Employee Benefits & Executive Compensation Advisory | Final Mental Health Parity Rules: A Plan Sponsor’s Implementation Guide

On September 9, 2024, the U.S. departments of Labor, Treasury, and Health and Human Services issued a Final Rule (published in the Federal Register on September 23, 2024) under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) focusing on nonquantitative treatment limitations (NQTLs) and the requirement to perform an NQTL comparative analysis as mandated by the Consolidated Appropriations Act, 2021 (CAA). Health plans and plan sponsors should act now to ensure compliance with the currently effective comparative analysis requirement as well as many aspects of the Final Rule effective the first plan year on or after January 1, 2025.

Time is short because even health plans with a currently compliant NQTL comparative analysis (and the departments have expressed a belief that there are few, if any, plans with a compliant NQTL comparative analysis) will have to substantially update that analysis for 2025. Additional new requirements are effective with the first plan year starting on/after January 1, 2026. The 2026 requirements include the gathering and analysis of extensive amounts of data, and that process needs to be started well before that 2026 effective date.

I. Major Differences Between the Proposed Rule and the Final Rule

The Final Rule adopted much of the rule proposed on July 25, 2023 (published in the Federal Register on August 3, 2023), with two significant changes and a number of minor changes and clarifications. The first notable change was that the Proposed Rule applied the mathematical substantially all/predominant test applicable to quantitative treatment limitations (QTLs) to NQTLs. In the comments to the Proposed Rule there were significant criticisms, including about providing a mathematical test for something that is labeled “nonquantitative,” whether such a test was even workable, and whether it advanced the purposes of the MHPAEA as stated in the Proposed Rule. The departments abandoned that test in the Final Rule. The decision not to finalize this substantially all/predominant mathematical test for NQTLs may also have been driven by expected challenges to such a test in the courts after the Supreme Court’s recent Loper Bright decision, which overturned the judicial doctrine that courts should give deference to agency rulemaking.

Second, on data collection and analysis, the Proposed Rule had a special provision for network composition NQTLs. For NQTLs other than network composition NQTLs, the Proposed Rule stated that if data collection and evaluation showed that an NQTL contributes to material differences in access to mental health and substance use disorder (MH/SUD) benefits as compared to medical and surgical (Med/Surg) benefits in a classification, that would be a “strong indicator” of a violation of the MHPAEA. Under the Proposed Rule, however, a material difference regarding network composition NQTLs would be a violation of the MHPAEA. In the Final Rule, the departments treat data collection and analysis for a network composition NQTL the same as for any other NQTL under the “strong indicator” standard and provide examples of actions a plan can take if data analyses reveal a “material difference” in network composition NQTLs.

Other noteworthy changes include (1) how independent professional medical or clinical standards and fraud and abuse measures factor into the analysis of an NQTL; (2) modification to the fiduciary certification of the NQTL comparative analysis; and (3) a determination, at this time, not to adopt a “relevant data requirement” safe harbor for network composition NQTLs that was suggested in the Technical Release that accompanied the Proposed Rule.

II. Summary

A. NQTLs Must Meet Two Requirements

The Final Rule has two primary requirements for NQTLs:

1. The plan must satisfy the requirements related to the design and application of the NQTL (referred to as the design and application requirements). The Final Rule adds specific provisions prohibiting the use of “discriminatory” or biased information in the design and application of NQTLs. In many ways, the design and application requirements are those currently required for an NQTL comparative analysis.
2. The plan must collect, evaluate, and consider the impact of relevant data on access to MH/SUD benefits relative to access to Med/Surg benefits and subsequently take reasonable action, as necessary, to address any material differences in access to MH/SUD benefits as shown in the data (referred to as the relevant data evaluation requirements).

As mentioned above, the Proposed Rule also had a “no more restrictive requirement” imposing the mathematical substantially all/predominant test that was not finalized. Given that “no more restrictive” is a statutory requirement, the Final Rule provides that a plan meets this statutory requirement by meeting both the design and application requirements and the relevant data evaluation requirements.

B. Meaningful Benefits in Each MHPAEA Benefit Classification

The original 2013 MHPAEA final rule provides that if a plan provides MH/SUD benefits in one of the six MHPAEA benefit classifications (see Section III.C), it must provide MH/SUD benefits in all MHPAEA benefit classifications. The Final Rule follows the Proposed Rule and expands this requirement to require that a plan provide “meaningful benefits” in each classification as compared to Med/Surg benefits. The Final Rule provides more guidance on “meaningful benefits” with a new requirement concerning “core treatments,” stating that a plan does not provide meaningful benefits unless it also provides benefits for a core treatment for an MH/SUD condition or disorder in each classification in which the plan provides benefits for a core treatment for one or more Med/Surg conditions or procedures.

C. Content of an NQTL Comparative Analysis

The CAA required each plan to have a written NQTL comparative analysis with five elements: (1) the identification of NQTLs and the MH/SUD and Med/Surg benefits to which the NQTLs apply; (2) the factors used to determine application of the NQTLs; (3) the evidentiary standards used to develop the factors; (4) an analysis of processes, strategies, evidentiary standards, and factors demonstrating comparability; and (5) specific findings and conclusions. The deadline for completing the comparative analysis was February 10, 2021. The Final Rule, like the Proposed Rule, reorganizes and expands on these requirements, incorporating a demonstration of the two requirements for NQTLs discussed above (i.e., the design and application requirements and the relevant data evaluation requirements).

D. Other Provisions

The Final Rule substantially adopts the Proposed Rule’s provisions on actions the departments may take if they find a comparative analysis is deficient. The departments, for example, can require that the plan eliminate the NQTL as it applies to MH/SUD benefits. Specific time periods are provided for responding to a department’s initial request for an NQTL comparative analysis and follow-up requests.

For ERISA-covered plans, the Final Rule, like the Proposed Rule, provides that the comparative analysis is an instrument under which a plan is established or operated under §104(b)(4) of ERISA and must be provided to participants and beneficiaries within 30 days of a written request. The plan administrator could face a penalty of up to a $110 per day for not providing that comparative analysis.

Previously self-insured state and local governmental plans could opt out of the MHPAEA if certain procedures were followed. The Consolidated Appropriations Act of 2023 ended that opt-out and provided a sunset timetable. The Final Rule codifies those sunset provisions, which state that no new opt-out elections can be made on or after December 29, 2022, and generally no election expiring on or after June 27, 2023 can be renewed. A limited exception for such plans subject to multiple collective bargaining agreements (CBAs) allows the otherwise expiring opt-out election to be extended until the date on which the term of the last CBA expires.

E. Effective Date

With certain exceptions noted below, the Final Rule has a general effective date of the first day of the plan year beginning on or after January 1, 2025. The following have an effective date of the first day of the plan year beginning on or after January 1, 2026:

• The prohibition on discriminatory information used in the design and application requirements.
• The relevant data evaluation requirements.
• The meaningful benefits standard, which includes the new “core treatments” requirement.

Any aspect of the comparative analysis that requires disclosure or analysis of these provisions is also not applicable until the first day of the plan year beginning on or after January 1, 2026. All other provisions regarding the comparative analysis are effective January 1, 2025, and, as mentioned above, the deadline for completion of a comparative analysis in the first instance was February 10, 2021.

