Requirements Related to the Mental Health Parity and Addiction Equity Act

Federal RegisterAug 3, 2023

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[REG-120727-21]

RIN 1545-BQ29

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AC11

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 146 and 147

[CMS-9902-P]

RIN 0938-AU93

Requirements Related to the Mental Health Parity and Addiction Equity Act

AGENCY:

Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, Department of Labor; Centers for Medicare & Medicaid Services, Department of Health and Human Services.

ACTION:

Proposed rules.

SUMMARY:

This document proposes amendments to regulations implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and proposes new regulations implementing the nonquantitative treatment limitation (NQTL) comparative analyses requirements under MHPAEA, as amended by the Consolidated Appropriations Act, 2021 (CAA, 2021). Specifically, these proposed rules would amend the existing NQTL standard to prevent plans and issuers from using NQTLs to place greater limits on access to mental health and substance use disorder benefits as compared to medical/surgical benefits. As part of these changes, these proposed rules would require plans and issuers to collect and evaluate relevant data in a manner reasonably designed to assess the impact of NQTLs on access to mental health and substance use disorder benefits and medical/surgical benefits, and would set forth a special rule with regard to network composition. These proposed rules would also amend existing examples and add new examples on the application of the rules for NQTLs to clarify and illustrate the protections of MHPAEA. Additionally, these proposed rules would set forth the content requirements for NQTL comparative analyses and specify how plans and issuers must make these comparative analyses available to the Department of the Treasury (Treasury), the Department of Labor (DOL), and the Department of Health and Human Services (HHS) (collectively, the Departments), as well as to an applicable State authority, and participants, beneficiaries, and enrollees. The Departments also solicit comments on whether there are ways to improve the coverage of mental health and substance use disorder benefits through other provisions of Federal law. Finally, HHS proposes regulatory amendments to implement the sunset provision for self-funded, non-Federal governmental plan elections to opt out of compliance with MHPAEA, as adopted in the Consolidated Appropriations Act, 2023 (CAA, 2023).

DATES:

To be assured consideration, comments must be received at one of the addresses provided below, no later than October 2, 2023.

ADDRESSES:

Written comments may be submitted to the address specified below. Any comment that is submitted will be shared with Treasury, Internal Revenue Service (IRS), and HHS. Please do not submit duplicates.

Comments will be made available to the public. Warning: Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publicly disclosed. All comments are posted on the internet exactly as received and can be retrieved by most internet search engines. No deletions, modifications, or redactions will be made to the comments received, as they are public records. Comments may be submitted anonymously.

In commenting, please refer to file code 1210-AC11. Because of staff and resource limitations, the Departments cannot accept comments by facsimile (FAX) transmission.

Comments must be submitted in one of the following two ways (please choose only one of the ways listed):

1. Electronically. You may submit electronic comments on this regulation to

https://www.regulations.gov.

Follow the “Submit a comment” instructions.

2. By mail. You may mail written comments to the following address ONLY: Office of Health Plan Standards and Compliance Assistance, Employee Benefits Security Administration, Room N-5653, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210,

Attention:

1210-AC11.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

Inspection of Public Comments:

All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. The comments are posted on the following website as soon as possible after they have been received:

https://www.regulations.gov.

Follow the search instructions on that website to view public comments.

FOR FURTHER INFORMATION CONTACT:

Shira McKinlay, Internal Revenue Service, Department of the Treasury, at 202-317-5500; Beth Baum or David Sydlik, Employee Benefits Security Administration, Department of Labor, at 202-693-8335; David Mlawsky, Centers for Medicare & Medicaid Services, Department of Health and Human Services, at 410-786-6851.

Customer Service Information:

Individuals interested in obtaining information from DOL concerning private employment-based health coverage laws may call the Employee Benefits Security Administration (EBSA) Toll-Free Hotline at 1-866-444-EBSA (3272) or visit the DOL's website (

www.dol.gov/agencies/ebsa

In addition, information from HHS on private health insurance coverage and coverage provided by self-funded, non-Federal governmental group health plans can be found on the Centers for Medicare & Medicaid Services (CMS) website (

www.cms.gov/cciio

), and information on health care reform can be found at

www.Healthcare.gov

https://www.hhs.gov/healthcare/index.html.

In addition, information about mental and behavioral health and addiction is available at

https://www.samhsa.gov/mental-health

and

https://www.samhsa.gov/find-support.

SUPPLEMENTARY INFORMATION:

I. Background

A. Introduction

Mental health is essential to personal and societal wellbeing. America is experiencing a mental health and substance use disorder crisis

that worsened during the COVID-19

pandemic.

This crisis impacts both children and adults across various demographics nationwide and disproportionately affects marginalized and underserved communities. Recent data from the Centers for Disease Control and Prevention (CDC) indicate that, between August 2020 and February 2021, the percentage of adults exhibiting symptoms of an anxiety or depressive disorder increased significantly, from 36.4 percent to 41.5 percent.

Department of Health and Human Services (2023). SAMHSA Announces National Survey on Drug Use and Health (NSDUH) Results Detailing Mental Illness and Substance Use Levels in 2021. Retrieved from

https://www.hhs.gov/about/news/2023/01/04/samhsa-announces-national-survey-drug-use-health-results-detailing-mental-illness-substance-use-levels-2021.html.

Vahratian, A., Blumberg, S.J., Terlizzi, E.P., Schiller, J.S. (2021). Symptoms of Anxiety or Depressive Disorder and Use of Mental Health Care Among Adults During the COVID-19 Pandemic—United States, August 2020-February 2021. MMWR Morb Mortal Wkly Rep 2021;70:490-494. DOI:

http://dx.doi.org/10.15585/mmwr.mm7013e2.

Id.

Similarly, the overdose and substance use disorder epidemic has worsened in recent years. Overdose death numbers have risen substantially since 2015, reaching a then-historic high of 70,630 deaths nationally in 2019 and growing to a reported value of 107,421 overdose deaths in the 12-month period ending in July 2022.

Additionally, from 1999 through 2019, the rate of drug overdose deaths increased from 4.0 per 100,000 to 19.6 in rural counties,

and in 2020, the age-adjusted rate of drug overdose deaths increased to 26.2 per 100,000 in rural counties.

The number of people who died from drug overdoses in 2021 increased by approximately 36,000 over the prior 2 years.

During the first year of the COVID-19 pandemic, the overdose death rates were highest for American Indians and Alaska Natives and Black or African Americans, exceeding the overdose death rate for White people by about 30 and 16 percent, respectively.

While Hispanic and Latino people saw the lowest overdose death rates, those rates still increased in 2020.

Hedegaard, H., Miniño, A.M., Wagner, M. (2020). Drug Overdose Deaths in the United States, 1999-2019. NCHS Data Brief No. 304 (December 2020)

https://www.cdc.gov/nchs/data/databriefs/db394-H.pdf;

Centers for Disease Control and Prevention, National Center for Health Statistics. Vital Statistics Rapid Release: Provisional Drug Overdose Death Counts. Available at

https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm.

Accessed on July 14, 2023.

Hedegaard H, Spencer MR. Urban-rural differences in drug overdose death rates, 1999-2019. NCHS Data Brief, no 403. Hyattsville, MD: National Center for Health Statistics. 2021. DOI:

https://dx.doi.org/10.15620/cdc:102891.

Spencer MR, Garnett MF, Miniño AM. Urban-rural differences in drug overdose death rates, 2020. NCHS Data Brief, no 440. Hyattsville, MD: National Center for Health Statistics. 2022. DOI:

https://dx.doi.org/10.15620/cdc:118601.

National Vital Statistics System. Provisional Drug Overdose Death Counts.

https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/202205.htm.

Friedman, Joseph R, and Helena Hansen (2022). Research Letter: Evaluation of Increases in Drug Overdose Mortality Rates in the US by Race and Ethnicity Before and During the COVID-19 Pandemic. JAMA Psychiatry.

https://jamanetwork.com/journals/jamapsychiatry/fullarticle/2789697?utm_campaign=articlePDF&utm_medium=articlePDFlink&utm_source=articlePDF&utm_content=jamapsychiatry.2022.0004.

