Red Flag Warnings of Noncompliance with Mental Health Parity Laws (article)
On June 1, 2016, the Employee Benefits Security Administration (EBSA) released sub-regulatory guidance relating to whether certain treatment limitations contained in health plans can satisfy the requirements of the federal mental health parity laws.
As background, the Mental Health Parity Act (MHPA), as amended by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA), require mental health services to be treated in a substantially similar manner to all covered medical and surgical services under a health plan, including:
- Cost-sharing requirements, such as deductibles, co-payments, coinsurance, and out-of-pocket expenses; and,
- Treatment limitations, such as frequency of treatments, number of visits, days of coverage, or similar plan limits.
Not only does the law apply to quantitative limits, such as financial and treatment limits, but it also applies to non-quantitative limits such as:
- Medical management standards that limit or exclude benefits based on medical necessity or appropriateness, or based upon whether the treatment is experimental or investigative;
- Prescription drug formulary limits;
- Standards for provider admission to participate in a network, including reimbursement rates;
- Plan methods for determining usual, customary, and reasonable charges;
- Step therapy; or
- Conditioning a benefit upon completion of a course of treatment.
To this end, EBSA’s guidance provides a non-exhaustive list of plan provisions that may trigger ‘red flags’ of non-compliance relating to the non-quantitative limitations set forth in the law. Following are examples of red flag warnings that might warrant additional scrutiny:
- Requiring preauthorization or pre-service notifications to receive mental health services or prescription drugs;
- Requiring individuals to meet certain progress protocols or to obtain conditional ‘first attempt’ treatments;
- Requiring individuals to meet an improvement standard in order to continue treatment;
- Requiring a health care provider to submit a written treatment plan especially if it includes completion of the treatment plan within certain timeframes;
- Denying services because the individual fails to comply with the treatment plan; or
- Imposing geographical limitations on mental health services or imposing certain licensure requirements of providers that differ from the limitations applicable to medical/surgical benefits.
EBSA indicates that while these examples of plan provisions would not automatically violate the mental health parity law, the plan or insurer would be required to provide evidence to substantiate the need for the provision.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.