Historic Parity Rule Closes Loopholes and Improves Access to Timely Care
A new federal mental health parity rule aims to identify and close loopholes that health plans and insurers have used to deny patients mental health and substance use disorder care.
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In what is being called a historic development and big win for behavioral health clinicians and their patients, the federal government has issued its first update in 10 years to rules governing mental health parity for more than 150 million people who have private health insurance.
“It’s definitely a much-needed improvement, because it clarifies the expectations for the insurance industry,” said Robert L. Trestman, M.D., Ph.D., chair of APA’s Council on Healthcare Systems and Financing. “Historically, insurance companies have had way too much wiggle room, particularly in establishing non-quantitative treatment limitations, such as prior authorization rules and medical necessity criteria.”
One omission in the law is the lack of mandatory audits and fines for insurers that fail to comply, said “The next logical step is mandatory auditing and significant financial penalties for health plans and insurers that fail to meet these standards.”
Scott P. Yates
The new final rule extends the reach of existing mental health parity law by specifying that certain plans covering state, city, or local employees—specifically, self-funded non-federal governmental plans—will no longer be permitted to “opt out” of compliance with the law. APA had strongly advocated for the sunsetting of the opt-out clause. “The federal mental health parity rules will now reach more patients than they did before,” said Trestman, who is also chair of psychiatry and behavioral medicine at Virginia Tech Carilion School of Medicine.
The rule also clarifies that eating disorders and autism spectrum disorder are considered mental health conditions and protected under the parity law. APA CEO and Medical Director Marketa M. Wills, M.D., M.B.A., called the final rule “a big step forward in holding insurance plans accountable. The new rules will help ensure that the law’s intent is fulfilled and that more people will be able to access the mental health and substance use treatment they need.”
Codifying Enforcement
The final rule, issued in September, reiterates that insurers’ coverage restrictions must not be more burdensome for people using mental health and substance use services than for those obtaining medical and surgical care. This principle was originally enshrined in 2008’s Mental Health Parity and Addiction Equity Act.
Much of the new rule focuses on coverage limitations that are not easily counted or measured, such as pre-payment audits, network admission rules, or prescription drug formulary exclusions, which are known as non-quantitative treatment limitations (NQTLs). The new rule codifies parity-enforcement enhancements that were lobbied for by APA and passed by Congress as part of a 2021 spending bill; they took effect days after.
That law requires plans and insurers to perform analyses of their NQTLs, compare them with their medical and surgical treatment limitations, document their findings, and make their analyses available to federal and state authorities and patients upon request.
However, insurer compliance has been a mixed bag, according to the latest federal report on parity issued to Congress in July 2023. Some health plans and insurers agreed to make changes to improve access to behavioral health care; however, many plans’ analyses were deemed insufficient to demonstrate compliance with parity laws, even after multiple letters of warning from federal regulators, the report noted.
Keeping Parity Front and Center
The new final rule clarifies the original intent of the 2008 law and spells out the required content that all plans and insurers must include in their NQTL analyses. It also specifies timeframes for compliance; for example, plans now have just 10 days to provide analyses after an initial request.
Another key provision is that all plans and insurers must collect and review patient outcomes data, such as claim-denial rates, to assess how NQTLs affect access to mental health and substance use care. Plans that are deficient must take “reasonable action” to correct the problem, according to the new rule. Most of the final rule’s provisions will take effect on January 1, 2025.
“The final rule keeps mental health parity front and center, by revisiting the law’s spirit and purpose, and helping to push it forward to reality,” said L. Lee Tynes, M.D., Ph.D., chair of APA’s Council on Advocacy and Government Relations. The rule also establishes greater specificity for health plans and transparency for state officials and patients, added Tynes, who is also a professor of psychiatry and behavioral sciences at Tulane University School of Medicine.
“The final rule keeps mental health parity front and center by revisiting the law’s spirit and purpose, and helping to push it forward to reality,” said L. Lee Tynes, M.D., Ph.D.
American College of Psychiatry
Tynes said that there is still much work to be done to achieve meaningful parity in behavioral health care. He pointed to a report by RTI International—funded in part by APA and issued in April—that analyzed claims data from 2019 through 2021 for 20 million people, and showed that when obtaining mental health or substance use disorder care, patients went out of network 8.9 times more often to see a psychiatrist, 6.2 times more often for acute inpatient care, and 19.9 times more often for sub-acute inpatient care.
“You cannot have consequences without solid data,” Tynes said, “and that’s what this rule will provide.”
Enforcement of parity laws often falls on each state and its state insurance commission. According to the Council of State Governments, a nonprofit organization serving state officials, 17 states have enacted legislation bolstering mental health parity reporting and oversight since 2018. APA has created comprehensive model parity legislation for all 50 states and has worked to help pass such laws in Delaware, Illinois, New Jersey, New York, and Tennessee.
Trestman pointed to one glaring omission in the new rule: a lack of financial consequences. “Without enforcement, it won’t be enough to change the behavior of the insurance companies,” he said. “The next logical step is mandatory auditing and significant financial penalties for health plans and insurers that fail to meet these standards.” ■
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Psychiatric News
History
Published online: 18 October 2024
Published in print: November 1, 2024 – November 30, 2024
Keywords
- Mental Health Parity and Addiction Equity Act of 2008
- Parity
- Mental health parity
- Consolidated Appropriations Act
- Insurance
- Prior authorization
- Mental health parity
- MHPAEA
- Consolidated
- RTI International
- Lannis Lee Tynes
- L. Lee Tynes
- Marketa M. Wills
- Marketa Wills
- Robert L. Trestman
- Robert Trestman
- NQTLs
- Nonquantitative treatment limitations
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