Id.

As noted above, both children and adolescents are also impacted by this mental health and substance use disorder crisis. Prior to the COVID-19 public health emergency (PHE), millions of children ages 12 to 17 reported experiencing at least one major depressive episode or severe major depression.

Suicidal behavior among children has increased sharply; known suicide attempts by ingestion alone in children ages 10 to 12 increased by about 450 percent from 2010 to 2020.

Suicide rates among Black or African American children below age 13 increased rapidly from 2001 to 2015, and those children are nearly twice as likely to die by suicide than White children of the same age.

Additionally, one survey, conducted from September 20 to December 31, 2021, notes that 45 percent of Lesbian, Gay, Bisexual, Transgender, and Queer (LGBTQ) youth respondents ages 13 to 24 seriously considered attempting suicide in the past year,

including nearly half of multiracial LGBTQ youth respondents.

A sharp rise in eating disorders throughout the COVID-19 PHE also demonstrates the extent of this crisis for young people.

Emergency department visits for adolescent girls ages 12-17 with eating disorders doubled in January 2022 as compared to 2019,

and children are beginning to experience eating disorders at younger ages.

In addition, in 2021, nearly 3 in 5 teen girls felt persistently sad or hopeless, the highest level reported over the past decade.

Mental Health America (2022). Youth Ranking 2022.

https://mhanational.org/issues/2022/mental-health-america-youth-data.

Sheridan D, Grusing S, Marshall R. (2022) Changes in Suicidal Ingestion Among Preadolescent Children from 2000 to 2020. JAMA Pediatrics.

https://jamanetwork.com/journals/jamapediatrics/article-abstract/2789948; see also

CDC, Youth Risk Behavior Survey, available at

https://www.cdc.gov/healthyyouth/data/yrbs/pdf/YRBS_Data-Summary-Trends_Report2023_508.pdf.

Bridge JA, Horowitz LM, Fontanella CA, et al. (2018). Age-Related Racial Disparity in Suicide Rates Among US Youths From 2001 Through 2015. JAMA Pediatrics.

https://jamanetwork.com/journals/jamapediatrics/fullarticle/2680952.

The Trevor Project (2022). 2022 National Survey on LGBTQ Youth Mental Health.

https://www.thetrevorproject.org/survey-2022/.

The Trevor Project (2022). The Mental Health and Well-Being of Multiracial LGBTQ Youth.

https://www.thetrevorproject.org/research-briefs/the-mental-health-and-well-being-of-multiracial-lgbtq-youth-aug-2022/.

Radhakrishnan L, Leeb R, Bitsko R, Carey K, Gates A, Holland K, Hartnett K, Kite-Powell A, DeVies J, Smith A, van Santen K, Crossen S, Sheppard M, Wotiz S, Lane R, Njai R, Johnson A, Winn A, Kirking H, Rodgers L, Thomas C, Soetebier K, Adjemian J, Anderson K. (2022) Pediatric Emergency Department Visits Associated with Mental Health Conditions Before and During the COVID-19 Pandemic—United States, January 2019-January 2022. MMWR Morb Mortal Wkly Rep 2022; 71(8);319-324.

https://www.cdc.gov/mmwr/volumes/71/wr/mm7108e2.htm.

Id.

Stuart B. Murray, Aaron J. Blashill, and Jerel P. Calzo (2022). Prevalence of Disordered Eating and Associations With Sex, Pubertal Maturation, and Weight in Children in the US, available at

https://jamanetwork.com/journals/jamapediatrics/article-abstract/2794847.

Centers for Disease Control and Prevention, National Center for HIV, Viral Hepatitis, STD, and TB Prevention, U.S. Teen Girls Experiencing Increased Sadness and Violence (Feb. 13, 2023), available at

https://www.cdc.gov/nchhstp/newsroom/2023/increased-sadness-and-violence-press-release.html.

Americans are too frequently discouraged from and forgo seeking mental health and substance use disorders care because of barriers, both inside and outside of the health care system, such as discrimination, stigmatization,

inability to find an in-network provider accepting new patients,

cost, and geography. These barriers are particularly problematic for young adults ages 18-34, who are less likely to believe their mental health symptoms are well-managed than older adults,

and for people seeking substance use disorder treatment.

One survey reports that less than seven percent of people in need of substance use disorder treatment received care at a specialty facility and less than 10 percent received “any treatment,”

while only about 19 percent of people with opioid use disorder in 2021 received life-saving medications.

Sixty percent of rural Americans live in mental health professional shortage areas.

Additionally, non-metropolitan adults were more likely than metropolitan adults (43.7% vs. 34.5%) to see a general practitioner or family doctor, as opposed to a mental health specialist, for depressive symptoms, and among non-metropolitan adults with depression, fewer than 20 percent received treatment from a mental health professional.

Van Boekel, L.C., Brouwers, E.P., van Weeghel, J., & Garretsen, H.F. (2013). Stigma among health professionals towards patients with substance use disorders and its consequences for healthcare delivery: systematic review. Drug and Alcohol Dependence, 131(1-2), 23-35. DOI: 10.1016/j.drugalcdep.2013.02.018, available at

https://pubmed.ncbi.nlm.nih.gov/23490450/.

Cf.

Jack Turbin. Ghost networks of psychiatrists make money for insurance companies but hinder patients' access to care. Stat News, June 17, 2019,

https://www.statnews.com/2019/06/17/ghost-networks-psychiatrists-hinder-patient-care/.

National Alliance on Mental Illness (2021). Mood Disorder Survey Report.

https://nami.org/NAMI/media/NAMI-Media/Research/NAMI-Mood-Disorder-Survey-White-Paper.pdf.

Esther Adeniran, Megan Quinn, Richard Wallace, Rachel R. Walden, Titilola Labisi, Afolakemi Olaniyan, Billy Brooks, Robert Pack (2023). A scoping review of barriers and facilitators to the integration of substance use treatment services into US mainstream health care, Drug and Alcohol Dependence Reports; Volume 7, 100152

https://www.sciencedirect.com/science/article/pii/S2772724623000227.

Center for Behavioral Health Statistics and Quality (2022), Results from the 2021 National Survey on Drug Use and Health: Detailed Tables, Substance Abuse and Mental Health Services

Administration, available at

https://www.samhsa.gov/data/report/2021-nsduh-detailed-tables.

For this purpose, “any treatment” includes having participated in a mutual aid group, such as Alcoholics Anonymous, Narcotics Anonymous, or SMART Recovery, and receiving services in a hospital through primary care.

Id.

Health Resources and Services Administration, Designated Health Professional Shortage Areas Statistics (data updated through June 30, 2023), available at

https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport

(last accessed July 18, 2023).

Borders, TF. Major Depression, Treatment Receipt, and Treatment Sources among Non-Metropolitan and Metropolitan Adults. Lexington, KY: Rural and Underserved Health Research Center; 2020. Available at

https://www.ruralhealthresearch.org/publications/1348.

Moreover, against the backdrop of this mental health and substance use disorder crisis, when patients seek benefits under their health plan or coverage, they often find that coverage for treatment of mental health conditions or substance use disorders operates in a separate—and too often disparate—system than their health plan's coverage for treatment of medical/surgical conditions.

These disparities exacerbate the hardships faced by people living with mental health conditions and substance use disorders. The disparities also can magnify the challenges faced by the parents, children, and loved ones of people living with mental health conditions or substance use disorders as well as those who care for them, who are profoundly affected by the person's illness and their difficulties in getting, or inability to get, coverage for needed care.

See, generally,

Commonwealth Fund, Behavioral Health Care in the United States: How It Works and Where It Falls Short, available at

https://www.commonwealthfund.org/publications/explainer/2022/sep/behavioral-health-care-us-how-it-works-where-it-falls-short.

