410\ Before the parity directive, average out-of-pocket
spending was $787 for someone with bipolar disorder, $563 for
someone with major depression, and $428 for someone with adjustment
disorder. See Alisa B. Busch, Frank Yoon, Colleen L. Barry, Vanessa
Azzone, Sharon-Lise T. Normand, Howard H. Goldman, & Haiden A.
Huskamp, The Effects of Parity on Mental Health and Substance Use
Disorder Spending and Utilization: Does Diagnosis Matter?, 170(2)
The American Journal of Psychiatry p. 180 (2013).
---------------------------------------------------------------------------
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 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 at 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.\411\
---------------------------------------------------------------------------
\411\ Alene Kennedy-Hendricks, Andrew J. Epstein, Elizabeth A.
Stuart, Rebecca L. Haffajee, Emma E. McGinty, Alisa B. Busch, Haiden
A. Huskamp, & Colleen L. Barry, Federal Parity and Spending for
Mental Illness, 142(2) Pediatrics (2018).
---------------------------------------------------------------------------
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.\412\ Additionally, a 2017 study that examined expenditures of
patients receiving behavioral health treatment following the
implementation of MHPAEA found that the out-of-pocket expenditure for
[[Page 77690]]
patients had decreased and the total expenditure for health plans had
increased, with no significant impact on health care utilization,
suggesting that the costs had shifted from patients to health
plans.\413\
---------------------------------------------------------------------------
\412\ Rebecca L. Haffajee, Michelle M. Mello, Fang Zhang, Alisa
B. Busch, Alan M. Zaslavsky, & J. Frank Wharam, Association of
Federal Mental Health Parity Legislation with Health Care Use and
Spending Among High Utilizers of Services, 57(4) Medical Care p.
245.
\413\ Susan L. Ettner, Jessica M. Harwood, Amber Thalmayer,
Michael K. Ong, Haiyong Xu, Michael J. Bresolin, Kenneth B. Wells,
Chi-Hong Tseng, & Francisca Azocar, The Mental Health Parity and
Addiction Equity Act Evaluation Study: Impact on Specialty
Behavioral Health Utilization and Expenditures Among ``Carve-Out''
Enrollees, 50 Journal of Health Economics pp. 131-143 (2016).
---------------------------------------------------------------------------
According to the 2019 MEPS-HC, private insurance covered $33.87
billion of expenditures for treatment of mental health disorders among
adults ages 18 and older \414\ while all individuals paid $15.62
billion out-of-pocket.\415\ As discussed throughout this analysis,
there are many reasons someone might seek care out-of-network or pay
out-of-pocket for treatment, such as limited coverage from the issuer
or plan, difficulty finding a network provider, or long wait times to
see an in-network provider. The Departments acknowledge that these
final rules will not address all the reasons that individuals pay out-
of-pocket for treatment, and there is significant uncertainty in how
these final rules will affect out-of-network spending.
---------------------------------------------------------------------------
\414\ As defined in the MEPS-HC, mental disorders include
anxiety, depression, bipolar disorder, schizophrenia, obsessive-
compulsive disorder, attention-deficit and/or hyperactivity
disorder, substance use disorder, and other mental and
neurodevelopmental illnesses.
\415\ Anita Soni, Healthcare Expenditures for Treatment of
Mental Disorders: Estimates for Adults Ages 18 and Older, U.S.
Civilian Noninstitutionalized Population, 2019, Agency for
Healthcare Research and Quality, Statistical Brief #539 (Feb. 2022),
https://meps.ahrq.gov/data_files/publications/st539/stat539.pdf.
---------------------------------------------------------------------------
Accordingly, the Departments do not know what proportion of total
out-of-pocket spending experienced in the past will be covered by group
health plans and health insurance coverage following the applicability
of these final rules. However, to illustrate the potential scale of
transfers from participants, beneficiaries, and enrollees to plans
under this rulemaking, the Departments reference a 2020 study of in-
network versus out-of-network psychotherapy employer-sponsored
insurance claims which found in-network cost sharing was, on average,
$24.41 less that out-of-network cost-sharing for psychotherapy
claims.\416\ Utilizing tabulations from the MEPS-HC on events, such as
office and outpatient visits for mental, behavioral, or neurological
conditions, there were 530.7 million of these medical events in 2021
for individuals 65 and under with private insurance.\417\ Applying the
initial out-of-network rates of 13.4 percent from the Marsh and Parish
paper would translate into 71.1 million out-of-network claims, which is
9 percentage points higher for mental health and substance use
disorders than for medical/surgical treatments.\418\ It is assumed
that, under these final rules, the out-of-network utilization rates for
mental health and substance use disorder benefits fall by just 10
percent to 12.1 percent of claims, this would still represent a
transfer from plans and issuers to participants and beneficiaries of
$168.4 million annually in lower cost-sharing.\419\
---------------------------------------------------------------------------
\416\ Nicole M. Benson & Zirui Song, Prices and Cost Sharing for
Psychotherapy In Network Versus Out Of Network in the United States,
39(7) Health Affairs pp. 1210-1218 (2020).
\417\ Agency for Healthcare Research and Quality, Number of
Events in Thousands by Condition and Insurance Coverage, United
States, 2021, Medical Expenditure Panel Survey, https://datatools.ahrq.gov/meps-hc?tab=medical-conditions&-=17.
\418\ Tami L. Mark & William Parish, Behavioral Health Parity--
Pervasive Disparities in Access to In-Network Care Continue, RTI
International (Apr. 2024), https://dpjh8al9zd3a4.cloudfront.net/publication/behavioral-health-parity-pervasive-disparities-access-network-care-continue/fulltext.pdf.
\419\ This estimate is calculated as follows: 530.7 million
medical events x change in share that are out-of-network (13.4
percent - 12.1 percent) x $24.41 = $168.4 million.
---------------------------------------------------------------------------
9.2. Transfers From Participants, Beneficiaries, and Enrollees to Plans
and Issuers Caused by Higher Premiums
These final 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, these final rules might cause plans and issuers to increase
premiums and change cost-sharing requirements (for example, by raising
deductibles) to offset these costs. Similarly, plans and issuers might
reduce the number of NQTLs employed and increase premiums in order to
offset the costs of participants, beneficiaries, and enrollees
utilizing more mental health and substance use disorder benefits.
Many studies attempt to isolate the changes in health costs
associated with implementing parity requirements. One 2005 study by the
Society of Actuaries on State mental health parity laws found that
``overall health care costs increased minimally and in some cases were
even reduced.'' \420\ As discussed earlier in section IV.8 of this
regulatory impact analysis, by removing some of the barriers to access
to mental health and substance use disorder treatments caused by
existing NQTLs, the Departments expect that the final rules will result
in increased utilization of mental health and substance use disorder
services, which could increase costs, including premiums. However, as
discussed in section IV.7.3 of this regulatory impact analysis, better
access to mental health and substance use disorder services can lead to
better health outcomes and prevent costly interventions, which may
reduce overall health care costs and premiums in the long-term. Thus,
the Departments anticipate that these final rules will have a minimal
impact on premiums, but there may be instances in which plans and
issuers may impose higher premiums.
---------------------------------------------------------------------------
\420\ Steve Melek, 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.
---------------------------------------------------------------------------
The Departments requested comments or data on this transfer in the
proposal. A few commenters stated that the proposal would hinder the
ability of plans to utilize common medical management techniques that
improve cost and quality outcomes, such as prior authorization. As a
result, commenters stated there would be an increase in premiums for
participants, beneficiaries, and enrollees. However, as discussed
previously, these final rules do not finalize the substantially all and
predominant mathematical tests for NQTLs as proposed. The final rules
also do not eliminate the use of prior authorization or other medical
management, but the Departments emphasize that they must be designed
and applied in parity as required by law.
9.3. Transfers Between Primary Care Providers and Mental Health and
Substance Use Disorder Providers
These final rules may result in a transfer from primary care
providers to mental health and substance use disorder providers. More
specifically, with improved in-network access to mental health and
substance use disorder providers, patients may be more likely to seek
treatment from a behavioral health specialist rather than a primary
care provider.
For example, 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,
[[Page 77691]]
psychiatrists, and psychologists,'' leading to a shift in the use of
nonphysician specialists and away from generalist physicians.\421\
Further, a 2020 study compared mental health outpatient visits of
adults in the period between 2008 and 2011 to the period between 2012
and 2015 using data from the MEPS-HC. Between the two time periods, the
study found that the percentage of adults who visited only primary care
non-physicians, such as physician assistants and nurse practitioners,
increased by about 4 percent, whereas the percentage of adults who
visited only primary care physicians decreased by about 2 percent.\422\
The findings of these papers suggest that the final rules may lead to a
slight shift in the use of nonphysician specialists, and away from
generalist physicians.
---------------------------------------------------------------------------
\421\ John K. McConnell, Samuel HN Gast, & Bentson H. McFarland,
The Effect of Comprehensive Behavioral Health Parity on Choice of
Provider, 50(6) Medical Care p. 527.
\422\ The study did not find a statistically significant change
in visits to specialty mental health providers. See Hayley D.
Germack, Coleman Drake, Julie M. Donohue, Ezra Golberstein, & Susan
H. Busch, National Trends in Outpatient Mental Health Service Use
Among Adults Between 2008 and 2015, 71 Psychiatric Services 11 pp.
1127-1135 (2020).
---------------------------------------------------------------------------
9.4. 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 rules implementing the CAA, 2023 provision
that sunsets the MHPAEA opt-out election for self-funded non-Federal
governmental plans will have similar effects as the other provisions
examined in this section IV.9 of the regulatory impact analysis. These
final rules are generally expected to 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 will lead to lower out-of-pocket
costs for plan participants and beneficiaries who receive mental health
or substance use disorder services, which will be a transfer from self-
funded non-Federal governmental plans to participants and
beneficiaries.
On the other hand, as noted in section IV.8.2 of this regulatory
impact analysis, if the final rules 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 may
increase, which may cause in the number of claims submitted, the number
of claims paid, and the overall costs incurred by plans to also
increase. This, in turn, might lead to higher contributions 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 the societal cost presented in section IV.8 of
this regulatory impact analysis (and who bears it).
10. Uncertainty
It is unclear what percentage of plans and issuers impose greater
burdens on mental health and substance use disorder benefits than on
medical/surgical benefits. This frequency may differ among small and
large plans and issuers. The Departments' experience in enforcing
MHPAEA shows that plans and issuers are not in full compliance with
MHPAEA, although the extent across all plans and issuers is not known.
As documented in the fiscal year (FY) 2022 MHPAEA Enforcement Fact
Sheet, DOL closed investigations on 145 health plans, with 86 of them
subject to MHPAEA, in fiscal year 2022. Of these closed investigations,
EBSA cited 18 MHPAEA violations in 11 investigations.\423\
---------------------------------------------------------------------------
\423\ EBSA, FY 2022 MHPAEA Enforcement Fact Sheet, https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2022.
---------------------------------------------------------------------------
One commenter stated that the new requirements of the comparative
analyses would require plans to make significant changes to their
benefits design and NQTL compliance structure, which could result in
more restrictions on medical/surgical benefits and/or higher premiums.
The commenter did not provide any data or evidence. The Departments
note that there is no evidence from previous parity requirements that
such actions led to the implementation of new NQTLs, particularly to
medical/surgical benefits, and impacted cost sharing, medical
management provisions, or medical/surgical coverage.
There is also the possibility that some plans and issuers will stop
offering mental health and substance use disorder benefits. In 2010, 2
percent of employers reported discontinuing their coverage of both
mental health and substance use disorder treatments or only substance
use disorder treatments since MHPAEA was passed.\424\ Nevertheless, as
discussed in section IV.9.1 of this regulatory impact analysis, the
Departments anticipate that these final rules will expand the level of
coverage for mental health and substance use disorder benefits, which
will result in reduced out-of-pocket spending for plan participants,
beneficiaries, and enrollees.
---------------------------------------------------------------------------
\424\ GAO, Mental Health and Substance Use: Employers' Insurance
Coverage Maintained or Enhanced Since Parity Act, but Effect of
Coverage on Enrollees Varied, GAO-12-63 (Nov. 2011), https://www.gao.gov/assets/gao-12-63.pdf.
---------------------------------------------------------------------------
Another commenter also stated that the proposed rules would largely
eliminate behavioral health carve-out vendors as a business model,
because such vendors would not be able to build networks in complete
alignment with medical/surgical disorder networks, as required under
the proposed network composition NQTL rule. In response, the
Departments note that similar claims--that MHPAEA would eliminate
behavioral health carve-outs--were made when MHPAEA was first enacted
in 2008. Furthermore, studies have found that the number of carve-out
plans have increased since the enactment of MHPAEA. A 2016 study
examined the impact of MHPAEA on carve-out plans and found that MHPAEA
``led to a proliferation of plans and heterogeneity in benefit design
in the post-parity period among employer groups choosing to retain the
carve-out model for their behavioral health coverage.'' The study also
found no evidence that carve-out plans dropped coverage altogether for
behavioral health treatments.\425\ A 2020 study also observing the
impact of MHPAEA on carve-out plans found that ``post-MHPAEA, the
number of carve-out plans increased relative to carve-ins'' and that
MHPAEA was associated with lower copayments and out-of-network
coinsurance for emergency room and outpatient services. The findings
suggest that MHPAEA led to more generous benefits for carve-out plans.
However, the authors also noted an increase in deductibles and in-
network outpatient coinsurance, suggesting that some patients
experienced higher out-of-pocket costs.\426\ Nevertheless, these
studies suggest that the purported issues referenced by commenters were
surmountable.
---------------------------------------------------------------------------
\425\ Susan L. Ettner, Jessica M. Harwood, Amber Thalmayer,
Michael K. Ong, Haiyong Xu, & Michael J. Bresolin, The Mental Health
Parity and Addiction Equity Act Evaluation Study: Impact on
Specialty Behavioral Health Utilization and Expenditures among
``Carve-Out'' Enrollees, 50 Journal of Health Economics pp. 131-143
(2016), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5127782.
\426\ Sarah Friedman, Haiyong Xu, Francisca Azocar, & Susan L.
Ettner, Carve-out Plan Financial Requirements Associated with
National Behavioral Health Parity, 55(6) Health Services Research
pp. 924-931 (2020), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7704471/.
---------------------------------------------------------------------------
Additionally, the Departments note that they are not finalizing the
proposed
[[Page 77692]]
special rule for NQTLs related to network composition, and are instead
including language in these final rules to explain how plans and
issuers are expected to comply with the relevant data evaluation
requirements with respect to those NQTLs. Under these final rules,
material differences in access to mental health and substance use
disorder benefits as compared to medical/surgical benefits (including
for NQTLs related to network composition) will not be treated as a
violation; instead, plans and issuers must take reasonable action, as
necessary, to address any material differences in access to mental
health or substance use disorder benefits as compared to medical/
surgical benefits, and document those actions in their comparative
analyses.
Further, there may be some possible societal spillover effects
which may occur as a result of these final rules such as improving
public safety in the long-term from an increase in access to mental
health and substance use disorder treatments. For example, a 2017 study
examined the effect of State parity laws for substance use disorder
treatments on fatal traffic accidents and found that enactment of State
parity laws were associated with reduced annual total traffic fatality
rates from 4.1 percent to 5.4 percent.\427\ Furthermore, a 2021 study
which examined the impact of State parity laws on crime between 1994
and 2010 found that the enactment of State parity laws was associated
with a reduction of violent crimes by 5 percent to 7 percent and that
the resulting lower crime rates were associated with an annual savings
of $3 billion.\428\ These studies suggest that the benefits of these
final rules may go beyond the listed benefits discussed in this
regulatory impact analysis.
---------------------------------------------------------------------------
\427\ Ioana Popovici, Johanna Catherine Maclean, & Michael T.
French, The Effects of Health Insurance Parity Laws for Substance
Use Disorder Treatment on Traffic Fatalities: Evidence of Unintended
Benefits, National Bureau of Economic Research (2017), https://www.nber.org/system/files/working_papers/w23388/revisions/w23388.rev0.pdf?sy=388.
\428\ Keshob Sharma, Do Mental Health Parity Laws Reduce Crime?,
working paper (Nov. 14, 2021).
---------------------------------------------------------------------------
The Departments face uncertainty in estimating the magnitude of
savings for participants, beneficiaries, and enrollees. The Departments
requested comments and data in the proposal related to how the
Departments may quantify the impact in out-of-pocket spending from
these rules, but did not receive any comments.
Additionally, HHS is unable to precisely forecast how many
participants and beneficiaries will be affected by the 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 opt-out
filings. See section IV.5.3 of this regulatory impact analysis for
further discussion on the affected participants and beneficiaries.
It is possible that some self-funded non-Federal governmental plans
will stop offering mental health and substance use disorder benefits in
response to the final rules. 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 provision, to ensure that financial requirements and
treatment limitations applicable to mental health and substance use
disorder benefits comply with MHPAEA and its implementing regulations.
HHS anticipates that this is a less likely outcome of these amendments.
HHS solicited 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 solicited
comments on the potential number of participants and beneficiaries that
might be affected by these potential plan changes. HHS did not receive
any comments that provided this information.
11. Alternatives
In addition to the regulatory approach outlined in these final
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 earlier in 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 before designing and applying NQTLs, in a manner that
is consistent with MHPAEA's fundamental purpose. While the Departments
have seen some improvements in response to their reviews of plans' and
issuers' comparative analyses under the CAA, 2021 requirements, they
have primarily seen a great deal of confusion about the application of
the current regulation to NQTLs and about the parity obligation
generally. Based on the experience with plans' and issuers' attempts to
comply with the existing regulations and guidance and the CAA, 2021,
the Departments have concluded that the existing MHPAEA regulations
failed to sufficiently focus attention on the obligation to ensure that
NQTLs, and associated processes, strategies, evidentiary standards, and
other factors avoid placing disparate burdens on participants',
beneficiaries', and enrollees' access to mental health and substance
use disorder benefits as compared to medical/surgical benefits.
Accordingly, the Departments are of the view that these final rules
will 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 designing and applying NQTLs and
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 as written,
in operation, 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 will improve the review of
plans' and issuers' policies and processes, and improved parity
outcomes for participants, beneficiaries, and enrollees.
12. Conclusion
The Departments expect that these final rules will 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 final
rules will 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
[[Page 77693]]
ultimately result in better health outcomes among those with mental
health conditions and substance use disorders.
V. Paperwork Reduction Act
1. Paperwork Reduction Act--Departments of Labor and the Treasury
In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44
U.S.C. 3506(c)(2)(A)), the Departments solicited comments concerning
the information collection requests (ICRs) included in the proposed
rules. At the same time, the Departments also submitted ICRs to OMB, in
accordance with 44 U.S.C. 3507(d).
The Departments received comments that specifically addressed the
paperwork burden analysis of the ICRs contained in the proposed rules.
Many commenters expressed concern that the Departments underestimated
the burden of collecting the required data, the burden required in
conducting the substantially all and predominant variation analysis,
the number of NQTLs that would need to be analyzed for each plan and
issuer, and the amount of time that it would take to conduct those
analyses. The Departments reviewed these public comments in developing
the paperwork burden analysis discussed here.
The changes made by these final rules affect the existing OMB
control number, 1210-0138. A copy of the ICR for OMB Control Number
1210-0138 may be obtained by contacting the PRA addressee listed in the
following sentence or at www.RegInfo.gov. For additional information
contact, U.S. Department of Labor, Employee Benefits Security
Administration, Office of Research and Analysis, Attention: PRA
Officer, 200 Constitution Avenue NW, Room N-5718, Washington, DC 20210;
or send to [email protected].
1.1. Final Amendments to Existing MHPAEA Regulations (26 CFR 54.9812-1;
29 CFR 2590.712)
These final rules add new definitions, amend existing definitions,
specify new requirements related to NQTLs, including by prohibiting
discriminatory factors and evidentiary standards, amend existing
examples illustrating the rules for NQTLs, and add new examples
illustrating the rules for NQTLs, providing clarity to interested
parties. The final rules also specify that the way a plan or issuer
defines mental health benefits, substance use disorder benefits, and
medical/surgical benefits must be consistent with generally recognized
independent standards of current medical practice and add more
specificity as to what conditions or disorders plans and issuers must
treat as mental health conditions, substance use disorders, and medical
conditions and surgical procedures. The final rules also require that
plans and issuers provide meaningful benefits for covered mental health
conditions or substance use disorders in each classification in which
meaningful medical/surgical benefits are provided. Additionally, these
final rules require plans and issuers to collect and evaluate relevant
data in a manner reasonably designed to assess the impact of the NQTL
on relevant outcomes related to access to mental health and substance
use disorder benefits and medical/surgical benefits. Where the relevant
data suggest that the NQTL contributes to material differences in
access to mental health and substance use disorder benefits as compared
to medical/surgical benefits in a classification, plans and issuers are
required to take reasonable action, as necessary, to address the
material differences to ensure compliance, in operation, with 26 CFR
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). These
final rules provide guidance for how to comply with the relevant data
evaluation requirements in limited circumstances where data is
initially and temporarily unavailable for new and newly imposed NQTLs
and where no data exists that can reasonably measure any relevant
impact of the NQTL on relevant outcomes related to access to mental
health and substance use disorder benefits and medical/surgical
benefits. In those instances, the plan or issuer must include specific
information in their comparative analyses, as explained earlier in this
preamble. However, as explained earlier in this preamble, the
Departments are of the view that nearly all NQTLs will have some
relevant data to collect and evaluate; therefore, the Departments
estimate the burden as if every plan and issuer performs the data
analysis.
1.2. New Regulation (26 CFR 54.9812-2; 29 CFR 2590.712-1)
These final 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.
For the purpose of this analysis, it is assumed that health
insurance issuers will 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 will fulfill the
requirements for the vast majority of self-funded group health plans.
1.3. Burden Estimates for Final Rules Requirements
The final rules will affect self-funded plans and MEWAs. The
Departments estimate that 709 self-funded plans with 500 or more
participants will prepare the comparative analysis and data themselves.
The Departments also estimate that 4,076 self-funded plans with 500 or
more participants will receive a generic comparative analysis from
their TPA or other service provider, which they will subsequently
customize to suit their specific needs. Finally, the Departments
estimate that 132 plan MEWAs and 21 non-plan MEWAs that are not fully
insured will provide assistance to plans in collecting and analyzing
the data, and generating the comparative analyses. For more information
on how the number of each type of entity is estimated, please refer to
the Affected Entities section of the regulatory impact analysis.
Non-grandfathered, fully insured ERISA plans with less than 50
participants that are subject to MHPAEA under the EHB requirements of
the ACA 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 in States that substantially fail to enforce
MHPAEA's requirements and therefore is accounting for this portion of
the burden in its analysis, in addition to the burden related to non-
Federal governmental plans. Accordingly, this analysis considers only
the burden associated with ERISA self-funded group health plans, which
are under the jurisdiction of the DOL and the Treasury.
These final rules require that a plan or issuer perform and
document a comparative analysis of each NQTL applicable to mental
health and substance use disorder benefits. In the proposed rules, the
Departments estimated that, on average, plans would need to analyze
four separate NQTLs and issuers would need to analyze eight NQTLs to
satisfy their additional comparative analysis requirements. The
Departments further estimated that plans and issuers preparing their
own comparative analyses would incur a burden of 20 hours per NQTL in
the first year, with 4 hours for a general or
[[Page 77694]]
operations manager to review the requirements and outline the changes
needed for the comparative analyses and 16 hours for a business
operations specialist to prepare the comparative analyses. Once the
comparative analyses are performed and documented, the Departments
estimated that plans and 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 as well as medical and surgical benefits. In
subsequent years, the Departments estimated plans would incur a burden
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 response to commenters' concerns that the Departments
underestimated the number of NQTLs that each plan or issuer would need
to create comparative analyses for, and that plans and issuers would on
average have the same number NQTLs, the Departments have revised their
assumptions to 10 NQTLs for both plans and issuers. One commenter
proposed the average number of NQTLs should be more than 15 at a
minimum, while another noted that there were at least 15 NQTLs
referenced in the proposed rules and other guidance. However, given
that the number of NQTLs vary by issuer and plan, that most plans will
not have every NQTL referenced in the proposed rules and other guidance
(although some might have more), and that NQTLs can be counted as an
umbrella group, the Departments assume 10 NQTLs.
The Departments assume that collecting the data, and reviewing and
revising the comparative analyses would require 60 hours per NQTL in
the first year and 12 hours per NQTL in subsequent years. For plans
that receive a generic comparative analysis that will require
customizing to suit the plan's specific needs, the Departments assume
that it will take 30 hours per NQTL in the first year and 6 hours per
NQTL in subsequent years. While plans and issuers can use other
professionals to fulfill their requirements, for purposes of developing
the wage estimate, the Departments assume that it will take a team of
data analysts, actuaries, and attorneys to collect the data and prepare
the comparative analyses and have estimated a composite wage rate of
$167.48.\429\ See Table 11 for calculations and burden totals.
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\429\ The wage rate of an attorney, actuary, and data analyst
is, respectively, $165.71, $177.11, and $159.61. (Internal DOL
calculation based on 2024 labor cost data. For a description of
DOL's methodology for calculating wage rates, see EBSA, Labor Cost
Inputs Used in the Employee Benefits Security Administration, Office
of Policy and Research's Regulatory Impact Analyses and Paperwork
Reduction Act Burden Calculations (June 2019), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.) The composite wage rate is
estimated in the following manner: [$165.71 x (1 / 3) + $159.61 x (1
/ 3) x $177.61 x (1 / 3) = $167.48].
