Health insurers are failing to deliver parity in mental health and substance use disorder benefits for their members, despite laws on the books designated to ensure equal coverage, according to a new report issued by HHS and the Labor and Treasury departments on Tuesday.
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires that the financial requirements and treatment limitations, such as copayments or prior authorization requirements, that payers impose on mental health or substance use disorder benefits can't be more restrictive than those on all other medical or surgical benefits. According to the law, group health plan or health insurance issuers aren't allowed to impose such non-quantitative treatment limitations (NQTLs) on mental health or substance use disorder benefits, unless it's comparable to other benefits.
Though progress has been made, NQTLs on mental health and substance use disorder benefits are still pervasive in the health insurance system — not as an oversight, but a decision, Acting Assistant Secretary for Employee Benefits Security Ali Khawar said.
"Personally, I'm pretty confused about why the level of compliance so long after the statute has passed and after so much guidance has been issued is as poor as it is," Khawar told reporters on a Tuesday call, though the acting Employee Benefits Security Administration head said he wasn't going to subscribe any motivation to it.
"We want to get to a place where compliance is the norm. And unfortunately that’s not the place we’re in right now," Khawar said.
Federal agencies have been ramping up compliance efforts across multiple administrations, though COVID-19 has thrown disparities in health access into sharp relief and made health equity a key prong of the Biden administration's agenda.
The Department of Labor's EBSA is a big part of this, having primary enforcement jurisdiction over MHPAEA for about 2 million health plans covering roughly 136 million Americans. CMS has also increased its MHPAEA enforcement activities in the individual and fully insured group markets in states where it has authority, and over non-federal governmental plans in all states (such as plans for employees of state and local governments).
The Consolidated Appropriations Act passed last year also gave the departments a new tool in enforcing MHPAEA, along with additional funding to implement it. CAA also required the departments to report their findings to Congress under the new provision.
The new enforcement tool expressly requires group health plans and health insurance issuers to document how they design and apply NQTLs. If after an analysis, regulators determine the plan is noncompliant with MHPAEA, they can call out the payer in their annual report to Congress, of which this is the first.
Regulators found widespread noncompliance with EBSA following a slew of investigations.
Since kicking off the process last year, EBSA has issued 156 letters to plans requesting NQTL analyses, while CMS has issued 15.
None of the initial comparative analyses received to date have been sufficient, the departments said. Among other shortcomings, plans have submitted analyses lacking supporting evidence or explanation or failing to identify specific benefits affected by an NQTL.
Additionally, many insurers said they were unprepared for the government's request for the analysis, despite MHPAEA's requirement they track and document the information for more than a decade.
That resulted in a flurry of followups from EBSA and CMS requesting additional information and calling out deficiencies in the original reports.
After receiving more information, so far EBSA has issued 30 initial determination letters finding plans were imposing NQTLs on mental health and substance use disorders lacking parity with medical or surgical benefits, while CMS has issued 15.
Regulators found a spate of common issues, including plans limiting or excluding applied behavioral analysis or other treatment for autism spectrum disorder; issuers requiring licensed mental health or substance use providers to bill the plan only through specific types of other providers; or limiting or excluding medication assisted treatment for opioid use disorder.
Some plans were also covering nutritional counseling for medical conditions like diabetes, but not for mental health conditions like anorexia, bulimia or binge-eating disorder.
Alerting the plans did lead to some increasing benefits, according to the report.
In response to the initial determination letters, EBSA received corrective action plans from 19 insurers, while CMS received six.
So far, 26 plans and issuers have agreed to make prospective changes to their benefits, as of the end of October. Those include the complete removal of an NQTL limiting mental health or substance use benefits, or adding previously excluded coverage for such benefits.
In one example, EBSA discovered a large service provider administering claims for hundreds of self-funded plans nationwide was excluding applied behavior analysis for children with autism. Applied behavior analysis, a treatment delivered by a behavioral specialist multiple times a week over the course of months, is a primary early therapy for autism and has been shown to improve development.
After identifying plans administered by that provider, EBSA requested the plans perform comparative analyses and found many were noncompliant.
So far, three plans that ran the analyses for the applied behavior analysis exclusion have decided to remove the exclusion in the future, and will now cover the therapy for children with autism. That correction affects more than 18,000 plan members, EBSA said.
No specific noncompliant plans were named in the report. Khawar said the government is either still engaging with them or they've corrected the problem.
But if noncompliant plans don't fix their arrangements, they'll receive a final termination of noncompliance which would make them notify their participants and beneficiaries that they’re not in compliance.
They'll also be named in the next report to Congress.
Access to mental health and substance use disorder treatment was a huge issue even before the pandemic, with the conditions facing stigma, discrimination and administrative barriers to care not faced by other patients.
Though the pandemic has greatly exacerbated conditions like anxiety and depression, mental illness was widespread in the U.S. even before COVID-19. Almost 52 million adults experienced some form of mental illness in 2019, according to the National Institute of Mental Health.
But now, with the pandemic, such benefits are needed like never before, regulators said.
"Especially in the midst of the pandemic when we've seen so much social isolation and so many health inequities really being laid bare, the importance of these issues has really come to the forefront," Khawar said.
Substance use disorders have also worsened during COVID-19. From April 2020 to April 2021, already rising overdose figures skyrocketed. More than 100,000 Americans died of overdose during that period, a figure representing a nearly 30% year-over-year increase, according to data from the Centers for Disease Control and Prevention.
Though the federal government is stepping up oversight of plans to ensure coverage parity, the Labor and Health departments could have more power, according to the report.
For one, EBSA noted additional civil monetary penalty authority for any plans not complying with MHPAEA would be "quite helpful," Khawar said.
Additionally, though EBSA has jurisdiction to oversee fully insured and self-insured group health plans, it doesn't have the authority to go after the issuers of those plans that actually administer benefits, and usually design any limitations or coverage terms.
The Department of Labor recommended Congress amend existing law to allow the agency to pursue parity violations by entities providing such administrative services.