See

National Alliance on Mental Illness, Mental Health By the Numbers, available at

https://www.nami.org/mhstats

(showing 8.4 million people in the U.S. provide care to an adult with a mental or emotional health issue); KFF, KFF/CNN Mental Health In America Survey, available at

https://www.kff.org/other/report/kff-cnn-mental-health-in-america-survey/

(showing half of adults say they have had a severe mental health crisis in their family); California Health Care Foundation, In Their Own Words: How Fragmented Care Harms People with Both Mental Illness and Substance Use Disorder, available at

https://www.chcf.org/publication/fragmented-care-harms-people-mental-illness-substance-use-disorder/.

Ensuring meaningful access to mental health and substance use disorder care is vital to addressing the Nation's mental health and substance use disorder crisis. A key component of access is the availability of an adequate number of appropriate providers within a plan's network. A survey of adults with private health coverage found that plan participants were more likely to perceive their mental health provider networks as inadequate when compared to medical provider networks.

Furthermore, another survey noted that most plan participants reported choosing mental health services from out-of-network mental health providers based on provider quality issues.

See

Busch, Susan H. and Kelly Kyanko, Assessment of Perception of Mental Health vs. Medical Health Plan Networks Among US Adults with Private Insurance, available at

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8536951/.

See

Kelly A. Kyanko, Leslie A. Curry, and Susan H. Busch, Out-of-Network Providers Use More Likely in Mental Health than General Health Care Among Privately Insured, available at

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4707657/.

A 2019 Milliman report found a growing disparity in the utilization of out-of-network behavioral health care (which the report uses to refer to care for mental health conditions and substance use disorders) providers relative to out-of-network medical/surgical care providers.

The same report found that the disparity between how often out-of-network behavioral health inpatient facilities were used relative to out-of-network medical/surgical inpatient facilities had increased 85 percent between 2013 and 2017 for people with commercial preferred provider organization (PPO) health plans. Over the same period, there were also increasing disparities in the use of out-of-network outpatient facilities and office visits for mental health and substance use disorder treatment relative to the use of out-of-network outpatient facilities and office visits for medical/surgical care.

The report additionally noted a growing disparity in reimbursement rates (as a percentage of Medicare-allowed amounts) between in-network mental health and substance use disorder providers and medical/surgical providers. Primary care reimbursements were, on average, 23.8 percent higher than behavioral health office visit reimbursements relative to Medicare allowed amounts in 2017—up from a 20.8 percent difference in 2015.

Low reimbursement rates for behavioral health providers and high demand for services, among other factors, contribute to this difficulty finding in-network providers,

which can stifle efforts to receive necessary care for mental health conditions or substance use disorders.

Melek, S., Davenport, S., Gray, T.J. (2019). Addiction and mental health vs. physical health: Widening disparities in network use and provider reimbursement (p. 6). Milliman.

https://assets.milliman.com/ektron/Addiction_and_mental_health_vs_physical_health_Widening_disparities_in_network_use_and_provider_reimbursement.pdf.

Id.

at pp. 6-7.

See

Busch, Susan H. and Kelly Kyanko, Assessment of Perception of Mental Health vs. Medical Health Plan Networks Among US Adults with Private Insurance, available at

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8536951/.

MHPAEA's fundamental purpose is to ensure that individuals in group health plans or with group or individual health insurance coverage who seek treatment for covered mental health conditions or substance use disorders do not face greater barriers to accessing benefits for such mental health conditions or substance use disorders than they would face when seeking coverage for the treatment of a medical condition or for a surgical procedure.

Such barriers are particularly problematic when they effectively result in the loss of benefits that the plan or issuer purports to make available and that individuals reasonably expect to be covered, and they contravene MHPAEA's clear mandate that the financial requirements and treatment limitations applicable to mental health benefits or substance use disorder benefits be “no more restrictive” than the predominant requirements and limitations applicable to substantially all medical/surgical benefits.

In a floor statement, Representative Patrick Kennedy (D-RI), one of the chief architects of MHPAEA, made the case for its passage on the grounds that “access to mental health services is one of the most important and most neglected civil rights issues facing the Nation. For too long, persons living with mental disorders have suffered from discriminatory treatment at all levels of society” 153 Cong. Rec. S1864-5 (daily ed. Feb. 12, 2007). Cf. H. Rept. 110-374, Part 3, available at

https://www.congress.gov/congressional-report/110th-congress/house-report/374.

(“The purpose of H.R. 1424, the `Paul Wellstone Mental Health and Addiction Equity Act of 2007' is to have fairness and equity in the coverage of mental health and substance-related disorders vis-a-vis coverage for medical and surgical disorders.”)

Internal Revenue Code (Code) section 9812(a)(3)(A), Employee Retirement Income Security Act of 1974 (ERISA) section 712(a)(3)(A), and Public Health Service Act (PHS Act) section 2726(a)(3)(A).

MHPAEA was enacted as bipartisan legislation reflecting what Congress saw as a shared public concern: that it is wrong to place greater burdens on people in need of mental health and

substance use disorder treatment than people in need of medical/surgical treatment under the same health coverage. However, almost 15 years after MHPAEA's enactment, disparities persist, as people face greater barriers when accessing benefits for mental health and substance use disorders under their plan or coverage than they do when accessing medical/surgical benefits. The Departments' experience since the MHPAEA final regulations were issued in 2013 (2013 final regulations) (78 FR 68240 (Nov. 13, 2013)) has shown that too often, group health plans and health insurance issuers offering group or individual health insurance coverage are not operating in compliance with MHPAEA, which can have devastating consequences for individuals with mental health conditions and substance use disorders and their families. The Departments continue to receive and investigate complaints that plans and issuers fail to comply with MHPAEA, by continuing to restrict access to benefits for mental health conditions and substance use disorders in ways that are more onerous and limiting than for medical or surgical care. As reflected in recent reports to Congress on MHPAEA compliance, the Departments found nearly all plans or issuers audited for MHPAEA compliance could not demonstrate compliance with the law's obligations in response to an initial request for NQTL comparative analyses.

As a result of these failures, participants and beneficiaries routinely encounter additional barriers to access and are denied needed and potentially lifesaving care for opioid use disorder, eating disorders, autism spectrum disorder (ASD), anxiety, depression, and other mental health conditions and substance use disorders. The harm to these participants and beneficiaries, and to their families, friends, co-workers, and others, is incalculable.

2022 MHPAEA Report to Congress, p. 4, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf

and

https://www.cms.gov/files/document/2022-mhpaea-report-congress.pdf;

2023 MHPAEA Comparative Analysis Report to Congress, July 2023 (2023 MHPAEA Report to Congress), available at

www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf

and

https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity.

In the last 2 years, the Departments have made an unprecedented commitment to advance parity for mental health and substance use disorder care by making it a top enforcement priority, especially with respect to NQTLs.

Specifically, EBSA, which has primary enforcement jurisdiction over MHPAEA for approximately 2.5 million private, employment-based group health plans covering approximately 133 million individuals, is taking extraordinary steps to enforce mental health and substance use disorder parity requirements and ensure that it is using its full authority to help participants and beneficiaries receive equitable coverage for mental health and substance use disorder treatment. Similarly, CMS continues to prioritize its MHPAEA enforcement activities with respect to non-Federal governmental plans nationwide

and health insurance issuers offering group and individual health insurance coverage in States where CMS is the direct enforcer of MHPAEA with respect to issuers.

40 41

As discussed in more detail later in this preamble, NQTLs are generally non-numerical requirements that limit the scope or duration of benefits, such as prior authorization requirements, step therapy, and standards for provider admission to participate in a network, including methodologies for determining reimbursement rates.

PHS Act section 2723(b).

PHS Act section 2723(a).

CMS currently enforces MHPAEA with respect to issuers in Texas and Wyoming. In addition, CMS has collaborative enforcement agreements with Alabama, Florida, Louisiana, Montana, and Wisconsin. These States with collaborative enforcement agreements with CMS perform State regulatory and oversight functions with respect to some or all of the applicable provisions of title XXVII of the PHS Act, including MHPAEA. However, if the State finds a potential violation and is unable to obtain compliance by an issuer, the State will refer the matter to CMS for possible enforcement action.