Table 11--Hour Burden to Fulfill the Data Requirements and Prepare the Comparative Analyses
----------------------------------------------------------------------------------------------------------------
Number of
hours per
Number of Number of NQTL for Total hour Hourly Equivalent cost
entities NQTLs per data and burden wage of hour burden
entity comparative
analysis
(A) (B) (C) (A x B x C) (D) E (A x B x C x
D)
----------------------------------------------------------------------------------------------------------------
First Year
----------------------------------------------------------------------------------------------------------------
TPAs.......................... 103 10 60 61,800 $167.48 $10,350,264
Self-funded plans with more 709 10 60 425,400 167.48 71,245,992
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded plans with more 4,076 10 30 1,222,800 167.48 204,794,544
than 500 participants that
will receive generic
comparative analyses from
TPAs or service providers,
and will then customize it...
Plan MEWAs that are not fully 132 10 60 79,200 167.48 13,264,416
insured......................
Non-plan MEWAs that are not 21 10 60 12,600 167.48 2,110,248
fully insured................
---------------------------------------------------------------------------------
First-year Total.......... 5,041 ........... ........... 1,801,800 ........ 301,765,464
----------------------------------------------------------------------------------------------------------------
Subsequent Years
----------------------------------------------------------------------------------------------------------------
TPAs.......................... 103 10 12 12,360 167.48 2,070,053
Self-funded plans with more 709 10 12 85,080 167.48 14,249,198
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded plans with more 4,076 10 6 244,560 167.48 40,958,909
than 500 participants that
will receive generic
comparative analyses from
TPAs or service providers,
and will then customize it...
Plan MEWAs that are not fully 132 10 12 15,840 167.48 2,652,883
insured......................
Non-plan MEWAs that are not 21 10 12 2,520 167.48 422,050
fully insured................
---------------------------------------------------------------------------------
Subsequent Years Total.... 5,041 ........... ........... 360,360 ........ 60,353,093
---------------------------------------------------------------------------------
Total (3-year average) 5,041 ........... ........... 840,840 ........ 140,823,883
----------------------------------------------------------------------------------------------------------------
These final rules also require that group health plans offering
group health insurance coverage must make a comparative analysis
available upon request by the Departments. The CAA, 2021 requires the
Departments to collect no fewer than 20 comparative analyses per year,
but it also provides that the Departments 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 Departments determine appropriate. Based on its prior
experience and current funding, DOL expects to request 20 comparative
analyses each year. See Table 12 for calculations and burden totals.
[[Page 77695]]
These final rules also require plans and issuers to make the
comparative analyses and other applicable information required by the
CAA, 2021 available upon request to participants, beneficiaries, and
enrollees in all non-grandfathered group health plans and non-
grandfathered group or individual health insurance coverage (including
a provider or other person acting as a participant's, beneficiary's, or
enrollee's authorized representative) in connection with an adverse
benefit determination, as well as to participants and beneficiaries in
plans subject to ERISA. The Departments estimate that each plan will
receive one request per covered health plan annually and that plans
will annually incur a burden of 5 minutes for a clerical worker to
prepare and send the comparative analyses to each requesting
participant or beneficiary. DOL also assumes that 58.3 percent of
requests will be delivered electronically, resulting in a de minimis
cost.\430\ The remaining 41.7 percent of requests will be mailed at a
cost of $2.79.\431\ See Table 12 for calculations and burden totals.
---------------------------------------------------------------------------
\430\ According to data from NTIA, 37.4 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 31.4 percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 44.1 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 26.9 percent receiving
electronic disclosure outside of work). Combining the 31.4 percent
who will receive electronic disclosure at work with the 26.9 percent
who will receive electronic disclosure outside of work produces a
total of 58.3 percent who will receive electronic disclosure
overall.
\431\ The postage for a first-class mail large envelope letter
is $2.04 and the material cost is $0.05 per page. Thus, $2.04 +
($0.05 x 15 pages) = $2.79.
---------------------------------------------------------------------------
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 6-year retention requirement. For these
reasons, the Departments estimate a minimal additional burden. The
Departments estimate that, on average, any additional recordkeeping
requirements will take clerical personnel 5 minutes annually. See Table
12 for calculations and burden totals.
Table 12--Hour and Cost Burden of Other Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Total Hour Mailing
Number of hours per hour Wage equivalent of cost per Cost burden
response responses burden rate cost burden response
(A) (B) (A x B) (C) (A x B x C) (D) (A x D x 41.7
percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Business operations specialists prepare comparative analysis 20 1 20 137.67 2,753 0 0
for audits..................................................
General operation managers prepare comparative analysis for 20 4 80 114.36 9,149 0 0
audits......................................................
Clerical workers prepare and distribute comparative analyses 2,129,516 0.083 177,460 65.99 11,710,585 2.79 2,477,543
upon participant request....................................
Clerical workers maintain recordkeeping...................... 2,129,516 0.083 177,460 65.99 11,710,585 0 0
------------------------------------------------------------------------------------------
Total.................................................... 2,129,536 ........... 355,020 ........ 23,433,073 ......... 2,477,543
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.5. Overall Summary
In summary, the total burden associated with these final rules has
a 3-year average hour burden of 1,195,860 hours with an equivalent cost
of $164,256,956 and a cost burden of $2,477,543.
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: 123,1752.
Estimated Number of Annual Responses: 123,1752.
Frequency of Response: Annual.
Estimated Total Annual Burden Hours: 1,195,860 (597,930 for DOL,
597,930 for Treasury).
Estimated Total Annual Burden Cost: $2,477,543 ($1,238,771 for DOL,
$1,238,771 for Treasury).
2. Paperwork Reduction Act--Department of HHS
In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44
U.S.C. 3506(c)(2)(A)), the Department solicited comments concerning the
ICRs included in the proposed rules. At the same time, the Departments
also submitted ICRs to OMB, in accordance with 44 U.S.C. 3507(d).
The Departments received comments that specifically addressed the
paperwork burden analysis of the ICRs contained in the proposed rules.
Many commenters expressed concern that the Departments underestimated
the burden of collecting the required data, the burden of conducting
the substantially all and predominant variation analysis, the number of
NQTLs that would need to be analyzed for each plan and issuer, and the
amount of time that it would take to conduct those analyses. The
Departments reviewed these public comments in developing the paperwork
burden analysis discussed here.
The changes made by these final rules affect the existing OMB
control number, 0938-1393. HHS will update the information collection
to account for the burden related to the provisions in these final
rules.
2.1. Final Amendments to Existing MHPAEA Regulations (45 CFR 146.136)
The amendments to the existing MHPAEA regulations in these final
rules add new definitions, amend existing definitions, clarify the
rules for NQTLs, including by prohibiting discriminatory factors and
evidentiary standards, amend existing examples illustrating the rules
for NQTLs, and add new examples illustrating the rules for NQTLs,
providing clarity to the regulated community. The amendments also
clarify that whether a condition or disorder is defined by the plan or
issuer as being a mental health condition or a substance use disorder
for purposes of
[[Page 77696]]
MHPAEA must be consistent with generally recognized independent
standards of current medical practice. The final rules also require
that plans and issuers provide meaningful benefits for covered mental
health conditions or substance use disorders in each classification in
which meaningful medical/surgical benefits are provided.
These final rules also require plans and issuers to collect and
evaluate relevant data in a manner reasonably designed to assess the
impact of the NQTL on relevant outcomes related to access to mental
health and substance use disorder benefits and medical/surgical
benefits. Relevant data for the majority of NQTLs could include, as
appropriate, but are not limited to, the number and percentage of
claims denials and any other data relevant to the NQTL required by
State law or private accreditation standards. Additionally, relevant
data for NQTLs related to network composition could include, as
appropriate, but are 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 (for comparable services and as benchmarked to a
reference standard).
2.2. New Regulations (45 CFR 146.137)
These final rules set forth 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 an
applicable State authority upon request.
These final rules provide guidance for how to comply with the
relevant data evaluation requirements in limited circumstances where
data is initially and temporarily unavailable for new and newly imposed
NQTLs and where no data exists that can reasonably measure any relevant
impact of the NQTL on relevant outcomes related to access to mental
health and substance use disorder benefits and medical/surgical
benefits. In those instances, the plan or issuer must include specific
information in their comparative analyses, as explained earlier in this
preamble. In such instances, providing this justification is likely to
be less expensive than the estimated burden for doing an analysis when
there is data. However, as explained earlier in this preamble, the
Departments are of the view that nearly all NQTLs will have some
relevant data to collect and evaluate; therefore, the Departments
estimate the burden as if every plan and issuer performs the data
analysis.
As discussed 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. HHS is therefore accounting for this portion of the burden
in its analysis, in addition to accounting for the burden on sponsors
of self-funded non-Federal governmental plans.
2.3. Burden Estimates for Final Requirements
These final rules will affect issuers, TPAs, and self-funded non-
Federal governmental plans. Health insurance issuers offering
individual or group health insurance coverage usually have multiple
products offered in multiple States. HHS estimates a total of 479
health insurance companies offering individual or group health
insurance coverage nationwide, with a total of 1,467 issuers (health
insurance company/State combinations). In addition, there are an
estimated 205 TPAs that provide services to group health plans,
particularly for self-funded plans where TPAs often establish provider
networks and adjudicate claims, which will be impacted by these final
rules. Furthermore, sponsors of self-funded non-Federal governmental
plans will be affected by these final rules. HHS estimates that out of
the estimated 32,901 self-funded non-Federal governmental plans, 505
self-funded non-Federal governmental plans with 500 or more
participants will prepare the comparative analysis and data themselves,
and 2,906 self-funded non-Federal governmental plans with 500 or more
participants will receive a generic comparative analysis from their
TPA, which they will subsequently customize to suit their specific
needs. For more information on how the number of each type of entity is
estimated, please refer to section IV.5.2 of the regulatory impact
analysis.
These final rules require that a plan or issuer perform and
document a comparative analysis of each NQTL applicable to mental
health and substance use disorder benefits. In the proposed rules, the
Departments estimated that, on average, plans would need to analyze
four separate NQTLs and issuers would need to analyze eight NQTLs to
satisfy their additional comparative analysis requirements. The
Departments further estimated that plans and issuers preparing their
own comparative analyses would incur a burden of 20 hours per NQTL in
the first year, with 4 hours for a general or operations manager to
review the requirements and outline the changes needed for the
comparative analyses and 16 hours for a business operations specialist
to prepare the comparative analyses. Once the comparative analyses are
performed and documented, plans and 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, as well as medical and surgical
benefits. In subsequent years, the Departments estimated plans would
incur a burden 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 response to commenters' concerns that the Departments
underestimated the number of NQTLs that each plan or issuer would need
to create comparative analyses for, and that plans and issuers would on
average have the same number NQTLs, the Departments have revised their
assumptions to 10 NQTLs for both plans and issuers. One commenter
proposed the average number of NQTLs should be more than 15 at a
minimum, while another noted that there were at least 15 NQTLs
referenced in the proposed rules and other guidance. However, because
the number of NQTLs varies by issuer and plan, most plans will not have
every NQTL referenced in the rules or guidance (although some might use
more), and NQTLs can be counted as an umbrella group, the Departments
assume 10 NQTLs.
The Departments assume that collecting the data, and reviewing and
revising the comparative analyses will require 60 hours per NQTL in the
first year and 12 hours per NQTL in subsequent years. For plan sponsors
that receive a generic comparative analysis from a TPA that will
require customizing to suit the plan's specific needs, the Departments
assume that it will take 30 hours per NQTL in the first year and 6
hours per NQTL in subsequent years. While plans and issuers can use
other professionals to fulfill their requirements, for purposes of
developing the wage estimate, the Departments assume that it will take
a team of data analysts, actuaries, and attorneys to collect the data
and prepare the comparative analyses, and have estimated a composite
wage rate of
[[Page 77697]]
$167.48.\432\ See Table 13 for calculations and burden totals.
---------------------------------------------------------------------------
\432\ The wage rate of an attorney, actuary, and data analyst
is, respectively, $165.71, $177.11, and $159.61. (Internal DOL
calculation based on 2024 labor cost data. For a description of
DOL's methodology for calculating wage rates, see EBSA, Labor Cost
Inputs Used in the Employee Benefits Security Administration, Office
of Policy and Research's Regulatory Impact Analyses and Paperwork
Reduction Act Burden Calculations (June 2019), https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.) The composite wage rate is
estimated in the following manner: [$165.71 x (1 / 3) + $159.61 x (1
/ 3) x $177.61 x (1 / 3) = $167.48].
Table 13--Hour Burden to Fulfill the Data Requirements and Prepare the Comparative Analyses
----------------------------------------------------------------------------------------------------------------
Number of
hours per
Number of Number of NQTL for Total hour Hourly Equivalent cost
entities NQTLs per data and burden wage of hour burden
entity comparative
analysis
(A) (B) (C) (A x B x C) (D) E (A x B x C x
D)
----------------------------------------------------------------------------------------------------------------
First Year
----------------------------------------------------------------------------------------------------------------
Issuers (health insurance 1,467 10 60 880,200 $167.48 $147,415,896
company/State combinations)..
TPAs.......................... 103 10 60 61,800 167.48 10,350,264
Self-funded non-Federal 505 10 60 303,000 167.48 50,746,440
governmental plans with more
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded non-Federal 2,906 10 30 871,800 167.48 146,009,064
governmental plans with more
than 500 participants that
will receive a generic
comparative analysis from
TPAs or service providers,
and will then customize it...
---------------------------------------------------------------------------------
First-year Total.......... 4,981 ........... ........... 2,116,800 ........ 354,521,664
----------------------------------------------------------------------------------------------------------------
Subsequent Years
----------------------------------------------------------------------------------------------------------------
Issuers....................... 1,467 10 12 176,040 167.48 29,483,179
TPAs.......................... 103 10 12 12,360 167.48 2,070,053
Self-funded non-Federal 505 10 12 60,600 167.48 10,149,288
governmental plans with more
than 500 participants that
will conduct the comparative
analysis themselves..........
Self-funded non-Federal 2,906 10 6 174,360 167.48 29,201,813
governmental plans with more
than 500 participants that
will receive a generic
comparative analysis from
TPAs or service providers,
and will then customize it...
---------------------------------------------------------------------------------
Subsequent Years Total.... 4,981 ........... ........... 423,360 ........ 70,904,333
---------------------------------------------------------------------------------
Total (3-year average) 4,981 ........... ........... 987,840 ........ 165,443,443
----------------------------------------------------------------------------------------------------------------
These final rules require that plans or issuers make their
comparative analyses available upon request to the Departments. The
CAA, 2021 requires the Departments to collect not fewer than 20
comparative analyses per year, but it also provides that the
Departments shall request that a 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 Departments determine appropriate. HHS
expects to request at least 20 comparative analyses each year. See
Table 14 for calculations and burden totals.
These final rules also require plans and issuers to make the
comparative analyses and other applicable information required by the
CAA, 2021 available upon request to participants, beneficiaries, and
enrollees in all non-grandfathered group health plans and non-
grandfathered group or individual health insurance coverage (including
a provider or other person acting as a participant's, beneficiary's, or
enrollee's authorized representative) in connection with an adverse
benefit determination, as well as to participants and beneficiaries in
plans subject to ERISA. HHS estimates that each non-Federal
governmental plan and each issuer will receive one request annually and
that plans and issuers will 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. HHS also assumes that
58.3 percent of requests will be delivered electronically, resulting in
a de minimis cost.\433\ The remaining 41.7 percent of requests will be
mailed.\434\ The annual cost burden to mail the comparative analyses to
the participants and beneficiaries will therefore be approximately
$107,500. See Table 14 for calculations and burden totals.
---------------------------------------------------------------------------
\433\ According to data from NTIA, 37.4 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 31.4 percent receiving electronic disclosure at work).
Additionally, the NTIA reports that 44.1 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 26.9 percent receiving
electronic disclosure outside of work). Combining the 31.4 percent
who will receive electronic disclosure at work with the 26.9 percent
who will receive electronic disclosure outside of work produces a
total of 58.3 percent who will receive electronic disclosure
overall.
\434\ The postage for a first-class mail large envelope is $2.04
and the material cost is $0.05 per page. Thus, $2.04 + ($0.05 x 15
pages) = $2.79.
---------------------------------------------------------------------------
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 final rules. HHS estimates that
each non-Federal governmental plan and issuer will annually incur a
burden of 5 minutes, on average. See Table 14 for calculations and
burden totals.
HHS will revise the information collection approved under OMB
Control
[[Page 77698]]
Number 0938-1393 to account for this burden.\435\
---------------------------------------------------------------------------
\435\ CMS-10773, Non-Quantitative Treatment Limitation Analyses
and Compliance Under MHPAEA.
Table 14--Hour and Cost Burden of Other Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Total Hour Mailing
Number of hours per hour Wage equivalent of cost per Cost burden
responses response burden rate cost burden response
(A) (B) (A x B) (C) (A x B x C) (D) (A x D x 41.7
percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Business operations specialists prepare comparative analysis 20 4 80 $114.36 $9,149 $0 $0
for audits..................................................
General operation managers prepare comparative analysis for 20 1 20 137.67 2,753 0 0
audits......................................................
Clerical workers prepare comparative analyses upon 92,354 0.083 7,696 65.99 507,859 2.79 107,477
participant request.........................................
Clerical workers maintain recordkeeping...................... 92,354 0.083 7,696 65.99 507,859 0 0
------------------------------------------------------------------------------------------
Total.................................................... 92,374 ........... 15,492 ........ 1,027,620 ......... 107,477
--------------------------------------------------------------------------------------------------------------------------------------------------------
2.5. ICRs Regarding the Self-Funded Non-Federal Governmental Plan Opt-
Out Provisions (45 CFR 146.180)
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 regulatory amendments to implement a provision in the CAA, 2023
that sunsets the election option for sponsors of self-funded non-
Federal governmental plans to opt out of requirements under MHPAEA
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.\436\ HHS estimates that sponsors of 185 plans will no
longer need to submit a notice to the Federal Government regarding
their plan's opt-out election. HHS estimates that for each self-funded
non-Federal governmental plan whose sponsor has elected to opt out of
the requirements, a compensation and benefits manager will need 15
minutes annually to fill out and electronically submit the model
notification form to HHS.\437\ See Table 14 for calculations and cost
savings.
---------------------------------------------------------------------------
\436\ 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).
\437\ This includes the time required by the individual signing
the certification to conduct a thorough review of the election
contents.
---------------------------------------------------------------------------
These amendments also generate cost savings for the Federal
Government, as HHS will 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 labor rate for the employee
who completes this task, which includes the locality pay adjustment for
the area of Washington-Baltimore-Arlington, and the cost of fringe
benefits and other indirect costs, is $113.04 per hour for a GS-13,
step 1 employee.\438\ HHS estimates that on average it takes an HHS
employee 15 minutes to process an opt-out notice submitted by a plan
sponsor. See Table 15 for calculations and cost savings.
---------------------------------------------------------------------------
\438\ See Office of Personnel Management, 2024 General Schedule
(GS) Locality Pay Tables, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2024/DCB_h.pdf.
---------------------------------------------------------------------------
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 regulatory amendments to implement the provision in the CAA,
2023 that sunsets the election option for sponsors of self-funded non-
Federal governmental plans to opt out of requirements under MHPAEA 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. HHS estimates that sponsors of 185 plans
will no longer need to prepare and disseminate an opt-out notice to
plan participants. HHS estimates that for each self-funded non-Federal
governmental plan whose sponsor has elected to opt out of the
requirements under MHPAEA, an administrative assistant will need 15
minutes to develop and update the HHS standardized disclosure statement
annually. Further, self-funded non-Federal governmental plan sponsors
will no longer be required to print and mail the opt-out notice to plan
participants and will therefore no longer incur costs associated with
this requirement. As noted earlier in section IV.5.2 of the regulatory
impact analysis, HHS estimates that there are approximately 261
participants in each self-funded non-Federal governmental plan, and
therefore approximately 48,285 notices \439\ will no longer have to be
printed and mailed. See Table 15 for calculations and cost savings.
---------------------------------------------------------------------------
\439\ This estimate is calculated as follows: 185 plans x 261
participants per plan on average = 48,285 notices in total.
---------------------------------------------------------------------------
The burden related to HIPAA opt-outs is currently approved under
OMB Control Number 0938-0702.\440\ HHS will update the information
collection to account for this burden reduction.
---------------------------------------------------------------------------
\440\ CMS-10430, Information Collection Requirements for
Compliance with Individual and Group Market Reforms under Title
XXVII of the Public Health Service Act.
[[Page 77699]]
Table 15--Cost Savings of Preparing and Distributing Opt-Out Election Notice
----------------------------------------------------------------------------------------------------------------
Number of Mailing
Number of hours per Total hour Wage rate cost per Cost savings
responses entity burden response
(A) (B) (A x B) (C) (D) (A x B x C) or
(A x D)
----------------------------------------------------------------------------------------------------------------
General operation managers 185 0.25 46 $131.14 ........... $6,032
preparing and processing of
opt-out election notice to
Federal Government............
Clerical workers preparing and 185 0.25 46 42.58 ........... 1,959
processing of opt-out election
notice to plan participants...
Clerical workers distributing 48,285 ........... ........... ........... $0.05 2,414
opt-out election notice to
plan participants.............
--------------------------------------------------------------------------------
Total...................... 48,470 ........... 92 ........... ........... 10,405
----------------------------------------------------------------------------------------------------------------
2.6. Overall Summary
In summary, the total new burden imposed by these final rules
regarding NQTL comparative analyses and compliance, has a 3-year
average hour burden of approximately 1,003,332 hours with an equivalent
cost of approximately $166,471,063 and a total cost burden of
approximately $107,447. The final amendments to implement the CAA, 2023
provision that sunsets the MHPAEA opt-out election for sponsors of
self-funded non-Federal governmental plans will result in an annual
burden reduction of approximately 92 hours with an equivalent annual
cost savings of approximately $7,991 and total cost savings of
approximately $10,405.
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: 92,457.
Estimated Number of Annual Responses: 189,709.
Frequency of Response: Annual.
Estimated Total Annual Burden Hours: 1,003,332.
Estimated Total Annual Burden Cost: $107,447.
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: ($2,414).
Note: Numbers in parentheses denote a burden reduction.
VI. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \441\ 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 and are likely to have a significant economic impact on a
substantial number of small entities. Unless the head of an agency
determines that a final rule is not likely to have a significant
economic impact on a substantial number of small entities, section 604
\442\ of the RFA requires the agency to present a final regulatory
flexibility analysis of these final rules.
---------------------------------------------------------------------------
\441\ 5 U.S.C. 601 et seq. (1980).
\442\ 5 U.S.C. 604 (1980).
---------------------------------------------------------------------------
The Departments certify that these final rules will not have a
significant impact on a substantial number of small entities. The
Departments have prepared the following justification for this
determination.
1. Need for and Objectives of the Rule
As documented in the 2022 MHPAEA Report to Congress and the 2023
MHPAEA Comparative Analysis Report to Congress,\443\ the Departments
found that none of the NQTL comparative analyses they reviewed upon
initial receipt contained sufficient information and documentation.
---------------------------------------------------------------------------
\443\ 2022 MHPAEA Report to Congress, 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 Comparative Analysis Report to
Congress, www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------
These final rules clarify existing definitions, add new definitions
of key terms, 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 final rules also clarify
that plan and issuer definitions of conditions or disorders as mental
health conditions and substance use disorders must be consistent with
generally recognized independent standards of current medical practice
and add more specificity as to what plans and issuers must treat as
mental health conditions or substance use disorders. The final rules
also require that plans and issuers must provide meaningful benefits
for covered mental health conditions or substance use disorders in each
such classification in which medical/surgical benefits are provided.
These final rules also require plans and issuers to 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. Relevant data for the
majority of NQTLs could include, as appropriate, but are not limited
to, the number and percentage of claims denials and any other data
relevant to the NQTL as required by State law or private accreditation
standards. Additionally, for NQTLs related to network composition,
relevant data could include, as appropriate, but are 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 (for comparable services and as
benchmarked to a reference standard). Under these final rules, the
Departments may specify the type, form, and manner for the relevant
data evaluation requirements in future guidance, which will allow the
Departments to adjust the data requirements as needed to account for
enforcement experience and industry trends.
These final rules also set more specific content requirements for
[[Page 77700]]
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.
The Departments expect that these final rules will result in plans
and issuers having a better understanding of the MHPAEA requirements
for NQTLs. These final rules will also improve the manner in which
parity is measured, compared, and demonstrated by plans and issuers.
The Departments are of the view that these final rules will improve the
compliance of plans and issuers with these requirements, resulting in
greater parity in access to benefits for mental health conditions and
substance use disorders as compared with medical/surgical benefits, as
intended by MHPAEA.
Additionally, in these final rules, HHS finalizes regulatory
amendments to implement a provision in the CAA, 2023 that sunsets the
election option for sponsors of self-funded non-Federal governmental
plans to opt out of requirements under MHPAEA. HHS is of the view that
these regulatory amendments will ultimately increase access to mental
health and substance use disorder services, and increase parity of
benefits for such services as compared to benefits for medical/surgical
services by requiring self-funded non-Federal governmental plans that
had previously opted out to come into compliance with the requirements
under MHPAEA.
2. Affected Small Entities
For purposes of analysis under the RFA, the Departments consider
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 of Labor may also provide for
exemptions or simplified annual reporting and disclosure for welfare
benefit plans. Under 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 are of the view that
assessing the impact of these final 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 the definition of small business based on size
standards (revenue or number of employees) issued by the Small Business
Administration (SBA) under the Small Business Act.