III. The Final Rule

A. Purpose of the Rule

The preamble to the Final Rule begins with statistics supporting the departments’ view that there is a national mental health and substance use disorder crisis with an unmet need for treatment. The departments also express concern that there is a greater use of out-of-network providers for MH/SUD conditions than there is for Med/Surg conditions. There is a focus on network composition NQTLs throughout the Final Rule. The departments recite their reports to Congress, finding deficiencies in “nearly all” comparative analyses that were performed by insurers and group health plans and selected for review by the departments. (The term “plans” encompasses both group health plans and health insurers unless otherwise specified). The preamble indicates that the purpose of the Final Rule is to:

• Make clear that the MHPAEA requires that individuals will not face greater restrictions on access to MH/SUD benefits as compared to Med/Surg benefits.
• Reinforce that plans cannot use NQTLs for MH/SUD benefits that are more restrictive than the predominant NQTL applied to Med/Surg benefits in the same classification, including:
  • Medical management techniques (such as prior authorization).
  • Standards related to network composition.
  • Methodologies to determine out-of-network reimbursement rates.
• Require plans to collect and evaluate data and take reasonable action to address material differences in access to MH/SUD benefits as compared to Med/Surg benefits.
• Codify the CAA NQTL comparative analysis requirement.
• Prohibit plans from using discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to MH/SUD benefits when designing NQTLs.

The Final Rule itself begins with a statement of purpose that it (and the original 2013 final rule) is designed to ensure that:

• Benefits for MH/SUD benefits are not subject to more restrictive lifetime or annual dollar limits, financial requirements, or treatment limitations for those benefits than the predominant dollar limits, financial requirements, or treatment limitations that are applied to substantially all Med/Surg benefits covered by the plan.
• Plans must not design or apply financial requirements and treatment limitations that impose a greater burden on access (that is, are more restrictive) to MH/SUD benefits under the plan than they impose on access to Med/Surg benefits in the same classification.
• All statutory and regulatory provisions for the MHPAEA should be interpreted in a manner consistent with the stated purpose.

B. New and Revised Definitions

The Final Rule made no substantive changes to the Proposed Rule’s definitions of mental health benefits, medical surgical benefits, and substance use disorder benefits. However, new definitions were added that are intended to remove perceived flexibility in classifying benefits as either Med/Surg benefits or MH/SUD benefits by limiting the effect of any reference to state law and specifically requiring a plan’s definition to align with generally recognized independent standards of current medical practice. While plans could still reference state law, they could only do so to the extent state law is consistent with those standards – specifically, the most current versions of the Diagnostic and Statistical Manual of Mental Disorders (DSM) or the International Classification of Diseases (ICD). The definitions of ICD and DSM were modified slightly in the Final Rule to clarify which version is  applicable. As new versions are updated and issued, they will be effective as of the first day of the plan year that is one year after the new version is adopted.

The preamble to the Final Rule recognizes that there are some services such as speech, occupational, and nutritional therapies that can apply to both MH/SUD conditions as well as Med/Surg conditions. The preamble discusses whether the distinction between MH/SUD and Med/Surg should be based on a diagnosis, on the condition or disorder being treated, or on the standards used for Medicare and Medicaid. The preamble states that the appropriate determination is based on the “condition or disorder being treated.”

There are new definitions for “factors,” “processes,” “strategies,” and “evidentiary standards,” which are all currently used in a comparative analysis. These terms were also used in the original 2013 final rule but not defined. The Final Rule largely incorporates the definitions from the Proposed Rule with just slight modifications in the examples that are given.

Factors include all information that a plan relied upon to design an NQTL. The preamble to the Final Rule restates the emphasis in the Proposed Rule that “factors” should be read broadly and include all information, including processes and strategies, that were relied on in developing the NQTL. Processes and strategies are then treated as subsets of factors. While the preamble to the Proposed Rule indicated that factors would also include information that was “considered” but rejected, the preamble to the Final Rule changes this to information that was “relied upon” and rejected, explaining that the former could be interpreted as including a broader set of information than prior guidance, which was not the departments’ intent. (Prior guidance had interpreted “considered” to include “factors that were relied upon and were rejected,” and the departments agreed with a commenter who questioned the utility of providing information that was considered early in the design process but rejected.) This definition provides a list of factors that include 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.

Processes are actions, steps, or procedures that a plan uses to apply an NQTL, including actions, steps, or procedures established by the plan for a participant or beneficiary to access benefits. For example, processes can include the actual written and operational steps of a preauthorization process or a concurrent review process. They could also include the development and approval of a treatment plan in a concurrent review process to determine whether a specific request should be granted or denied. This definition provides other nonexclusive examples of processes.

Strategies are practices, methods, or internal metrics that a plan considers, reviews, or uses to design an NQTL. Examples from the nonexclusive list of strategies include the development of the clinical rationale used in approving or denying benefits; the method of whether and how to deviate from generally accepted standards of care in concurrent review; the selection of information deemed reasonably necessary to make medical necessity determinations; professional standards/protocols to determine utilization standards; and fee schedules used to determine reimbursement rates.

The definition of “treatment limitations” is largely the same as in the Proposed Rule but now with a specific callout for standards related to network composition as an example of an NQTL. The definition includes a cross-reference to the nonexclusive list of NQTLs contained in another section of the Final Rule. The definition includes the MHPAEA statutory provision that a “complete exclusion of all benefits for a particular condition or disorder, however, is not a treatment limitation for purposes of this definition.” How this provision works in practice is a subject of some debate – for example, a complete exclusion of ASD is arguably permissible. Commentators urged the departments to provide examples of permissible complete exclusions, but the departments declined.

The Final Rule contains a nonexclusive list of NQTLs. Commentators urged the departments to expand this list to provide better guidance on what is and what is not an NQTL or to provide a definitive list of NQTLs. The departments again declined, citing the broad range of treatment limitations that a plan may impose. The departments adopted the following nonexclusive list from the Proposed Rule while emphasizing the network composition NQTL:

• 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.
• Formulary design for prescription drugs.
• For plans with multiple network tiers (such as preferred providers and participating providers), network tier design.
• Standards related to network composition, including 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.
• 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.
• 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).
• Exclusions based on failure to complete a course of treatment.
• 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.

C. Clarification of MHPAEA Classifications

The original 2013 final rule established six benefit classifications for QTLs:

• Inpatient, in-network.
• Inpatient, out-of-network.
• Outpatient, in-network.
• Outpatient, out-of-network.
• Emergency care.
• Prescription drugs.

QTLs are quantitative or numeric aspects of group health plans, such as deductibles, copays, coinsurance, maximum out-of-pocket, and visit limits. The QTLs that apply to MH/SUD benefits are required to be no more restrictive than the predominant QTLs that apply to substantially all Med/Surg benefits in a classification. This parity is established through the mathematical test that the Proposed Rule would have applied to NQTLs but was not finalized. The test remains for QTLs, and the requirements related to QTLs remain unchanged from the original 2013 final rule, which allowed certain limited subclassifications for drug tiering, in-network tiering, and an outpatient subclassification for office visits. Those subclassifications are still allowed.

The Final Rule confirms that these classifications and subclassifications for QTLs are equally applicable to NQTLs. For example, in analyzing an NQTL such as preauthorization, that analysis is done for each of the benefit classifications (although there can be no preauthorization requirement for emergency care).