In addition to using their enforcement authority, the Departments continue to work to reduce the stigma and discrimination that individuals with mental health conditions and substance use disorders face, raise awareness so these individuals can receive the treatment they need and the benefits to which they are entitled, and engage consumer advocates, members of the regulated community, State regulators, and other interested parties to inform the Departments' efforts in addressing the nation's mental illness and substance use disorder epidemic. These efforts have helped to deepen the Departments' understanding of the barriers to mental health and substance use disorder treatment Americans face, inform DOL's and HHS's MHPAEA enforcement approach, and connect advocacy groups to government resources.

The Departments have also continued to help plans, issuers, consumers, providers, States, and other interested parties understand and comply with MHPAEA's requirements, including the NQTL comparative analysis requirements. Additionally, the Departments have worked to help families, caregivers, and individuals understand the law and benefit from it, as Congress intended.

Since the promulgation of the 2013 final regulations on November 13, 2013,

the Departments have provided extensive guidance and compliance assistance materials to the regulated community, State regulators, and other interested parties to facilitate the implementation and enforcement of MHPAEA, as discussed later in this preamble, including numerous sets of Frequently Asked Questions (FAQs),

fact sheets,

compliance assistance tools,

templates,

reports,

and publications.

Despite this unprecedented outreach, plans and issuers continue to fall short of MHPAEA's central mandate to ensure that participants, beneficiaries, and enrollees do not face greater barriers and restrictions to accessing benefits for mental health conditions or substance use disorders than they face when accessing benefits for a medical condition or surgical procedure. This noncompliance is especially evident with respect to the design and application of NQTLs that apply to mental health and substance use disorder benefits. Accordingly, Congress amended MHPAEA in the CAA, 2021, as described later in this preamble.

78 FR 68240 (Nov. 13, 2013).

See, e.g.,

FAQs About Affordable Care Act Implementation Part V and Mental Health Parity Implementation (Dec. 22, 2010), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-v.pdf

and

https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-5

; FAQs About Affordable Care Act Implementation (Part VII) and Mental Health Parity Implementation (Nov. 17, 2011), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-vii.pdf

and

https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-7

; Understanding Implementation of the Mental Health Parity and Addiction Equity Act of 2008 (May 9, 2012), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/understanding-implementation-of-mhpaea.pdf

; FAQs for Employees about the Mental Health Parity and Addiction Equity Act (May 18, 2012), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/mhpaea-2.pdf

; FAQs About Affordable Care Act Implementation (Part XVII) and Mental Health Parity Implementation (Nov. 8, 2013), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xvii.pdf

and

https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-17

; FAQs About Affordable Care Act Implementation (Part XVIII) and Mental Health Parity Implementation (Jan. 9, 2014), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xviii.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-18

; FAQs About Affordable Care Act Implementation (Part XXIX) and Mental Health Parity Implementation (Oct. 23, 2015), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xxix.pdf

and

https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-29

(FAQs Part XXIX); FAQs About Affordable Care Act Implementation Part 31, Mental Health Parity Implementation, and Women's Health and Cancer Rights Act Implementation (Apr. 20, 2016), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf

and

https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-31

; FAQs About Affordable Care Act Implementation Part 34 and Mental Health and Substance Use Disorder Parity Implementation (Oct. 27, 2016), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/

faqs/aca-part-34.pdf

and

https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-34

(FAQs Part 34); FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 38 (June 16, 2017), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-38.pdf

and

https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-38

(FAQs Part 38); Proposed FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 39, available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-39-proposed.pdf

(Proposed FAQs Part 39); Final FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 39 (Sept. 5, 2019), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-39-final.pdf

and

https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-final-set-39

(FAQs Part 39); FAQs About Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 43 (June 23, 2020), available at

https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-43.pdf

and

https://www.hhs.gov/guidance/document/faqs-about-families-first-coronavirus-response-act-and-coronavirus-aid-relief-and-0

(FAQs part 43); FAQs About Mental Health and Substance Use Disorder Parity Implementation and the Consolidated Appropriations Act, 2021 Part 45 (Apr. 2, 2021), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-45.pdf

and

https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/MHPAEA-FAQs-Part-45.pdf

(FAQs Part 45); and Mental Health Parity and Addiction Equity Act (MHPAEA) FAQs, available at

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/mhpaea-1#

See, e.g.,

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) Fact Sheet (Jan. 2010), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea.pdf

; MHPAEA Enforcement Fact Sheet (Jan. 2016), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement.pdf

; FY 2016 MHPAEA Enforcement Fact Sheet, available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2016.pdf

; FY 2017 MHPAEA Enforcement Fact Sheet, available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2017.pdf

; FY 2018 MHPAEA Enforcement Fact Sheet, available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2018.pdf

; FY 2019 MHPAEA Enforcement Fact Sheet, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2019.pdf

and

https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/mhpaea-enforcement-2019.pdf

; FY 2020 MHPAEA Enforcement Fact Sheet, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2020.pdf

and

https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/mhpaea-enforcement-2020.pdf

; FY 2021 MHPAEA Enforcement Fact Sheet, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2021.pdf

; and FY 2022 MHPAEA Enforcement Fact Sheet, available at

www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2022.pdf

See

Self-Compliance Tool for Part 7 of ERISA: Health Care-Related Provisions, available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide-appendix-a.pdf

; 2018 Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA), available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool-2018.pdf

; and 2020 Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA), available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf

See

Form to Request Documentation from an Employer-Sponsored Health Plan or a Group or Individual Market Insurer Concerning Treatment Limitations, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-disclosure-template.pdf

See, e.g.,

DOL 2012 Report to Congress: Compliance With the Mental Health Parity and Addiction Equity Act of 2008 (Jan. 1, 2012), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/mhpaea-report-to-congress-2012.pdf

; DOL 2014 Report to Congress: Compliance of Group Health Plans (and Health Insurance Coverage Offered in Connection with Such Plans With the Requirements of the Mental Health Parity and Addiction Equity Act of 2008 (Sept. 2014), available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/mhpaea-report-to-congress-2014.pdf

; DOL 2016 Report to Congress: Improving Healoverage for Mental Health and Substance Use Disorder Patients Including Compliance with the Federal Mental Health and Substance Use Disorder Parity Provisions (Jan. 2016), available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/improving-health-coverage-for-mental-health-and-substance-use-disorder-patients.pdf

; HHS Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) Enforcement Report (Dec. 12, 2017), available at

https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/HHS-2008-MHPAEA-Enforcement-Period.pdf

; DOL 2018 Report to Congress: Pathway to Full Parity, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/dol-report-to-congress-2018-pathway-to-full-parity.pdf

; 21st Century Cures Act: Section 13002 Action Plan for Enhanced Enforcement of Mental Health and Substance Use Disorder Coverage, available at

https://www.hhs.gov/sites/default/files/parity-action-plan-b.pdf

; HHS Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) Enforcement Report for the 2018 Federal Fiscal Year, available at

https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/FY2018-MHPAEA-Enforcement-Report.pdf

; DOL 2020 Report to Congress: Parity Partnerships: Working Together, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/dol-report-to-congress-parity-partnerships-working-together.pdf

; 2022 Report to Congress: Realizing Parity, Reducing Stigma, and Raising Awareness, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf

and

https://www.cms.gov/files/document/2022-mhpaea-report-congress.pdf

; MHPAEA Comparative Analysis Report to Congress, July 2023, available at

www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf

and

https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity

See

Consumer Guide to Disclosure Rights: Making the Most of Your Mental Health and Substance Use Disorder Benefits, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/disclosure-guide-making-the-most-of-your-mental-health-and-substance-use-disorder-benefits.pdf

; Know Your Rights: Parity for Mental Health and Substance Use Disorder Benefits, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/know-your-rights-parity-for-mental-health-and-substance-use-disorder-benefits.pdf