As discussed in section IV.5.2 of the regulatory impact analysis,
these final rules will affect nearly all small ERISA-covered group
health plans, including fully insured group health plans and self-
funded group health plans, as well as small health insurance issuers
and non-Federal governmental plans. The Departments estimate that these
final rules will affect approximately 106,000 fully insured plans with
50 to 100 participants,\444\ and approximately 1,719,000 fully insured,
non-grandfathered plans with less than 50 participants.\445\
---------------------------------------------------------------------------
\444\ The Departments estimate that there are 140,998 ERISA-
covered group health plans with 50 to 100 participants based on the
MEPS-IC and the 2020 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 these same data. Thus, the
Departments have calculated the number of fully insured plans with
50 to 100 participants in the following manner: 140,998 ERISA-
covered group health plans with 50 to 100 participants x 75 percent
= 105,749.
\445\ The Departments estimate that there are 2,465,483 ERISA-
covered group health plans with less than 50 participants based on
data from the 2022 MEPS-IC and the 2020 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 2022 MEPS-IC. The 2020 KFF
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 percent
(100 percent-16 percent). KFF, 2020 Employer Health Benefits Survey
(Oct. 8, 2020), 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: 2,465,483 small
ERISA-covered group health plans x 83 percent x 84 percent =
1,718,935.
---------------------------------------------------------------------------
The Departments also estimate that approximately 25,300 self-funded
plans with less than 100 participants will be affected by these final
rules.\446\ Additionally, the Departments estimate that approximately
18,000 self-funded non-Federal governmental plans with less than 100
participants will also be affected by these final rules.\447\ The
Departments assume that these small, self-funded plans will receive
assistance with the comparative analyses and data requirements from
TPAs or other service providers involved with the plan. Due to many
small plans using identical insurance products, these small plans are
not expected to be significantly impacted as costs are spread across
many small plans.
---------------------------------------------------------------------------
\446\ Estimates based on the 2021 Form 5500 data.
\447\ Based on the 2022 Census of Governments, there are 90,887
non-Federal governmental plans. Based on the 2022 MEPS-IC, the
Departments estimate that 36.2 percent of non-Federal governmental
plans are self-funded Thus, 90,887 plans x 36.2 percent = 32,901
self-funded non-Federal governmental plans. Based on the 2021 Form
5500 data, the Departments estimate that 54.6 percent of self-funded
health plans with less than 100 participants have filed the Form
5500. The Departments use the percent of self-funded health plans
with less than 100 participants that have filed a Form 5500 as a
proxy for the percent of self-funded non-Federal governmental plans
with less than 100 participants. Thus, 32,901 self-funded non-
Federal governmental plans x 54.6 percent = 17,964 self-funded non-
Federal governmental plans with less than 100 participants.
---------------------------------------------------------------------------
As discussed in section IV.5.1 of the regulatory impact analysis,
these final rules will also affect health insurance issuers. The
Departments estimate that these final rules will affect 479 health
insurance companies nationwide that provide mental health and substance
use disorder benefits in the group and individual health insurance
markets, with a total of 1,467 issuers (health insurance company/State
combinations).\448\
---------------------------------------------------------------------------
\448\ The Departments' estimate of the number of health
insurance issuers are based on MLR reports submitted by issuers for
the 2022 reporting year. CMS, Medical Loss Ratio Data and System
Resources (2022), https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
---------------------------------------------------------------------------
Health insurance companies 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.\449\ The Departments
expect that few, if any, health insurance companies underwriting health
insurance policies fall below these size thresholds. Based on data from
MLR annual report submissions for the 2022 MLR reporting year,
approximately 87 out of 487 health insurance companies (of which 479
are impacted by these final rules) had total premium revenue of $47
million or less.\450\ However, it should be noted that at least 76
percent of these small companies belong to larger holding groups that
may not be small, and many,
[[Page 77701]]
if not all, of these companies are likely to have non-health lines of
business that would result in their revenues exceeding $47 million.
---------------------------------------------------------------------------
\449\ SBA, Table of Size Standards, https://www.sba.gov/document/support--table-size-standards, as of March 2023.
\450\ CMS, Medical Loss Ratio Data and System Resources (2022),
https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------
The amendments to implement the CAA, 2023 provision that sunsets
the MHPAEA opt-out election will affect sponsors of self-funded non-
Federal governmental plans, some of which might be small entities. As
noted in section IV.8.4 of the regulatory impact analysis, 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 solicited comments in the proposal on the number of small
entities that would be impacted by the implementation of the sunset
provision and the potential effects on small entities. HHS did not
receive any comments on these estimates.
2.1. Amendments to Existing MHPAEA Regulation (26 CFR 54.9812-1, 29 CFR
2590.712, and 45 CFR 146.136)
These final rules clarify existing definitions, add new
definitions, generally ensure that the NQTLs applicable to mental
health and substance use disorder benefits are generally no more
restrictive than the predominant NQTLs applied to substantially all
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. These final rules
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 add more
specificity as to what plans and issuers must define as mental health
conditions or substance use disorders. The final rules also require
that plans and issuers must provide meaningful benefits for covered
mental health conditions or substance use disorders in each
classification in which medical/surgical benefits are provided. These
final rules also require plans and issuers to collect and evaluate
relevant data and include an analysis of the data as part of each
comparative analysis. The Departments are of the view that plans and
issuers will incur costs in collecting, preparing, and analyzing the
data.
The Departments are of the view that the final 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 services
may see the largest increase in utilization.
2.2. New Regulations (26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR
146.137 and 146.180)
These final rules codify existing guidance, set more specific
content requirements for comparative analyses required by the CAA,
2021, and outline the timeframes and process for plans and issuers to
provide their comparative analyses to the Departments upon request.
Participants and beneficiaries in ERISA plans may also request a copy
of comparative analyses at any time, and all participants,
beneficiaries, and enrollees may request a comparative analysis in
connection with an adverse benefit determination. Additionally, in
these final rules, HHS finalizes 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 TPAs, MEWAs,
issuers, and self-funded group health plans, most if not all of which
are large entities, will conduct the comparative analysis themselves
will incur an incremental per-entity cost of approximately $101,600
associated with these final rules. The Departments also estimate an
incremental per-entity cost of $51,300 in the first year for self-
funded group health plans that will receive a generic comparative
analysis from their TPA or other service provider and subsequently will
customize to suit their specific needs.
In the subsequent years, the Departments estimate that TPAs, MEWAs,
issuers, and self-funded group health plans that will conduct the
comparative analysis themselves, will incur an incremental per-entity
cost of approximately $20,100 associated with these final rules and
amendments. The Departments also estimate an incremental per-entity
cost of $10,100 in subsequent years for self-funded group health plans
that will receive a generic comparative analysis from their TPA or
other service provider and subsequently will customize it to suit their
specific needs.
The Departments note that these per-entity costs are average costs,
and these costs are expected to vary by plan or issuer depending on the
number of NQTL analyses performed.
3. Comment Summary
In the proposal, commenters expressed concerns that the Departments
underestimated the burden of collecting the required data and
performing the comparative analyses. One commenter stated that small
plans lack access to aggregated claims data. The same commenter
suggested that the proposal was burdensome, since it required
information that was beyond the possession of small plans. The
commenter contended that small employers may decide to stop offering
health coverage altogether in favor of having their employees purchase
their own individual health insurance coverage through the ACA
Exchange, stating that the penalties under the ACA for employers not
offering coverage may be preferable compared to the costly requirements
under the proposal. The Departments note that there are no such
penalties that apply to small employers. The commenter also did not
provide any data or evidence.
Another commenter stated that there is a limited market of vendors
for conducting the comparative analyses, mentioning that these services
could cost upwards of $100,000. The same commenter expressed concern
that the proposal's comparative analysis requirements would
disproportionately consume the health benefits budget of plan sponsors,
potentially causing small employers to discontinue offering mental
health and substance use disorder benefits. The Departments note that
while there is a possibility that some plans and issuers will stop
offering mental health and substance use disorder benefits, the
Departments anticipate that these final rules will expand the level of
coverage for mental health and substance use disorder benefits, which
will result in reduced out-of-pocket spending for plan participants,
beneficiaries, and enrollees. The Departments also note that the
commenter did not cite any data or evidence.
Furthermore, another commenter was concerned that the proposal
would disrupt the operations of plans, by forcing plans to change their
network composition and eliminate the use of common medical management
techniques. The same commenter stated that the burden would fall on
small plans, since they may have insufficient resources to cope with
this unanticipated cost burden. The commenter did not provide any data
or evidence to support these assertions. As discussed earlier in this
preamble, these final rules do not eliminate the use of prior
authorization or other medical
[[Page 77702]]
management techniques, but emphasize that they must be developed and
used in parity as required by law.
Finally, the Departments did not receive any comments from the
Chief Counsel for Advocacy of SBA.
4. Duplicate, Overlapping, or Relevant Federal Rules
There are no duplicate, overlapping, or relevant Federal rules.
VII. Special Analyses--Department of the Treasury
Under the Memorandum of Agreement, Review of Treasury Regulations
under Executive Order 12866 (June 9, 2023), tax regulatory actions
issued by the Internal Revenue Service (IRS) are not subject to the
requirements of section 6 of Executive Order 12866, as amended.
Therefore, a regulatory impact analysis is not required. As required by
section 7805(f) of the Code, these regulations were submitted to the
Chief Counsel for Advocacy of SBA for comment on their impact on small
business.
VIII. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
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 one year by
State, local, and Tribal governments, in the aggregate, or by the
private sector.\451\ For purposes of the UMRA, this rulemaking is
expected to have such an impact. For the purposes of this rulemaking,
the regulatory impact analysis shall meet the UMRA obligations.
---------------------------------------------------------------------------
\451\ 2 U.S.C. 1501 et seq. (1995).
---------------------------------------------------------------------------
IX. 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.\452\ 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 final
rules.
---------------------------------------------------------------------------
\452\ Federalism, 64 FR 153 (Aug. 4, 1999).
---------------------------------------------------------------------------
In the Departments' view, these final rules have federalism
implications because they will 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 final rules could also have federalism implications
because the Departments remove the reference to State guidelines in the
definitions of medical/surgical benefits, mental health benefits, and
substance use disorder benefits, and amend these definitions to provide
that any condition or procedure defined by the plan or coverage as
being or not being a mental health condition or substance use disorder,
respectively, must be defined to be consistent with generally
recognized independent standards of current medical practice, which for
purposes of these final rules are all conditions or disorders under the
relevant chapters of the ICD or DSM. Finally, these final rules have
federalism implications because the implementation of the CAA, 2023
provision that sunsets the election option for sponsors of self-funded
non-Federal governmental plans to opt out of requirements under MHPAEA
will require State and local government sponsors of self-funded non-
Federal governmental 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 Conf. Rep. No. 104-736, pg. 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 final 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.
X. Congressional Review Act
In accordance with Subtitle E of the Small Business Regulatory
Enforcement Fairness Act of 1996 (also known as the Congressional
Review Act, 5 U.S.C. 801 et seq.), OIRA has determined that this rule
meets the criteria set forth in 5 U.S.C. 804(2). Accordingly, a report
containing a copy of the rule along with other specified information
has been submitted to each House of the Congress and to the Comptroller
General.
List of Subjects
26 CFR Part 54
Excise taxes, Health care, Health insurance, Pensions, Reporting
and recordkeeping requirements.
29 CFR Part 2590
Continuation coverage, Disclosure, Employee benefit plans, Group
health plans, Health care, Health insurance, 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
[[Page 77703]]
and recordkeeping requirements, Sex discrimination.
Douglas W. O'Donnell,
Deputy Commissioner, Internal Revenue Service.
Aviva Aron-Dine,
Acting Assistant Secretary (Tax Policy), Department of the Treasury.
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
26 CFR Part 54
Accordingly, the Treasury Department and the IRS amend 26 CFR part
54 as follows:
PART 54--PENSION EXCISE TAXES
0
Paragraph 1. The authority citation for part 54 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 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), (c)(2)(ii)(A)
introductory text, (c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
0
d. In paragraph (c)(3)(iii), adding introductory text;
0
e. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4),
(d)(3), (e)(4), and (i)(1); and
0
f. 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
aggregate 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 in the same classification, 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 or substance use disorder
benefits under the plan than they impose on access to medical/surgical
benefits in the same classification of 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 as of November 22,
2024, is the Diagnostic and Statistical Manual of Mental Disorders,
Fifth Edition, Text Revision published in March 2022. A subsequent
version of the DSM published after November 22, 2024, will be
considered the most current version beginning on the first day of the
plan year that is one year after the date the subsequent version is
published.
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 as of November 22,
2024, is the International Classification of Diseases, 10th Revision,
Clinical Modification adopted for the period beginning on October 1,
2015. Any subsequent version of the ICD adopted through 45 CFR 162.1002
after November 22, 2024, will be considered the most current version
beginning on the first day of the plan year that is one year after the
date the subsequent version is adopted.
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
[[Page 77704]]
preceding sentence, any condition or procedure defined by the plan 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 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. Examples of 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 that are used to determine when and how a participant or
beneficiary may access certain services; and the development and
approval of a treatment plan used in a concurrent review process to
determine whether a specific request should be granted or denied.
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 the degree of 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; the method of determining whether and how to deviate from
generally accepted standards of care in concurrent reviews; the
selection of information deemed reasonably necessary to make medical
necessity determinations; reliance on treatment guidelines or
guidelines provided by third-party organizations in the design of a
nonquantitative treatment limitation; and rationales used in selecting
and adopting certain threshold amounts to apply a nonquantitative
treatment limitation, professional standards and protocols to determine
utilization management standards, and fee schedules used to determine
provider reimbursement rates, used as part of a nonquantitative
treatment limitation. Strategies also include the method of creating
and determining the 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 methods for making 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 (such as
standards related to network composition), which otherwise limit the
scope or duration of benefits for treatment under a plan. (See
paragraph (c)(4)(ii) 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
[[Page 77705]]
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)(ii) 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 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), it must provide meaningful
benefits for that mental health condition or substance use disorder in
every classification in which medical/surgical benefits are provided.
For purposes of this paragraph (c)(2)(ii)(A), whether the benefits
provided are meaningful benefits is determined in comparison to the
benefits provided for medical conditions and surgical procedures in the
classification and requires, at a minimum, coverage of benefits for
that condition or disorder in each classification in which the plan
provides benefits for one or more medical conditions or surgical
procedures. A plan does not provide meaningful benefits under this
paragraph (c)(2)(ii)(A) unless it provides benefits for a core
treatment for that condition or disorder in each classification in
which the plan provides benefits for a core treatment for one or more
medical conditions or surgical procedures. For purposes of this
paragraph (c)(2)(ii)(A), a core treatment for a condition or disorder
is a standard treatment or course of treatment, therapy, service, or
intervention indicated by generally recognized independent standards of
current medical practice. If there is no core treatment for a covered
mental health condition or substance use disorder with respect to a
classification, the plan is not required to provide benefits for a core
treatment for such condition or disorder in that classification (but
must provide benefits for such condition or disorder in every
classification in which medical/surgical benefits are provided). 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) Examples. The rules of this paragraph (c)(2)(ii) 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. With regard to the examples in this paragraph
(c)(2)(ii)(C), references to any particular core treatment are included
for illustrative purposes only. Plans must consult generally recognized
independent standards of current medical practice to determine the
applicable core treatment, therapy, service, or intervention for any
covered condition or disorder.
(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 covers treatment for autism
spectrum disorder (ASD), a mental health condition, and covers
outpatient, out-of-network developmental
[[Page 77706]]
screenings for ASD but excludes all other benefits for outpatient
treatment for ASD, including applied behavior analysis (ABA)
therapy, when provided on an out-of-network basis. The plan
generally covers the full range of outpatient treatments (including
core treatments) and treatment settings for medical conditions and
surgical procedures when provided on an out-of-network basis. Under
the generally recognized independent standards of current medical
practice consulted by the plan, developmental screenings alone do
not constitute a core treatment for ASD.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5),
the plan violates the rules of this paragraph (c)(2)(ii). Although
the plan covers benefits for ASD, in the outpatient, out-of-network
classification, it only covers developmental screenings, so it does
not cover a core treatment for ASD in the classification. Because
the plan generally covers the full range of medical/surgical
benefits including a core treatment for one or more medical
conditions or surgical procedures in the classification, it fails to
provide meaningful benefits for treatment of ASD in the
classification.
(6) Example 6--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(5) of this section (Example 5), except that the plan
is an HMO that does not cover the full range of medical/surgical
benefits, including a core treatment for any medical conditions or
surgical procedures in the outpatient, out-of-network classification
(except as required under Code sections 9816 and 9817), but covers
benefits for medical conditions and surgical procedures in the
inpatient, in-network; outpatient, in-network; emergency care; and
prescription drug classifications.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6),
the plan does not violate the rules of this paragraph (c)(2)(ii).
Because the plan does not provide meaningful benefits, including for
a core treatment for any medical condition or surgical procedure in
the outpatient, out-of-network classification (except as required
under Code sections 9816 and 9817), the plan is not required to
provide meaningful benefits for any mental health conditions or
substance use disorders in that classification. Nevertheless, the
plan must provide meaningful benefits for each mental health
condition and substance use disorder for which the plan provides
benefits in every classification in which meaningful medical/
surgical benefits are provided, as required under paragraph
(c)(2)(ii)(A) of this section. This example does not address whether
the plan has complied with other applicable requirements of this
section in excluding coverage of ABA therapy in the outpatient, out-
of-network classification.
(7) Example 7--(i) Facts. A plan provides extensive benefits,
including for core treatments for many medical conditions and
surgical procedures in the outpatient, in-network classification,
including nutrition counseling for diabetes and obesity. The plan
also generally covers diagnosis and treatment for eating disorders,
which are mental health conditions, including coverage for nutrition
counseling to treat eating disorders in the outpatient, in-network
classification. Nutrition counseling is a core treatment for eating
disorders, in accordance with generally recognized independent
standards of current medical practice consulted by the plan.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(7) (Example 7),
the plan does not violate the rules of this paragraph (c)(2)(ii).
The coverage of diagnosis and treatment for eating disorders,
including nutrition counseling, in the outpatient, in-network
classification results in the plan providing meaningful benefits for
the treatment of eating disorders in the classification, as
determined in comparison to the benefits provided for medical
conditions or surgical procedures in the classification.
(8) Example 8--(i) Facts. A plan provides extensive benefits for
the core treatments for many medical conditions and surgical
procedures in the outpatient, in-network and prescription drug
classifications. The plan provides coverage for diagnosis and
treatment for opioid use disorder, a substance use disorder, in the
outpatient, in-network classification, by covering counseling and
behavioral therapies and, in the prescription drug classification,
by covering medications to treat opioid use disorder (MOUD).
Counseling and behavioral therapies and MOUD, in combination, are
one of the core treatments for opioid use disorder, in accordance
with generally recognized independent standards of current medical
practice consulted by the plan.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(8) (Example 8),
the plan does not violate the rules of this paragraph (c)(2)(ii).
The coverage of counseling and behavioral therapies and MOUD, in
combination, in the outpatient, in-network classification and
prescription drug classification, respectively, results in the plan
providing meaningful benefits for the treatment of opioid use
disorder in the outpatient, in-network and prescription drug
classifications.
(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. The rules of this paragraph
(c)(3)(i)(D) 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,
[[Page 77707]]
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 N/A............ 12.5% (100x/800x)... 56.25% (450x/800x).. 12.5% (100x/800x).. 18.75% (150x/800x).
level.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(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 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).
[[Page 77708]]
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 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. Consistent with
paragraph (a)(1) of this section, a group health plan may not impose
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 that applies to substantially all
medical/surgical benefits in the same classification. For purposes of
this paragraph (c)(4), a nonquantitative treatment limitation is more
restrictive than the predominant nonquantitative treatment limitation
that applies to substantially all medical/surgical benefits in the same
classification if the plan fails to meet the requirements of paragraph
(c)(4)(i) or (iii) of this section. In such a case, the plan will be
considered to violate Code section 9812(a)(3)(A)(ii), and the
nonquantitative treatment limitation may not be imposed by the plan
with respect to mental health or substance use disorder benefits in the
classification.
(i) Requirements related to design and application of a
nonquantitative treatment limitation--(A) In general. 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)(i)(A) of this section, a plan may not rely upon
discriminatory factors or evidentiary standards to design a
nonquantitative treatment limitation to be imposed on mental health or
substance use disorder benefits. A factor or evidentiary standard is
discriminatory if the information, evidence, sources, or standards on
which the factor or evidentiary standard are based are biased or not
objective in a manner that discriminates against mental health or
substance use disorder benefits as compared to medical/surgical
benefits.
(1) Information, evidence, sources, or standards are considered to
be biased or not objective in a manner that discriminates against
mental health or substance use disorder benefits as compared to
medical/surgical benefits if, based on all the relevant facts and
circumstances, the information, evidence, sources, or standards
systematically disfavor access or are specifically designed to disfavor
access to mental health or substance use disorder benefits as compared
to medical/surgical benefits. For purposes of this paragraph
(c)(4)(i)(B)(1), relevant facts and circumstances may include, but are
not limited to, the reliability of the source of the information,
evidence, sources, or standards, including any underlying data; the
independence of the information, evidence, sources, and standards
relied upon; the analyses and methodologies employed to select the
information and the consistency of their application; and any known
safeguards deployed to prevent reliance on skewed data or metrics.
Information, evidence,
[[Page 77709]]
sources, or standards are not considered biased or not objective for
this purpose if the plan has taken the steps necessary to correct,
cure, or supplement any information, evidence, sources, or standards
that would have been biased or not objective in the absence of such
steps.
(2) For purposes of this paragraph (c)(4)(i)(B), historical plan
data or other historical information from a time when the plan was not
subject to Code section 9812 or was not in compliance with Code section
9812 are considered to be biased or not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits, if the historical plan data
or other historical information systematically disfavor access or are
specifically designed to disfavor access to mental health or substance
use disorder benefits as compared to medical/surgical benefits, and the
plan has not taken the steps necessary to correct, cure, or supplement
the data or information.
(3) For purposes of this paragraph (c)(4)(i)(B), generally
recognized independent professional medical or clinical standards and
carefully circumscribed measures reasonably and appropriately designed
to detect or prevent and prove fraud and abuse that minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits are not information, evidence, sources, or
standards that are biased or not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits. However, plans must comply
with the other requirements in this paragraph (c)(4), as applicable,
with respect to such standards or measures that are used as the basis
for a factor or evidentiary standard used to design or apply a
nonquantitative treatment limitation.
(ii) 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.
(iii) Required use of outcomes data--(A) In general. To ensure that
a nonquantitative treatment limitation applicable to mental health or
substance use disorder benefits in a classification, in operation, is
no more restrictive than the predominant nonquantitative treatment
limitation applied to substantially all medical/surgical benefits in
the classification, a plan must collect and evaluate relevant data in a
manner reasonably designed to assess the impact of the nonquantitative
treatment limitation on relevant outcomes related to access to mental
health and substance use disorder benefits and medical/surgical
benefits and carefully consider the impact as part of the plan's
evaluation. As part of its evaluation, the plan may not disregard
relevant outcomes data that it knows or reasonably should know suggest
that a nonquantitative treatment limitation is associated with material
differences in access to mental health or substance use disorder
benefits as compared to medical/surgical benefits. The Secretary,
jointly with the Secretary 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)(iii)(A).
(1) Relevant data generally. For purposes of this paragraph
(c)(4)(iii)(A), relevant data could include, as appropriate, but are
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) Relevant data for nonquantitative treatment limitations related
to network composition. In addition to the relevant data set forth in
paragraph (c)(4)(iii)(A)(1) of this section, relevant data for
nonquantitative treatment limitations related to network composition
could include, as appropriate, but are 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 (for comparable services and as
benchmarked to a reference standard).
(3) Unavailability of data. (i) If a plan newly imposes a
nonquantitative treatment limitation for which relevant data is
initially temporarily unavailable and the plan therefore cannot comply
with this paragraph (c)(4)(iii)(A), the plan must include in its
comparative analysis, as required under Sec. 54.9812-2(c)(5)(i)(C), a
detailed explanation of the lack of relevant data, the basis for the
plan's conclusion that there is a lack of relevant data, and when and
how the data will become available and be collected and analyzed. Such
a plan also must comply with this paragraph (c)(4)(iii)(A) as soon as
practicable once relevant data becomes available.
(ii) If a plan imposes a nonquantitative treatment limitation for
which no data exist that can reasonably assess any relevant impact of
the nonquantitative treatment limitation on relevant outcomes related
to access to mental health and substance use disorder benefits and
medical/surgical benefits, the plan must include in its comparative
analysis, as required under Sec. 54.9812-2(c)(5)(i)(D), a reasoned
justification as to the basis for the conclusion that there are no data
that can reasonably assess the nonquantitative treatment limitation's
impact, why the nature of the nonquantitative treatment limitation
prevents the plan from reasonably measuring its impact, an explanation
of what data was considered and rejected, and documentation of any
additional safeguards or protocols used to ensure the nonquantitative
treatment limitation complies with this section. If a plan becomes
aware of data that can reasonably assess any relevant impact of the
nonquantitative treatment limitation, the plan must comply with this
paragraph (c)(4)(iii)(A) as soon as practicable.
(iii) Consistent with paragraph (a)(1) of this section, paragraphs
[[Page 77710]]
(c)(4)(iii)(A)(3)(i) and (ii) of this section shall only apply in very
limited circumstances and, where applicable, shall be construed
narrowly.
(B) Material differences. To the extent the relevant data evaluated
under paragraph (c)(4)(iii)(A) of this section suggest that the
nonquantitative treatment limitation contributes to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits in a classification,
such differences will be considered a strong indicator that the plan
violates this paragraph (c)(4).