D. The Mathematical No More Restrictive Requirement for NQTLs Was Not Finalized

The modification to the “no more restrictive” requirement represents the greatest change from the Proposed Rule to the Final Rule. The Proposed Rule provided a variation of the substantially/all predominant test that currently applies to QTLs. Under the Proposed Rule, a plan would have been required to identify all NQTLs that applied to Med/Surg benefits in each classification. An NQTL could apply to MH/SUD benefits in that classification only if it applied to substantially all Med/Surg benefits in that classification. “Substantially all” was defined in the Proposed Rule as two-thirds, based on the dollar amount of all plan payments for Med/Surg benefits expected to be paid. If the “substantially all” part of the test was met, and if the NQTL included variations (e.g., prior authorizations for one, three, or seven days), then a plan could apply to MH/SUD benefits only the variation of the NQTL that was “predominant” among the Med/Surg benefits in the same classification. The Proposed Rule defined predominant as the most common or frequent variation of the NQTL, also tied to expected plan spending.

This mathematical application of two-thirds and “most common or frequent” in the Proposed Rule received much criticism and questions from commentators on its workability and whether it would have a negative effect on providing MH/SUD benefits. The departments did not finalize this aspect of the Proposed Rule, which would have based these determinations on the dollar amount of all plan payments for Med/Surg benefits expected to be paid, similar to the steps that apply when analyzing parity for financial requirements or QTLs. Still, they also had to address the MHPAEA statutory requirement that “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).” See ERISA §712(a)(3)(A)(2). The Final Rule provides that this statutory requirement is met if, as described below, both the design and application requirements and the relevant data acquisition requirements are met.

E. The Design and Application Requirements

The Final Rule’s design and application requirements apply the factors, processes, strategies, and evidentiary standards framework that is currently part of a comparative analysis (as implemented by the CAA). These requirements state that an NQTL cannot be imposed “under the terms of the plan, as written and in operation” unless “any processes, strategies, evidentiary standards, or other factors used in designing and applying the [NQTL] to [MH/SUD] 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 [Med/Surg] benefits in the classification.” This language is almost identical to the 2013 original final rule, but that rule was limited to “applying” the NQTL. The word “designing” was added in the Proposed Rule and adopted in the Final Rule. The departments believe that the addition of the word “designing” is consistent with the current requirements for NQTLs and bring the design and application requirements into harmony with the CAA statutory requirements on a comparative analysis. The Final Rule provides examples of the design and application requirements, which are summarized in Examples 1 and 2 in this link to our NQTL Examples Addendum.

The Final Rule, like the Proposed Rule, adds a provision that a plan cannot rely on factors or evidentiary standards to design an NQTL if the information, evidence, sources, or standards on which they are based are biased, or not objective, in a manner that discriminates against MH/SUD benefits as compared to Med/Surg benefits.

The Final Rule clarifies that information, evidence, sources or standards, including historical plan data or other historical information from a time when the plan was not subject to or not in compliance with the MHPAEA, are biased or not objective “if based on all the relevant facts and circumstances, they systematically disfavor access or are specifically designed to disfavor access to [MH/SUD] benefits as compared to [Med/Surg] benefits.” Pre-MHPAEA historical plan data or other historical information that is biased or not objective can be used if the plan has taken the steps necessary to correct, cure, or supplement the data or information. The Final Rule then provides an extensive (but not exhaustive) list of relevant facts and circumstances and two examples of using discriminatory or biased evidence or sources of information. Those two examples (one of which includes an example for correcting a past impermissible use of historical pre-MHPAEA claims data) are summarized in Examples 3 and 4 of this link to our NQTL Examples Addendum.

The preamble to the Final Rule specifically states that fee schedules set by Medicare and CMS standards are unbiased and objective. Of course, how those schedules are incorporated into or used in the plan could be an NQTL violation. The preamble notes that in most cases a plan would not be able to justify a fee schedule based on 125% of the Medicare fee schedule rates for Med/Surg specialty providers and only 75% of the Medicare fee schedule rates for MH/SUD specialty providers.

The Final Rule also did not finalize the specific exceptions to the prohibition on discriminatory factors and evidentiary standards for independent professional medical or clinical standards and fraud, waste, and abuse measures. But the Final Rule does provide that generally recognized independent medical standards 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 MH/SUD benefits would be considered unbiased and objective. Note that the departments eliminated from the Final Rule the word “waste” that was in the Proposed Rule, deeming that the word “waste” was overly broad. The departments state that fraud and abuse measures should be established through unbiased and narrowly tailored objective data.

The preamble to the Final Rule provides that independent medical or clinical standards should be based on generally recognized sources such as peer-reviewed scientific studies and medical literature, formal published recommendations of federal government agencies, drug labeling approved by the U.S. Food and Drug Administration, and recommendations of relevant nonprofit health care provider professional associations and specialty societies, including patient placement criteria and clinical practice guidelines. The Final Rule provides one example of the incorrect use of independent medical or clinical standards, which is summarized in Example 5 of this link to our NQTL Examples Addendum.

F. The Relevant Data Evaluation Requirements

The Final Rule largely incorporates the Proposed Rule’s provisions on the relevant data evaluation requirements. Although not applicable until plan years beginning on or after January 1, 2026, plans will need to begin focusing on the relevant data requirements now. For each NQTL, the Final Rule requires a plan to “collect and evaluate relevant data” in a manner reasonably designed to assess the impact of NQTLs on relevant outcomes related to access to MH/SUD benefits as compared to Med/Surg benefits. Action generally must be taken to resolve any material differences in access to MH/SUD benefits. This collection of data and analysis needs to be in place for 2026 and incorporated into the plan’s comparative analysis for the plan year beginning on or after January 1, 2026. Meeting this deadline will be challenging for plans, and any extension granted by the departments would be welcomed.

We were hopeful that the Final Rule would include more guidance on “relevant data,” but the departments declined to elaborate more than a few brief data elements. Instead, the departments promised further guidance “for the data required and the lists of examples of data that are relevant across the majority of NQTLs, as well as additional relevant data for NQTLs related to network composition.” This guidance will also include an update of the MHPAEA self-compliance tool to provide a “robust framework and roadmap” for plans to determine which data to collect and evaluate. In the discussion below, based on the preamble to the Final Rule and examples in the Final Rule, we go to some length on what that data collection might include.

The Final Rule deviates from the Proposed Rule in two respects for relevant data for network composition NQTLs. First, the Final Rule eliminates the special rule on the effect of data evaluation for the network composition NQTLs. Second, the Final Rule also does not adopt a possible data evaluation safe harbor for network composition NQTLs that was in the Technical Release accompanying the Proposed Rule. The Final Rule provides that guidance will be forthcoming on the type, form, and manner of collection and evaluation for the relevant data required under the Final Rule, and plans would be given “adequate” time to comply.

On data collection generally, the Final Rule itself refers only to the number and percentage of claims denials and any other data relevant to the NQTL required by state law or private accreditation standards. As for NQTLs for network composition, the Final Rule also includes in-network and out-of-network utilization rates (including data related to provider claim submissions), network adequacy metrics (including time and distance data and data on providers accepting new patients), and provider reimbursement rates (for comparable services and as benchmarked to a reference standard). The Final Rule added the “benchmarked” reference for provider reimbursement rates, likely anticipating benchmarking with Medicare (as is done in the current MHPAEA Self-Compliance Tool).

The departments took a negative view of assertions that no data exists for an NQTL. There was acknowledgement that the data might be limited for a new NQTL, but even there the Final Rule states that a plan must provide, in its comparative analysis, 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.