; Parity of Mental Health and Substance Use Benefits with Other Benefits: Using Your Employer-Sponsored Health Plan to Cover Services, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/parity-of-mental-health-and-substance-use-benefits-with-other-benefits.pdf

; Understanding Parity: A Guide to Resources for Families and Caregivers, available at

https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/laws/mental-health-parity/understanding-parity-a-guide-to-resources-for-families-and-caregivers.pdf

; Warning Signs—Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/warning-signs-plan-or-policy-nqtls-that-require-additional-analysis-to-determine-mhpaea-compliance.pdf

; Mental Health Parity Provisions Questions and Answers, available at

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide-mhpaea.pdf

; Mental Health and Substance use Disorder Parity: Compliance Assistance Materials Index, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/compliance-assistance-materials-index.pdf

; The Essential Aspects of Parity: A Training Tool for Policymakers, available at

https://store.samhsa.gov/product/essential-aspects-of-parity-training-tool-for-policymakers/pep21-05-00-001

; and Approaches in Implementing the Mental Health Parity and Addiction Equity Act: Best Practices from the States, available at

https://store.samhsa.gov/product/Approaches-in-Implementing-the-Mental-Health-Parity-and-Addiction-Equity-Act-Best-Practices-from-the-States/SMA16-4983

The Departments are proposing these revised rules to reinforce MHPAEA's fundamental objective, to ensure that limitations on mental health and substance use disorder benefits are no

more restrictive than the limitations applicable to medical/surgical benefits. These proposed rules also would implement important requirements that Congress enacted in the CAA, 2021 to ensure that plans and issuers perform and document their NQTL comparative analyses and provide them to the Departments or an applicable State authority upon request for evaluation of compliance with MHPAEA. The aim of these proposed rules is to ensure that individuals benefit from the full protections afforded to them under MHPAEA, while providing clear standards for plans and issuers on how to comply with MHPAEA.

Specifically, the proposed regulations would:

• Make clear that MHPAEA requires that individuals can access their mental health and substance use disorder benefits in parity with medical/surgical benefits.

• Provide specific examples that make clear that plans and issuers cannot use more restrictive prior authorization and other medical management techniques for mental health and substance use disorder benefits; standards related to network composition for mental health and substance use disorder benefits; and factors to determine out-of-network reimbursement rates for mental health and substance use disorder providers.

• Require plans and issuers to collect and evaluate outcomes data and take action to address material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, with a specific focus on ensuring that there are not any material differences in access as a result of the application of their network composition standards.

• Codify the requirement that plans and issuers conduct meaningful comparative analyses to measure the impact of NQTLs. This includes evaluating standards related to network composition, out-of-network reimbursement rates, and prior authorization NQTLs.

• Implement the sunset provision for self-funded, non-Federal governmental plan elections to opt out of compliance with MHPAEA, adopted in the CAA, 2023.

As a result of these proposals, the Departments anticipate changes in network composition and medical management techniques that would result in more robust mental health and substance use disorder provider networks and fewer and less restrictive prior authorization requirements for individuals seeking mental health and substance use disorder treatment.

Under a regulatory regime in which MHPAEA's promise of parity is realized, participants, beneficiaries, and enrollees would experience financial requirements and treatment limitations for mental health and substance use disorder benefits that are in parity with those applied to their medical/surgical benefits. These proposed rules are designed to achieve MHPAEA's purpose to ensure that participants, beneficiaries, and enrollees will not face greater restrictions on access to obtaining mental health and substance use disorder benefits than those for medical/surgical benefits. At the same time, the proposed rules also aim to ensure that benefit structures that apply limitations that reflect independent professional medical or clinical standards or guard against indicators of fraud, waste, and abuse (while minimizing the negative impact on access to appropriate benefits) would continue to be permitted, as the Departments are of the view that such limitations are premised on standards that generally provide an independent and less suspect basis for determining access to mental health and substance use disorder treatment. These proposed rules also aim to ensure that plans and issuers that offer mental health and substance use disorder benefits strive to attain and maintain mental health and substance use disorder treatment provider networks that are as robust as their medical/surgical provider networks in terms of available in-network providers and facilities-not just as shown by a list of names in a provider directory, but as measured by actual provider participation and as evidenced by participant usage.

In evaluating their compliance with these proposed rules, plans and issuers would be required to consider whether an NQTL is inhibiting access to treatment for mental health conditions and substance use disorders by examining whether the NQTL that applies to mental health or substance use disorder benefits is more restrictive than the predominant NQTL that applies to substantially all medical/surgical benefits within a classification of benefits set forth under the regulations.

A plan or issuer would also be required to consider whether the processes, strategies, evidentiary standards, or other factors that it uses to design or apply an NQTL to mental health or substance use disorder benefits in a classification are comparable to, and applied no more stringently than, those used in designing and applying the NQTL to medical/surgical benefits in the same classification. Under these proposed rules, plans and issuers would be required to consider data relevant to an NQTL's impact on participants' or beneficiaries'

abilities to obtain mental health and substance use disorder benefits under the plan or coverage relative to its impact on access to medical/surgical benefits, and to take action to address the potential causes of material differences in access identified through the data as necessary to ensure compliance. As the proposal makes clear, ensuring that people seeking mental health and substance use disorder treatment do not face greater barriers to access to benefits for such treatment is central to the fundamental purpose of MHPAEA. These proposed rules would ensure that NQTLs that apply to mental health and substance use disorder benefits are “no more restrictive,” and that processes, strategies, evidentiary standards, and other factors are “comparable to, and applied no more stringently,” than those applicable to medical/surgical benefits. These proposed rules' focus on access to mental health and substance use disorder benefits and constraints on obtaining such benefits would add needed clarity to the statutory requirements for the regulated community and other interested parties.

The required classifications of benefits (and permissible sub-classifications) used to apply the MHPAEA regulations are addressed at 26 CFR 54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii).

These proposed rules would apply directly to group health plans or health insurance coverage offered by an issuer in connection with a group health plan, and would apply to individual health insurance coverage by cross-reference through 45 CFR 147.160, which currently provides that the requirements of 45 CFR 146.136 apply to health insurance coverage offered by a health insurance issuer in the individual market in the same manner and to the same extent as to health insurance coverage offered by a health insurance issuer in connection with a group health plan in the large group market. As noted below, HHS also proposes an amendment to 45 CFR 147.160 to also include a cross-reference to proposed 45 CFR 146.137 to similarly extend the new proposed comparative analysis requirements to individual health insurance coverage in the same manner and to the same extent as group health insurance coverage. For simplicity, this preamble generally refers only to the applicability on group health plans and health insurance coverage offered in connection with a group health plan and to participants and beneficiaries enrolled in such a plan or coverage, but references to participants and beneficiaries should also be considered to include enrollees in the individual market, unless otherwise specified.

Under the current rules, plans and issuers are generally permitted to prepare NQTL comparative analyses without regard to the overall impact of NQTLs on participants and beneficiaries. This has contributed to plans and issuers looking for ways to

characterize the processes, strategies, evidentiary standards, and other factors associated with an NQTL as being “comparable” and “applied no more stringently” through careful word choice, without regard to how, in operation, the limitation burdens participants and beneficiaries by limiting access to, or by limiting the scope and duration of, the plan's or issuer's mental health and substance use disorder benefits relative to medical/surgical benefits. Such limitations on mental health and substance use disorder benefits under the plan or coverage must be analyzed in terms of the comparative burden on access they place (that is, whether they are more restrictive) on individuals.

These proposed rules set forth a number of standards that are intended to reinforce the proper application of the statutory and regulatory requirements; promote compliance with the NQTL comparative analysis requirements; explain how the various components of the regulation work together; and ensure that the purpose of MHPAEA, to remove greater barriers to access to mental health and substance use disorder benefits, is fulfilled. The Departments recognize the value of input from interested parties and welcome feedback on all aspects of the approach set forth in these proposed rules, as well as alternative approaches that would enable the Departments to more effectively implement MHPAEA.

