The journey toward mental health parity began in 1961, when President Kennedy directed the Civil Service Commission (now known as the Office of Personnel Management) to implement mental health parity. The Strengthening Behavioral Health Parity Act (“SBHPA”), which was signed into law on December 27, 2020 as part of the Consolidated Appropriations Act of 2021, represents a major milestone in that journey by adding ERISA plans to the plans that are covered by the Mental Health Parity Act of 1996 and by working to achieve parity in physical and mental health care management processes.
The first major legislation leading toward mental health parity was the Mental Health Parity Act (“MHPA”), which was enacted in 1996 and requires comparable annual and lifetime dollar limits for mental health and medical coverage in large group health plans, including employer-sponsored group health plans.
The Mental Health Parity and Addiction Equity Act (“MHPAEA”) followed in 2008. It applies to large group health plans, including employer-sponsored plans. The same year, Congress enacted the Medicare Improvements for Patients and Providers Act, which includes a provision phasing out statutory provisions that required higher co-pays for outpatient mental health services.
The Children's Health Insurance Program (“CHIP”) Reauthorization Act was enacted in 2009 and requires mental health parity in CHIP plans.
Congress enacted The Affordable Care Act (“ACA”) in 2010, which extends mental health parity protections to individual health insurance policies.
In 2013, final rules were issued to implement the MHPAEA. These final rules provided that mental health and substance use disorders are included as a category of Enhanced Health Benefits and extended the MHPAEA final rule parity requirements to small group and individual insurance plans, beginning in 2015. Final rules on Alternative Benefit Plans were issued to provide additional guidance about the MHPAEA's application to Essential Health Benefits in the Medicaid program. And a Medicaid State Health Officials letter was published to provide guidance on the application of MHPAEA requirements to Medicaid managed care organizations, Medicaid Alternative Benefit Plans, and the CHIP.
TRICARE issued a proposed rule in 2016 that equalized cost sharing between physical and behavioral health care and eliminated treatment limits for mental health and substance use disorder care. TRICARE also issued final regulations to create mental health parity in Medicaid managed care organizations, Medicaid Alternative Benefit Plans, and the CHIP.
One of the most important aspects of the SBHPA is that it adds self-insured, employer-sponsored ERISA plans to the plans that are covered under the Mental Health Parity and Addiction Equity Act. ERISA health insurance plans have generally been considered exempt from federal and state mental health parity laws. This exemption has been based on ERISA plans being self-funded, instead of being funded by an insurance company. These self-funded ERISA plans are ordinarily managed by a third-party administrator that looks and acts like an insurance company. Self-funded ERISA plans have, in some instances, been established to avoid the requirements of mental health parity laws. The SBHPA closes this hole in Mental Health Parity and Addition Equity Act.
MHPA took the first step toward eliminating differences in cost-sharing and the number of covered visits between medical-surgical and mental health services. Although these differences have largely been eliminated, differences in care management processes have persisted. Known as non-quantitative treatment limits (“NQTLs”), these care management processes include such things as prior authorization, concurrent review, the definition of medical necessity, clinical coverage guidelines, utilization management, reimbursement rate methodologies, provider network recruitment and structure, and other processes that limit the scope or duration of services. As the name states, the processes are non-quantitative, making it difficult to make meaningful comparisons between the processes for medical-surgical and behavioral care. Nonetheless, the SBHPA requires an insurance plan to develop and maintain detailed documentation to show that the processes and strategies used in development of the plan’s NQTLs do not discriminate against behavioral health patients.
As a result of passage of the SBHPA, both ERISA plans and state-regulated health insurance plans will be required to perform comparative analyses of their medical-surgical and behavioral health benefits and provide their analyses to the U.S. Department of Labor or state insurance commissioners. The analyses will need to demonstrate that the plans are using appropriate standards of care and not violating mental health parity. The Secretary of the Department of Labor is then required to submit an annual report to Congress identifying any health insurance plans that are determined to be out of compliance.
So, with the passage of the SBHPA, are we there yet with respect to mental health parity? Not yet, but we are getting closer.
James F. Henry practices healthcare law with Cabaniss, Johnston, Gardner, Dumas & O’Neal in Birmingham.
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