CMS “Final Rules” for Mental Health and Substance Use Disorder Coverage Take Effect January 1.
The Mental Health Parity and Addiction Equity Act (MHPAEA) was passed by Congress in 2008 and amended by the Affordable Care Act with the goal of improving health insurance coverage for mental health (MH) and substance use disorders (SUD). The act mandates that insurers provide MH/SUD services at the same level as medical/surgical (M/S) coverage.
Exactly what it means to offer MH/SUD treatment at parity with M/S treatment was left for a rules committee to determine. The committee, with representatives from the U.S. Department of Health and Human Services (HHS) and the U.S. Treasury, issued preliminary rules in 2023 — only 15 years after MHPAEA was passed by the U.S. Congress. The “Final Rules” were just released a few weeks ago.
The new rules revolve around the definition of a “non-quantitative treatment limitation,” or NQTL. These are limitations put on the level of care to be reimbursed under the patient’s healthcare plan. The HHS defines NQTLs as “non-numerical limits on the scope or duration of benefits for treatment (such as preauthorization requirements).”
The final rules require insurers to apply the same limitations to medical/surgical coverage as they apply to coverage for mental health and substance use disorders. An example would be that you cannot require preauthorization for MH/SUD services if you do not require preauthorization for M/S coverage. The idea appears to be that insurers can offer lousy but affordable coverage for both M/S and MH/SUD, but they cannot offer special treatment for one area over the other.
Let’s look at some of the other insurance provisions where, starting on January 1, 2025, insurers will have to show parity between M/S and MH/SUD:
- Preauthorization requirements in non-emergency situations
- Precertification requirements for inpatient mental health services
- Prenotification requirements prior to non-scheduled admissions
- Preauthorization for inpatient and outpatient MH/SUD services
- The length of time before authorization renewal required must be at parity
- If attending physicians determine eligibility for M/S they must be able to determine eligibility for MH/SUD
- Prescription drug preauthorization set at three months for MH/SUD prescriptions
The intended impact of these changes is to make insurers treat mental health issues and substance use disorders in the same manner as other medical problems, and not deny or delay coverage. The MHPAEA prohibits separate financial requirements and treatment limitations that apply only to MH/SUD benefits.
As of January 1, 2025, if insurers have non-quantitative treatment limitations (NQTLs), the burden is on the insurer to conduct a “comparative analysis” of each NQTL. How that comparative analysis must be conducted is set out in the “Final Rules,” according to a review of the rules published by law firm Squire Patton Boggs. The analysis must have a similar design and data collection for both M/S and MH/SUD, including such factors as:
- time and distance to network providers
- the number of network providers accepting new patients
- network provider reimbursement rates
- in-network and out-of-network utilization rates
One of the most important provisions of the MHPAEA is that benefits for mental health treatment and substance use disorders must be “meaningful.” According to the review of the “Final Rules” by Squire Patton Boggs, coverage is meaningful when insurers “cover core treatments for that condition, meaning a standard treatment or course of treatment, therapy, service, or intervention indicated by generally recognized independent standards of current medical practice.”
The sum impact of the “Final Rules” is we can expect special requirements for mental health care and substance use disorder treatment to disappear or be merged into the general limits of care on a policy. This particularly impacts rules for preauthorization, annual financial expense caps and lifetime financial expense caps.
As far as enforcement goes, plans governed by ERISA must provide documentation upon request of each NQL in a timely manner:
Plans and issuers only have 10 business days to respond to a request from the relevant Secretary to review its comparative analyses and, if an initial determination of noncompliance is made, the plan or issuer only has 45 calendar days to respond with specific actions it will take to bring the plan into compliance and provide additional comparative analyses that demonstrate compliance.
The “Final Rules” clarify the design of comparison analysis and the level of data required to prove that an NQTL does not discriminate against providing mental health services and substance use disorder treatment on parity with other medical treatments. This law should help decrease the stigma and increase the coverage for people dealing with mental health and substance use disorders.
Written by Steve O’Keefe. First published October 29, 2024.
Sources:
“Mental Health Parity and Addiction Equity Act Final Rules (“Final Rules”) Are Released: Plans and Issuers Must Prepare for January 1, 2025 Effective Date (US),” Triage Health Law, Squire Patton Boggs, October 21, 2024.
“Warning Signs — Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance,” Centers for Medicare & Medicaid Services, retrieved October 28, 2024.
“The Mental Health Parity and Addiction Equity Act (MHPAEA),” Centers for Medicare & Medicaid Services, retrieved October 28, 2024.
Image courtesy of 2022 MHPAEA Report to Congress, used under Fair Use: Public Domain.