Except for a new NQTL, if a plan asserts that no data exist, then the comparative analysis must contain a reasoned justification as to the basis for the conclusion that there is no data that can reasonably assess the NQTLs impact, 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 Final Rule. The departments provide one example of a plan that unsuccessfully asserts it lacks relevant data, which is summarized in Example 6 in this link to our NQTL Examples Addendum.

In the preamble to the Final Rule, the departments provide some suggestions on relevant data collection and evaluation but note that collection would depend on “facts and circumstances” surrounding each NQTL. The departments state that the relevant data for the “majority of NQTLs” might include the following nonexhaustive list for each MHPAEA classification:

• The number and percentage of claims denials in a classification of benefits.
• Other data relevant to the NQTL required by state law or private accreditation standards.
• Utilization data for MH/SUD and Med/Surg services.

For a prior-authorization NQTL, 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.
• Turnaround times for prior-authorization requests.

For NQTLs related to network composition, relevant data could include:

• 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).
• Provider reimbursement rates (for comparable services and as benchmarked to a reference standard).

Providing further clarification on network composition, the departments stated in the preamble that they would “expect” that a plan might collect and analyze data on the following:

• For in-network and out-of-network utilization, the ratio of inpatient, in-network and outpatient, in-network MH/SUD and Med/Surg claims to inpatient, out-of-network and outpatient, out-of-network MH/SUD and Med/Surg claims.
• The number of providers (or facilities) within specified MH/SUD and Med/Surg provider categories (or categories of facilities) per 1,000 participants and beneficiaries who have actively submitted claims within the past six months.
• Comparison of MH/SUD and Med/Surg turnaround times for applications to be approved for a provider to join the plan’s network as well as approval and denial rates for applications to join the network.
• Percentage of participants and beneficiaries who have access, within a specified time and distance, to one (or more) in-network providers who are available to accept new patients, comparing MH/SUD providers and Med/Surg providers.
• Median in-network MH/SUD and Med/Surg reimbursement rates for services with the same CPT codes.
• Median in-network reimbursement rates for inpatient MH/SUD and Med/Surg benefits, as compared to Medicare rates.
• Median in-network reimbursement rates for outpatient MH/SUD benefits and Med/Surg benefits, as compared to Medicare rates.

Example 10 in this link to our NQTL Examples Addendum also provides some further clarifications for what could be relevant data for network composition NQTLs.

In the preamble to the Final Rule, the departments emphasized repeatedly that the listing of types of possible data to be collected was nonexclusive and depends on facts and circumstances. The departments also expressed concern about “ghost” or phantom networks when a plan may list MH/SUD providers as being in network when they actually are not or are unreachable by participants, based on the information in a provider directory, or are not accepting new patients. The preamble includes some examples of “secret shoppers” calling MH/SUD providers listed in provider directories to see if the information was correct or whether the “secret shopper” could get an appointment. There is at least one recent complaint, filed as a class action in federal court, that also details the use of “secret shoppers” who purportedly discovered deficiencies in a plan’s provider directory on access to MH/SUD providers.

If the analysis of the outcomes data reveals “material differences” in access to MH/SUD benefits as compared to Med/Surg benefits, then the Final Rule states that this is a “strong indicator” that the NQTL violates the MHPAEA.

The departments explain that the materiality standard of the relevant data evaluation requirements arises from an interpretation of the statutory terms “substantially all” and “predominant.” That materiality 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.

Under the Final Rule, relevant data is material if, based on facts and circumstances, it suggests that the NQTL is likely to have a negative impact on access to MH/SUD benefits in comparison with Med/Surg benefits. The Final Rule specifies that relevant facts and circumstances may include (1) the terms of the NQTL; (2) the quality or limitations of the data; (3) causal explanations and analyses; (3) evidence as to the recurring or nonrecurring nature of the results; and (4) the magnitude of any disparities. This is a nonexclusive list, and plans may consider other relevant factors that are not specifically listed in the Final Rule, including that a difference in access to MH/SUD benefits is attributable to independent professional medical or clinical standards or fraud and abuse measures.

Plans can explain in their comparative analyses whether differences are, or are not, statistically significant, and why such differences are determined to be, or not to be, material. The Final Rule does not require a plan to obtain a statistical, actuarial, or other equivalent opinion to support a conclusion as to whether a difference is material. Importantly, the departments note in the preamble that statistical significance may not always be the appropriate standard. If a plan does obtain an expert opinion, then, as part of the comparative analysis, the plan should document the relevance of that opinion to its conclusions on materiality. The expert’s qualifications must be documented as part of the comparative analysis as well.

If there are material differences related to an NQTL, plans must take corrective action, which must be described in the comparative analysis. The departments noted that, for a network composition NQTL, plans may already be taking corrective action to expand networks due to demands for services, needs of participants, or requests from plan sponsors regarding expanded network coverage.

The Final Rule provides an illustrative list of possible actions the departments expect plans to take to strengthen efforts to recruit and encourage a broad range of available providers and facilities in addressing material differences in access for a network composition NQTL. Those actions include:

• Increase compensation or other inducements.
• Streamline credentialing processes.
• Contact providers reimbursed on an out-of-network basis to offer participation in the network and develop a process to monitor these efforts.
• Expand the availability of telehealth arrangements, particularly to mitigate shortages in certain geographic areas.
• Provide additional outreach and assistance to participants and beneficiaries enrolled in the plan or coverage to assist them in finding available in-network MH/SUD providers and facilities.
• Ensure that provider directories are accurate and reliable.

The Final Rule provides a number of examples of the relevant data evaluation requirements, which are included in this link to our NQTL Examples Addendum. Example 7 finds no MHPAEA violation when a plan collects data and finds no material differences. In Example 8, there is no MHPAEA violation even though there are material differences in data but the plan takes action to address those material differences. Example 9 illustrates the interaction of the data evaluation requirement with independent professional medical or clinical standards. In Example 10, there are different service providers for MH/SUD benefits and Med/Surg benefits and material differences are found, but as in Example 8, the plan takes corrective action so that there is no MHPAEA violation. Example 10 also provides detail on some of the corrective actions listed above.

G. An NQTL Cannot Apply Exclusively to MH/SUD Benefits

The statute itself provides that a plan cannot provide a treatment limitation to MH/SUD benefits when the treatment limitation does not apply to any Med/Surg benefits. The original 2013 final rule did not make this statutory prohibition specific but provided an example of its application. The Proposed Rule and Final Rule both incorporate this statutory prohibition. The departments provide examples of this requirement that can be found in Examples 11 and 12 in the linked NQTL Examples Addendum.

H. Meaningful Benefits in Each MHPAEA Benefit Classification

The original 2013 final rule provided that if a plan provides MH/SUD benefits in one of the MHPAEA benefit classifications, it must provide MH/SUD benefits in all MHPAEA benefit classifications. The Proposed Rule expanded this requirement to require that a plan provide “meaningful benefits” in each classification as compared to Med/Surg benefits, and the departments asked for comment on whether and how to define the term. The Final Rule does not provide a definition for “meaningful benefits” but instead explains that a plan does not provide meaningful benefits in a classification unless it provides a “core treatment” for a condition or disorder. “Core treatment” is defined as “a standard treatment or course of treatment, therapy, service, or intervention indicated by generally recognized independent standards of current medical practice.” (The preamble to the Final Rule notes that except for this broad definition, there is no specific requirement on what constitutes a core treatment, and it might not necessarily be a single item or service but could be a “suite” of services.) If there is no core treatment available for an MH/SUD condition, then a plan is not required to provide a core treatment, but it still must provide benefits for the condition in every classification when Med/Surg benefits are provided.

