Agencies Delay SBC Application Date, Issue New Guidance on MHPAEA

The Departments of Labor, Treasury, and Health and Human Services (HHS) have issued a new set of frequently asked questions (FAQs) announcing the delay of the Affordable Care Act’s summary of benefits and coverage (SBC) requirements for insurers and health plans, and providing guidance on the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

Notably, the guidance reveals that the effective date of the Affordable Care Act’s SBC requirements has been postponed. The health reform law requires health insurers and group health plans to provide participants and beneficiaries with a summary of plan information that “accurately describes the benefits and coverage under the applicable plan or coverage” to enable them to comparison shop. A proposed rule on the SBC provisions was issued in August 2011. According to the new set of FAQs, plans and issuers do not have to comply with the SBC requirement until final regulations are issued and applicable. Under the statute, the SBC requirement was slated to take effect as of March 23, 2012.

With respect to the MHPAEA, which was signed into law on October 3, 2008, the FAQs respond to a number of questions concerning the law’s nonquantitative treatment limitations.  Generally, the MHPAEA requires private group health benefit plans that provide mental health and/or substance use disorder benefits through a group health benefit plan that also offers medical and surgical benefits to do so on an equivalent basis.

The aforementioned agencies issued interim final regulations implementing the MHPAEA in February 2010. The guidance explains that these interim rules specify that a group health plan or group health insurance issuer “generally cannot impose a financial requirement (such as a copayment or coinsurance) or a quantitative treatment limitation (such as a limit on the number of outpatient visits or inpatient days covered) on mental health or substance use disorder benefits in any of 6 classifications that is more restrictive than the financial requirements or quantitative treatment limitations that apply to at least 2/3 of medical/surgical benefits in the same classification.”  Nor can plans impose such financial requirements or quantitative treatment limitations on mental health or substance use disorder benefits only.

The parity standard for nonquantitative treatment limitations is not amenable to arithmetic comparison.  The guidance notes that:

any processes, strategies, evidentiary standards, or other factors used in applying the nonquantitative treatment limitation with respect to mental health or substance use disorder benefits must be comparable to, and applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the limitation with respect to medical/surgical benefits, except to the extent that recognized clinically appropriate standards of care may permit a difference.

The FAQs answer questions from stakeholders regarding nonquantitative treatment limitations. In response to one query, the FAQs explain that it is not permissible for a group health plan to require prior authorization from the plan’s utilization reviewer that a mental health or substance disorder treatment is medically necessary if it does not impose a similar preauthorization requirement for medical/surgical benefits.  Nor is it permissible under the MHPAEA to routinely pre-approve mental/substance disorder treatments for a period of time that is less than that approved for medical/surgical treatments.  The guidance states that:

While some differences in prior authorization practices with respect to individual conditions or treatments might be permissible based on recognized clinically appropriate standards of care, the interim final regulations do not permit a plan to apply stricter nonquantitative treatment limitations to all benefits for mental health or substance use disorders than those applied to all medical/surgical benefits.

One question asked whether it is permissible for a plan to require prior authorization for a range of both mental health and medical/surgical treatments where that plan’s selection of the treatments subject to preauthorization is based on “consideration of a wide array of recognized medical literature and professional standards and protocols (including comparative effectiveness studies and clinical trials),” and where the plan’s rationale for developing the medical management techniques is well documented.  In response, the guidance approved of this approach, stating that it “appears that, under the terms of the plan as written and in practice, the processes, strategies, evidentiary standards, and other factors considered by the plan in implementing its prior authorization requirement with respect to mental health and substance use disorder benefits are comparable to, and applied no more stringently than, those applied with respect to medical/surgical benefits.”   Unlikely to pass muster is a plan that requires prior authorization for all outpatient mental health benefits but only a few types of outpatient medical/surgical benefits.

If a plan uses an evidentiary standard that is applied no more stringently for mental health and substance use disorder benefits than for medical/surgical benefits, it is immaterial if the application disproportionally affects mental health conditions or substance use disorders.  For example, one inquiry presented a scenario where a plan “applies concurrent review to inpatient care where there are high levels of variation in length of stay (as measured by a coefficient of variation exceeding 0.8). In practice, the application of this standard affects 60 percent of mental health conditions and substance use disorder conditions, but only 30 percent of medical/surgical conditions.”  The guidance responded that this practice was permissible.

Finally, the last FAQ responded that a group health plan is not necessarily required to charge the same co-payment amount for all mental health/substance use disorder providers as for medical/surgical generalists.  Specifically:

The standard for determining the maximum copayment that can be applied to mental health/substance use disorder benefits is determined by the predominant copayment that applies to substantially all medical/surgical benefits within a classification. If the copayment that meets this standard is the one charged for a medical/surgical specialist, that copayment can be charged for all mental health/substance use disorder benefits within that classification. On the other hand, if the copayment that meets this standard is the one charged for a medical/surgical generalist, then that is the copayment that can be charged to all mental health/substance use disorder benefits within that classification.

Prior sets of FAQs on the MHPAEA were published on June 30, 2010 and December 22, 2010.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.