After a 3 year wait, the Final Regulations for the Mental Health Parity and Addiction Act were released on November 13, 2013 and will take effect on January 13, 2013 for plans with effective dates on or after July 1, 2014. All 206 pages of the Rule can be found in the Federal Register and a summary of the Rule and FAQ can be found here.
Advocates did not get everything they wanted, but overall the rule is a huge step forward in enabling full enforcement of the Mental Health Parity and Addiction Equity Act. The Final Rule maintained the majority of the consumer protections provided in the Interim Rule and in some cases added more protections and transparency requirements for the insurance plans. Remember the law does not include a mandate for mental health and substance use disorder services and the Final Rule did not change that. Only those plans required to provide the Essential Health Benefits (individual and small group) are required to provide mental health and substance use disorder services. Although the Final Rule does not mandate that a plan provide any particular service/benefit, it does clarify that parity protections apply to any mental health and substance use disorder benefit offered by a plan, including intermediate levels of service (residential treatment, intensive outpatient, partial hospitalization). These services must be classified similarly to the comparable medical/surgical benefit and parity assessed as such.
Other important clarifications and protections included in the Final Rule:
- Deletion of the “clinically recognized standard of care” exemption. Plans may no longer use this as an excuse to have more restrictive NQTL for MH/SUD benefits.
- Explanation that provider reimbursement, as well as restrictions on geographic location and type of facilities, and provider specialty ARE considered NQTLs for purposes of enforcement.
- Continuation of “comparable and no more stringent” standard with respect to NQTLs, the Final Rule did not establish a quantitative formula for NQTL determinations.
- New and clarified transparency and disclosure requirements:
- Criteria for medical necessity determinations for both medical/surgical and mental health/substance use disorder care must be made available upon request
- Reason for denial of treatment or reimbursement must be made available upon request
- Written documentation of how a plan’s processes, strategies, evidentiary standards used to apply and NQTL were imposed on both medical/surgical benefits and mental health/substance use disorder benefits must be provided within 30 days.
- The Final Rule maintains the cost exemption for plans and issuers, but as it is an onerous process, it is likely few plans will take advantage of this provision. State and local government self-funded plans may continue to opt-out of compliance by following the CMS approved process.
- Plans are allowed to use tiered networks of providers and mult-tiered prescription drug programs as long as these are not more stringent for mental health and substance use disorder benefits.
- States will continue to have the primary enforcement authority of MHPAEA, but US DOL and HHS will continue to have enforcement over plans were states do not comply.
Unfortunately, the Final Rule does not apply to Medicaid plans, but CMS has stated they will issue further guidance for State Medicaid Directors on how to implement provisions in the Final Rule. Until then, the January 2013 CMS letter to State Health Official Letter will govern the implementation of parity for Medicaid plans.
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