The departments revised two examples in the Proposed Rule regarding the meaningful benefits standard and added two new examples that incorporate the concept of “core treatments.” A summary of those examples can be found in this link to our Meaningful Benefits Examples Addendum.

I. Content Requirements for an NQTL Comparative Analysis

The Final Rule reshapes the content of the NQTL comparative analysis by incorporating the data collection requirements. Other organizational and substantive changes are made as well. The departments declined to provide examples of compliant comparative analyses. The preamble indicates that the departments remain committed to providing additional guidance, including an updated MHPAEA self-compliance tool. The departments acknowledge that for self-funded plans, third-party administrators play a critical role in developing a comparative analysis. DOL stated that ERISA-governed plans should contact DOL if any service provider refuses to provide information needed to perform a comparative analysis.

The Final Rule contains six separate requirements for a comparative analysis, with multiple subparts under each requirement.

The six broad requirements are:

1. Description of the NQTLs. There are three subparts here: (1) identifying NQTLs from plan documents, policies, guidelines, provider contracts, or other places they might appear; (2) identifying the MH/SUD and Med/Surg benefits to which the NQTLs apply; and (3) a description of which benefits are included in each of the MHPAEA classifications. Under the Proposed Rule, application of the substantially all/predominant test was also part of this requirement. With the removal of that requirement from the Final Rule, it has also been removed as a part of the comparative analysis.

2. Identification and definition of the factors used to design or apply the NQTL. This is part of the design and application requirements that, in large part, have been the basis of the required NQTL comparative analysis since February 10, 2021. Here, the plan will identify and give a detailed description of the factors relied upon to design and apply the NQTL, as well as the evidentiary standards supporting those factors. The Final Rule adds a provision that a plan must provide steps to correct, cure, or supplement any information, sources, or standards that would otherwise be biased or not objective.

3. Description of how the factors are used in the design and application of the NQTL. This requirement codifies much of the prior 2021 FAQs Part 45 on the content of an NQTL comparative analysis. For this part, a plan must provide a detailed explanation of how each factor is used to determine which MH/SUD and Med/Surg benefits are subject to the NQTL, as well as an explanation for the evidentiary standards or other information or sources (if any) considered or relied on in designing or applying the factors or relied upon in designing and applying the NQTL, including in the determination of whether and how MH/SUD or Med/Surg benefits are subject to the NQTL. When specific decisions made in the administration of benefits affect the NQTL, the comparative analysis would be required to provide information on the nature and timing of the decisions, and on the professional designations and qualifications of each decision-maker. Also, this description would include any weighting and ordering of factors and the reasons for the weighting and ordering. Any deviations or variations from a factor would also have to be included in this part of the comparative analysis.

4. Determination of comparability and stringency as written. Here, the plan must look at each classification and evaluate whether, under the terms of the plan as written, any processes, strategies, evidentiary standards, or other factors used in designing and applying the NQTL to MH/SUD benefits are comparable to, and are applied no more stringently than, these same evidentiary standards and factors for Med/Surg benefits. This includes a showing of why or why not an NQTL was applied to MH/SUD or Med/Surg benefits in the same classification, how the NQTL is applied, as written, to MH/SUD or Med/Surg benefits (including the use of any forms, checklists, procedure manuals, or other documentation in applying or designing the NQTL), and an explanation for deviations or variations.

5. Determination of comparability and stringency in operation. The “as written” and “in operation” stringency requirements are similar in that they both require discussion of the results of the relevant data evaluation requirements. The Final Rule adopts the provisions in the Proposed Rule on stringency in operation requiring a detailed identification of the data collected, an evaluation of the outcomes of the data, a detailed description of any material differences found that are not attributable to access of MH/SUD benefits as compared to Med/Surg benefits, and actions taken to address any material differences.

The Final Rule adds or augments several provisions to this fifth requirement:

• For a new NQTL for which data is currently unavailable there must be a description of when and how the data will become available, collected, and analyzed.
• When a plan asserts no data exists, there must be a “reasoned justification” as to the basis for the conclusion that there is no data, 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 that the NQTL complies with all applicable requirements.
• The Final Rule requires more specifics on instances when material differences are not attributable to differences in the comparability or relative stringency of an NQTL as applied to MH/SUD benefits as compared to Med/Surg benefits. There must be a reasoned and detailed discussion of any considerations beyond a plan’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. This explanation should be comprehensive and include evidence to support the conclusion that considerations beyond a plan’s control contribute to the existence of material differences in access to MH/SUD benefits.
• To the extent differences in access to MH/SUD benefits are attributable to generally recognized independent professional medical or clinical standards or fraud and abuse measures that comply with the Final Rule, there needs to be an explanation of how any such differences are attributable to those standards or measures.
• Finally, more detail is required on reasonable actions taken to address material differences and whether such differences persist after such action.

6. Findings and conclusions. “The comparative analysis must address the findings and conclusions,” including those that indicate that the plan “is or is not (or might or might not)” be in compliance, as well as explain any actions the plan is taking or intends to take to address areas of concern. This must be accompanied by a “reasoned and detailed discussion” of the findings and conclusions, complete with citations to any additional information not otherwise included in the comparative analysis. Basic formalities of date completed and title and credentials of all relevant persons who participated in the performance and documentation of the comparative analysis are also required, as well as an assessment of the qualifications of any participating reviewer or consultant considered by the plan to be an “expert,” and the extent to which the plan ultimately relied upon the expert’s evaluation. Significantly, the Final Rule modified the Proposed Rule on the fiduciary certification of the comparative analysis discussed below.

J. The Fiduciary Certification of the NQTL Comparative Analysis

As part of the findings and conclusions of the NQTL comparative analysis, the Proposed Rule required one or more named fiduciaries to certify the results for ERISA-covered plans. The Final Rule modified this certification, requiring one or more named plan fiduciaries to confirm such fiduciary’s engagement in a prudent process to select one or more qualified service providers to perform and document a comparative analysis as well as satisfaction of the duty to monitor those service providers. In the preamble, DOL stated it does expect that a plan fiduciary will, at a minimum, review the comparative analysis, ask questions about the analysis, and discuss it with service providers, as necessary, to understand the findings and conclusions. According to the preamble, the fiduciary should also have the service provider make an assurance that, to the best of its ability, the comparative analysis complies with the requirements of the MHPAEA and the Final Rule.

K. The NQTL Comparative Analysis Process

The Final Rule follows the Proposed Rule and provides further clarity on the NQTL comparative analysis process. When a department requests an NQTL comparative analysis from an employer, it typically provides a very short time frame for response. The departments emphasize that under the CAA, comparative analyses should have been prepared by February 10, 2021. Similarly, the departments typically provide short time periods for employers to respond to follow-up requests. Under the Final Rule, each of those time periods would be codified as 10 business days. Additional time may be granted by the department making the request.

If there is an initial finding of noncompliance, then the statutory 45-day period is triggered when a plan must provide the department with actions it will take to bring the plan into compliance.