(1) Where the relevant data suggest that the nonquantitative
treatment limitation contributes to material differences in access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits in a classification, the plan must take
reasonable action, as necessary, to address the material differences to
ensure compliance, in operation, with this paragraph (c)(4) and must
document the actions that have been or are being taken by the plan to
address material differences in access to mental health or substance
use disorder benefits, as compared to medical/surgical benefits, as
required by Sec. 54.9812-2(c)(5)(iv).
(2) For purposes of this paragraph (c)(4)(iii)(B), relevant data
are considered to suggest that the nonquantitative treatment limitation
contributes to material differences in access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits if, based on all relevant facts and circumstances, and taking
into account the considerations outlined in this paragraph
(c)(4)(iii)(B)(2), the difference in the data suggests that the
nonquantitative treatment limitation is likely to have a negative
impact on access to mental health or substance use disorder benefits as
compared to medical/surgical benefits.
(i) Relevant facts and circumstances, for purposes of this
paragraph (c)(4)(iii)(B)(2), may include, but are not limited to, the
terms of the nonquantitative treatment limitation at issue, the quality
or limitations of the data, causal explanations and analyses, evidence
as to the recurring or non-recurring nature of the results, and the
magnitude of any disparities.
(ii) Differences in access to mental health or substance use
disorder benefits attributable to generally recognized independent
professional medical or clinical standards or carefully circumscribed
measures reasonably and appropriately designed to detect or prevent and
prove fraud and abuse that minimize the negative impact on access to
appropriate mental health and substance use disorder benefits, which
are used as the basis for a factor or evidentiary standard used to
design or apply a nonquantitative treatment limitation, are not
considered to be material for purposes of this paragraph
(c)(4)(iii)(B). To the extent a plan attributes any differences in
access to the application of such standards or measures, the plan must
explain the bases for that conclusion in the documentation prepared
under Sec. 54.9812-2(c)(5)(iv)(A).
(C) Nonquantitative treatment limitations related to network
composition. For purposes of applying paragraph (c)(4)(iii)(A) of this
section with respect to nonquantitative treatment limitations related
to network composition, a plan must collect and evaluate relevant data
in a manner reasonably designed to assess the aggregate impact of all
such nonquantitative treatment limitations on access to mental health
and substance use disorder benefits and medical/surgical benefits.
Examples of possible actions that a plan could take to comply with the
requirement under paragraph (c)(4)(iii)(B)(1) of this section to take
reasonable action, as necessary, to address any material differences in
access with respect to nonquantitative treatment limitations related to
network composition, to ensure compliance with this paragraph (c)(4),
include, but are not limited to:
(1) Strengthening efforts to recruit and encourage a broad range of
available mental health and substance use disorder providers and
facilities to join the plan's network of providers, including taking
actions to increase compensation or other inducements, streamline
credentialing processes, or contact providers reimbursed for items and
services provided on an out-of-network basis to offer participation in
the network;
(2) Expanding the availability of telehealth arrangements to
mitigate any overall mental health and substance use disorder provider
shortages in a geographic area;
(3) Providing additional outreach and assistance to participants
and beneficiaries enrolled in the plan to assist them in finding
available in-network mental health and substance use disorder providers
and facilities; and
(4) Ensuring that provider directories are accurate and reliable.
(iv) 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.
(v) Effect of final determination of noncompliance under Sec.
54.9812-2. (A) If a group health plan receives a final determination
from the Secretary that the plan is not in compliance with the
requirements of Code section 9812(a)(8) or 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 with respect to mental health or substance use disorder
benefits in the relevant classification, unless and until the plan
demonstrates to the Secretary compliance with the requirements of this
section or takes appropriate action to remedy the violation.
(B) A determination by the Secretary of whether to require
cessation of a nonquantitative treatment limitation under this
paragraph (c)(4)(v) will be based on an evaluation of the relevant
facts and circumstances involved in the specific final determination
and the nature of the underlying nonquantitative treatment limitation
and will take into account the interest of plan participants and
beneficiaries and feedback from the plan.
(vi) 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.
(A) Example 1 (not comparable and more stringent factors for
reimbursement rate methodology, in operation)--(1) Facts. A plan's
reimbursement rate methodology for outpatient, in-network providers
is based on a variety of factors. 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 are based on
a combination of factors, such as the nature of the service,
duration of the service, intensity and specialization of training,
provider licensure and type, number of providers qualified to
provide the service in a given geographic area, and market need
(demand). In operation, the plan utilizes an additional strategy to
further reduce reimbursement rates for mental health and substance
use disorder non-physician providers from those
[[Page 77711]]
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)(vi)(A) (Example 1), the
plan violates the rules of this paragraph (c)(4). 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 of mental health and substance use
disorder services by the same percentage for every CPT code but does
not apply the same reductions to non-physician providers of medical/
surgical services from the rate for physician providers of medical/
surgical services, in operation, the factors used in designing and
applying the nonquantitative treatment limitation to mental health
and substance use disorder benefits in the outpatient, in-network
classification are not comparable to, and are applied more
stringently than, the factors used in designing and applying the
limitation with respect to medical/surgical benefits in the same
classification. As a result, the nonquantitative treatment
limitation with respect to mental health or substance use disorder
benefits in the outpatient, in-network classification is more
restrictive than the predominant nonquantitative treatment
limitation that applies to substantially all medical/surgical
benefits in the same classification.
(B) Example 2 (strategy for exclusion for experimental or
investigative treatment more stringently applied to ABA therapy in
operation)--(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, as experimental, a
treatment or procedure when no professionally recognized treatment
guidelines include the treatment or procedure as a clinically
appropriate standard 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 as one intervention to treat certain children with ASD.
(2) Conclusion. In this paragraph (c)(4)(vi)(B) (Example 2), the
plan violates the rules of this paragraph (c)(4). As written, the
plan excludes coverage of 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 as including the treatment or procedure at
issue, and fewer than two randomized controlled trials are available
to support the treatment's use with respect to the given condition
or procedure. However, in operation, the plan deviates from this
strategy with respect to ABA therapy because more than one
professionally recognized treatment guideline defines clinically
appropriate standards of care for ASD as including ABA therapy to
treat certain children with ASD and more than two randomized
controlled trials are available to support the use of ABA therapy to
treat certain children with ASD. Therefore, in operation, the
strategy used to design the nonquantitative treatment limitation for
benefits for the treatment of ASD, which is a mental health
condition, in the outpatient, in-network classification is not
comparable to, and is applied more stringently than, the strategy
used to design the nonquantitative treatment limitation for medical/
surgical benefits in the same classification. As a result, the
nonquantitative treatment limitation with respect to mental health
or substance use disorder benefits in the outpatient, in-network
classification is more restrictive than the predominant
nonquantitative treatment limitation that applies to substantially
all medical/surgical benefits in the same classification.
(C) Example 3 (step therapy protocol with exception for severe
or irreversible consequences, discriminatory factor)--(1) Facts. A
plan's written terms include a step therapy protocol that requires
participants and beneficiaries who are prescribed certain drugs to
try and fail a generic or preferred brand name drug before the plan
will cover the drug originally prescribed by a participant's or
beneficiary's attending provider. The plan provides an exception to
this protocol that was developed solely based on a methodology
developed by an external third-party organization. The third-party
organization's methodology, which is not based on a generally
recognized independent professional medical or clinical standard,
identifies instances in which a delay in treatment with a drug
prescribed for a medical condition or surgical procedure could
result in either severe or irreversible consequences. However, with
respect to a drug prescribed for a mental health condition or a
substance use disorder, the third-party organization's methodology
only identifies instances in which a delay in treatment could result
in both severe and irreversible consequences, and the plan does not
take any steps to correct, cure, or supplement the methodology.
(2) Conclusion. In this paragraph (c)(4)(vi)(C) (Example 3), the
plan violates the rules of paragraph (c)(4)(i)(B) of this section.
The source upon which the factor used to apply the step therapy
protocol is based is biased or not objective in a manner that
discriminates against mental health or substance use disorder
benefits as compared to medical/surgical benefits because it
addresses instances in which a delay in treatment with a drug
prescribed for a medical condition or surgical procedure could
result in either severe or irreversible consequences, but only
addresses instances in which a delay in treatment with a drug
prescribed for a mental health condition or substance use disorder
could result in both severe and irreversible consequences, and the
plan fails to take the steps necessary to correct, cure, or
supplement the methodology so that it is not biased and is
objective. Based on the relevant facts and circumstances, this
source systematically disfavors access or is specifically designed
to disfavor access to mental health or substance use disorder
benefits as compared to medical/surgical benefits. Therefore, the
factor used to apply the step therapy protocol is discriminatory for
purposes of determining comparability and stringency under paragraph
(c)(4)(i)(A) of this section, and may not be relied upon by the
plan.
(D) Example 4 (use of historical plan data and plan steps to
correct, cure, or supplement)--(1) Facts. A plan's methodology for
calculating provider reimbursement rates relies only on historical
plan data on total plan spending for each specialty, divided between
mental health and substance use disorder providers and medical/
surgical providers, from a time when the plan was not subject to
Code section 9812. The plan has used these historical plan data for
many years to establish base reimbursement rates in all provider
specialties for which it provides medical/surgical, mental health,
and substance use disorder benefits in the inpatient, in-network
classification. In evaluating the use of these historical plan data
in the design of the methodology for calculating provider
reimbursement rates, the plan determined, based on all the relevant
facts and circumstances, that the historical plan data
systematically disfavor access or are specifically designed to
disfavor access to mental health or substance use disorder benefits
as compared to medical/surgical benefits. To ensure this information
about historical reimbursement rates is not biased and is objective,
the plan supplements its methodology to develop the base
reimbursement rates for mental health and substance use disorder
providers in accordance with additional information, evidence,
sources, and standards that reflect the increased demand for mental
health and substance use disorder benefits in the inpatient, in-
network classification and to attract sufficient mental health and
substance use disorder providers to the network, so that the
relevant facts and circumstances indicate the supplemented
information, evidence, sources, or standards do not systematically
disfavor access and are not specifically designed to disfavor access
to mental health and substance use disorder benefits as compared to
medical/surgical benefits.
(2) Conclusion. In this paragraph (c)(4)(vi)(D) (Example 4), the
plan does not violate the rules of paragraph (c)(4)(i)(B) of this
section with respect to the plan's methodology for calculating
provider reimbursement rates in the inpatient, in-network
classification. The relevant facts and circumstances indicate that
the plan's use of only historical plan data to design its
methodology for calculating provider reimbursement rates in the
inpatient, in-network classification would otherwise be
[[Page 77712]]
considered to be biased or not objective in a manner that
discriminates against mental health or substance use disorder
benefits as compared to medical/surgical benefits under paragraph
(c)(4)(i)(B)(2) of this section, since the historical data
systematically disfavor access or are specifically designed to
disfavor access to mental health or substance use disorder benefits
as compared to medical/surgical benefits. However, the plan took the
steps necessary to supplement the information, evidence, sources,
and standards to reasonably reflect the increased demand for mental
health and substance use disorder benefits in the inpatient, in-
network classification, and adjust the methodology to increase
reimbursement rates for those benefits, thereby ensuring that the
information, evidence, sources, and standards relied upon by the
plan for this purpose are not biased and are objective. Therefore,
the factors and evidentiary standards used to design the plan's
methodology for calculating provider reimbursement rates in the
inpatient, in-network classification are not discriminatory.
(E) Example 5 (generally recognized independent professional
medical or clinical standards and more stringent prior authorization
requirement in operation)--(1) Facts. The provisions of a plan state
that it relies on, and does not deviate from, generally recognized
independent professional medical or clinical standards to inform the
factor used to design prior authorization requirements for both
medical/surgical and mental health and substance use disorder
benefits in the prescription drug classification. The 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 for
treatment of opioid use disorder, every 30 days, which is
inconsistent with the generally recognized independent professional
medical standard on which the factor used to design the limitation
is based. The plan's factor used to design prior authorization
requirements for medical/surgical benefits in the prescription drug
classification relies on, and does not deviate from, generally
recognized independent professional medical or clinical standards.
(2) Conclusion. In this paragraph (c)(4)(vi)(E) (Example 5), the
plan violates the rules of this paragraph (c)(4). The American
Society of Addiction Medicine national practice guidelines on which
the factor used to design prior authorization requirements for
substance use disorder benefits is based are generally recognized
independent professional medical or clinical standards that are not
considered to be biased or not objective in a manner that
discriminates against mental health and substance use disorder
benefits under paragraph (c)(4)(i)(B)(3) of this section. However,
the plan must comply with other requirements in this paragraph
(c)(4), as applicable, with respect to such standards or measures
that are used as the basis for a factor or evidentiary standard used
to design or apply a nonquantitative treatment limitation. In
operation, the plan's factor used to design and apply prior
authorization requirements with respect to substance use disorder
benefits is not comparable to, and is applied more stringently than,
the same factor used to design and apply prior authorization
requirements for medical/surgical benefits, because the factor
relies on, and does not deviate from, generally recognized
independent professional medical or clinical standards for medical/
surgical benefits, but deviates from the relevant guidelines for
substance use disorder benefits. As a result, the nonquantitative
treatment limitation with respect to substance use disorder benefits
in the prescription drug classification is more restrictive than the
predominant nonquantitative treatment limitation that applies to
substantially all medical/surgical benefits in the same
classification.
(F) Example 6 (plan claims no data exist to reasonably assess
impact of nonquantitative treatment limitation on access; medical
necessity criteria)--(1) Facts. A plan approves or denies claims for
mental health and substance use disorder benefits and for medical/
surgical benefits in the inpatient, in-network and outpatient, in-
network classifications based on medical necessity criteria. The
plan states in its comparative analysis that no data exist that can
reasonably assess any relevant impact of the medical necessity
criteria nonquantitative treatment limitation on relevant outcomes
related to access to mental health or substance use disorder
benefits as compared to the plan's medical necessity criteria
nonquantitative treatment limitation's impact on relevant outcomes
related to access to medical/surgical benefits in the relevant
classifications, without further explanation.
(2) Conclusion. In this paragraph (c)(4)(vi)(F) (Example 6), the
plan violates this paragraph (c)(4). The plan does not comply with
paragraph (c)(4)(iii)(A)(3)(ii) of this section because the plan did
not include in its comparative analysis, as required under Sec.
54.9812-2(c)(5)(i)(D), a reasoned justification as to the basis for
its conclusion that there are no data that can reasonably assess the
nonquantitative treatment limitation's impact, an explanation of why
the nature of the nonquantitative treatment limitation prevents the
plan from reasonably measuring its impact, an explanation of what
data was considered and rejected, and documentation of any
additional safeguards or protocols used to ensure the
nonquantitative treatment limitation complies with this paragraph
(c)(4). Data that could reasonably assess the medical necessity
criteria nonquantitative treatment limitation's impact might
include, for example, the number and percentage of claims denials,
or the number and percentage of claims that were approved for a
lower level of care than the level requested on the initial claim.
Therefore, because the plan has not collected and evaluated relevant
data in a manner reasonably designed to assess the impact of the
nonquantitative treatment limitation on relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits in the relevant classifications, the plan
violates the requirements of paragraph (c)(4)(iii) of this section,
and violates the requirements under Sec. 54.9812-2(c)(5)(i)(D)
because it did not include sufficient information in its comparative
analysis with respect to the lack of relevant data.
(G) Example 7 (concurrent review data collection; no material
difference in access)--(1) Facts. A plan follows a written process
to apply a concurrent review nonquantitative treatment limitation to
all medical/surgical benefits and mental health and substance use
disorder benefits within the inpatient, in-network classification.
Under this 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. The plan collects relevant data, including the
number of referrals to second-level review, and the number of
denials of claims for medical/surgical benefits and mental health
and substance use disorder benefits subject to concurrent review as
compared to the total number of claims subject to concurrent review,
in the inpatient, in-network classification. The plan also collects
and evaluates the number of denied claims for medical/surgical
benefits and mental health and substance use disorder benefits that
are overturned on appeal in the inpatient, in-network
classification. The plan evaluates the relevant data and determines
that, based on the relevant facts and circumstances, the data do not
suggest that the concurrent review nonquantitative treatment
limitation contributes to material differences in access to mental
health or substance use disorder benefits as compared to medical/
surgical benefits in the classification Upon requesting the plan's
comparative analysis for the concurrent review nonquantitative
treatment limitation and reviewing the relevant data, the Secretary
does not request additional data and agrees that the data do not
suggest material differences in access.
(2) Conclusion. In this paragraph (c)(4)(vi)(G) (Example 7), the
plan does not violate the rules of paragraph (c)(4)(iii) of this
section. The plan collected and evaluated relevant data in a manner
reasonably designed to assess the impact of the nonquantitative
treatment limitation on relevant outcomes related to access to
mental health and substance use disorder benefits and medical/
surgical benefits and considered the impact as part of its
evaluation. Because the relevant data evaluated do not suggest that
the nonquantitative treatment limitation contributes to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits in the inpatient,
in-network classification, under paragraph (c)(4)(iii)(B) of this
section, there is no strong indicator that the plan violates this
paragraph (c)(4).
[[Page 77713]]
(H) Example 8 (material difference in access for prior
authorization requirement with reasonable action)--(1) Facts. A plan
requires prior authorization 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. The plan collects and evaluates relevant data in a manner
reasonably designed to assess the impact of the prior authorization
requirement on relevant outcomes related to access to mental health
and substance use disorder benefits and medical/surgical benefits in
the inpatient, in-network classification. The plan's written process
for prior authorization states that the plan approves inpatient, in-
network benefits for medical conditions and surgical procedures and
mental health and substance use disorder benefits 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. Approvals for
mental health and substance use disorder benefits are most commonly
given only for 1 day, after which a treatment plan must be submitted
by the patient's attending provider and approved by the plan. The
relevant data show that approvals for 7 days are most common for
medical conditions and surgical procedures under this plan. Based on
all the relevant facts and circumstances, the difference in the
relevant data suggests that the nonquantitative treatment limitation
is likely to have a negative impact on access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits. Therefore, the data suggest that the nonquantitative
treatment limitation contributes to material differences in access.
To address these material differences in access, the plan consults
more recent medical guidelines to update the factors that inform its
medical necessity nonquantitative treatment limitations. Based on
this review, the plan modifies the limitation so that inpatient, in-
network prior authorization requests for mental health or substance
use disorder benefits are approved for similar periods to what is
approved for medical/surgical benefits. The plan includes
documentation of this action as part of its comparative analysis.
(2) Conclusion. In this paragraph (c)(4)(vi)(H) (Example 8), the
plan does not violate the rules of paragraph (c)(4)(iii) of this
section. While relevant data for the plan's prior authorization
requirements suggested that the nonquantitative treatment limitation
contributes to material differences in access to mental health and
substance use disorder benefits as compared to inpatient, in-network
medical/surgical benefits under paragraph (c)(4)(iii)(B) of this
section, the plan has taken reasonable action, as necessary, to
ensure compliance, in operation, with this paragraph (c)(4) by
updating the factors that inform its prior authorization
nonquantitative treatment limitation for inpatient, in-network
mental health and substance use disorder benefits so that these
benefits are approved for similar periods to what is approved for
medical/surgical benefits. The plan also documents its action taken
to address material differences in access to inpatient, in-network
benefits as required by paragraph (c)(4)(iii)(B)(1) of this section.
(I) Example 9 (differences attributable to 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 factors and evidentiary
standards used to design and apply the medical management
requirement rely on independent professional medical or clinical
standards that are generally recognized by health care providers and
facilities in relevant clinical specialties. 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.
The plan collects and evaluates relevant data in a manner reasonably
designed to assess the impact of the medical management
nonquantitative treatment limitation on relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits, and considers the impact as part of the
plan's evaluation, as required by paragraph (c)(4)(iii)(A) of this
section. 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. The plan correctly
determines that these differences in access are attributable to the
generally recognized independent professional medical or clinical
standards used as the basis for the factors and evidentiary
standards used to design or apply the limitation and adequately
explains the bases for that conclusion as part of its comparative
analysis.
(2) Conclusion. In this paragraph (c)(4)(vi)(I) (Example 9), the
plan does not violate the rules of this paragraph (c)(4). Generally
recognized independent professional medical or clinical standards of
care are not considered to be information, evidence, sources, or
standards that are biased and not objective in a manner that
discriminates against mental health or substance use disorder
benefits as compared to medical/surgical benefits, and the plan
otherwise complies with the requirements in paragraph (c)(4)(i) of
this section. Additionally, the plan does not violate paragraph
(c)(4)(iii) of this section because it has collected and evaluated
relevant data, the differences in access are attributable to the
generally recognized independent professional medical or clinical
standards that are used as the basis for the factors and evidentiary
standards used to design or apply the medical management
nonquantitative treatment limitation, and the plan explains the
bases for this conclusion in its comparative analysis. As a result,
the nonquantitative treatment limitation with respect to mental
health or substance use disorder benefits in the inpatient, out-of-
network classification is no more restrictive than the predominant
nonquantitative treatment limitation that applies to substantially
all medical/surgical benefits in the same classification.
(J) Example 10 (material differences in access for standards for
provider admission to a network with reasonable action)--(1) Facts.
A plan applies nonquantitative treatment limitations related to
network composition in the inpatient, in-network and outpatient, 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 processes,
strategies, evidentiary standards, and other factors used in
designing and applying the nonquantitative treatment limitations
related to network composition for 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)(i) of this
section. In order to ensure, in operation, that the nonquantitative
treatment limitations are no more restrictive than the predominant
nonquantitative treatment limitations applied to substantially all
medical/surgical benefits in the classification, the plan collects
and evaluates relevant data in a manner reasonably designed to
assess the aggregate impact of all the nonquantitative treatment
limitations related to network composition on relevant outcomes
related to 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 evaluation. The plan
considers relevant data that is known, or reasonably should be
known, including 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 (for comparable services and
benchmarked to a reference standard, as appropriate); and in-network
and out-of-network utilization rates (including data related to the
dollar value and number of provider claims submissions). The plan
determines that the relevant data suggest that the nonquantitative
treatment limitations in the aggregate contribute to material
differences in access to mental health and substance use disorder
benefits compared to medical/surgical benefits in the
classifications because, based on all the relevant facts and
circumstances, the
[[Page 77714]]
differences in the data suggest that the nonquantitative treatment
limitations related to network composition are likely to have a
negative impact on access to mental health or substance use disorder
benefits as compared to medical/surgical benefits. The plan takes
reasonable actions, as necessary, to address the material
differences in access, to ensure compliance, in operation, with this
paragraph (c)(4), by strengthening its efforts to recruit and
encourage a broad range of available providers and facilities to
join the plan's network of providers, including by taking actions to
increase compensation and other inducements, streamline
credentialing processes, contact providers reimbursed for items and
services provided on an out-of-network basis to offer participation
in the network, and develop a process to monitor the effects of such
efforts; expanding the availability of telehealth arrangements to
mitigate overall provider shortages in certain geographic areas;
providing additional outreach and assistance to participants and
beneficiaries enrolled in the plan to assist them in finding
available in-network providers and facilities; and ensuring that the
plan's provider directories are accurate and reliable. The plan
documents the efforts that it has taken to address the material
differences in access that the data revealed, and the plan includes
the documentation as part of its comparative analysis submission.
(2) Conclusion. In this paragraph (c)(4)(vi)(J) (Example 10),
the plan does not violate the rules of this paragraph (c)(4). The
plan's nonquantitative treatment limitations related to network
composition comply with the rules of paragraph (c)(4)(i) of this
section. Additionally, the plan collects and evaluates relevant
data, as required under paragraph (c)(4)(iii)(A) of this section, in
a manner reasonably designed to assess the aggregate impact of all
such nonquantitative treatment limitations on relevant outcomes
related to access to mental health and substance use disorder
benefits and medical/surgical benefits, as required under paragraph
(c)(4)(iii)(C) of this section. While the data suggest that the
nonquantitative treatment limitations contribute to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits, the plan has
taken reasonable action, as necessary, to ensure compliance with
this paragraph (c)(4). The plan also documents the actions that have
been and are being taken by the plan to address material differences
as required by Sec. 54.9812-21(c)(5)(iv). As a result, the network
composition nonquantitative treatment limitations with respect to
mental health or substance use disorder benefits in the inpatient,
in-network and outpatient, in-network classifications are no more
restrictive than the predominant nonquantitative treatment
limitations that apply to substantially all medical/surgical
benefits in the same classifications.
(K) Example 11 (separate EAP exhaustion treatment limitation
applicable only to mental health or substance use disorder
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)(vi)(K) (Example 11),
the requirement that limits 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)(4). 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)(iv) 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 exclusion for treatment in a
residential facility applicable only to mental health and substance
use disorder benefits)--(1) Facts. A plan generally covers
inpatient, in-network and inpatient, out-of-network treatment
without any limitations on setting, including skilled nursing
facilities and rehabilitation hospitals, provided other medical
necessity standards are satisfied. The plan has an exclusion for
treatment at residential facilities, 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)(vi)(L) (Example 12),
the plan violates the rules of paragraph (c)(4)(iv) of this section.
The exclusion of treatment at residential facilities 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 because the
plan does not apply a comparable exclusion with respect to any
medical/surgical benefits in the same benefit classification.
