DOL to Focus on Red Flags in Mental Health Parity

DOL to Focus on Red Flags in Mental Health Parity Requests

By DOUGLAS W. DAHL II, SUSAN K. BILBRO, and CATHERINE N. SIMPSON

Last month, the Department of Labor (DOL) announced

that it will focus on requesting information from employers where there are potential “red flags” of non-compliance with the provisions and rules of the Mental Health Parity and Addiction Equity Act (MHPAEA), as modified by the Consolidated Appropriations Act, 2021 (CAA).

Section 203 of the CAA imposes a new requirement on group health plans to ensure compliance with the MHPAEA: group health plans and insurers that provide both medical/surgical benefits and mental health or substance use disorder (MH/SUD) benefits—and that impose non-quantitative treatment limitations (NQTLs) on the MH/SUD benefits—must prepare a “comparative analysis” of any NQTLs that apply. As of February 10, 2021, plans must supply this comparative analysis and other specific information upon request by an applicable state or federal agency (e.g., the DOL for ERISA plans). The DOL has been actively auditing group health plans for compliance with the MHPAEA and requesting documentation of these comparative analyses.

Photographer: By AgnosticPreachersKid - Own work, CC BY-SA 3.0

Types of NQTLs

NQTLs consist of any limitations on the scope and duration of benefits that cannot be expressed numerically. For example, the DOL has identified the following four specific NQTLs on which the agencies intend to focus their enforcement in the near term:

1. Prior authorization requirements for in-network and out-of-network inpatient services.

2. Concurrent review for in-network and out-of-network inpatient and outpatient services.

3. Standards for provider admission to a network, including reimbursement rates.

4. Out-of-network reimbursement rates, including plan methods for determining usual, customary, and reasonable charges.

Essentially, the main focus of the comparative analysis is to ensure that no arbitrary limits are placed on MH/SUD benefits that may be less favorable than on medical/surgical benefits.