If there is a final finding of noncompliance with the comparative analysis, the Final Rule requires that the plan notify all participants and beneficiaries of that noncompliance within seven business days in a stand-alone notice. (This is a modification from seven calendar days in the Proposed Rule.) The Final Rule contains five general content requirements for that notice, including a statement “prominently displayed” on the first page in no less than 14-point type that the applicable department “has determined that [the group health plan] is not in compliance with the Mental Health Parity and Addiction Equity Act.” In the Final Rule, the departments stressed the requirement that the notice contains the steps the plan is taking to come into compliance with the MHPAEA. The Final Rule specifies the delivery method for the notice and allows an internet posting if the participant or beneficiary is notified in paper form (such as a postcard) that the notice is posted on the internet.

Notice must also be provided to any service provider involved in the claims process and to any fiduciary responsible for deciding benefit claims.

If there is a final determination that a plan is noncompliant with the comparative analysis requirement for an NQTL (e.g., the comparative analysis for the NQTL is incomplete or contains insufficient information), the departments may direct the plan not to apply the NQTL to MH/SUD benefits. The Final Rule provides that it is a facts and circumstances test on whether the departments will take such action that could include the level of disruption in the provision of benefits under the plan 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 time likely needed to cease or modify the NQTL. Example 13 in this link to our NQTL Examples Addendum provides an illustration of the departments’ taking such an action.

The Final Rule clarifies that this failure for a comparative analysis is different from a finding that an NQTL itself is in violation of the MHPAEA after applying the design and application requirements and the relevant data evaluation requirements. There, the departments have full authority to prevent the plan from applying the NQTL.

For ERISA-covered plans, the Final Rule would codify DOL’s position previously expressed in the FAQs that the NQTL comparative analysis is an instrument under which the plan is established or operated for purposes of document requests under §104 of ERISA. Under the Final Rule, plan administrators must provide the comparative analysis to participants and beneficiaries within 30 days following a written request or potentially face a penalty of $110 per day.

L. Challenges to the Final Rule Are Likely

For approximately 40 years, courts adhered to the Supreme Court’s decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., 467 U.S. 837 (1984), which established an overall deferential standard to agency regulations when a statute itself was silent or ambiguous. This past summer in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), the Supreme Court reversed its holding in Chevron, and consequently courts are no longer required to defer to an agency’s regulatory interpretation of a statute even if the statute is silent or ambiguous on the regulatory provision. After Loper Bright, we expect that there will be challenges to the Final Rule, especially the relevant data evaluation requirement and the meaningful benefits standard. Loper Bright challenges to many other employee benefit regulations issued by one or more of the departments are ongoing, and we would not expect the Final Rule to be free from challenge for long. It is also possible that the incoming Administration or new Congress may seek to review or revoke the Final Rule under the Congressional Review Act or administrative procedure.

IV. Next Steps for Plan Sponsors

Plan sponsors should be prepared to have an updated comparative analysis completed by the first day of the plan year beginning on or after January 1, 2025. We would expect that all comparative analyses would need to be updated. If no comparative analysis exists, the Final Rule provides even more impetus to create a compliant comparative analysis, given that covered plan were required to complete this as of February 10, 2021. Remember, there are very short turnaround times if a department or a participant or beneficiary asks for this comparative analysis. Now that the rule is final, we anticipate the departments’ investigations of plans for MHPAEA compliance will accelerate.

The comparative analysis should cover all six of the detailed requirements contained in the Final Rule except for any requirements imposed because of:

• The meaningful benefits standard.
• The prohibition on discriminatory information used in the design and application requirements.
• The relevant data evaluation requirements.

Comparative analyses will need to be updated to cover these requirements, effective January 1, 2026 for calendar year plans.

Agreements with service providers need to be reviewed – in particular, ASO and TPA agreements – to make sure that they are clear on the allocation of responsibilities for preparing a comparative analysis.

Plan fiduciaries should be made aware of the certification requirement and the need to engage in “a prudent process to select one or more qualified service providers to perform and document a comparative analysis.”

This is also a good time to make sure that ASO/TPA agreements spell out who is responsible for QTL testing/analysis (e.g., might a qualified service provider other than the ASO/TPA prepare the analysis) and that the plan sponsor retains a copy of that testing. QTL testing does not have to be done every year but needs to be performed if there is a change in plan benefit design, cost-sharing structure, or utilization that would affect a QTL within a classification (or subclassification).

Work with your ASO or TPA to identify any areas when there may be a plan design issue with the meaningful benefits/core treatment standard, and be prepared to address those for plan years beginning in 2026.

For the design and application requirements, seek verification from the TPA/ASO that they are not using any biased or discriminatory information in designing the NQTL, including historical data.

Data collection will be the most challenging aspect of the Final Rule. There are still many unknowns about the type of data that must be collected. The Final Rule is limited in the list of these requirements, but at the very least, plans should start collecting the data identified in the Final Rule as well as other relevant data suggested in the preamble and examples – especially related to the network composition NQTLs. Keep an eye out for the promised further clarifications and guidance from the departments on the data to be collected and analyzed. Discuss with the TPA/ASO their ability to collect and analyze the data, including whether they have the technology required for data collection.

As mentioned above, be prepared to review/revise TPA/ASO agreements for the NQTL comparative analysis. These service provider agreements should go beyond that to address responsibilities for the meaningful benefit requirement, data collection, and whether the TPA/ASO is using any discriminatory data.

Watch for developments in the courts and whether the Final Rule is challenged under Loper Bright or otherwise. In particular, there may be challenges to the relevant data evaluation and meaningful benefits requirements. Congressional action from the incoming Administration is also possible, such as under the Congressional Review Act or administrative procedure.

NQTL EXAMPLES ADDENDUM

The Final Rule substantially rewrites and reorganizes the examples given in the Proposed Rule on the design and application requirements and the relevant data evaluation requirements. This was necessary for a number of reasons, including the elimination of the mathematical substantially all/predominant test for NQTLs. Below is a summary of the examples.

Example 1 (modified from Example 4 in the Proposed Rule). MHPAEA violation.

Example 1 provides an illustration of a violation of the design and application requirements.

A plan’s reimbursement rate methodology for outpatient, in-network providers for a specific CPT code varies for both MH/SUD and Med/Surg benefits, 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 demand. But in operation, the plan violates the design and application requirements because it also provides a further percentage reduction for MH/SUD nonphysician providers that it does not provide for Med/Surg nonphysician providers. This example appears to be taken from a case brought by DOL on reimbursement rates for nonphysician MH/SUD providers. This example applies only the design and application requirements and does not address whether the plan complies with the relevant data evaluation requirements.

Example 2 (modified from Example 10 in the Proposed Rule). MHPAEA violation.

Example 2 is another example of a violation of the design and application requirements when a strategy is more stringently applied to an MH/SUD NQTL.

A plan, as written, generally excludes coverage for all treatments that are experimental or investigative for both Med/Surg and MH/SUD benefits in the outpatient, in-network classification. The plan contains specific provisions on what is considered experimental and investigative (including, for example, fewer than two randomized controlled trials are available to support the treatment’s use for the given condition or disorder). As written, the plan provides benefits for the treatment of ASD, but, in operation, excludes coverage for applied behavioral analysis (ABA) therapy to treat children with ASD, deeming it experimental. However, among other facts, there are more than two randomized controlled trials that are available to support the use of ABA therapy to treat certain children with ASD. The example concludes that the plan violates the design and application requirements because the plan deviates from its own general strategy/guidelines on experimental and investigative services to exclude ABA therapy. As with Example 1, there is no analysis of the relevant data evaluation requirements.

Example 3 (new). MHPAEA violation.