(M) Example 13 (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 the
plan's exclusion of mental health and substance use disorder
benefits for failure to complete a course of treatment in the
inpatient, in-network classification under Sec. 54.9812-2(d), the
plan submits a comparative analysis for the nonquantitative
treatment limitation. After review of the comparative analysis, as
well as additional information submitted by the plan after the
Secretary determines that the plan has not submitted sufficient
information to be responsive to the request, 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 inpatient, in-network 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. Under 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. However, the
corrective action plan does not alter or eliminate the exclusion or
alter the processes, strategies, evidentiary standards, and other
factors used in designing and applying the exclusion. Moreover, the
additional comparative analysis still does not include sufficient
information. The Secretary then determines that the additional
comparative analyses do not demonstrate compliance with the
requirements of this paragraph (c)(4). Accordingly, the plan
receives a final determination of noncompliance with Code section
9812(a)(8) and Sec. 54.9812-2 from the Secretary, which concludes
that the plan did not demonstrate compliance through the comparative
analysis process. After considering the relevant facts and
circumstances, and considering the interests of plan participants
and beneficiaries, as well as feedback from the plan, the Secretary
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 exclusion of benefits for failure
to complete a course of treatment in the inpatient, in-network
classification.
(2) Conclusion. In this paragraph (c)(4)(vi)(M) (Example 13), by
continuing to impose the exclusion of mental health and substance
use disorder benefits for failure to complete a course of treatment
in the inpatient, in-network classification after the Secretary
directs the plan not to impose this nonquantitative treatment
limitation, the plan violates the requirements of paragraph
(c)(4)(v) of this section.
* * * * *
* * *
(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,
[[Page 77715]]
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. 54.9815-2719 set forth rules
regarding claims and appeals, including the right of claimants (or
their authorized representative) who have received 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 that is required to provide 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 at 45 CFR 146.136 and 146.137 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--
(i) This section applies to group health plans on the first day of
the first plan year beginning on or after January 1, 2025, except that
the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and
(c)(4)(iii) of this section apply on the first day of the first plan
year beginning on or after January 1, 2026.
(ii) Until the applicability date in paragraph (i)(1)(i) of this
section, plans are required to continue to comply with 26 CFR 54.9812-
1, revised as of April 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
Par. 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.
(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 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; and
(iii) A description of which benefits are included in each
classification set forth in Sec. 54.9812-1(c)(2)(ii)(A).
(2) Identification and definition of the factors and evidentiary
standards 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 every factor considered or relied upon, 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;
(B) A description of each evidentiary standard used to design or
apply each
[[Page 77716]]
factor (and the source of each evidentiary standard) identified under
paragraph (c)(2)(i) of this section; and
(C) A description of any steps the plan has taken to correct, cure,
or supplement any information, evidence, sources, or standards that
would otherwise have been considered biased or not objective under
Sec. 54.9812-1(c)(4)(i)(B)(1) in the absence of such steps.
(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 under 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
designations 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 deviations or variations 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 deviations
or variations.
(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 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 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 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 reasons for any deviations or variations
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 deviations or variations, 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, 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 evaluates whether,
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;
[[Page 77717]]
(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;
(C) With respect to a nonquantitative treatment limitation for
which relevant data is temporarily unavailable as described in Sec.
54.9812-1(c)(4)(iii)(A)(3)(i), a detailed explanation of the lack of
relevant data, the basis for the plan's conclusion that there is a lack
of relevant data, and when and how the data will become available and
be collected and analyzed; and
(D) With respect to a nonquantitative treatment limitation for
which no data exist that can reasonably assess any relevant impact of
the nonquantitative treatment limitation on relevant outcomes related
to access to mental health and substance use disorder benefits and
medical/surgical benefits as described in Sec. 54.9812-
1(c)(4)(iii)(A)(3)(ii), a reasoned justification as to the basis for
the conclusion that there are no data that can reasonably assess the
nonquantitative treatment limitation's impact, an explanation of why
the nature of the nonquantitative treatment limitation prevents the
plan from reasonably measuring its impact, an explanation of what data
was considered and rejected, and documentation of any additional
safeguards or protocols used to ensure that the nonquantitative
treatment limitation complies with Sec. 54.9812-1(c)(4);
(ii) Identification of the relevant data collected and evaluated,
as required under Sec. 54.9812-1(c)(4)(iii)(A);
(iii) Documentation 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:
(A) The evaluation of relevant data as required under Sec.
54.9812-1(c)(4)(iii)(A); and
(B) A reasoned justification and analysis that explains why the
plan concluded that any differences in the relevant data do or do not
suggest the nonquantitative treatment limitation contributes to
material differences in access to mental health or substance use
disorder benefits as compared to medical/surgical benefits, in
accordance with Sec. 54.9812-1(c)(4)(iii)(B)(2);
(iv) A detailed explanation of any material differences in access
demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of
this section, including:
(A) A reasoned explanation of any material differences in access
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 (including any considerations beyond a plan's
control that contribute to the existence of material differences) and a
detailed explanation of the bases for concluding that material
differences are not attributable to differences in the comparability or
relative stringency of the nonquantitative treatment limitation; and
(B) To the extent differences in access to mental health or
substance use disorder benefits are attributable to generally
recognized independent professional medical or clinical standards or
carefully circumscribed measures reasonably and appropriately designed
to detect or prevent and prove fraud and abuse that minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits, and such standards or measures are used as the
basis for a factor or evidentiary standard used to design or apply a
nonquantitative treatment limitation, documentation explaining how any
such differences are attributable to those standards or measures, as
required in Sec. 54.9812-1(c)(4)(iii)(B)(2)(ii); and
(v) A discussion of the actions that have been or are being taken
by the plan to address any material differences in access to mental
health or substance use disorder benefits as compared to medical/
surgical benefits, including the actions the plan has taken or is
taking under Sec. 54.9812-1(c)(4)(iii)(B)(1) to address material
differences to comply, in operation, with Sec. 54.9812-1(c)(4),
including, as applicable:
(A) A reasoned explanation of any material differences in access to
mental health or substance use disorder benefits as compared to
medical/surgical benefits that persist despite reasonable actions that
have been or are being taken; and
(B) For a plan designing and applying one or more nonquantitative
treatment limitations related to network composition, a discussion of
the actions that have been or are being taken to address material
differences in access to in-network mental health and substance use
disorder benefits as compared to in-network medical/surgical benefits,
including those listed in Sec. 54.9812-1(c)(4)(iii)(C).
(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 or is
not (or might or might not be) in compliance with the requirements of
Sec. 54.9812-1(c)(4), including any additional 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 not otherwise discussed in the comparative analysis;
(iv) The date the analysis is completed 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
the 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 determine whether
the
[[Page 77718]]
comparative analysis required in paragraph (b) of this section complies
with paragraph (c) of this section or whether the plan complies with
Sec. 54.9812-1(c)(4), 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). 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 initial determination by 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 (c) of this section that
demonstrate compliance with Sec. 54.9812-1(c)(4), not 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 business days of receipt of the final
determination of noncompliance, and the plan must 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 timeframe.
(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 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 submitted or 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 Sec. 54.9812-1(c)(4) or this section, 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 concurred with those actions; 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 (including 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), on the first day of the
first plan year beginning on or after January 1, 2025, except the
requirements of paragraphs (c)(2)(ii)(C), (c)(5)(i)(C) and (D), and
(c)(5)(ii) through (v) of this section apply on the first day of the
first plan year beginning on or after January 1, 2026.
(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
amends 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;
[[Page 77719]]
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), (c)(2)(ii)(A)
introductory text, (c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
0
d. In paragraph (c)(3)(iii), adding introductory text;
0
e. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4),
(d)(3), (e)(4), and (i)(1); and
0
f. Adding paragraph (j).
The revisions and additions read as follows:
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 aggregate 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 in the same classification, 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 or substance use disorder
benefits under the plan or coverage than they impose on access to
medical/surgical benefits in the same classification of 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 as of November 22,
2024, is the Diagnostic and Statistical Manual of Mental Disorders,
Fifth Edition, Text Revision published in March 2022. A subsequent
version of the DSM published after November 22, 2024, will be
considered the most current version beginning on the first day of the
plan year that is one year after the date the subsequent version is
published.
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 as of November 22,
2024, is the International Classification of Diseases, 10th Revision,
Clinical Modification adopted for the period beginning on October 1,
2015. Any subsequent version of the ICD adopted through 45 CFR 162.1002
after November 22, 2024, will be considered the most current version
beginning on the first day of the plan year that is one year after the
date the subsequent version is adopted.
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
[[Page 77720]]
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.
Examples of 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 that are used to determine when and how
a participant or beneficiary may access certain services; and the
development and approval of a treatment plan used in a concurrent
review process to determine whether a specific request should be
granted or denied. 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 the degree of 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; the method of determining whether and how to deviate from
generally accepted standards of care in concurrent reviews; the
selection of information deemed reasonably necessary to make medical
necessity determinations; reliance on treatment guidelines or
guidelines provided by third-party organizations in the design of a
nonquantitative treatment limitation; and rationales used in selecting
and adopting certain threshold amounts to apply a nonquantitative
treatment limitation, professional standards and protocols to determine
utilization management standards, and fee schedules used to determine
provider reimbursement rates, used as part of a nonquantitative
treatment limitation. Strategies also include the method of creating
and determining the 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 or issuer's
methods for making 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 (such as
standards related to network composition), which otherwise limit the
scope or duration of benefits for treatment under a plan or coverage.
(See paragraph (c)(4)(ii) 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
[[Page 77721]]
include annual, episode, and lifetime day and visit limits. See
paragraph (c)(4)(ii) 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),
it must provide meaningful benefits for that mental health condition or
substance use disorder in every classification in which medical/
surgical benefits are provided. For purposes of this paragraph
(c)(2)(ii)(A), whether the benefits provided are meaningful benefits is
determined in comparison to the benefits provided for medical
conditions and surgical procedures in the classification and requires,
at a minimum, coverage of benefits for that condition or disorder in
each classification in which the plan (or coverage) provides benefits
for one or more medical conditions or surgical procedures. A plan (or
coverage) does not provide meaningful benefits under this paragraph
(c)(2)(ii)(A) unless it provides benefits for a core treatment for that
condition or disorder in each classification in which the plan (or
coverage) provides benefits for a core treatment for one or more
medical conditions or surgical procedures. For purposes of this
paragraph (c)(2)(ii)(A), a core treatment for a condition or disorder
is a standard treatment or course of treatment, therapy, service, or
intervention indicated by generally recognized independent standards of
current medical practice. If there is no core treatment for a covered
mental health condition or substance use disorder with respect to a
classification, the plan (or coverage) is not required to provide
benefits for a core treatment for such condition or disorder in that
classification (but must provide benefits for such condition or
disorder in every classification in which medical/surgical benefits are
provided). 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) Examples. The rules of this paragraph (c)(2)(ii) 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. With regard to the examples in this paragraph
(c)(2)(ii)(C), references to any particular core treatment are included
for illustrative purposes only. Plans and issuers must consult
generally recognized independent standards of current medical practice
to determine the applicable core treatment, therapy, service, or
intervention for any covered condition or disorder.
(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 covers treatment for autism
spectrum disorder (ASD), a mental health condition, and covers
outpatient, out-of-network developmental
[[Page 77722]]
screenings for ASD but excludes all other benefits for outpatient
treatment for ASD, including applied behavior analysis (ABA)
therapy, when provided on an out-of-network basis. The plan
generally covers the full range of outpatient treatments (including
core treatments) and treatment settings for medical conditions and
surgical procedures when provided on an out-of-network basis. Under
the generally recognized independent standards of current medical
practice consulted by the plan, developmental screenings alone do
not constitute a core treatment for ASD.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5),
the plan violates the rules of this paragraph (c)(2)(ii). Although
the plan covers benefits for ASD in the outpatient, out-of-network
classification, it only covers developmental screenings, so it does
not cover a core treatment for ASD in the classification. Because
the plan generally covers the full range of medical/surgical
benefits, including a core treatment for one or more medical
conditions or surgical procedures in the classification, it fails to
provide meaningful benefits for treatment of ASD in the
classification.
(6) Example 6--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(5) of this section (Example 5), except that the plan
is an HMO that does not cover the full range of medical/surgical
benefits, including a core treatment for any medical conditions or
surgical procedures in the outpatient, out-of-network classification
(except as required under ERISA sections 716 and 717), but covers
benefits for medical conditions and surgical procedures in the
inpatient, in-network; outpatient, in-network; emergency care; and
prescription drug classifications.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6),
the plan does not violate the rules of this paragraph (c)(2)(ii).
Because the plan does not provide meaningful benefits, including for
a core treatment for any medical condition or surgical procedure in
the outpatient, out-of-network classification (except as required
under ERISA sections 716 and 717), the plan is not required to
provide meaningful benefits for any mental health conditions or
substance use disorders in that classification. Nevertheless, the
plan must provide meaningful benefits for each mental health
condition and substance use disorder for which the plan provides
benefits in every classification in which meaningful medical/
surgical benefits are provided as required under paragraph
(c)(2)(ii)(A) of this section. This example does not address whether
the plan has complied with other applicable requirements of this
section in excluding coverage of ABA therapy in the outpatient, out-
of-network classification.
(7) Example 7--(i) Facts. A plan provides extensive benefits,
including for core treatments for many medical conditions and
surgical procedures in the outpatient, in-network classification,
including nutrition counseling for diabetes and obesity. The plan
also generally covers diagnosis and treatment for eating disorders,
which are mental health conditions, including coverage for nutrition
counseling to treat eating disorders in the outpatient, in-network
classification. Nutrition counseling is a core treatment for eating
disorders, in accordance with generally recognized independent
standards of current medical practice consulted by the plan.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(7) (Example 7),
the plan does not violate the rules of this paragraph (c)(2)(ii).
The coverage of diagnosis and treatment for eating disorders,
including nutrition counseling, in the outpatient, in-network
classification results in the plan providing meaningful benefits for
the treatment of eating disorders in the classification, as
determined in comparison to the benefits provided for medical
conditions or surgical procedures in the classification.
(8) Example 8--(i) Facts. A plan provides extensive benefits for
the core treatments for many medical conditions and surgical
procedures in the outpatient, in-network and prescription drug
classifications. The plan provides coverage for diagnosis and
treatment for opioid use disorder, a substance use disorder, in the
outpatient, in-network classification, by covering counseling and
behavioral therapies and, in the prescription drug classification,
by covering medications to treat opioid use disorder (MOUD).
Counseling and behavioral therapies and MOUD, in combination, are
one of the core treatments for opioid use disorder, in accordance
with generally recognized independent standards of current medical
practice consulted by the plan.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(8) (Example 8),
the plan does not violate the rules of this paragraph (c)(2)(ii).
The coverage of counseling and behavioral therapies and MOUD, in
combination, in the outpatient, in-network classification and
prescription drug classification, respectively, results in the plan
providing meaningful benefits for the treatment of opioid use
disorder in the outpatient, in-network and prescription drug
classifications.
(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. The rules of this paragraph
(c)(3)(i)(D) 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
[[Page 77723]]
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 N/A............ 12.5% (100x/800x)... 56.25% (450x/800x).. 12.5% (100x/800x).. 18.75% (150x/800x).
level.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(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 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).
[[Page 77724]]
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.
(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. Consistent with
paragraph (a)(1) 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 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 that applies
to substantially all medical/surgical benefits in the same
classification. For purposes of this paragraph (c)(4), a
nonquantitative treatment limitation is more restrictive than the
predominant nonquantitative treatment limitation that applies to
substantially all medical/surgical benefits in the same classification
if the plan or issuer fails to meet the requirements of paragraph
(c)(4)(i) or (iii) of this section. In such a case, the plan (or health
insurance coverage) will be considered to violate ERISA section
712(a)(3)(A)(ii), and the nonquantitative treatment limitation may not
be imposed by the plan (or health insurance coverage) with respect to
mental health or substance use disorder benefits in the classification.
(i) Requirements related to design and application of a
nonquantitative treatment limitation--(A) In general. A plan (or health
insurance coverage) 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)(i)(A) of this section, a plan (or health
insurance coverage) may not rely upon discriminatory factors or
evidentiary standards to design a nonquantitative treatment limitation
to be imposed on mental health or substance use disorder benefits. A
factor or evidentiary standard is discriminatory if the information,
evidence, sources, or standards on which the factor or evidentiary
standard are based are biased or not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits.
(1) Information, evidence, sources, or standards are considered to
be biased or not objective in a manner that discriminates against
mental health or substance use disorder benefits as compared to
medical/surgical benefits if, based on all the relevant facts and
circumstances, the information, evidence, sources, or standards
systematically disfavor access or are specifically designed to disfavor
access to mental health or substance use disorder benefits as compared
to medical/surgical benefits. For purposes of this paragraph
(c)(4)(i)(B)(1), relevant facts and circumstances may include, but are
not limited to, the reliability of the source of the information,
evidence, sources, or standards, including any underlying data; the
independence of the information, evidence, sources, and
[[Page 77725]]
standards relied upon; the analyses and methodologies employed to
select the information and the consistency of their application; and
any known safeguards deployed to prevent reliance on skewed data or
metrics. Information, evidence, sources, or standards are not
considered biased or not objective for this purpose if the plan or
issuer has taken the steps necessary to correct, cure, or supplement
any information, evidence, sources, or standards that would have been
biased or not objective in the absence of such steps.
(2) For purposes of this paragraph (c)(4)(i)(B), historical plan
data or other historical information from a time when the plan or
coverage was not subject to ERISA section 712 or was not in compliance
with ERISA section 712 are considered to be biased or not objective in
a manner that discriminates against mental health or substance use
disorder benefits as compared to medical/surgical benefits, if the
historical plan data or other historical information systematically
disfavor access or are specifically designed to disfavor access to
mental health or substance use disorder benefits as compared to
medical/surgical benefits, and the plan or issuer has not taken the
steps necessary to correct, cure, or supplement the data or
information.
(3) For purposes of this paragraph (c)(4)(i)(B), generally
recognized independent professional medical or clinical standards and
carefully circumscribed measures reasonably and appropriately designed
to detect or prevent and prove fraud and abuse that minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits are not information, evidence, sources, or
standards that are biased or not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits. However, plans and issuers
must comply with the other requirements in this paragraph (c)(4), as
applicable, with respect to such standards or measures that are used as
the basis for a factor or evidentiary standard used to design or apply
a nonquantitative treatment limitation.
(ii) 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.
(iii) Required use of outcomes data--(A) In general. To ensure that
a nonquantitative treatment limitation applicable to mental health or
substance use disorder benefits in a classification, in operation, is
no more restrictive than the predominant nonquantitative treatment
limitation applied to substantially all medical/surgical benefits in
the classification, 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 relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits and carefully consider the impact as part of
the plan's or issuer's evaluation. As part of its evaluation, the plan
or issuer may not disregard relevant outcomes data that it knows or
reasonably should know suggest that a nonquantitative treatment
limitation is associated with material differences in access to mental
health or substance use disorder benefits as compared to medical/
surgical benefits. 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)(iii)(A).
(1) Relevant data generally. For purposes of this paragraph
(c)(4)(iii)(A), relevant data could include, as appropriate, but are
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) Relevant data for nonquantitative treatment limitations related
to network composition. In addition to the relevant data set forth in
paragraph (c)(4)(iii)(A)(1) of this section, relevant data for
nonquantitative treatment limitations related to network composition
could include, as appropriate, but are 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 (for comparable services and as
benchmarked to a reference standard).
(3) Unavailability of data. (i) If a plan or issuer newly imposes a
nonquantitative treatment limitation for which relevant data is
initially temporarily unavailable and the plan or issuer therefore
cannot comply with this paragraph (c)(4)(iii)(A), the plan or issuer
must include in its comparative analysis, as required under Sec.
2590.712-1(c)(5)(i)(C), a detailed explanation of the lack of relevant
data, the basis for the plan's or issuer's conclusion that there is a
lack of relevant data, and when and how the data will become available
and be collected and analyzed. Such a plan or issuer also must comply
with this paragraph (c)(4)(iii)(A) as soon as practicable once relevant
data becomes available.
(ii) If a plan or issuer imposes a nonquantitative treatment
limitation for which no data exist that can reasonably assess any
relevant impact of the nonquantitative treatment limitation on relevant
outcomes related to access to mental health and substance use disorder
benefits and medical/surgical benefits, the plan or issuer must include
in its comparative analysis, as required under Sec. 2590.712-
1(c)(5)(i)(D), a reasoned justification as to the basis for the
conclusion that there are no data that can reasonably assess the
nonquantitative treatment limitation's impact, why the nature of the
nonquantitative treatment limitation prevents the plan or issuer from
reasonably measuring its impact, an explanation of what data was
[[Page 77726]]
considered and rejected, and documentation of any additional safeguards
or protocols used to ensure the nonquantitative treatment limitation
complies with this section. If a plan or issuer becomes aware of data
that can reasonably assess any relevant impact of the nonquantitative
treatment limitation, the plan or issuer must comply with this
paragraph (c)(4)(iii)(A) as soon as practicable.
(iii) Consistent with paragraph (a)(1) of this section, paragraphs
(c)(4)(iii)(A)(3)(i) and (ii) of this section shall only apply in very
limited circumstances and, where applicable, shall be construed
narrowly.
(B) Material differences. To the extent the relevant data evaluated
under paragraph (c)(4)(iii)(A) of this section suggest that the
nonquantitative treatment limitation contributes to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits in a classification,
such differences will be considered a strong indicator that the plan or
issuer violates this paragraph (c)(4).
(1) Where the relevant data suggest that the nonquantitative
treatment limitation contributes to material differences in access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits in a classification, the plan or issuer must
take reasonable action, as necessary, to address the material
differences to ensure compliance, in operation, with this paragraph
(c)(4) and must document the actions that have been or are being taken
by the plan or issuer to address material differences in access to
mental health or substance use disorder benefits, as compared to
medical/surgical benefits, as required by Sec. 2590.712-1(c)(5)(iv).
(2) For purposes of this paragraph (c)(4)(iii)(B), relevant data
are considered to suggest that the nonquantitative treatment limitation
contributes to material differences in access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits if, based on all relevant facts and circumstances, and taking
into account the considerations outlined in this paragraph
(c)(4)(iii)(B)(2), the difference in the data suggests that the
nonquantitative treatment limitation is likely to have a negative
impact on access to mental health or substance use disorder benefits as
compared to medical/surgical benefits.
(i) Relevant facts and circumstances, for purposes of this
paragraph (c)(4)(iii)(B)(2), may include, but are not limited to, the
terms of the nonquantitative treatment limitation at issue, the quality
or limitations of the data, causal explanations and analyses, evidence
as to the recurring or non-recurring nature of the results, and the
magnitude of any disparities.
(ii) Differences in access to mental health or substance use
disorder benefits attributable to generally recognized independent
professional medical or clinical standards or carefully circumscribed
measures reasonably and appropriately designed to detect or prevent and
prove fraud and abuse that minimize the negative impact on access to
appropriate mental health and substance use disorder benefits, which
are used as the basis for a factor or evidentiary standard used to
design or apply a nonquantitative treatment limitation, are not
considered to be material for purposes of this paragraph
(c)(4)(iii)(B). To the extent a plan or issuer attributes any
differences in access to the application of such standards or measures,
the plan or issuer must explain the bases for that conclusion in the
documentation prepared under Sec. 2590.712-1(c)(5)(iv)(A).
(C) Nonquantitative treatment limitations related to network
composition. For purposes of applying paragraph (c)(4)(iii)(A) of this
section with respect to nonquantitative treatment limitations related
to network composition, a plan or issuer must collect and evaluate
relevant data in a manner reasonably designed to assess the aggregate
impact of all such nonquantitative treatment limitations on access to
mental health and substance use disorder benefits and medical/surgical
benefits. Examples of possible actions that a plan or issuer could take
to comply with the requirement under paragraph (c)(4)(iii)(B)(1) of
this section to take reasonable action, as necessary, to address any
material differences in access with respect to nonquantitative
treatment limitations related to network composition, to ensure
compliance with this paragraph (c)(4), include, but are not limited to:
(1) Strengthening efforts to recruit and encourage a broad range of
available mental health and substance use disorder providers and
facilities to join the plan's or issuer's network of providers,
including taking actions to increase compensation or other inducements,
streamline credentialing processes, or contact providers reimbursed for
items and services provided on an out-of-network basis to offer
participation in the network;
(2) Expanding the availability of telehealth arrangements to
mitigate any overall mental health and substance use disorder provider
shortages in a geographic area;
(3) Providing additional outreach and assistance to participants
and beneficiaries enrolled in the plan or coverage to assist them in
finding available in-network mental health and substance use disorder
providers and facilities; and
(4) Ensuring that provider directories are accurate and reliable.
(iv) 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.
(v) Effect of final determination of noncompliance under Sec.
2590.712-1. (A) If a group health plan (or health insurance issuer
offering coverage in connection with a group health plan) receives a
final determination from the Secretary that the plan or issuer is not
in compliance with the requirements of ERISA section 712(a)(8) or 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 with respect to mental health or
substance use disorder benefits in the relevant classification, 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.
(B) A determination by the Secretary of whether to require
cessation of a nonquantitative treatment limitation under this
paragraph (c)(4)(v) will be based on an evaluation of the relevant
facts and circumstances involved in the specific final determination
and the nature of the underlying nonquantitative treatment limitation
and will take into account the interest of plan participants and
beneficiaries and feedback from the plan or issuer.
(vi) 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.