B. The Mental Health Parity Act, The Mental Health Parity and Addiction Equity Act, and the Affordable Care Act

In 1996, Congress enacted the Mental Health Parity Act of 1996 (MHPA 1996), which required parity in aggregate lifetime and annual dollar limits for mental health benefits and medical/surgical benefits. These mental health parity provisions were codified in Employee Retirement Income Security Act of 1974 (ERISA) section 712, PHS Act section 2705, and Internal Revenue Code (Code) section 9812, and applied to group health plans and health insurance coverage offered in connection with a group health plan.

Public Law 104-204, 110 Stat. 2874 (Sept. 26, 1996). The Departments published interim final rules implementing MHPA 1996 at 62 FR 66932 (Dec. 22, 1997).

MHPAEA was enacted on October 3, 2008, as sections 511 and 512 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (Division C of Pub. L. 110-343, 122 Stat. 3765), to amend ERISA section 712, PHS Act section 2705, and Code section 9812 to add new requirements, including provisions to apply the mental health parity requirements to substance use disorder benefits, and make further amendments to the existing mental health parity provisions.

MHPAEA, as enacted, generally requires that group health plans and health insurance issuers offering group health insurance coverage ensure that the financial requirements and treatment limitations applicable to mental health or substance use disorder benefits be no more restrictive than those applicable to medical/surgical benefits and that there be no separate financial requirements and treatment limitations applicable only with respect to mental health or substance use disorder benefits. Together with the existing requirements for parity in aggregate lifetime and annual dollar limits, this is referred to as providing mental health and substance use disorder benefits “in parity” with medical/surgical benefits.

The Patient Protection and Affordable Care Act (Pub. L. 111-148, 123 Stat. 3028) was enacted on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, 124 Stat. 1029) was enacted on March 30, 2010 (collectively, the Affordable Care Act). The Affordable Care Act reorganized, amended, and added to the provisions of part A of title XXVII of the PHS Act relating to group health plans and health insurance issuers in the group and individual markets. The Affordable Care Act added section 715(a)(1) to ERISA and section 9815(a)(1) to the Code to incorporate the provisions of part A of title XXVII of the PHS Act into ERISA and the Code, and to make them applicable to group health plans and health insurance issuers providing health insurance coverage in connection with group health plans. The PHS Act sections incorporated by these references are sections 2701 through 2728.

The Affordable Care Act extended MHPAEA to apply to individual health insurance coverage and redesignated MHPAEA in the PHS Act as section 2726.

Additionally, section 1311(j) of the Affordable Care Act applies PHS Act section 2726 to qualified health plans (QHPs)

in the same manner and to the same extent as to health insurance issuers and group health plans. Furthermore, HHS' regulations regarding essential health benefits (EHBs)

require health insurance issuers offering non-grandfathered health insurance coverage in the individual and small group markets to comply with MHPAEA and its implementing regulations in order to satisfy the requirement to cover “mental health and substance use disorder services, including behavioral health treatment,” as part of EHBs.

The requirements of MHPAEA generally apply to both grandfathered and non-grandfathered health plans.

See

section 1251 of the Affordable Care Act and its implementing regulations at 26 CFR 54.9815-1251, 29 CFR 2590.715-1251, and 45 CFR 147.140. Under section 1251 of the Affordable Care Act, grandfathered health plans are exempted only from certain Affordable Care Act requirements enacted in Subtitles A and C of Title I of the Affordable Care Act. The provisions extending MHPAEA requirements to individual health insurance coverage and requiring that qualified health plans comply with MHPAEA are not included in these sections. However, because MHPAEA requirements apply to health insurance coverage offered in the small group market only through the requirement to provide EHB, which does not apply to grandfathered health plans, the requirements of MHPAEA do not apply to grandfathered health plans offered in the small group market.

A QHP is a health insurance plan that is certified by a health insurance exchange that it meets certain minimum standards established under the Affordable Care Act and described in subpart C of 45 CFR part 156.

See

45 CFR 155.20.

Section 1302 of the Affordable Care Act requires non-grandfathered health plans in the individual and small group markets to cover essential health benefits (EHB), which include items and services in the following ten benefit categories: (1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services including behavioral health treatment; (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services; (9) preventive and wellness services and chronic disease management; and (10) pediatric services, including oral and vision care.

See

45 CFR 156.115 for description of the benefits a health plan must provide to provide EHB.

Section 1302(b)(1)(E) of the Affordable Care Act; 45 CFR 156.115(a)(3).

On April 28, 2009, the Departments published a request for information soliciting comments on issues under MHPAEA (2009 RFI).

Over the next few years, the Departments considered comments regarding MHPAEA and issued further clarifications and guidance. On February 2, 2010, the Departments published interim final regulations implementing MHPAEA (interim final regulations).

After considering the comments and other feedback received from interested parties, the Departments published the 2013 final regulations.

74 FR 19155 (Apr. 28, 2009).

75 FR 5410 (Feb. 2, 2010).

78 FR 68240 (Nov. 13, 2013).

The 2013 final regulations established an exhaustive list of six classifications of benefits (not counting the exhaustive list of permissible sub-classifications also articulated in the 2013 final regulations): inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs.

If a plan or health insurance coverage provides benefits for a mental health condition or substance use disorder in any of these classifications of benefits, benefits for that condition or disorder must be provided in every classification in which medical/surgical benefits are provided. The 2013 final regulations specify that the parity requirements apply to financial requirements, such as deductibles, copayments, and coinsurance; quantitative treatment limitations that are expressed numerically, such as day or visit limits; and NQTLs, which are generally non-numerical requirements that limit the scope or duration of benefits, such as prior authorization requirements, step therapy requirements, and standards for provider admission to participate in a network, including methodologies for determining reimbursement rates.

Under MHPAEA, financial requirements and treatment limitations imposed on mental health or substance use disorder benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical/surgical benefits in a classification.

The 2013 final regulations defined the “substantially all” numerical standard for a financial requirement or quantitative treatment limitation as two-thirds, using the same approach as the regulations implementing MHPA 1996 with respect to aggregate annual and lifetime limits.

The 2013 final regulations also quantified “predominant” to mean the level of the financial requirement or quantitative treatment limitation that applies to more than one-half of medical/surgical benefits in the relevant classification subject to the financial requirement or quantitative treatment limitation. Using these numerical standards, the Departments established a mathematical test by which plans and issuers could determine if a financial requirement or quantitative treatment limitation that applies to medical/surgical benefits in a classification may be applied to mental health and substance use disorder benefits in that classification, and if so, what level of the financial requirement or quantitative treatment limitation is the most restrictive level that could be imposed on mental health or substance use disorder benefits within the classification.

Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act section 2726(a)(3)(A).

With respect to aggregate lifetime and annual limits under MHPA 1996, the regulations in 26 CFR 54.9812-1(b); 29 CFR 2590.712(b), and 45 CFR 146.136(b) set forth rules based on whether a plan (or health insurance coverage) includes an aggregate lifetime or annual dollar limit that applies to less than one-third or at least two-thirds of all medical/surgical benefits. These provisions do not address the provisions of PHS Act section 2711, as incorporated by ERISA section 715 and Code section 9815, which prohibit imposing lifetime and annual limits on the dollar value of EHBs. As a result, plans and issuers cannot impose lifetime and annual dollar limits on mental health and substance use disorder benefits that are not EHBs, if such a limit applies to less than one-third of all medical/surgical benefits.

MHPAEA generally prohibits separate financial requirements and treatment limitations that apply only to mental health and substance use disorder benefits.

The 2013 final regulations also prohibit plans and issuers from applying separate cumulative financial requirements, such as deductibles or out-of-pocket maximums, or separate cumulative quantitative treatment limitations, such as annual or lifetime day or visit limits, to mental health or substance use disorder benefits in a classification.

Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act section 2726(a)(3)(A).

26 CFR 54.9812-1(c)(3)(v), 29 CFR 2590.712(c)(3)(v), 45 CFR 146.136(c)(3)(v) and 147.160.

In addition, the 2013 final regulations require that a group health plan or health insurance issuer may not impose an NQTL with respect to mental health and substance use disorder benefits in any classification unless, under the terms of the plan (or health insurance coverage) as written and in operation, any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to mental health and substance use disorder benefits in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the limitation to medical/surgical benefits in the same classification.