Example 3 contains an illustration of discriminatory factors and evidentiary standards used in the design and application requirements, resulting in an MHPAEA violation.

Under Example 3, a plan has a step therapy protocol that requires covered individuals who are prescribed certain drugs to try and fail a generic or preferred brand name drug before the plan will cover the medication originally prescribed by a provider. The plan has an exception to this protocol based on a methodology developed by an external third-party organization that identifies instances in which a delay in treatment with a drug prescribed for a Med/Surg procedure could result in either severe or irreversible consequences. However, the third-party organization only recognizes an exception for a drug prescribed for an MH/SUD condition or disorder when the delay in treatment could result in both severe and irreversible consequences. This distinction between Med/Surg and MH/SUD conditions is not based on generally recognized independent professional medical or clinical standard. The plan does not take any steps to correct, cure, or supplement the methodology from the third-party organization. The example concludes that because of this “or/and” distinction, the source upon which the step therapy exclusion arose was biased or not objective and discriminates against MH/SUD benefits as compared to Med/Surg benefits. Also, the plan fails to take the steps necessary to correct, cure, or supplement the methodology so that it is not biased and is objective. Therefore, there is a violation of the plan design and application requirements. This example also does not consider the relevant data evaluation requirements.

Example 4 (same fact pattern as Example 4 in the Proposed Rule but with further detail on correction and cure). No MHPAEA violation.

Example 4 involves the correction of the impermissible use of historical pre-MHPAEA claims data in the design and application requirements.

Under Example 4, a plan, in arriving at reimbursement rates for a specified MHPAEA classification, relies only on historical plan total spending for each specialty, divided between MH/SUD and Med/Surg providers, including spending before the plan was subject to the MHPAEA. The plan subsequently determines, based on all the relevant facts and circumstances, that the historical plan data systematically disfavor access or are specifically designed to disfavor access to MH/SUD benefits as compared to Med/Surg benefits. The plan then supplements its methodology to develop reimbursement rates with additional information, evidence, sources, and standards that reflect the increased demand for MH/SUD benefits in that MHPAEA classification to attract sufficient MH/SUD providers to the network. The relevant facts and circumstances indicate that the supplemented information, evidence, sources, or standards do not systematically disfavor access and are not specifically designed to disfavor access to MH/SUD benefits as compared to Med/Surg benefits. Here, the plan took the steps necessary to supplement the information, evidence, sources, and standards to reasonably reflect the increased demand for MH/SUD 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. Accordingly, there is no violation of the design and application requirements.

Example 5 (revision from Example 6 in the Proposed Rule on the application of independent medical or clinical standards). MHPAEA violation.

In Example 5, a plan states that it relies on and does not deviate from independent professional medical or clinical standards but actually deviates for MH/SUD benefits, resulting in a violation of the design and application requirements.

The example’s plan states 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 Med/Surg and MH/SUD benefits in the prescription drug classification. The plan states that it uses the American Society of Addiction Medicine (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 opioid use disorder (OUD). However, in operation, the plan applies a more frequent prior-authorization requirement for a specific drug to treat OUD, which the ASAM guidelines do not support. For Med/Surg benefits, however, the plan’s factor used to design prior-authorization requirements for the prescription drug classification relies on, and does not deviate from, independent professional medical or clinical standards.

In this example, the ASAM national practice guidelines are independent medical or clinical standards and are not considered biased or discriminatory under the design and application requirements, but there is still an NQTL violation because the plan deviates from these standards, while it does not deviate from the independent professional medical and clinical standard for Med/Surg benefits.

Example 6 (new). MHPAEA violation.

In Example 6, a plan claims that it has no data to perform the relevant data evaluation requirements without sufficient justification, resulting in an MHPAEA violation.

The example’s plan approves or denies benefits for specified MHPAEA classifications based on medical necessity. In its NQTL comparative analysis, the plan claims it has no data to measure any relative impact of the medical necessity NQTL for MH/SUD benefits as compared to Med/Surg benefits. The plan offers no explanation in its comparative analysis for this lack of data. The plan violates the relevant data evaluation requirements because it did not perform the data gathering or analysis on the medical necessity NQTL. The example points out that the plan could have considered a comparison of the number and percentage of claims denials for MH/SUD and Med/Surg benefits based on the medical necessity criteria or the number and percentage of claims that were approved for a lower level of care than the level requested on the initial claim.

Example 7 (same general facts as Example 2 in the Proposed Rule). No MHPAEA violation.

In Example 7, a plan meets the relevant data evaluation requirements for concurrent review.

In this example a plan follows a written process to apply a concurrent review NQTL to all MH/SUD and Med/Surg 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 MH/SUD benefits and Med/Surg benefits in the inpatient, in-network classification. The plan evaluates the relevant data and determines that, based on the facts and circumstances, the data does not suggest that the concurrent review NQTL contributes to material differences in access to MH/SUD benefits as compared to Med/Surg benefits for the inpatient, in-network classification. While the plan meets the relevant data evaluation requirements for this NQTL, it is still required to comply with the design and application requirements (including the prohibition on discriminatory factors and evidentiary standards.)

Example 8 (adapted from Example 1 in the Proposed Rule). No MHPAEA violation.

In Example 8, the plan employs the relevant data evaluation requirements and finds a material difference but addresses the material difference with reasonable action.

This example’s plan requires prior authorization that a treatment is medically necessary for all inpatient, in-network Med/Surg benefits and for all inpatient, in-network MH/SUD benefits. The plan’s written process for prior authorization states that the plan approves inpatient, in-network benefits for Med/Surg benefits and MH/SUD benefits for periods of one, three, and seven days, after which a treatment plan must be submitted by the patient’s attending provider and approved by the plan. Analysis of the data reveals MH/SUD benefits are most commonly approved for only one 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 seven days are most common for Med/Surg benefits. The plan concludes that the data establish that there are material differences between MH/SUD benefits and Med/Surg benefits. To address these material differences, the plan consults more-recent medical guidelines to update the factors used for preauthorization NQTL and modifies the NQTL so that inpatient, in-network prior-authorization requests for MH/SUD benefits are approved for similar periods to what is approved for Med/Surg benefits. The plan includes documentation of this action as part of its comparative analysis. While in this example there were material differences, the plan took reasonable appropriate corrective action to satisfy the relevant data evaluation requirements.

Example 9 (adapted from Example 5 of the Proposed Rule). No MHPAEA violation.

In Example 9, the relevant data evaluation requirements reveal a higher percentage of denials for MH/SUD benefits as compared to Med/Surg benefits, but that difference is attributable to independent professional medical or clinical standards.

This example’s plan develops a medical management requirement for all inpatient Med/Surg and MH/SUD benefits in specified MHPAEA classifications to ensure treatment is medically necessary. The medical management requirement for both Med/Surg and MH/SUD benefits is based on independent professional medical or clinical standards. In the example, the plan meets the design and application requirements, including the implementation of the independent professional medical or clinical standards. The relevant data and evaluation requirements reveal medical management results in a higher percentage of denials for MH/SUD claims than for Med/Surg claims because the benefits were found to be medically necessary for a lower percentage of MH/SUD claims. The plan correctly determines that these differences in access are attributable to the independent professional medical or clinical standards that were appropriately used under the design and application requirements. The plan’s NQTL comparative analysis adequately explains the bases for concluding that it meets the relevant data evaluation requirements because it has collected and evaluated relevant data and the differences in access are attributable to the independent professional medical or clinical standards. The plan meets the relevant data evaluation requirements because even though there is a difference in the data, that difference is attributable to those independent professional medical or clinical standards.