[[Page 77727]]
(A) Example 1 (not comparable and more stringent factors for
reimbursement rate methodology, in operation)--(1) Facts. A plan's
reimbursement rate methodology for outpatient, in-network providers
is based on a variety of factors. 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 are based on
a combination of factors, such as the nature of the service,
duration of the service, intensity and specialization of training,
provider licensure and type, number of providers qualified to
provide the service in a given geographic area, and market need
(demand). In operation, the plan utilizes an additional strategy to
further reduce reimbursement rates for mental health and substance
use disorder non-physician providers from those 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)(vi)(A) (Example 1), the
plan violates the rules of this paragraph (c)(4). 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 of mental health and substance use
disorder services by the same percentage for every CPT code but does
not apply the same reductions to non-physician providers of medical/
surgical services from the rate for physician providers of medical/
surgical services, in operation, the factors used in designing and
applying the nonquantitative treatment limitation to mental health
and substance use disorder benefits in the outpatient, in-network
classification are not comparable to, and are applied more
stringently than, the factors used in designing and applying the
limitation with respect to medical/surgical benefits in the same
classification. As a result, the nonquantitative treatment
limitation with respect to mental health or substance use disorder
benefits in the outpatient, in-network classification is more
restrictive than the predominant nonquantitative treatment
limitation that applies to substantially all medical/surgical
benefits in the same classification.
(B) Example 2 (strategy for exclusion for experimental or
investigative treatment more stringently applied to ABA therapy in
operation)--(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, as experimental, a
treatment or procedure when no professionally recognized treatment
guidelines include the treatment or procedure as a clinically
appropriate standard 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 as one intervention to treat certain children with ASD.
(2) Conclusion. In this paragraph (c)(4)(vi)(B) (Example 2), the
plan violates the rules of this paragraph (c)(4). As written, the
plan excludes coverage of 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 as including the treatment or procedure at
issue, and fewer than two randomized controlled trials are available
to support the treatment's use with respect to the given condition
or procedure. However, in operation, the plan deviates from this
strategy with respect to ABA therapy because more than one
professionally recognized treatment guideline defines clinically
appropriate standards of care for ASD as including ABA therapy to
treat certain children with ASD and more than two randomized
controlled trials are available to support the use of ABA therapy to
treat certain children with ASD. Therefore, in operation, the
strategy used to design the nonquantitative treatment limitation for
benefits for the treatment of ASD, which is a mental health
condition, in the outpatient, in-network classification is not
comparable to, and is applied more stringently than, the strategy
used to design the nonquantitative treatment limitation for medical/
surgical benefits in the same classification. As a result, the
nonquantitative treatment limitation with respect to mental health
or substance use disorder benefits in the outpatient, in-network
classification is more restrictive than the predominant
nonquantitative treatment limitation that applies to substantially
all medical/surgical benefits in the same classification.
(C) Example 3 (step therapy protocol with exception for severe
or irreversible consequences, discriminatory factor)--(1) Facts. A
plan's written terms include a step therapy protocol that requires
participants and beneficiaries who are prescribed certain drugs to
try and fail a generic or preferred brand name drug before the plan
will cover the drug originally prescribed by a participant's or
beneficiary's attending provider. The plan provides an exception to
this protocol that was developed solely based on a methodology
developed by an external third-party organization. The third-party
organization's methodology, which is not based on a generally
recognized independent professional medical or clinical standard,
identifies instances in which a delay in treatment with a drug
prescribed for a medical condition or surgical procedure could
result in either severe or irreversible consequences. However, with
respect to a drug prescribed for a mental health condition or a
substance use disorder, the third-party organization's methodology
only identifies instances in which a delay in treatment could result
in both severe and irreversible consequences, and the plan does not
take any steps to correct, cure, or supplement the methodology.
(2) Conclusion. In this paragraph (c)(4)(vi)(C) (Example 3), the
plan violates the rules of paragraph (c)(4)(i)(B) of this section.
The source upon which the factor used to apply the step therapy
protocol is based is biased or not objective in a manner that
discriminates against mental health or substance use disorder
benefits as compared to medical/surgical benefits because it
addresses instances in which a delay in treatment with a drug
prescribed for a medical condition or surgical procedure could
result in either severe or irreversible consequences, but only
addresses instances in which a delay in treatment with a drug
prescribed for a mental health condition or substance use disorder
could result in both severe and irreversible consequences, and the
plan fails to take the steps necessary to correct, cure, or
supplement the methodology so that it is not biased and is
objective. Based on the relevant facts and circumstances, this
source systematically disfavors access or is specifically designed
to disfavor access to mental health or substance use disorder
benefits as compared to medical/surgical benefits. Therefore, the
factor used to apply the step therapy protocol is discriminatory for
purposes of determining comparability and stringency under paragraph
(c)(4)(i)(A) of this section, and may not be relied upon by the
plan.
(D) Example 4 (use of historical plan data and plan steps to
correct, cure, or supplement)--(1) Facts. A plan's methodology for
calculating provider reimbursement rates relies only on historical
plan data on total plan spending for each specialty, divided between
mental health and substance use disorder providers and medical/
surgical providers, from a time when the plan was not subject to
ERISA section 712. The plan has used these historical plan data for
many years to establish base reimbursement rates in all provider
specialties for which it provides medical/surgical, mental health,
and substance use disorder benefits in the inpatient, in-network
classification. In evaluating the use of these historical plan data
in the design of the methodology for calculating provider
reimbursement rates, the plan determined, based on all the relevant
facts and circumstances, that the historical plan data
systematically disfavor access or are specifically designed to
disfavor access to mental health or substance use disorder benefits
as compared to medical/surgical benefits. To ensure this information
about historical reimbursement rates is not biased and is objective,
the plan supplements its methodology to develop the base
reimbursement rates for mental health and substance use disorder
providers in accordance with additional information, evidence,
sources, and standards that reflect the increased demand for mental
health and substance use disorder benefits in the inpatient, in-
network classification and to
[[Page 77728]]
attract sufficient mental health and substance use disorder
providers to the network, so that the relevant facts and
circumstances indicate the supplemented information, evidence,
sources, or standards do not systematically disfavor access and are
not specifically designed to disfavor access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits.
(2) Conclusion. In this paragraph (c)(4)(vi)(D) (Example 4), the
plan does not violate the rules of paragraph (c)(4)(i)(B) of this
section with respect to the plan's methodology for calculating
provider reimbursement rates in the inpatient, in-network
classification. The relevant facts and circumstances indicate that
the plan's use of only historical plan data to design its
methodology for calculating provider reimbursement rates in the
inpatient, in-network classification would otherwise be considered
to be biased or not objective in a manner that discriminates against
mental health or substance use disorder benefits as compared to
medical/surgical benefits under paragraph (c)(4)(i)(B)(2) of this
section, since the historical data systematically disfavor access or
are specifically designed to disfavor access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits. However, the plan took the steps necessary to supplement
the information, evidence, sources, and standards to reasonably
reflect the increased demand for mental health and substance use
disorder benefits in the inpatient, in-network classification, and
adjust the methodology to increase reimbursement rates for those
benefits, thereby ensuring that the information, evidence, sources,
and standards relied upon by the plan for this purpose are not
biased and are objective. Therefore, the factors and evidentiary
standards used to design the plan's methodology for calculating
provider reimbursement rates in the inpatient, in-network
classification are not discriminatory.
(E) Example 5 (generally recognized independent professional
medical or clinical standards and more stringent prior authorization
requirement in operation)--(1) Facts. The provisions of a plan state
that it relies on, and does not deviate from, generally recognized
independent professional medical or clinical standards to inform the
factor used to design prior authorization requirements for both
medical/surgical and mental health and substance use disorder
benefits in the prescription drug classification. The 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 for
treatment of opioid use disorder, every 30 days, which is
inconsistent with the generally recognized independent professional
medical standard on which the factor used to design the limitation
is based. The plan's factor used to design prior authorization
requirements for medical/surgical benefits in the prescription drug
classification relies on, and does not deviate from, generally
recognized independent professional medical or clinical standards.
(2) Conclusion. In this paragraph (c)(4)(vi)(E) (Example 5), the
plan violates the rules of this paragraph (c)(4). The American
Society of Addiction Medicine national practice guidelines on which
the factor used to design prior authorization requirements for
substance use disorder benefits is based are generally recognized
independent professional medical or clinical standards that are not
considered to be biased or not objective in a manner that
discriminates against mental health and substance use disorder
benefits under paragraph (c)(4)(i)(B)(3) of this section. However,
the plan must comply with other requirements in this paragraph
(c)(4), as applicable, with respect to such standards or measures
that are used as the basis for a factor or evidentiary standard used
to design or apply a nonquantitative treatment limitation. In
operation, the plan's factor used to design and apply prior
authorization requirements with respect to substance use disorder
benefits is not comparable to, and is applied more stringently than,
the same factor used to design and apply prior authorization
requirements for medical/surgical benefits, because the factor
relies on, and does not deviate from, generally recognized
independent professional medical or clinical standards for medical/
surgical benefits, but deviates from the relevant guidelines for
substance use disorder benefits. As a result, the nonquantitative
treatment limitation with respect to substance use disorder benefits
in the prescription drug classification is more restrictive than the
predominant nonquantitative treatment limitation that applies to
substantially all medical/surgical benefits in the same
classification.
(F) Example 6 (plan claims no data exist to reasonably assess
impact of nonquantitative treatment limitation on access; medical
necessity criteria)--(1) Facts. A plan approves or denies claims for
mental health and substance use disorder benefits and for medical/
surgical benefits in the inpatient, in-network and outpatient, in-
network classifications based on medical necessity criteria. The
plan states in its comparative analysis that no data exist that can
reasonably assess any relevant impact of the medical necessity
criteria nonquantitative treatment limitation on relevant outcomes
related to access to mental health or substance use disorder
benefits as compared to the plan's medical necessity criteria
nonquantitative treatment limitation's impact on relevant outcomes
related to access to medical/surgical benefits in the relevant
classifications, without further explanation.
(2) Conclusion. In this paragraph (c)(4)(vi)(F) (Example 6), the
plan violates this paragraph (c)(4). The plan does not comply with
paragraph (c)(4)(iii)(A)(3)(ii) of this section because the plan did
not include in its comparative analysis, as required under Sec.
2590.712-1(c)(5)(i)(D), a reasoned justification as to the basis for
its conclusion that there are no data that can reasonably assess the
nonquantitative treatment limitation's impact, an explanation of why
the nature of the nonquantitative treatment limitation prevents the
plan from reasonably measuring its impact, an explanation of what
data was considered and rejected, and documentation of any
additional safeguards or protocols used to ensure the
nonquantitative treatment limitation complies with this paragraph
(c)(4). Data that could reasonably assess the medical necessity
criteria nonquantitative treatment limitation's impact might
include, for example, the number and percentage of claims denials,
or the number and percentage of claims that were approved for a
lower level of care than the level requested on the initial claim.
Therefore, because the plan has not collected and evaluated relevant
data in a manner reasonably designed to assess the impact of the
nonquantitative treatment limitation on relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits in the relevant classifications, the plan
violates the requirements of paragraph (c)(4)(iii) of this section,
and violates the requirements under Sec. 2590.712-1(c)(5)(i)(D)
because it did not include sufficient information in its comparative
analysis with respect to the lack of relevant data.
(G) Example 7 (concurrent review data collection; no material
difference in access)--(1) Facts. A plan follows a written process
to apply a concurrent review nonquantitative treatment limitation to
all medical/surgical benefits and mental health and substance use
disorder benefits within the inpatient, in-network classification.
Under this 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. The plan collects relevant data, including the
number of referrals to second-level review, and the number of
denials of claims for medical/surgical benefits and mental health
and substance use disorder benefits subject to concurrent review as
compared to the total number of claims subject to concurrent review,
in the inpatient, in-network classification. The plan also collects
and evaluates the number of denied claims for medical/surgical
benefits and mental health and substance use disorder benefits that
are overturned on appeal in the inpatient, in-network
classification. The plan evaluates the relevant data and determines
that, based on the relevant facts and circumstances, the data do not
suggest that the concurrent review nonquantitative treatment
limitation contributes to material differences in access to mental
health or substance use disorder benefits as compared to medical/
surgical benefits in the classification Upon requesting the plan's
comparative analysis for the concurrent review nonquantitative
treatment limitation and reviewing the relevant data, the Secretary
does not request additional data
[[Page 77729]]
and agrees that the data do not suggest material differences in
access.
(2) Conclusion. In this paragraph (c)(4)(vi)(G) (Example 7), the
plan does not violate the rules of paragraph (c)(4)(iii) of this
section. The plan collected and evaluated relevant data in a manner
reasonably designed to assess the impact of the nonquantitative
treatment limitation on relevant outcomes related to access to
mental health and substance use disorder benefits and medical/
surgical benefits and considered the impact as part of its
evaluation. Because the relevant data evaluated do not suggest that
the nonquantitative treatment limitation contributes to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits in the inpatient,
in-network classification, under paragraph (c)(4)(iii)(B) of this
section, there is no strong indicator that the plan violates this
paragraph (c)(4).
(H) Example 8 (material difference in access for prior
authorization requirement with reasonable action)--(1) Facts. A plan
requires prior authorization 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. The plan collects and evaluates relevant data in a manner
reasonably designed to assess the impact of the prior authorization
requirement on relevant outcomes related to access to mental health
and substance use disorder benefits and medical/surgical benefits in
the inpatient, in-network classification. The plan's written process
for prior authorization states that the plan approves inpatient, in-
network benefits for medical conditions and surgical procedures and
mental health and substance use disorder benefits 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. Approvals for
mental health and substance use disorder benefits are most commonly
given only for 1 day, after which a treatment plan must be submitted
by the patient's attending provider and approved by the plan. The
relevant data show that approvals for 7 days are most common for
medical conditions and surgical procedures under this plan. Based on
all the relevant facts and circumstances, the difference in the
relevant data suggests that the nonquantitative treatment limitation
is likely to have a negative impact on access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits. Therefore, the data suggest that the nonquantitative
treatment limitation contributes to material differences in access.
To address these material differences in access, the plan consults
more recent medical guidelines to update the factors that inform its
medical necessity nonquantitative treatment limitations. Based on
this review, the plan modifies the limitation so that inpatient, in-
network prior authorization requests for mental health or substance
use disorder benefits are approved for similar periods to what is
approved for medical/surgical benefits. The plan includes
documentation of this action as part of its comparative analysis.
(2) Conclusion. In this paragraph (c)(4)(vi)(H) (Example 8), the
plan does not violate the rules of paragraph (c)(4)(iii) of this
section. While relevant data for the plan's prior authorization
requirements suggested that the nonquantitative treatment limitation
contributes to material differences in access to mental health and
substance use disorder benefits as compared to inpatient, in-network
medical/surgical benefits under paragraph (c)(4)(iii)(B) of this
section, the plan has taken reasonable action, as necessary, to
ensure compliance, in operation, with this paragraph (c)(4) by
updating the factors that inform its prior authorization
nonquantitative treatment limitation for inpatient, in-network
mental health and substance use disorder benefits so that these
benefits are approved for similar periods to what is approved for
medical/surgical benefits. The plan also documents its action taken
to address material differences in access to inpatient, in-network
benefits as required by paragraph (c)(4)(iii)(B)(1) of this section.
(I) Example 9 (differences attributable to 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 factors and evidentiary
standards used to design and apply the medical management
requirement rely on independent professional medical or clinical
standards that are generally recognized by health care providers and
facilities in relevant clinical specialties. 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.
The plan collects and evaluates relevant data in a manner reasonably
designed to assess the impact of the medical management
nonquantitative treatment limitation on relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits, and considers the impact as part of the
plan's evaluation, as required by paragraph (c)(4)(iii)(A) of this
section. 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. The plan correctly
determines that these differences in access are attributable to the
generally recognized independent professional medical or clinical
standards used as the basis for the factors and evidentiary
standards used to design or apply the limitation and adequately
explains the bases for that conclusion as part of its comparative
analysis.
(2) Conclusion. In this paragraph (c)(4)(vi)(I) (Example 9), the
plan does not violate the rules of this paragraph (c)(4). Generally
recognized independent professional medical or clinical standards of
care are not considered to be information, evidence, sources, or
standards that are biased and not objective in a manner that
discriminates against mental health or substance use disorder
benefits as compared to medical/surgical benefits, and the plan
otherwise complies with the requirements in paragraph (c)(4)(i) of
this section. Additionally, the plan does not violate paragraph
(c)(4)(iii) of this section because it has collected and evaluated
relevant data, the differences in access are attributable to the
generally recognized independent professional medical or clinical
standards that are used as the basis for the factors and evidentiary
standards used to design or apply the medical management
nonquantitative treatment limitation, and the plan explains the
bases for this conclusion in its comparative analysis. As a result,
the nonquantitative treatment limitation with respect to mental
health or substance use disorder benefits in the inpatient, out-of-
network classification is no more restrictive than the predominant
nonquantitative treatment limitation that applies to substantially
all medical/surgical benefits in the same classification.
(J) Example 10 (material differences in access for standards for
provider admission to a network with reasonable action)--(1) Facts.
A plan applies nonquantitative treatment limitations related to
network composition in the inpatient, in-network and outpatient, 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 processes,
strategies, evidentiary standards, and other factors used in
designing and applying the nonquantitative treatment limitations
related to network composition for 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)(i) of this
section. In order to ensure, in operation, that the nonquantitative
treatment limitations are no more restrictive than the predominant
nonquantitative treatment limitations applied to substantially all
medical/surgical benefits in the classification, the plan collects
and evaluates relevant data in a manner reasonably designed to
assess the aggregate impact of all the nonquantitative treatment
limitations related to network composition on relevant outcomes
related to 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 evaluation. The plan
considers relevant data that is known, or reasonably should be
known, including metrics relating to the time and distance from
[[Page 77730]]
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 (for comparable services and
benchmarked to a reference standard, as appropriate); and in-network
and out-of-network utilization rates (including data related to the
dollar value and number of provider claims submissions). The plan
determines that the relevant data suggest that the nonquantitative
treatment limitations in the aggregate contribute to material
differences in access to mental health and substance use disorder
benefits compared to medical/surgical benefits in the
classifications because, based on all the relevant facts and
circumstances, the differences in the data suggest that the
nonquantitative treatment limitations related to network composition
are likely to have a negative impact on access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits. The plan takes reasonable actions, as necessary, to
address the material differences in access, to ensure compliance, in
operation, with this paragraph (c)(4), by strengthening its efforts
to recruit and encourage a broad range of available providers and
facilities to join the plan's network of providers, including by
taking actions to increase compensation and other inducements,
streamline credentialing processes, contact providers reimbursed for
items and services provided on an out-of-network basis to offer
participation in the network, and develop a process to monitor the
effects of such efforts; expanding the availability of telehealth
arrangements to mitigate overall provider shortages in certain
geographic areas; providing additional outreach and assistance to
participants and beneficiaries enrolled in the plan to assist them
in finding available in-network providers and facilities; and
ensuring that the plan's provider directories are accurate and
reliable. The plan documents the efforts that it has taken to
address the material differences in access that the data revealed,
and the plan includes the documentation as part of its comparative
analysis submission.
(2) Conclusion. In this paragraph (c)(4)(vi)(J) (Example 10),
the plan does not violate the rules of this paragraph (c)(4). The
plan's nonquantitative treatment limitations related to network
composition comply with the rules of paragraph (c)(4)(i) of this
section. Additionally, the plan collects and evaluates relevant
data, as required under paragraph (c)(4)(iii)(A) of this section, in
a manner reasonably designed to assess the aggregate impact of all
such nonquantitative treatment limitations on relevant outcomes
related to access to mental health and substance use disorder
benefits and medical/surgical benefits, as required under paragraph
(c)(4)(iii)(C) of this section. While the data suggest that the
nonquantitative treatment limitations contribute to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits, the plan has
taken reasonable action, as necessary, to ensure compliance with
this paragraph (c)(4). The plan also documents the actions that have
been and are being taken by the plan to address material differences
as required by Sec. 2590.712-1(c)(5)(iv). As a result, the network
composition nonquantitative treatment limitations with respect to
mental health or substance use disorder benefits in the inpatient,
in-network and outpatient, in-network classifications are no more
restrictive than the predominant nonquantitative treatment
limitations that apply to substantially all medical/surgical
benefits in the same classifications.
(K) Example 11 (separate EAP exhaustion treatment limitation
applicable only to mental health or substance use disorder
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)(vi)(K) (Example 11),
the requirement that limits 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)(4). 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)(iv) 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 exclusion for treatment in a
residential facility applicable only to mental health and substance
use disorder benefits)--(1) Facts. A plan generally covers
inpatient, in-network and inpatient, out-of-network treatment
without any limitations on setting, including skilled nursing
facilities and rehabilitation hospitals, provided other medical
necessity standards are satisfied. The plan has an exclusion for
treatment at residential facilities, 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)(vi)(L) (Example 12),
the plan violates the rules of paragraph (c)(4)(iv) of this section.
The exclusion of treatment at residential facilities 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 because the
plan does not apply a comparable exclusion with respect to any
medical/surgical benefits in the same benefit classification.
(M) Example 13 (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 the
plan's exclusion of mental health and substance use disorder
benefits for failure to complete a course of treatment in the
inpatient, in-network classification under Sec. 2590.712-1(d), the
plan submits a comparative analysis for the nonquantitative
treatment limitation. After review of the comparative analysis, as
well as additional information submitted by the plan after the
Secretary determines that the plan has not submitted sufficient
information to be responsive to the request, 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 inpatient, in-network 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. Under 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. However, the
corrective action plan does not alter or eliminate the exclusion or
alter the processes, strategies, evidentiary standards, and other
factors used in designing and applying the exclusion. Moreover, the
additional comparative analysis still does not include sufficient
information. The Secretary then determines that the additional
comparative analyses do not demonstrate compliance with the
requirements of this paragraph (c)(4). Accordingly, the plan
receives a final determination of noncompliance with ERISA section
712(a)(8) and Sec. 2590.712-1 from the Secretary, which concludes
that the plan did not demonstrate compliance through the comparative
analysis process. After considering the relevant facts and
circumstances, and considering the interests of plan participants
and beneficiaries, as well as feedback from the plan, the Secretary
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 exclusion of benefits for failure
to complete a course of treatment in the inpatient, in-network
classification.
(2) Conclusion. In this paragraph (c)(4)(vi)(M) (Example 13), by
continuing to impose the exclusion of mental health and
[[Page 77731]]
substance use disorder benefits for failure to complete a course of
treatment in the inpatient, in-network classification after the
Secretary directs the plan not to impose this nonquantitative
treatment limitation, the plan violates the requirements of
paragraph (c)(4)(v) of this section.
* * * * *
(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) who have received 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 that is required to provide 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 at 45 CFR 146.136 and 146.137 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--
(i) 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, except that
the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and
(c)(4)(iii) of this section apply on the first day of the first plan
year beginning on or after January 1, 2026.
(ii) Until the applicability date in paragraph (i)(1)(i) of this
section, 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 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, which must be provided
to the named fiduciaries of the plan who are required to include a
certification as part 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 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
[[Page 77732]]
substance use disorder benefits and which benefits are considered
medical/surgical benefits; and
(iii) A description of which benefits are included in each
classification set forth in Sec. 2590.712(c)(2)(ii)(A).
(2) Identification and definition of the factors and evidentiary
standards 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 every factor considered or relied upon, 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;
(B) A description of each evidentiary standard used to design or
apply each factor (and the source of each evidentiary standard)
identified under paragraph (c)(2)(i) of this section; and
(C) A description of any steps the plan or issuer has taken to
correct, cure, or supplement any information, evidence, sources, or
standards that would otherwise have been considered biased or not
objective under Sec. 2590.712(c)(4)(i)(B)(1) in the absence of such
steps.
(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 under 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
designations 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 deviations or variations 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
deviations or variations.
(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 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 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 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 reasons for any deviations or variations
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 deviations or variations, 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, in
operation, the processes, strategies, evidentiary standards, or other
factors used in designing and applying the
[[Page 77733]]
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 evaluates
whether, 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;
(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;
(C) With respect to a nonquantitative treatment limitation for
which relevant data is temporarily unavailable as described in Sec.
2590.712(c)(4)(iii)(A)(3)(i), a detailed explanation of the lack of
relevant data, the basis for the plan's or issuer's conclusion that
there is a lack of relevant data, and when and how the data will become
available and be collected and analyzed; and
(D) With respect to a nonquantitative treatment limitation for
which no data exist that can reasonably assess any relevant impact of
the nonquantitative treatment limitation on relevant outcomes related
to access to mental health and substance use disorder benefits and
medical/surgical benefits as described in Sec.
2590.712(c)(4)(iii)(A)(3)(ii), a reasoned justification as to the basis
for the conclusion that there are no data that can reasonably assess
the nonquantitative treatment limitation's impact, an explanation of
why the nature of the nonquantitative treatment limitation prevents the
plan or issuer from reasonably measuring its impact, an explanation of
what data was considered and rejected, and documentation of any
additional safeguards or protocols used to ensure that the
nonquantitative treatment limitation complies with Sec.
2590.712(c)(4);
(ii) Identification of the relevant data collected and evaluated,
as required under Sec. 2590.712(c)(4)(iii)(A);
(iii) Documentation 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:
(A) The evaluation of relevant data as required under Sec.
