Advancing the Blueprint to Mental Health Parity Reform

Access to mental health and substance use disorder (MH/SUD) treatment is a persistent challenge with 50.6% of adults aged 18 years or older with any MH condition and 14.9% of people aged 12 years of older with an SUD receiving treatment in 2022.¹ One strategy to improve treatment access is to require insurance coverage of MH/SUDs to be equal to the coverage of medical and surgical (M/S) services. The Mental Health Parity and Addiction Equity Act (MHPAEA) requires this equivalence for many insurance plans. The MHPAEA applies to quantitative treatment limitations (QTLs) (eg, deductibles and visit limits) and nonquantitative treatment limitations (NQTLs) (eg, utilization review processes and prior authorization). Despite years since the MHPAEA’s enactment, evaluating parity remains a challenge. In August 2023, the Departments of Treasury, Labor, and Health and Human Services proposed changes to MHPAEA regulations concerning evaluation and enforcement of insurer compliance with NQTLs,² although it is unclear how this will affect patient care. We highlight the government’s historical approach to coverage, review the proposed reforms, and present opportunities for the field.

Current Status of the MHPAEA

Insurers offering group and individual plans through employers or state marketplaces are generally required to comply with the MHPAEA. The 2013 final rules identify classes of benefits for parity: inpatient in network and out of network, outpatient in network and out of network, emergency, and prescription drugs. Studies demonstrate that MHPAEA led to increased use of MH/SUD services³ and evidence of improved financial protections for beneficiaries.⁴ However, noncompliance with parity for NQTLs remains an obstacle, with results of comparative analyses required by the Consolidated Appropriations Act of 2021 showing low compliance and failure to provide requested reports.⁵

Understanding the Proposed Amendments

The proposed rules strengthen existing NQTL standards. These changes clarify definitions, set content and procedural requirements for comparative analyses, and delineate data requirements for NQTLs related to network composition.

One priority is to standardize the classification of conditions and benefits (ie, MH/SUD vs M/S). Historically, insurers categorized some conditions (eg, autism spectrum disorder and eating disorders) as medical conditions, despite their inclusion in the Diagnostic and Statistical Manual of Mental Disorders (DSM). The proposed rules unambiguously consider these MH conditions. Moreover, the definitions of conditions and benefits must conform with “generally recognized independent standards of current medical practice,”² including the current DSM and International Classification of Diseases.

Additionally, the rules clarify terminology for NQTL design and application to promote uniformity and rigorousness of comparative analysis. For instance, the definition of “treatment limitation” is differentiated from the complete exclusion of benefits for a given condition and affirms that the illustrative list of NQTLs is nonexhaustive. This clarifies what should be considered NQTLs, regardless of the condition. Other defined terms include strategies, processes, factors, and evidentiary standards, which additionally support comparisons. To illustrate, the rules define evidentiary standards as “any evidence, sources, or standards that a group health plan…considered or relied upon in designing or applying a factor with respect to an NQTL, including specific benchmarks or thresholds.”² Additional explanation is included to help determine the kinds of information the term denotes. Clearly defining the essential components of NQTLs facilitates comparisons between the standards for MH/SUD and M/S benefits.

Many NQTLs are applied to M/S benefits; thus, establishing which one to use as a benchmark for comparison with MH/SUD benefits is important. For QTLs, a mathematical test is applied, and then comparisons are straightforward (eg, copayment for an outpatient psychiatric visit should not be greater than that for a dermatology visit because both are considered specialists). The proposed changes extend a similar approach to NQTLs, giving insurers a mechanism for determining the relevant M/S benchmarks against which their NQTLs should be evaluated.

If an NQTL satisfies this requirement (ie, no more restrictive than the M/S benchmark), insurers need to perform a comparative analysis. Insurers should demonstrate that the NQTL is formulated on objective information (eg, clinical scores) and applied similarly to MH/SUD and M/S benefits. Moreover, they must show absence of any consequent disparity in benefits access, or else explain the disparity. Consider the NQTL of utilization review frequency (ie, approved treatment days) for inpatient benefits. Although a frequency applied to MH/SUD inpatient treatment greater than that applied to M/S inpatient treatment appears concerning, no parity violation exists if clinical standards (or evidence) account for this difference.

A special rule requires specific data elements for NQTLs related to network composition, including out-of-network use, percentage of in-network clinicians actively submitting claims, time and distance standards, and reimbursement rates. These data must be interpreted in the relevant health care context (eg, clinician shortages) and with the understanding that standards set by accreditation organizations or government programs should be only a starting point for insurers to develop a unique set of information to evaluate for MHPAEA compliance.

Considerations and Challenges

The proposed changes aim to clarify compliance requirements and reduce NQTLs that limit access without regard to clinical standards. Increased data reporting will enhance evaluation of the impact of NQTLs on treatment access and health outcomes. Although these changes may improve compliance, some issues remain unresolved.

To evaluate parity between M/S and MH/SUD benefits, agreement about what services are comparable is needed. Government officials and insurers have noted the challenge and subjectivity of determining equivalence. For example, residential treatment for MH/SUDs lacks a clear M/S equivalent. Previous guidance clarified that if skilled nursing facilities (SNFs) or rehabilitation hospitals are considered inpatient benefits, so must residential treatment for MH/SUDs. Although consistent classification is helpful, it is unclear whether using SNFs as comparators for residential MH/SUD treatment could be detrimental in other processes, such as utilization reviews. Aligning NQTLs does not necessarily ensure those limitations are appropriate for both types of care.

Data requirements for network composition may have limited usefulness. Concerns exist over inaccuracies in insurers’ directories regarding addresses, acceptance of new patients, and in-network status. Additionally, the percentage of in-network clinicians actively submitting claims likely includes those not accepting new patients for the foreseeable future, thereby overestimating the number of clinicians available to enrollees seeking care. Capturing an accurate picture of network adequacy requires clarity on what is measured by a given metric and its suitability to the evaluation of “adequacy.”

Additional compliance requirements may impact administrative burden for both insurers and regulators. Greater costs for insurers may be passed to beneficiaries via increased premiums, and an increasing workload for government officials may result in inconsistent enforcement of compliance. Multiple federal and state agencies share responsibility for parity enforcement.⁶ Although the federal government has prioritized parity enforcement by increasing resources to the Department of Labor, there is no guarantee states will follow suit.

The proposed rules address crucial issues with the MHPAEA, but their effectiveness hinges on stakeholder investment. Federal agencies should prioritize evaluating the changes for both compliance and consistency of enforcement across states and agencies to determine whether the rules have their intended effect. Health services researchers could play a role in aiding insurers with comparative analyses and in assessing the impact of these rule changes on access to treatment and health outcomes. Clinicians are uniquely positioned to guide implementation through advocacy initiatives and alignment of clinical standards with parity requirements. Although a formidable challenge, ensuring individuals with MH/SUDs have an equal chance of accessing care through their benefits as those with M/S conditions is a meaningful opportunity to advance mental health care.