The 2013 final regulations also implemented the statutory disclosure requirements imposed on group health plans and health insurance issuers that are subject to MHPAEA's requirements.

26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), 45 CFR 146.136(c)(4)(i) and 147.160.

26 CFR 54.9812-1(d), 29 CFR 2590.712(d), 45 CFR 146.136(d) and 147.160.

C. Guidance

As described earlier in this preamble, since the promulgation of the 2013 final regulations, the Departments have provided extensive guidance and compliance assistance materials to the regulated community, State regulators, and other interested parties to facilitate the implementation and enforcement of MHPAEA. Specifically, the Departments have jointly issued 15 sets of FAQs with 96 questions, eight enforcement fact sheets, six compliance assistance tools and templates, seven reports to Congress, six press releases, and seven consumer publications. In general, the Departments' FAQs are designed to provide additional guidance and clarification on how MHPAEA applies in specific contexts and are informed by questions raised by interested parties and scenarios encountered in the context of the Departments' enforcement efforts. For example, FAQs Part 34 addresses how MHPAEA applies to treatment of substance use disorders (such as treating opioid use disorder with medication) and provides examples of impermissible NQTLs (such as more stringent fail-first or step-therapy requirements, including where an individual cannot reasonably satisfy if there are no available providers that can provide services related to the requirement in the participant's geographic area).

See

FAQs Part 34, Q4-Q9

Guidance issued by the Departments also reflects stakeholder feedback and, in several instances, guidance documents were proposed before they were issued in final form. For example, the Departments proposed FAQs Part 39 on April 23, 2018. The finalized FAQs Part 39 was issued on September 5, 2019, and incorporate insights from the regulated community regarding compliance issues faced by plans and issuers, as well as issues faced by plan participants and their authorized representatives when seeking information about mental health and substance use disorder benefits. FAQs Part 39 also provides guidance on how the law and regulations apply to treatments for eating disorders, opioid use disorder, and ASD, as well as exclusions for experimental or investigative treatments, and standards for provider admission to a plan's or issuer's network, including the methodology for determining reimbursement rates for mental health and substance use disorder providers.

See

FAQs Part 39, Q1-8.

In addition to FAQs issued after the promulgation of the 2013 final regulations, the Departments have issued, generally every 2 years, an updated compliance program guidance document (the MHPAEA Self-Compliance Tool), which is intended to help plans and issuers, State regulators, and other interested parties comply with and understand MHPAEA and the additional related requirements under ERISA that apply to group health plans. The Departments most recently issued

the MHPAEA Self-Compliance Tool in 2020 (2020 MHPAEA Self-Compliance Tool).

The 2020 MHPAEA Self-Compliance Tool includes an illustrative, non-exhaustive list of NQTLs, a process for conducting NQTL comparative analyses, a list of the types of documents and information that a plan or issuer should have available to support its analyses, and illustrations of specific fact patterns to aid in compliance.

Section 13001(a) of the 21st Century Cures Act added section 2726(a)(6) of the PHS Act, which directs the Departments to provide a publicly available compliance program guidance document that is updated every 2 years.

See

Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA) (2020), available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf

. The Departments issued the proposed 2020 MHPAEA Self-Compliance Tool on June 19, 2020, and requested comments from interested parties. Engagement with interested parties through written comments and listening sessions provided vital feedback for finalizing the 2020 update to the MHPAEA Self-Compliance Tool, and that final version includes revisions in response to that feedback.

The 2020 MHPAEA Self-Compliance Tool includes a stepwise process a plan or issuer can follow to perform an analysis assessing whether its NQTLs satisfy MHPAEA's parity requirements.

Under this stepwise process, the plan or issuer should identify all NQTLs that apply to benefits under the plan or coverage. The plan or issuer should also identify all the medical/surgical benefits and mental health and substance use disorder benefits to which each NQTL applies. After identifying all NQTLs and the benefits to which each NQTL applies, the 2020 MHPAEA Self-Compliance Tool suggests the plan or issuer identify the factors considered in the design of each NQTL. The plan or issuer should also identify the sources used to define those factors. Plans and issuers have flexibility in determining the factors and sources of factors to apply to NQTLs, so long as they are comparable and applied no more stringently to mental health and substance use disorder benefits than to medical/surgical benefits in the respective benefits classification. When identifying the sources of the factors considered in designing an NQTL, the plan or issuer should also identify any threshold of a factor that will implicate the NQTL.

Id.

at section F (at pp. 21-28).

After identifying the plan's NQTLs, their application to mental health and substance use disorder benefits and to medical/surgical benefits, the factors used in designing each NQTL, and the sources of those factors, the plan or issuer should determine whether the processes, strategies, and evidentiary standards used in applying the NQTL are comparable and no more stringently applied to mental health and substance use disorder benefits than to medical/surgical benefits, both as written and in operation, in the relevant benefit classification. For instance, if a plan's or issuer's utilization review is conducted by different entities or individuals for mental health and substance use disorder benefits and medical/surgical benefits, the plan or issuer should have measures in place to ensure comparable application of utilization review policies.

The 2020 MHPAEA Self-Compliance Tool stresses that measuring and evaluating results and quantitative outcomes can be helpful to identify potential areas of noncompliance. For example, comparing a plan's or issuer's average reimbursement rates for both mental health and substance use disorder providers and medical/surgical providers against an external benchmark of reimbursement rates, such as Medicare, may help identify whether the underlying methodology used to determine the plan's or issuer's reimbursement rates warrants additional review. The 2020 MHPAEA Self-Compliance Tool notes that substantially disparate results are a red flag that a plan or issuer may be imposing an NQTL on mental health and substance use disorder benefits in a way that fails to satisfy the parity requirements. Other warning signs of potential noncompliance identified in the 2020 MHPAEA Self-Compliance Tool include generally paying at or near Medicare reimbursement rates for mental health or substance use disorder benefits, while paying much more than Medicare reimbursement rates for medical/surgical benefits, and reimbursing psychiatrists, on average, less than medical/surgical physicians for the same evaluation and management codes.

2020 MHPAEA Self-Compliance Tool, at p. 21, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf

The 2020 MHPAEA Self-Compliance Tool also provides many compliance tips on how an NQTL should be analyzed. For example, a plan or issuer should have information available to substantiate how factors are used to design or apply any specific NQTL to both medical/surgical benefits and mental health or substance use disorder benefits. The plan or issuer should be clear as to whether and why any factors were given more weight than others and should be able to explain any variation in the application of a guideline or evidentiary standard, including the process and factors relied upon for establishing the variation. To comply with MHPAEA's parity requirements, plans and issuers must adopt measures for mental health and substance use disorder providers that are at least comparable to and no more stringently applied (with regard to limiting the scope and duration of a participant's, beneficiary's, or enrollee's benefits under the plan or coverage) than those applied to medical/surgical providers. This includes taking steps to help address provider shortages, ensure an adequate network of mental health and substance use disorder providers, and ensure reasonable patient wait times to avoid noncompliance with MHPAEA's parity requirements. By providing a basic framework for plans and issuers to do a stepwise analysis and providing additional warning signs and tips, the 2020 MHPAEA Self-Compliance Tool has provided additional guidance for plans and issuers to comply with the requirements of MHPAEA with respect to NQTLs.

D. The Consolidated Appropriations Act, 2021 and Related Guidance

The CAA, 2021 was enacted on December 27, 2020.

Section 203 of Title II of Division BB of the CAA, 2021 amended MHPAEA, in part, by adding Code section 9812(a)(8), ERISA section 712(a)(8), and PHS Act section 2726(a)(8) to expressly require group health plans and health insurance issuers offering group or individual health insurance coverage that include both medical/surgical benefits and mental health or substance use disorder benefits and impose NQTLs on mental health or substance use disorder benefits to perform and document their comparative analyses of the design and application of NQTLs.