2590.712(c)(4)(iii)(A); and
(B) A reasoned justification and analysis that explains why the
plan or issuer concluded that any differences in the relevant data do
or do not suggest the nonquantitative treatment limitation contributes
to material differences in access to mental health or substance use
disorder benefits as compared to medical/surgical benefits, in
accordance with Sec. 2590.712(c)(4)(iii)(B)(2);
(iv) A detailed explanation of any material differences in access
demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of
this section, including:
(A) A reasoned explanation of any material differences in access
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 (including any considerations beyond a plan's
or issuer's control that contribute to the existence of material
differences) and a detailed explanation of the bases for concluding
that material differences are not attributable to differences in the
comparability or relative stringency of the nonquantitative treatment
limitation; and
(B) To the extent differences in access to mental health or
substance use disorder benefits are attributable to generally
recognized independent professional medical or clinical standards or
carefully circumscribed measures reasonably and appropriately designed
to detect or prevent and prove fraud and abuse that minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits, and such standards or measures are used as the
basis for a factor or evidentiary standard used to design or apply a
nonquantitative treatment limitation, documentation explaining how any
such differences are attributable to those standards or measures, as
required in Sec. 2590.712(c)(4)(iii)(B)(2)(ii); and
(v) A discussion of the actions that have been or are being taken
by the plan or issuer to address 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 has
taken or is taking under Sec. 2590.712(c)(4)(iii)(B)(1) to address
material differences to comply, in operation, with Sec.
2590.712(c)(4), including, as applicable:
(A) A reasoned explanation of any material differences in access to
mental health or substance use disorder benefits as compared to
medical/surgical benefits that persist despite reasonable actions that
have been or are being taken; and
(B) For a plan or issuer designing and applying one or more
nonquantitative treatment limitations related to network composition, a
discussion of the actions that have been or are being taken to address
material differences in access to in-network mental health and
substance use disorder benefits as compared to in-network medical/
surgical benefits, including those listed in Sec.
2590.712(c)(4)(iii)(C).
(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 or is not (or might or might not be) in compliance with the
requirements of Sec. 2590.712(c)(4), including any additional 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 not otherwise discussed in the comparative analysis;
(iv) The date the analysis is completed and the title and
credentials of all relevant persons who participated
[[Page 77734]]
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 the 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 that they
have engaged in a prudent process to select one or more qualified
service providers to perform and document a comparative analysis in
connection with the imposition of any nonquantitative treatment
limitations that apply to mental health and substance use disorder
benefits under the plan in accordance with applicable law and
regulations, and have satisfied their duty to monitor those service
providers as required under part 4 of ERISA with respect to the
performance and documentation of such comparative analysis.
(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 coverage in connection with 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 or issuer has not submitted sufficient
information under paragraph (d)(1) of this section for the Secretary to
determine whether the comparative analysis required in paragraph (b) of
this section complies with paragraph (c) of this section or whether the
plan or issuer complies with Sec. 2590.712(c)(4), 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). 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
initial determination by 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 (c) of this section that demonstrate
compliance with Sec. 2590.712(c)(4), 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
business days of receipt of the final determination of noncompliance,
and the plan or issuer must 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
timeframe.
(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 submitted or 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 Sec. 2590.712(c)(4) or this section, 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 concurred with those
actions; 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 (including a provider or other
person acting as a participant's or beneficiary's authorized
representative) who has
[[Page 77735]]
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), on the
first day of the first plan year beginning on or after January 1, 2025,
except the requirements of paragraphs (c)(2)(ii)(C), (c)(5)(i)(C) and
(D), and (c)(5)(ii) through (v) of this section apply on the first day
of the first plan year beginning on or after January 1, 2026.
(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 amends 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 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), (c)(2)(ii)(A)
introductory text, (c)(2)(ii)(C), and (c)(3)(i)(A), (C), and (D);
0
d. In paragraph (c)(3)(iii), adding introductory text;
0
e. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4),
(d)(3), (e)(4), and (i)(1); and
0
f. 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 aggregate 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 in the same classification, 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 or substance use disorder
benefits under the plan or coverage than they impose on access to
medical/surgical benefits in the same classification of benefits. The
provisions of PHS Act 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 as of November 22,
2024, is the Diagnostic and Statistical Manual of Mental Disorders,
Fifth Edition, Text Revision published in March 2022. A subsequent
version of the DSM published after November 22, 2024, will be
considered the most current version beginning on the first day of the
plan year that is one year after the date the subsequent version is
published.
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
[[Page 77736]]
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 as of November
22, 2024, is the International Classification of Diseases, 10th
Revision, Clinical Modification adopted for the period beginning on
October 1, 2015. Any subsequent version of the ICD adopted through
Sec. 162.1002 of this subtitle after November 22, 2024, will be
considered the most current version beginning on the first day of the
plan year that is one year after the date the subsequent version is
adopted.
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.
Examples of 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 that are used to determine when and how
a participant or beneficiary may access certain services; and the
development and approval of a treatment plan used in a concurrent
review process to determine whether a specific request should be
granted or denied. 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 the degree of 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; the method of determining whether and how to deviate from
generally accepted standards of care in concurrent reviews; the
selection of information deemed reasonably necessary to make medical
necessity determinations; reliance on treatment guidelines or
guidelines provided by third-party organizations in the design of a
nonquantitative treatment limitation; and rationales used in selecting
and adopting certain threshold amounts to apply a nonquantitative
treatment limitation, professional standards and protocols to determine
utilization management standards, and fee schedules used to determine
provider reimbursement rates, used as part of a nonquantitative
treatment limitation. Strategies also include the method of creating
and determining the 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 or issuer's
methods for making 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
[[Page 77737]]
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 (such as
standards related to network composition), which otherwise limit the
scope or duration of benefits for treatment under a plan or coverage.
(See paragraph (c)(4)(ii) 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)(ii) 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),
it must provide meaningful benefits for that mental health condition or
substance use disorder in every classification in which medical/
surgical benefits are provided. For purposes of this paragraph
(c)(2)(ii)(A), whether the benefits provided are meaningful benefits is
determined in comparison to the benefits provided for medical
conditions and surgical procedures in the classification and requires,
at a minimum, coverage of benefits for that condition or disorder in
each classification in which the plan (or coverage) provides benefits
for one or more medical conditions or surgical procedures. A plan (or
coverage) does not provide meaningful benefits under this paragraph
(c)(2)(ii)(A) unless it provides benefits for a core treatment for that
condition or disorder in each classification in which the plan (or
coverage) provides benefits for a core treatment for one or more
medical conditions or surgical procedures. For purposes of this
paragraph (c)(2)(ii)(A), a core treatment for a condition or disorder
is a standard treatment or course of treatment, therapy, service, or
intervention indicated by generally recognized independent standards of
current medical practice. If there is no core treatment for a covered
mental health condition or substance use disorder with respect to a
classification, the plan (or coverage) is not required to provide
benefits for a core treatment for such condition or disorder in that
classification (but must provide benefits for such condition or
disorder in every classification in which medical/surgical benefits are
provided). 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) Examples. The rules of this paragraph (c)(2)(ii) 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. With regard to the examples in this paragraph
(c)(2)(ii)(C), references to any particular core treatment are included
for illustrative purposes only. Plans and issuers must consult
generally recognized independent standards of current medical practice
to determine the applicable core treatment, therapy, service, or
intervention for any covered condition or disorder.
(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
[[Page 77738]]
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 covers treatment for autism
spectrum disorder (ASD), a mental health condition, and covers
outpatient, out-of-network developmental screenings for ASD but
excludes all other benefits for outpatient treatment for ASD,
including applied behavior analysis (ABA) therapy, when provided on
an out-of-network basis. The plan generally covers the full range of
outpatient treatments (including core treatments) and treatment
settings for medical conditions and surgical procedures when
provided on an out-of-network basis. Under the generally recognized
independent standards of current medical practice consulted by the
plan, developmental screenings alone do not constitute a core
treatment for ASD.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5),
the plan violates the rules of this paragraph (c)(2)(ii). Although
the plan covers benefits for ASD in the outpatient, out-of-network
classification, it only covers developmental screenings, so it does
not cover a core treatment for ASD in the classification. Because
the plan generally covers the full range of medical/surgical
benefits, including a core treatment for one or more medical
conditions or surgical procedures in the classification, it fails to
provide meaningful benefits for treatment of ASD in the
classification.
(6) Example 6--(i) Facts. Same facts as in paragraph
(c)(2)(ii)(C)(5) of this section (Example 5), except that the plan
is an HMO that does not cover the full range of medical/surgical
benefits including a core treatment for any medical conditions or
surgical procedures in the outpatient, out-of-network classification
(except as required under PHS Act sections 2799A-1 and 2799A-2), but
covers benefits for medical conditions and surgical procedures in
the inpatient, in-network; outpatient, in-network; emergency care;
and prescription drug classifications.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6),
the plan does not violate the rules of this paragraph (c)(2)(ii).
Because the plan does not provide meaningful benefits including for
a core treatment for any medical condition or surgical procedure in
the outpatient, out-of-network classification (except as required
under PHS Act sections 2799A-1 and 2799A-2), the plan is not
required to provide meaningful benefits for any mental health
conditions or substance use disorders in that classification.
Nevertheless, the plan must provide meaningful benefits for each
mental health condition and substance use disorder for which the
plan provides benefits in every classification in which meaningful
medical/surgical benefits are provided as required under paragraph
(c)(2)(ii)(A) of this section. This example does not address whether
the plan has complied with other applicable requirements of this
section in excluding coverage of ABA therapy in the outpatient, out-
of-network classification.
(7) Example 7--(i) Facts. A plan provides extensive benefits,
including for core treatments for many medical conditions and
surgical procedures in the outpatient, in-network classification,
including nutrition counseling for diabetes and obesity. The plan
also generally covers diagnosis and treatment for eating disorders,
which are mental health conditions, including coverage for nutrition
counseling to treat eating disorders in the outpatient, in-network
classification. Nutrition counseling is a core treatment for eating
disorders, in accordance with generally recognized independent
standards of current medical practice consulted by the plan.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(7) (Example 7),
the plan does not violate the rules of this paragraph (c)(2)(ii).
The coverage of diagnosis and treatment for eating disorders,
including nutrition counseling, in the outpatient, in-network
classification results in the plan providing meaningful benefits for
the treatment of eating disorders in the classification, as
determined in comparison to the benefits provided for medical
conditions or surgical procedures in the classification.
(8) Example 8--(i) Facts. A plan provides extensive benefits for
the core treatments for many medical conditions and surgical
procedures in the outpatient, in-network and prescription drug
classifications. The plan provides coverage for diagnosis and
treatment for opioid use disorder, a substance use disorder, in the
outpatient, in-network classification, by covering counseling and
behavioral therapies and, in the prescription drug classification,
by covering medications to treat opioid use disorder (MOUD).
Counseling and behavioral therapies and MOUD, in combination, are
one of the core treatments for opioid use disorder, in accordance
with generally recognized independent standards of current medical
practice consulted by the plan.
(ii) Conclusion. In this paragraph (c)(2)(ii)(C)(8) (Example 8),
the plan does not violate the rules of this paragraph (c)(2)(ii).
The coverage of counseling and behavioral therapies and MOUD, in
combination, in the outpatient, in-network classification and
prescription drug classification, respectively, results in the plan
providing meaningful benefits for the treatment of opioid use
disorder in the outpatient, in-network and prescription drug
classifications.
(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
[[Page 77739]]
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. The rules of this paragraph
(c)(3)(i)(D) 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 N/A............ 12.5% (100x/800x)... 56.25% (450x/800x).. 12.5% (100x/800x).. 18.75% (150x/800x).
level.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(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 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
[[Page 77740]]
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 brand Specialty drugs.
name drugs. 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.
(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. Consistent with
paragraph (a)(1) 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 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 that applies
to substantially all medical/surgical benefits in the same
classification. For purposes of this paragraph (c)(4), a
nonquantitative treatment limitation is more restrictive than the
predominant nonquantitative treatment limitation that applies to
substantially all medical/surgical benefits in the same classification
if the plan or issuer fails to meet the requirements of paragraph
(c)(4)(i) or (iii) of this section. In such a case, the plan (or health
insurance coverage) will be considered to violate PHS Act section 2726
(a)(3)(A)(ii), and the nonquantitative treatment limitation may not be
imposed by the plan (or health insurance coverage) with respect to
mental health or substance use disorder benefits in the classification.
(i) Requirements related to design and application of a
nonquantitative treatment limitation--(A) In general. A plan (or health
insurance coverage) 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,
[[Page 77741]]
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)(i)(A) of this section, a plan (or health
insurance coverage) may not rely upon discriminatory factors or
evidentiary standards to design a nonquantitative treatment limitation
to be imposed on mental health or substance use disorder benefits. A
factor or evidentiary standard is discriminatory if the information,
evidence, sources, or standards on which the factor or evidentiary
standard are based are biased or not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits.
(1) Information, evidence, sources, or standards are considered to
be biased or not objective in a manner that discriminates against
mental health or substance use disorder benefits as compared to
medical/surgical benefits if, based on all the relevant facts and
circumstances, the information, evidence, sources, or standards
systematically disfavor access or are specifically designed to disfavor
access to mental health or substance use disorder benefits as compared
to medical/surgical benefits. For purposes of this paragraph
(c)(4)(i)(B)(1), relevant facts and circumstances may include, but are
not limited to, the reliability of the source of the information,
evidence, sources, or standards, including any underlying data; the
independence of the information, evidence, sources, and standards
relied upon; the analyses and methodologies employed to select the
information and the consistency of their application; and any known
safeguards deployed to prevent reliance on skewed data or metrics.
Information, evidence, sources, or standards are not considered biased
or not objective for this purpose if the plan or issuer has taken the
steps necessary to correct, cure, or supplement any information,
evidence, sources, or standards that would have been biased or not
objective in the absence of such steps.
(2) For purposes of this paragraph (c)(4)(i)(B), historical plan
data or other historical information from a time when the plan or
coverage was not subject to PHS Act section 2726 or was not in
compliance with PHS Act section 2726 are considered to be biased or not
objective in a manner that discriminates against mental health or
substance use disorder benefits as compared to medical/surgical
benefits, if the historical plan data or other historical information
systematically disfavor access or are specifically designed to disfavor
access to mental health or substance use disorder benefits as compared
to medical/surgical benefits, and the plan or issuer has not taken the
steps necessary to correct, cure, or supplement the data or
information.
(3) For purposes of this paragraph (c)(4)(i)(B), generally
recognized independent professional medical or clinical standards and
carefully circumscribed measures reasonably and appropriately designed
to detect or prevent and prove fraud and abuse that minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits are not information, evidence, sources, or
standards that are biased or not objective in a manner that
discriminates against mental health or substance use disorder benefits
as compared to medical/surgical benefits. However, plans and issuers
must comply with the other requirements in this paragraph (c)(4), as
applicable, with respect to such standards or measures that are used as
the basis for a factor or evidentiary standard used to design or apply
a nonquantitative treatment limitation.
(ii) 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.
(iii) Required use of outcomes data--(A) In general. To ensure that
a nonquantitative treatment limitation applicable to mental health or
substance use disorder benefits in a classification, in operation, is
no more restrictive than the predominant nonquantitative treatment
limitation applied to substantially all medical/surgical benefits in
the classification, 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 relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits and carefully consider the impact as part of
the plan's or issuer's evaluation. As part of its evaluation, the plan
or issuer may not disregard relevant outcomes data that it knows or
reasonably should know suggest that a nonquantitative treatment
limitation is associated with material differences in access to mental
health or substance use disorder benefits as compared to medical/
surgical benefits. 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)(iii)(A).
(1) Relevant data generally. For purposes of this paragraph
(c)(4)(iii)(A), relevant data could include, as appropriate, but are
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) Relevant data for nonquantitative treatment limitations related
to network composition. In addition to the relevant data set forth in
paragraph (c)(4)(iii)(A)(1) of this section, relevant data for
nonquantitative treatment limitations related to network composition
could include, as appropriate, but are 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
[[Page 77742]]
data, and data on providers accepting new patients), and provider
reimbursement rates (for comparable services and as benchmarked to a
reference standard).
(3) Unavailability of data. (i) If a plan or issuer newly imposes a
nonquantitative treatment limitation for which relevant data is
initially temporarily unavailable and the plan or issuer therefore
cannot comply with this paragraph (c)(4)(iii)(A), the plan or issuer
must include in its comparative analysis, as required under Sec.
146.137(c)(5)(i)(C), a detailed explanation of the lack of relevant
data, the basis for the plan's or issuer's conclusion that there is a
lack of relevant data, and when and how the data will become available
and be collected and analyzed. Such a plan or issuer also must comply
with this paragraph (c)(4)(iii)(A) as soon as practicable once relevant
data becomes available.
(ii) If a plan or issuer imposes a nonquantitative treatment
limitation for which no data exist that can reasonably assess any
relevant impact of the nonquantitative treatment limitation on relevant
outcomes related to access to mental health and substance use disorder
benefits and medical/surgical benefits, the plan or issuer must include
in its comparative analysis, as required under Sec.
146.137(c)(5)(i)(D), a reasoned justification as to the basis for the
conclusion that there are no data that can reasonably assess the
nonquantitative treatment limitation's impact, why the nature of the
nonquantitative treatment limitation prevents the plan or issuer from
reasonably measuring its impact, an explanation of what data was
considered and rejected, and documentation of any additional safeguards
or protocols used to ensure the nonquantitative treatment limitation
complies with this section. If a plan or issuer becomes aware of data
that can reasonably assess any relevant impact of the nonquantitative
treatment limitation, the plan or issuer must comply with this
paragraph (c)(4)(iii)(A) as soon as practicable.
(iii) Consistent with paragraph (a)(1) of this section, paragraphs
(c)(4)(iii)(A)(3)(i) and (ii) of this section shall only apply in very
limited circumstances and, where applicable, shall be construed
narrowly.
(B) Material differences. To the extent the relevant data evaluated
under paragraph (c)(4)(iii)(A) of this section suggest that the
nonquantitative treatment limitation contributes to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits in a classification,
such differences will be considered a strong indicator that the plan or
issuer violates this paragraph (c)(4).
(1) Where the relevant data suggest that the nonquantitative
treatment limitation contributes to material differences in access to
mental health and substance use disorder benefits as compared to
medical/surgical benefits in a classification, the plan or issuer must
take reasonable action, as necessary, to address the material
differences to ensure compliance, in operation, with this paragraph
(c)(4) and must document the actions that have been or are being taken
by the plan or issuer to address material differences in access to
mental health or substance use disorder benefits, as compared to
medical/surgical benefits, as required by Sec. 146.137(c)(5)(iv).
(2) For purposes of this paragraph (c)(4)(iii)(B), relevant data
are considered to suggest that the nonquantitative treatment limitation
contributes to material differences in access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits if, based on all relevant facts and circumstances, and taking
into account the considerations outlined in this paragraph
(c)(4)(iii)(B)(2), the difference in the data suggests that the
nonquantitative treatment limitation is likely to have a negative
impact on access to mental health or substance use disorder benefits as
compared to medical/surgical benefits.
(i) Relevant facts and circumstances, for purposes of this
paragraph (c)(4)(iii)(B)(2), may include, but are not limited to, the
terms of the nonquantitative treatment limitation at issue, the quality
or limitations of the data, causal explanations and analyses, evidence
as to the recurring or non-recurring nature of the results, and the
magnitude of any disparities.
(ii) Differences in access to mental health or substance use
disorder benefits attributable to generally recognized independent
professional medical or clinical standards or carefully circumscribed
measures reasonably and appropriately designed to detect or prevent and
prove fraud and abuse that minimize the negative impact on access to
appropriate mental health and substance use disorder benefits, which
are used as the basis for a factor or evidentiary standard used to
design or apply a nonquantitative treatment limitation, are not
considered to be material for purposes of this paragraph
(c)(4)(iii)(B). To the extent a plan or issuer attributes any
differences in access to the application of such standards or measures,
the plan or issuer must explain the bases for that conclusion in the
documentation prepared under Sec. 146.137(c)(5)(iv)(A).
(C) Nonquantitative treatment limitations related to network
composition. For purposes of applying paragraph (c)(4)(iii)(A) of this
section with respect to nonquantitative treatment limitations related
to network composition, a plan or issuer must collect and evaluate
relevant data in a manner reasonably designed to assess the aggregate
impact of all such nonquantitative treatment limitations on access to
mental health and substance use disorder benefits and medical/surgical
benefits. Examples of possible actions that a plan or issuer could take
to comply with the requirement under paragraph (c)(4)(iii)(B)(1) of
this section to take reasonable action, as necessary, to address any
material differences in access with respect to nonquantitative
treatment limitations related to network composition, to ensure
compliance with this paragraph (c)(4), include, but are not limited to:
(1) Strengthening efforts to recruit and encourage a broad range of
available mental health and substance use disorder providers and
facilities to join the plan's or issuer's network of providers,
including taking actions to increase compensation or other inducements,
streamline credentialing processes, or contact providers reimbursed for
items and services provided on an out-of-network basis to offer
participation in the network;
(2) Expanding the availability of telehealth arrangements to
mitigate any overall mental health and substance use disorder provider
shortages in a geographic area;
(3) Providing additional outreach and assistance to participants
and beneficiaries enrolled in the plan or coverage to assist them in
finding available in-network mental health and substance use disorder
providers and facilities; and
(4) Ensuring that provider directories are accurate and reliable.
(iv) 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
[[Page 77743]]
medical/surgical benefits in the same benefit classification.
(v) Effect of final determination of noncompliance under Sec.
146.137. (A) If a group health plan (or health insurance issuer
offering coverage in connection with a group health plan) receives a
final determination from the Secretary or applicable State authority
that the plan or issuer is not in compliance with the requirements of
PHS Act section 2726(a)(8) or Sec. 146.137 with respect to a
nonquantitative treatment limitation, the nonquantitative treatment
limitation violates this paragraph (c)(4) and the Secretary or
applicable State authority may direct the plan or issuer not to impose
the nonquantitative treatment limitation with respect to mental health
or substance use disorder benefits in the relevant classification,
unless and until the plan or issuer demonstrates to the Secretary or
applicable State authority compliance with the requirements of this
section or takes appropriate action to remedy the violation.
(B) A determination by the Secretary of whether to require
cessation of a nonquantitative treatment limitation under this
paragraph (c)(4)(v) will be based on an evaluation of the relevant
facts and circumstances involved in the specific final determination
and the nature of the underlying nonquantitative treatment limitation
and will take into account the interest of plan participants and
beneficiaries and feedback from the plan or issuer.
(vi) 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.
(A) Example 1 (not comparable and more stringent factors for
reimbursement rate methodology, in operation)--(1) Facts. A plan's
reimbursement rate methodology for outpatient, in-network providers
is based on a variety of factors. 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 are based on
a combination of factors, such as the nature of the service,
duration of the service, intensity and specialization of training,
provider licensure and type, number of providers qualified to
provide the service in a given geographic area, and market need
(demand). In operation, the plan utilizes an additional strategy to
further reduce reimbursement rates for mental health and substance
use disorder non-physician providers from those 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)(vi)(A) (Example 1), the
plan violates the rules of this paragraph (c)(4). 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 of mental health and substance use
disorder services by the same percentage for every CPT code but does
not apply the same reductions to non-physician providers of medical/
surgical services from the rate for physician providers of medical/
surgical services, in operation, the factors used in designing and
applying the nonquantitative treatment limitation to mental health
and substance use disorder benefits in the outpatient, in-network
classification are not comparable to, and are applied more
stringently than, the factors used in designing and applying the
limitation with respect to medical/surgical benefits in the same
classification. As a result, the nonquantitative treatment
limitation with respect to mental health or substance use disorder
benefits in the outpatient, in-network classification is more
restrictive than the predominant nonquantitative treatment
limitation that applies to substantially all medical/surgical
benefits in the same classification.
(B) Example 2 (strategy for exclusion for experimental or
investigative treatment more stringently applied to ABA therapy in
operation)--(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, as experimental, a
treatment or procedure when no professionally recognized treatment
guidelines include the treatment or procedure as a clinically
appropriate standard 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 as one intervention to treat certain children with ASD.
(2) Conclusion. In this paragraph (c)(4)(vi)(B) (Example 2), the
plan violates the rules of this paragraph (c)(4). As written, the
plan excludes coverage of 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 as including the treatment or procedure at
issue, and fewer than two randomized controlled trials are available
to support the treatment's use with respect to the given condition
or procedure. However, in operation, the plan deviates from this
strategy with respect to ABA therapy because more than one
professionally recognized treatment guideline defines clinically
appropriate standards of care for ASD as including ABA therapy to
treat certain children with ASD and more than two randomized
controlled trials are available to support the use of ABA therapy to
treat certain children with ASD. Therefore, in operation, the
strategy used to design the nonquantitative treatment limitation for
benefits for the treatment of ASD, which is a mental health
condition, in the outpatient, in-network classification is not
comparable to, and is applied more stringently than, the strategy
used to design the nonquantitative treatment limitation for medical/
surgical benefits in the same classification. As a result, the
nonquantitative treatment limitation with respect to mental health
or substance use disorder benefits in the outpatient, in-network
classification is more restrictive than the predominant
nonquantitative treatment limitation that applies to substantially
all medical/surgical benefits in the same classification.
(C) Example 3 (step therapy protocol with exception for severe
or irreversible consequences, discriminatory factor)--(1) Facts. A
plan's written terms include a step therapy protocol that requires
participants and beneficiaries who are prescribed certain drugs to
try and fail a generic or preferred brand name drug before the plan
will cover the drug originally prescribed by a participant's or
beneficiary's attending provider. The plan provides an exception to
this protocol that was developed solely based on a methodology
developed by an external third-party organization. The third-party
organization's methodology, which is not based on a generally
recognized independent professional medical or clinical standard,
identifies instances in which a delay in treatment with a drug
prescribed for a medical condition or surgical procedure could
result in either severe or irreversible consequences. However, with
respect to a drug prescribed for a mental health condition or a
substance use disorder, the third-party organization's methodology
only identifies instances in which a delay in treatment could result
in both severe and irreversible consequences, and the plan does not
take any steps to correct, cure, or supplement the methodology.