Example 10 (adapted from Example 13 in the Proposed Rule). No MHPAEA violation.

In Example 10, there is no violation of the relevant data and evaluation requirements when, even though different service providers are used for MH/SUD and Med/Surg benefits and the data analysis reveals material differences between the network composition NQTLs, the plan takes and documents appropriate corrective action.

In this example, 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 Med/Surg and MH/SUD benefits. The assumption in the example is the plan meets the design and application requirements. For the relevant data evaluation requirements, the plan considers relevant data that is known, or reasonably should be known, including time and distance metrics for covered individuals to reach network providers in rural and urban regions, the number of network providers accepting new patients, the proportions of MH/SUD and Med/Surg 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 network composition NQTLs in the aggregate contribute to material differences in access to MH/SUD benefits as compared to Med/Surg benefits in the classifications because, based on all the relevant facts and circumstances, the NQTL is likely to have a negative impact on access to MH/SUD benefits as compared to Med/Surg benefits in the same classifications.

The plan takes reasonable actions, as necessary, to address the material differences in access, to ensure compliance, in operation, by strengthening its efforts to recruit and encourage a broad range of available providers and facilities to join the plan’s network of providers, increasing compensation and other inducements, streamlining credentialing processes, contacting providers reimbursed for items and services provided on an out-of-network basis to offer participation in the network (and developing 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 its comparative analysis and also documents in that analysis the reasons beyond the plan’s control that the plan believes may contribute to the material differences in access.

In this example, the plan meets the relevant data evaluation requirements because while material differences were revealed, the plan takes reasonable action necessary for the material differences and documents that action in its comparative analysis.

Example 11 (Example 11 in the Proposed Rule with only slight modifications). MHPAEA violation.

In Example 11, there is an NQTL violation because an NQTL applies only to MH/SUD benefits.

In this example, an employer maintains both a major medical plan and an employee assistance program (EAP). The EAP provides, among other benefits, a limited number of MH/SUD counseling sessions. Participants are eligible for MH/SUD benefits under the major medical plan only after exhausting the counseling sessions provided by the EAP, and no similar exhaustion requirement applies to Med/Surg benefits under the major medical plan. Because the EAP exhaustion requirement applies only to MH/SUD benefits, there is an NQTL violation.

Example 12 (Example 12 in the Proposed Rule with only slight modifications). MHPAEA violation.

Example 12, similar to Example 11, involves an exclusion applied only to MH/SUD benefits. The plan covers rehabilitation facilities and skilled nursing for Med/Surg but excludes residential treatment for MH/SUD.

Under this example, 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 MH/SUD residential treatment facilities. The exclusion of residential treatment is a separate NQTL applicable only to MH/SUD benefits in the inpatient, in-network and inpatient, out-of-network classifications. Because the plan does not apply a comparable exclusion to any Med/Surg benefits in the same MHPAEA classification, there is an NQTL violation.

Example 13 (Example 7 in the Proposed Rule with some modifications). MHPAEA violation.

Example 13 provides an illustration of the actions the departments can take when there is an incomplete or deficient NQTL comparative analysis.

In this example, following an initial request by a department for a plan’s comparative analysis of the plan’s exclusion of MH/SUD benefits for failure to complete a course of treatment in the inpatient, in-network classification, the plan submits a comparative analysis for that 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, the department determines that the plan has not submitted sufficient information for the comparative analysis. The department makes an initial determination that the comparative analysis fails to demonstrate, over the course of treatment requirement, that the processes, strategies, evidentiary standards, and other factors used in designing and applying the exclusion to MH/SUD 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 Med/Surg benefits in the classification. This triggers the statutory 45-day “cure period.” A subsequent corrective action plan and additional comparative analysis submitted by the plan do not cure the comparative analysis failure. The department determines that the additional comparative analysis does not demonstrate compliance with the requirements for NQTLs under the MHPAEA. Accordingly, the plan receives a final determination of noncompliance. After considering the relevant facts and circumstances, and considering the interests of plan participants and beneficiaries as well as feedback from the plan, the department directs the plan to cease imposing the course of treatment NQTL by a certain date, unless and until the plan demonstrates compliance.

MEANINGFUL BENEFITS EXAMPLES ADDENDUM

The Proposed Rule provided two examples of meaningful benefits. The Final Rule refines two of the Proposed Rule’s examples and provides two more examples. Example 5 from the Proposed Rule is adopted largely as is. Example 6 from the Proposed Rule is modified and renumbered as Example 7, and Example 6 and Example 8 in the Final Rule are new.

Example 5 (Example 5 in the Proposed Rule modified slightly to include “core treatments”). Plan violates the meaningful benefit standard.

Covering ASD but only covering developmental screenings (and not covering applied behavioral analysis (ABA) therapy) is a failure to provide meaningful benefits and a core treatment.

In this example, a plan covers treatment for ASD. ASD is a mental health condition under generally recognized independent standards of current medical practice. Specifically, the plan covers outpatient, out-of-network developmental screenings for ASD, but excludes all other benefits for outpatient, out-of-network treatment for ASD, including ABA therapy. The plan generally covers the full range of outpatient treatments (including core treatments) for Med/Surg benefits when provided on an out-of-network basis. Diagnostic screenings alone do not constitute a meaningful benefit or core treatment. The plan violates the meaningful benefit standard since meaningful benefits and a core treatment are not provided for MH/SUD benefits in this classification, while they are provided for Med/Surg benefits.

Example 6 (new). Plan does not violate the meaningful benefit standard.

Example 6 has the same general fact as Example 5 but involves an HMO that does not generally provide out-of-network services.

Example 6 takes the facts of Example 5 but applies them to an HMO. While an HMO will provide out-of-network emergency services, it generally will not provide out-of-network outpatient services for Med/Surg. Since the plan does not provide meaningful benefits or core treatments for Med/Surg in the outpatient out-of-network classification, it need not provide meaningful benefits or a core treatment in the same classification for MH/SUD benefits.

Example 7 (redesignated from Example 6 in the Proposed Rule and slightly modified). Plan does not violate the meaningful benefit standard.

In Example 7, a plan provides nutritional counseling for eating disorders, which is considered a meaningful benefit and a core treatment for an MH/SUD condition.

This example’s plan provides extensive benefits, including core treatments for many Med/Surg conditions in outpatient, in-network classification, including nutrition counseling for diabetes and obesity. The plan also generally covers diagnosis and treatment for eating disorders, which are MH/SUD conditions, including coverage for nutrition counseling in the outpatient, in-network classification. Under this example, nutrition counseling is a core treatment and meaningful benefit for eating disorders, so the plan does not violate the meaningful benefit standard.

Example 8 (new). No violation of the meaningful benefit standard.

In example 8, the plan provides counseling and prescription drugs for OUD, which is a core treatment and meaningful benefit.

This example’s plan provides extensive benefits for the core treatments for many Med/Surg procedures in the outpatient, in-network and prescription drug classifications. The plan provides coverage for the 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 OUD. Under this example, counseling and behavioral therapies in combination with prescription drugs constitute core treatments and meaningful benefits for OUD in both the outpatient, in-network and prescription drug classifications. Consequently, the plan provides meaningful benefits and core treatments for OUD in the outpatient, in-network and prescription drug classifications.