More Government Rules Drive Plan Sponsors Crazy With Mental Health Issues

Proposed rules include closing the loophole under the original enactment of the MHPAEA which did not require the health plans of state and local government employees to comply with the federal law.

White House puts insurance companies on alert for mental health care

BY JOSEPH CHOI – 07/25/23

The Biden administration on Tuesday announced new proposed rules to reinforce legislation requiring insurance companies to cover mental health benefits to the same degree as medical and surgical benefits, with an administration official citing the stark lack of access Americans have to mental health care.

The Mental Health Parity and Addiction Equity Act (MHPAEA), passed in 2008, blocked large group health plans from enacting “annual or lifetime dollar limits” on mental health benefits.

Fifteen years later, the Biden administration lamented that access to mental health services still remains limited.

“We know that treatment works and that is why access to mental health providers is crucial, crucial for the well-being of our families,” White House domestic policy adviser Neera Tanden said in a briefing.

“In 2020, less than half of Americans with mental health needs receive the mental health care they needed most,” Tanden said. “And too many Americans struggle to get that care covered. It’s not supposed to be this way.”

Under the proposed rules, health plans would be required to make changes if they are found to be providing “inadequate access” to mental health services. Inadequacies would be determined through analyses that look to see if companies are failing to meet legal requirements.

Insurance companies, however, have previously not been found to conduct these analyses as thoroughly as the federal government might hope.

The Departments of Labor, Treasury and Health and Human Services reported to Congress in 2022 that 40 percent of insurance companies requested extensions of time when asked to provide comparative analyses on the limits they place on mental health benefits, like preauthorization requirements.

“Given this high percentage, [Employee Benefits Security Administration] concludes that many plans and issuers were deficient in their statutory obligation to perform and document the necessary analyses,” the report from last year stated.

Violations of the MHPAEA include insurance companies not providing out-of-network providers or inpatient benefits to treat mental health or substance abuse even though those benefits are offered for medical and surgical services.

A company is also in violation if it charges a higher premium for mental health services, imposes broad preauthorization requirements or fails to disclose the criteria for why benefits were denied.

Course-corrective measures that companies would be expected to take if they are found to be inadequate include having them add more mental health professionals to their networks and reducing the amount of red tape to get care.

The proposed rules will also include specifications on what health plans can and cannot do, explicitly stating companies cannot use “more restrictive prior authorization, other medical management techniques, or narrower networks” to limit mental healthcare access.

The final change that the Biden administration is proposing would close the loophole under the original enactment of the MHPAEA which did not require the health plans of state and local government employees to comply with the federal law.

By codifying changes to the MHPAEA that were passed by Congress, the White House estimated 200 more health plans and 90,000 consumers would be affected.

Once the proposed rules are published in the Federal Register, there will be a 60-day comment period for the public.

When asked how the White House plans to enforce these new rules, given that prior legislation has routinely been ignored, senior administration officials said they planned to report to Congress on non-compliance as well as raise public education among consumers on how their health plans are legally obligated to cover mental health care.

The officials did not disclose any plans for penalties on health insurance companies that do not comply. Without disclosing a strict timeline, an administration official said the rules would be finalized in the “near future.”