(2) Conclusion. In this paragraph (c)(4)(vi)(C) (Example 3), the
plan violates the rules of paragraph (c)(4)(i)(B) of this section.
The source upon which the factor used to apply the step therapy
protocol is based is biased or not objective in a manner that
discriminates against mental health or substance use disorder
benefits as compared to medical/surgical benefits because it
addresses instances in which a delay in treatment with a drug
prescribed for a medical condition or surgical procedure could
result in either severe or irreversible consequences, but only
addresses instances in which a delay in treatment with a drug
prescribed for a mental health condition or substance use disorder
could result in both
[[Page 77744]]
severe and irreversible consequences, and the plan fails to take the
steps necessary to correct, cure, or supplement the methodology so
that it is not biased and is objective. Based on the relevant facts
and circumstances, this source systematically disfavors access or is
specifically designed to disfavor access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits. Therefore, the factor used to apply the step therapy
protocol is discriminatory for purposes of determining comparability
and stringency under paragraph (c)(4)(i)(A) of this section, and may
not be relied upon by the plan.
(D) Example 4 (use of historical plan data and plan steps to
correct, cure, or supplement)--(1) Facts. A plan's methodology for
calculating provider reimbursement rates relies only on historical
plan data on total plan spending for each specialty, divided between
mental health and substance use disorder providers and medical/
surgical providers, from a time when the plan was not subject to PHS
Act section 2726. The plan has used these historical plan data for
many years to establish base reimbursement rates in all provider
specialties for which it provides medical/surgical, mental health,
and substance use disorder benefits in the inpatient, in-network
classification. In evaluating the use of these historical plan data
in the design of the methodology for calculating provider
reimbursement rates, the plan determined, based on all the relevant
facts and circumstances, that the historical plan data
systematically disfavor access or are specifically designed to
disfavor access to mental health or substance use disorder benefits
as compared to medical/surgical benefits. To ensure this information
about historical reimbursement rates is not biased and is objective,
the plan supplements its methodology to develop the base
reimbursement rates for mental health and substance use disorder
providers in accordance with additional information, evidence,
sources, and standards that reflect the increased demand for mental
health and substance use disorder benefits in the inpatient, in-
network classification and to attract sufficient mental health and
substance use disorder providers to the network, so that the
relevant facts and circumstances indicate the supplemented
information, evidence, sources, or standards do not systematically
disfavor access and are not specifically designed to disfavor access
to mental health and substance use disorder benefits as compared to
medical/surgical benefits.
(2) Conclusion. In this paragraph (c)(4)(vi)(D) (Example 4), the
plan does not violate the rules of paragraph (c)(4)(i)(B) of this
section with respect to the plan's methodology for calculating
provider reimbursement rates in the inpatient, in-network
classification. The relevant facts and circumstances indicate that
the plan's use of only historical plan data to design its
methodology for calculating provider reimbursement rates in the
inpatient, in-network classification would otherwise be considered
to be biased or not objective in a manner that discriminates against
mental health or substance use disorder benefits as compared to
medical/surgical benefits under paragraph (c)(4)(i)(B)(2) of this
section, since the historical data systematically disfavor access or
are specifically designed to disfavor access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits. However, the plan took the steps necessary to supplement
the information, evidence, sources, and standards to reasonably
reflect the increased demand for mental health and substance use
disorder benefits in the inpatient, in-network classification, and
adjust the methodology to increase reimbursement rates for those
benefits, thereby ensuring that the information, evidence, sources,
and standards relied upon by the plan for this purpose are not
biased and are objective. Therefore, the factors and evidentiary
standards used to design the plan's methodology for calculating
provider reimbursement rates in the inpatient, in-network
classification are not discriminatory.
(E) Example 5 (generally recognized independent professional
medical or clinical standards and more stringent prior authorization
requirement in operation)--(1) Facts. The provisions of a plan state
that it relies on, and does not deviate from, generally recognized
independent professional medical or clinical standards to inform the
factor used to design prior authorization requirements for both
medical/surgical and mental health and substance use disorder
benefits in the prescription drug classification. The 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 for
treatment of opioid use disorder, every 30 days, which is
inconsistent with the generally recognized independent professional
medical standard on which the factor used to design the limitation
is based. The plan's factor used to design prior authorization
requirements for medical/surgical benefits in the prescription drug
classification relies on, and does not deviate from, generally
recognized independent professional medical or clinical standards.
(2) Conclusion. In this paragraph (c)(4)(vi)(E) (Example 5), the
plan violates the rules of this paragraph (c)(4). The American
Society of Addiction Medicine national practice guidelines on which
the factor used to design prior authorization requirements for
substance use disorder benefits is based are generally recognized
independent professional medical or clinical standards that are not
considered to be biased or not objective in a manner that
discriminates against mental health and substance use disorder
benefits under paragraph (c)(4)(i)(B)(3) of this section. However,
the plan must comply with other requirements in this paragraph
(c)(4), as applicable, with respect to such standards or measures
that are used as the basis for a factor or evidentiary standard used
to design or apply a nonquantitative treatment limitation. In
operation, the plan's factor used to design and apply prior
authorization requirements with respect to substance use disorder
benefits is not comparable to, and is applied more stringently than,
the same factor used to design and apply prior authorization
requirements for medical/surgical benefits, because the factor
relies on, and does not deviate from, generally recognized
independent professional medical or clinical standards for medical/
surgical benefits, but deviates from the relevant guidelines for
substance use disorder benefits. As a result, the nonquantitative
treatment limitation with respect to substance use disorder benefits
in the prescription drug classification is more restrictive than the
predominant nonquantitative treatment limitation that applies to
substantially all medical/surgical benefits in the same
classification.
(F) Example 6 (plan claims no data exist to reasonably assess
impact of nonquantitative treatment limitation on access; medical
necessity criteria)--(1) Facts. A plan approves or denies claims for
mental health and substance use disorder benefits and for medical/
surgical benefits in the inpatient, in-network and outpatient, in-
network classifications based on medical necessity criteria. The
plan states in its comparative analysis that no data exist that can
reasonably assess any relevant impact of the medical necessity
criteria nonquantitative treatment limitation on relevant outcomes
related to access to mental health or substance use disorder
benefits as compared to the plan's medical necessity criteria
nonquantitative treatment limitation's impact on relevant outcomes
related to access to medical/surgical benefits in the relevant
classifications, without further explanation.
(2) Conclusion. In this paragraph (c)(4)(vi)(F) (Example 6), the
plan violates this paragraph (c)(4). The plan does not comply with
paragraph (c)(4)(iii)(A)(3)(ii) of this section because the plan did
not include in its comparative analysis, as required under Sec.
146.137(c)(5)(i)(D), a reasoned justification as to the basis for
its conclusion that there are no data that can reasonably assess the
nonquantitative treatment limitation's impact, an explanation of why
the nature of the nonquantitative treatment limitation prevents the
plan from reasonably measuring its impact, an explanation of what
data was considered and rejected, and documentation of any
additional safeguards or protocols used to ensure the
nonquantitative treatment limitation complies with this paragraph
(c)(4). Data that could reasonably assess the medical necessity
criteria nonquantitative treatment limitation's impact might
include, for example, the number and percentage of claims denials,
or the number and percentage of claims that were approved for a
lower level of care than the level requested on the initial claim.
Therefore, because the plan has not collected and evaluated relevant
data in a manner reasonably designed to assess the impact of the
nonquantitative treatment limitation on relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits in the relevant classifications, the plan
violates the requirements of paragraph
[[Page 77745]]
(c)(4)(iii) of this section, and violates the requirements under
Sec. 146.137(c)(5)(i)(D) because it did not include sufficient
information in its comparative analysis with respect to the lack of
relevant data.
(G) Example 7 (concurrent review data collection; no material
difference in access)--(1) Facts. A plan follows a written process
to apply a concurrent review nonquantitative treatment limitation to
all medical/surgical benefits and mental health and substance use
disorder benefits within the inpatient, in-network classification.
Under this 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. The plan collects relevant data, including the
number of referrals to second-level review, and the number of
denials of claims for medical/surgical benefits and mental health
and substance use disorder benefits subject to concurrent review as
compared to the total number of claims subject to concurrent review,
in the inpatient, in-network classification. The plan also collects
and evaluates the number of denied claims for medical/surgical
benefits and mental health and substance use disorder benefits that
are overturned on appeal in the inpatient, in-network
classification. The plan evaluates the relevant data and determines
that, based on the relevant facts and circumstances, the data do not
suggest that the concurrent review nonquantitative treatment
limitation contributes to material differences in access to mental
health or substance use disorder benefits as compared to medical/
surgical benefits in the classification. Upon requesting the plan's
comparative analysis for the concurrent review nonquantitative
treatment limitation and reviewing the relevant data, the Secretary
does not request additional data and agrees that the data do not
suggest material differences in access.
(2) Conclusion. In this paragraph (c)(4)(vi)(G) (Example 7), the
plan does not violate the rules of paragraph (c)(4)(iii) of this
section. The plan collected and evaluated relevant data in a manner
reasonably designed to assess the impact of the nonquantitative
treatment limitation on relevant outcomes related to access to
mental health and substance use disorder benefits and medical/
surgical benefits and considered the impact as part of its
evaluation. Because the relevant data evaluated do not suggest that
the nonquantitative treatment limitation contributes to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits in the inpatient,
in-network classification, under paragraph (c)(4)(iii)(B) of this
section, there is no strong indicator that the plan violates this
paragraph (c)(4).
(H) Example 8 (material difference in access for prior
authorization requirement with reasonable action)--(1) Facts. A plan
requires prior authorization 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. The plan collects and evaluates relevant data in a manner
reasonably designed to assess the impact of the prior authorization
requirement on relevant outcomes related to access to mental health
and substance use disorder benefits and medical/surgical benefits in
the inpatient, in-network classification. The plan's written process
for prior authorization states that the plan approves inpatient, in-
network benefits for medical conditions and surgical procedures and
mental health and substance use disorder benefits 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. Approvals for
mental health and substance use disorder benefits are most commonly
given only for 1 day, after which a treatment plan must be submitted
by the patient's attending provider and approved by the plan. The
relevant data show that approvals for 7 days are most common for
medical conditions and surgical procedures under this plan. Based on
all the relevant facts and circumstances, the difference in the
relevant data suggests that the nonquantitative treatment limitation
is likely to have a negative impact on access to mental health and
substance use disorder benefits as compared to medical/surgical
benefits. Therefore, the data suggest that the nonquantitative
treatment limitation contributes to material differences in access.
To address these material differences in access, the plan consults
more recent medical guidelines to update the factors that inform its
medical necessity nonquantitative treatment limitations. Based on
this review, the plan modifies the limitation so that inpatient, in-
network prior authorization requests for mental health or substance
use disorder benefits are approved for similar periods to what is
approved for medical/surgical benefits. The plan includes
documentation of this action as part of its comparative analysis.
(2) Conclusion. In this paragraph (c)(4)(vi)(H) (Example 8), the
plan does not violate the rules of paragraph (c)(4)(iii) of this
section. While relevant data for the plan's prior authorization
requirements suggested that the nonquantitative treatment limitation
contributes to material differences in access to mental health and
substance use disorder benefits as compared to inpatient, in-network
medical/surgical benefits under paragraph (c)(4)(iii)(B) of this
section, the plan has taken reasonable action, as necessary, to
ensure compliance, in operation, with this paragraph (c)(4) by
updating the factors that inform its prior authorization
nonquantitative treatment limitation for inpatient, in-network
mental health and substance use disorder benefits so that these
benefits are approved for similar periods to what is approved for
medical/surgical benefits. The plan also documents its action taken
to address material differences in access to inpatient, in-network
benefits as required by paragraph (c)(4)(iii)(B)(1) of this section.
(I) Example 9 (differences attributable to 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 factors and evidentiary
standards used to design and apply the medical management
requirement rely on independent professional medical or clinical
standards that are generally recognized by health care providers and
facilities in relevant clinical specialties. 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.
The plan collects and evaluates relevant data in a manner reasonably
designed to assess the impact of the medical management
nonquantitative treatment limitation on relevant outcomes related to
access to mental health and substance use disorder benefits and
medical/surgical benefits, and considers the impact as part of the
plan's evaluation, as required by paragraph (c)(4)(iii)(A) of this
section. 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. The plan correctly
determines that these differences in access are attributable to the
generally recognized independent professional medical or clinical
standards used as the basis for the factors and evidentiary
standards used to design or apply the limitation and adequately
explains the bases for that conclusion as part of its comparative
analysis.
(2) Conclusion. In this paragraph (c)(4)(vi)(I) (Example 9), the
plan does not violate the rules of this paragraph (c)(4). Generally
recognized independent professional medical or clinical standards of
care are not considered to be information, evidence, sources, or
standards that are biased and not objective in a manner that
discriminates against mental health or substance use disorder
benefits as compared to medical/surgical benefits, and the plan
otherwise complies with the requirements in paragraph (c)(4)(i) of
this section. Additionally, the plan does not violate paragraph
(c)(4)(iii) of this section because it has collected and evaluated
relevant data, the differences in access are attributable to the
generally recognized independent professional medical or clinical
standards that are used as the basis for the factors and evidentiary
standards used to design or apply the medical management
nonquantitative treatment limitation, and the plan explains the
bases for this conclusion in its comparative analysis. As a result,
the
[[Page 77746]]
nonquantitative treatment limitation with respect to mental health
or substance use disorder benefits in the inpatient, out-of-network
classification is no more restrictive than the predominant
nonquantitative treatment limitation that applies to substantially
all medical/surgical benefits in the same classification.
(J) Example 10 (material differences in access for standards for
provider admission to a network with reasonable action)--(1) Facts.
A plan applies nonquantitative treatment limitations related to
network composition in the inpatient, in-network and outpatient, 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 processes,
strategies, evidentiary standards, and other factors used in
designing and applying the nonquantitative treatment limitations
related to network composition for 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)(i) of this
section. In order to ensure, in operation, that the nonquantitative
treatment limitations are no more restrictive than the predominant
nonquantitative treatment limitations applied to substantially all
medical/surgical benefits in the classification, the plan collects
and evaluates relevant data in a manner reasonably designed to
assess the aggregate impact of all the nonquantitative treatment
limitations related to network composition on relevant outcomes
related to 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 evaluation. The plan
considers relevant data that is known, or reasonably should be
known, including 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 (for comparable services and
benchmarked to a reference standard, as appropriate); and in-network
and out-of-network utilization rates (including data related to the
dollar value and number of provider claims submissions). The plan
determines that the relevant data suggest that the nonquantitative
treatment limitations in the aggregate contribute to material
differences in access to mental health and substance use disorder
benefits compared to medical/surgical benefits in the
classifications because, based on all the relevant facts and
circumstances, the differences in the data suggest that the
nonquantitative treatment limitations related to network composition
are likely to have a negative impact on access to mental health or
substance use disorder benefits as compared to medical/surgical
benefits. The plan takes reasonable actions, as necessary, to
address the material differences in access, to ensure compliance, in
operation, with this paragraph (c)(4), by strengthening its efforts
to recruit and encourage a broad range of available providers and
facilities to join the plan's network of providers, including by
taking actions to increase compensation and other inducements,
streamline credentialing processes, contact providers reimbursed for
items and services provided on an out-of-network basis to offer
participation in the network, and develop a process to monitor the
effects of such efforts; expanding the availability of telehealth
arrangements to mitigate overall provider shortages in certain
geographic areas; providing additional outreach and assistance to
participants and beneficiaries enrolled in the plan to assist them
in finding available in-network providers and facilities; and
ensuring that the plan's provider directories are accurate and
reliable. The plan documents the efforts that it has taken to
address the material differences in access that the data revealed,
and the plan includes the documentation as part of its comparative
analysis submission.
(2) Conclusion. In this paragraph (c)(4)(vi)(J) (Example 10),
the plan does not violate the rules of this paragraph (c)(4). The
plan's nonquantitative treatment limitations related to network
composition comply with the rules of paragraph (c)(4)(i) of this
section. Additionally, the plan collects and evaluates relevant
data, as required under paragraph (c)(4)(iii)(A) of this section, in
a manner reasonably designed to assess the aggregate impact of all
such nonquantitative treatment limitations on relevant outcomes
related to access to mental health and substance use disorder
benefits and medical/surgical benefits, as required under paragraph
(c)(4)(iii)(C) of this section. While the data suggest that the
nonquantitative treatment limitations contribute to material
differences in access to mental health and substance use disorder
benefits as compared to medical/surgical benefits, the plan has
taken reasonable action, as necessary, to ensure compliance with
this paragraph (c)(4). The plan also documents the actions that have
been and are being taken by the plan to address material differences
as required by Sec. 146.137(c)(5)(iv). As a result, the network
composition nonquantitative treatment limitations with respect to
mental health or substance use disorder benefits in the inpatient,
in-network and outpatient, in-network classifications are no more
restrictive than the predominant nonquantitative treatment
limitations that apply to substantially all medical/surgical
benefits in the same classifications.
(K) Example 11 (separate EAP exhaustion treatment limitation
applicable only to mental health or substance use disorder
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)(vi)(K) (Example 11),
the requirement that limits 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)(4). 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)(iv) 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 exclusion for treatment in a
residential facility applicable only to mental health and substance
use disorder benefits)--(1) Facts. A plan generally covers
inpatient, in-network and inpatient, out-of-network treatment
without any limitations on setting, including skilled nursing
facilities and rehabilitation hospitals, provided other medical
necessity standards are satisfied. The plan has an exclusion for
treatment at residential facilities, 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)(vi)(L) (Example 12),
the plan violates the rules of paragraph (c)(4)(iv) of this section.
The exclusion of treatment at residential facilities 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 because the
plan does not apply a comparable exclusion with respect to any
medical/surgical benefits in the same benefit classification.
(M) Example 13 (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 the
plan's exclusion of mental health and substance use disorder
benefits for failure to complete a course of treatment in the
inpatient, in-network classification under Sec. 146.137(d), the
plan submits a comparative analysis for the nonquantitative
treatment limitation. After review of the comparative analysis, as
well as additional information submitted by the plan after the
Secretary determines that the plan has not submitted sufficient
information
[[Page 77747]]
to be responsive to the request, 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 inpatient, in-network 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. Under Sec. 146.137(d)(3), the plan submits a
corrective action plan and additional comparative analyses within 45
calendar days after the initial determination. However, the
corrective action plan does not alter or eliminate the exclusion or
alter the processes, strategies, evidentiary standards, and other
factors used in designing and applying the exclusion. Moreover, the
additional comparative analysis still does not include sufficient
information. The Secretary then determines that the additional
comparative analyses do not demonstrate compliance with the
requirements of this paragraph (c)(4). Accordingly, the plan
receives a final determination of noncompliance with PHS Act section
2726 (a)(8) and Sec. 146.137 from the Secretary, which concludes
that the plan did not demonstrate compliance through the comparative
analysis process. After considering the relevant facts and
circumstances, and considering the interests of plan participants
and beneficiaries, as well as feedback from the plan, the Secretary
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 exclusion of benefits for failure
to complete a course of treatment in the inpatient, in-network
classification.
(2) Conclusion. In this paragraph (c)(4)(vi)(M) (Example 13), by
continuing to impose the exclusion of mental health and substance
use disorder benefits for failure to complete a course of treatment
in the inpatient, in-network classification after the Secretary
directs the plan not to impose this nonquantitative treatment
limitation, the plan violates the requirements of paragraph
(c)(4)(v) of this section.
* * * * *
(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) who have received 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 that is required to
provide 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 section and Sec.
146.137 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--
(i) 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, except that
the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and
(c)(4)(iii) of this section apply on the first day of the first plan
year beginning on or after January 1, 2026.
(ii) Until the applicability date in paragraph (i)(1)(i) of this
section, plans and issuers are required to continue to comply with 45
CFR 146.136, revised as of October 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
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 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.
(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,
[[Page 77748]]
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; and
(iii) A description of which benefits are included in each
classification set forth in Sec. 146.136(c)(2)(ii)(A).
(2) Identification and definition of the factors and evidentiary
standards 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 every factor considered or relied upon, 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;
(B) A description of each evidentiary standard used to design or
apply each factor (and the source of each evidentiary standard)
identified under paragraph (c)(2)(i) of this section; and
(C) A description of any steps the plan or issuer has taken to
correct, cure, or supplement any information, evidence, sources, or
standards that would otherwise have been considered biased or not
objective under Sec. 146.136(c)(4)(i)(B)(1) in the absence of such
steps.
(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 under 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
designations 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 deviations or variations 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
deviations or variations.
(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 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 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 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 reasons for any deviations or variations
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,
[[Page 77749]]
and how the plan or issuer establishes such deviations or variations,
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, 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 evaluates
whether, 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;
(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;
(C) With respect to a nonquantitative treatment limitation for
which relevant data is temporarily unavailable as described in Sec.
146.136(c)(4)(iii)(A)(3)(i), a detailed explanation of the lack of
relevant data, the basis for the plan's or issuer's conclusion that
there is a lack of relevant data, and when and how the data will become
available and be collected and analyzed; and
(D) With respect to a nonquantitative treatment limitation for
which no data exist that can reasonably assess any relevant impact of
the nonquantitative treatment limitation on relevant outcomes related
to access to mental health and substance use disorder benefits and
medical/surgical benefits as described in Sec.
146.136(c)(4)(iii)(A)(3)(ii), a reasoned justification as to the basis
for the conclusion that there are no data that can reasonably assess
the nonquantitative treatment limitation's impact, an explanation of
why the nature of the nonquantitative treatment limitation prevents the
plan or issuer from reasonably measuring its impact, an explanation of
what data was considered and rejected, and documentation of any
additional safeguards or protocols used to ensure that the
nonquantitative treatment limitation complies with Sec. 146.136(c)(4);
(ii) Identification of the relevant data collected and evaluated,
as required under Sec. 146.136(c)(4)(iii)(A);
(iii) Documentation 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:
(A) The evaluation of relevant data as required under Sec.
146.136(c)(4)(iii)(A); and
(B) A reasoned justification and analysis that explains why the
plan or issuer concluded that any differences in the relevant data do
or do not suggest the nonquantitative treatment limitation contributes
to material differences in access to mental health or substance use
disorder benefits as compared to medical/surgical benefits, in
accordance with Sec. 146.136(c)(4)(iii)(B)(2);
(iv) A detailed explanation of any material differences in access
demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of
this section, including:
(A) A reasoned explanation of any material differences in access
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 (including any considerations beyond a plan's
or issuer's control that contribute to the existence of material
differences) and a detailed explanation of the bases for concluding
that material differences are not attributable to differences in the
comparability or relative stringency of the nonquantitative treatment
limitation; and
(B) To the extent differences in access to mental health or
substance use disorder benefits are attributable to generally
recognized independent professional medical or clinical standards or
carefully circumscribed measures reasonably and appropriately designed
to detect or prevent and prove fraud and abuse that minimize the
negative impact on access to appropriate mental health and substance
use disorder benefits, and such standards or measures are used as the
basis for a factor or evidentiary standard used to design or apply a
nonquantitative treatment limitation, documentation explaining how any
such differences are attributable to those standards or measures, as
required in Sec. 146.136(c)(4)(iii)(B)(2)(ii); and
(v) A discussion of the actions that have been or are being taken
by the plan or issuer to address 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 has
taken or is taking under Sec. 146.136(c)(4)(iii)(B)(1) to address
material differences to comply, in operation, with Sec. 146.136(c)(4),
including, as applicable:
(A) A reasoned explanation of any material differences in access to
mental health or substance use disorder benefits as compared to
medical/surgical benefits that persist despite reasonable actions that
have been or are being taken; and
(B) For a plan or issuer designing and applying one or more
nonquantitative treatment limitations related to network composition, a
discussion of the actions that have been or are being taken to address
material differences in access to in-network mental health and
substance use disorder benefits as compared to in-network medical/
surgical benefits, including those listed in Sec.
146.136(c)(4)(iii)(C).
(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 or is not (or might or might not be) in compliance with the
requirements of Sec. 146.136(c)(4), including any additional actions
the plan or issuer has taken or intends to take to address any
potential areas of concern or noncompliance;
[[Page 77750]]
(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 not otherwise discussed in the comparative analysis;
(iv) The date the analysis is completed 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 the 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 coverage in connection with 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 or issuer has not submitted sufficient
information under paragraph (d)(1) of this section for the Secretary to
determine whether the comparative analysis required in paragraph (b) of
this section complies with paragraph (c) of this section or whether the
plan or issuer complies with Sec. 146.136(c)(4), 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). 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
initial determination by 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 (c) of this section that demonstrate
compliance with Sec. 146.136(c)(4), 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
business days of receipt of the final determination of noncompliance,
and the plan or issuer must 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
timeframe.
(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
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 submitted or 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 Sec. 146.136(c)(4) or this section, 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 concurred with those actions; 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 Centers for Medicare & 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 (including a provider or other
person acting as a participant's or beneficiary's authorized
representative) who has received an adverse benefit
[[Page 77751]]
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), on the
first day of the first plan year beginning on or after January 1, 2025,
except the requirements of paragraphs (c)(2)(ii)(C), (c)(5)(i)(C) and
(D), and (c)(5)(ii) through (v) of this section apply on the first day
of the first plan year beginning on or after January 1, 2026.
(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
10. 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 plans 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 1st 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 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
11. 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
12. 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, incorporating 45 CFR 146.136,
each revised as of October 1, 2023. This section applies to non-
grandfathered and grandfathered health plans as defined in Sec.
147.140.
[FR Doc. 2024-20612 Filed 9-13-24; 4:15 pm]
BILLING CODE 4510-29-P; 4830-01-P; 4120-01-P
