Mental health parity
Summary
The Final Rules (the Rules) implementing the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) began to apply on the first day of the plan year that started on or after July 1, 2014.
Individual and group health plans that provide both medical/surgical (M/S) benefits and mental health/substance use disorder (MH/SUD) benefits may not apply financial requirements (deductibles, coinsurance, copays, out-of-pocket maximums, etc.) or treatment limits (day or visit limits, etc.) to MH/SUD that are more restrictive than the financial requirements or treatment limits that apply to M/S benefits.
Mental Health Parity laws address parity limits in two broad categories and apply different standards to each, as described below.
1. Financial Requirements/Quantitative Treatment Limitations (QTL). QTLs are limits on benefits that are numerical in nature, such as limits to the number of visits.
Examples of Financial Requirements include:
- Deductibles
- Coinsurance/Copayments
- Penalties for lack of prior authorization
- Maximum out-of-pocket
- Excludes lifetime and annual dollar limits
Examples of QTLs include:
- Visit and Day limits
- Treatment and Episode limits
2. Non-Quantitative Treatment Limitations (NQTL) are limits on the scope or duration of benefits for treatment and are not expressed numerically. Examples include:
- Medical management strategies (e.g. prior authorization, concurrent review, retrospective review, medical necessity criteria)
- Experimental and investigational exclusions and/or limitations
- Formulary design
- Network admission and reimbursement methodologies (in-network and out-of-network)
- Step therapy requirements
- Restrictions based on geographic location, provider type or specialty
Financial parity testing is performed on the medical plan classification (or permissible sub-classes) to determine the cost share type and maximum level of cost share that would be at parity with behavioral health benefits of a similar classification. Mental Health Parity laws require the testing to be done for each type of financial requirement (quantitative treatment limitations) separately for each classification of benefits.
The following six classifications to be used for mental health parity testing purposes:
- Inpatient/in-network
- Inpatient/out-of-network
- Outpatient/in-network
- Outpatient/out-of-network
- Prescription drugs
- Emergency services
Mental Health Parity laws maintain this classification scheme as well as formalizing a previously approved safe harbor which allows plans to further split the outpatient classification categories into two sub-categories:
- Office visits
- All other outpatient items and services (“all other”)
Financial treatment limits for MH/SUD services under a plan can be no more restrictive than the “Predominant” financial limits (at least 50 percent) that apply to “Substantially All” (at least two-thirds) of the plan’s M/S benefits. This requires a comparison of the type and amount of cost sharing applicable to M/S benefits under a plan to the type and amount of cost sharing applicable to MH/SUD benefits under the plan.