Further, plans and issuers are required to make their comparative analyses and other applicable information available to the Departments or applicable State authorities, upon request.

The comparative analysis requirement took effect on February 10, 2021, 45 days after the date of enactment of the CAA, 2021.

Public Law 116-260, 134 Stat. 1182 (Dec. 27, 2020).

Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A), and PHS Act section 2726(a)(8)(A).

Id.

In order to advance compliance with MHPAEA, the CAA, 2021 states that the Departments shall request that a group health plan or health insurance issuer

offering group or individual health insurance coverage submit comparative analyses, with respect to a plan or coverage, that involve potential MHPAEA violations, in response to complaints against a plan or coverage regarding potentially noncompliant NQTLs, and in any other instances that the Departments determine appropriate.

These comparative analyses must include:

Code section 9812(a)(8)(B)(i), ERISA section 712(a)(8)(B)(i), and PHS Act section 2726(a)(8)(B)(i).

(1) the specific plan or coverage terms or other relevant terms regarding the NQTLs and a description of all mental health and substance use disorder benefits and medical/surgical benefits to which each such term applies in each benefit classification;

(2) the factors used to determine how the NQTLs will apply to mental health or substance use disorder benefits and medical/surgical benefits;

(3) the evidentiary standards used to develop the identified factors, when applicable, provided that each factor shall be defined, and any other source or evidence relied upon to design and apply the NQTLs to mental health or substance use disorder benefits and medical/surgical benefits;

(4) the comparative analyses demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to mental health or substance use disorder benefits, as written and in operation, are comparable to, and are applied no more stringently than those used to apply the NQTLs to medical/surgical benefits in the benefits classification; and

(5) the specific findings and conclusions reached by the plan or issuer, including any results of the analyses that indicate that the plan or coverage is or is not in compliance with MHPAEA requirements.

Code section 9812(a)(8)(A)(i)-(v), ERISA section 712(a)(8)(A)(i)-(v), and PHS Act section 2726(a)(8)(A)(i)-(v).

The CAA, 2021 further sets forth a process by which the Departments must evaluate the requested NQTL comparative analyses and enforce the comparative analyses requirements. If the relevant Department with jurisdiction over the group health plan (or health insurance coverage) determines that a plan or issuer has not provided sufficient information for the relevant Department to review the comparative analyses, the CAA, 2021 provides that the Departments shall specify the information the plan or issuer must submit to be responsive to the request.

In instances in which the Departments have reviewed the requested comparative analyses and determined that the plan or issuer is not in compliance with MHPAEA, the plan or issuer must specify the actions it will take to come into compliance and submit additional comparative analyses that demonstrate compliance not later than 45 days after the initial determination of noncompliance.

Following the 45-day corrective action period, if the relevant Department makes a final determination that the plan or issuer is still not in compliance, the plan or issuer must notify all individuals enrolled in the plan or coverage of this determination, not later than 7 days after such final determination.

Code section 9812(a)(8)(B)(ii), ERISA section 712(a)(8)(B)(ii), and PHS Act section 2726(a)(8)(B)(ii).

Code section 9812(a)(8)(B)(iii)(I), ERISA section 712(a)(8)(B)(iii)(I), and PHS Act section 2726(a)(8)(B)(iii)(I).

Id.

The CAA, 2021 also requires the Departments, after review of the comparative analyses, to share information on findings of compliance and noncompliance with the State where the plan is located or the State where the issuer is licensed to do business, in accordance with any information sharing agreement entered into with the State.

Additionally, as explained in more detail later in this preamble, the CAA, 2021 requires the Departments to submit annually to Congress and make publicly available a report summarizing the comparative analyses requested by the Departments. The report must state, in part, whether each plan or issuer submitted sufficient information to permit review; whether and why the plan or issuer is in compliance with MHPAEA; the specific information each plan or issuer needed to submit to allow for a review of their comparative analysis; and, for each plan or issuer the Departments determined not to be in compliance, specifications of the actions that must be taken to come into compliance.

Code section 9812(a)(8)(C)(iii), ERISA section 712(a)(8)(C)(iii), and PHS Act section 2726(a)(8)(C)(iii).

Code section 9812(a)(8)(B)(iv), ERISA section 712(a)(8)(B)(iv), and PHS Act section 2726(a)(8)(B)(iv).

On April 2, 2021, the Departments issued FAQs Part 45 to provide guidance on the amendments to MHPAEA made by the CAA, 2021 and to promote compliance by plans and issuers. FAQs Part 45 underscores that, for a comparative analysis to be treated as sufficient under the CAA, 2021, it must contain a detailed, written, and reasoned explanation of the specific plan terms and practices at issue and include the bases for the plan's or issuer's conclusion that the NQTL complies with MHPAEA. As FAQs Part 45 explains, at a minimum, a sufficient NQTL comparative analysis must include a robust discussion of certain elements, including a clear description of the specific NQTL; plan terms; policies at issue; and identification of any factors, evidentiary standards, sources, strategies, and processes considered in the design and application of the NQTL and in determining which benefits, including both mental health and substance use disorder benefits and medical/surgical benefits, are subject to the NQTL. To the extent a plan or issuer defines any of the factors, evidentiary standards, strategies, or processes in a quantitative manner, its analysis should include the precise definitions used and any supporting sources. The analysis also should explain whether the plan or issuer imposes any variation in the application of a guideline or standard between mental health and substance use disorder benefits and medical/surgical benefits, and if so, should describe the processes and factors used for establishing that variation. The plan or issuer should provide a reasoned discussion, including citations or any specific evidence of its findings and conclusions, as to the comparability of the processes, strategies, evidentiary standards, factors, and sources identified within each affected classification and their relative stringency, both as written and in operation.

FAQs Part 45 highlights that a general statement of compliance by plans and issuers, coupled with a conclusory reference to broadly stated processes, strategies, evidentiary standards, or other factors is insufficient to meet the statutory requirements for an NQTL comparative analysis. Accordingly, a comparative analysis that consists of conclusory or generalized statements, without specific supporting evidence and detailed explanations, or the production of a large volume of documents without a clear explanation of how and why each document is relevant to the comparative analysis, fails to satisfy the statutory requirements.

In addition, FAQs Part 45 provides guidance as to the types of documents that plans and issuers should be prepared to make available to support the analysis and conclusions reached in their comparative analyses. This includes records documenting NQTL processes and detailing how the plan or

issuer applies NQTLs to both medical/surgical and mental health or substance use disorder benefits, documents and other information relevant to the factors identified, and samples of covered and denied mental health or substance use disorder and medical/surgical benefits claims. FAQs Part 45 also highlights several NQTLs that DOL anticipated focusing on in the near term.

FAQs Part 45 also notes that under the CAA, 2021, plans and issuers must make available their respective comparative analyses of NQTLs and other applicable information to the applicable State authority upon request. Additionally, plans and issuers must make the comparative analyses and other applicable information required by the CAA, 2021 available upon request to participants and beneficiaries in plans subject to ERISA and to participants, beneficiaries, and enrollees in all non-grandfathered group health plans and non-grandfathered group or individual health insurance coverage upon request in connection with an appeal of an adverse benefit determination. If a provider or other individual is acting as a patient's authorized representative, the provider or other authorized representative may request these documents.

E. Reports to Congress

DOL is required to send Congress a biennial report on MHPAEA implementation,

and the Departments are required to send Congress an annual report on NQTL comparative analyses reviews.

To satisfy these requirements, on January 25, 2022, the Departments issued the first report to Congress since the enactment of the CAA, 2021 (2022 MHPAEA Report to Congress).

The 2022 MHPAEA Report to Congress contains extensive descriptions of the Departments' MHPAEA enforcement efforts, outreach efforts, consumer and compliance assistance efforts, and guidance to interested parties, including information related to the requirement that plans and issuers perform and document comparative analyses with respect to the design and application of NQTLs.

ERISA section 712(f).

Section 203 of the CAA, 2021 (Pub. L. 116-260, 134 Stat. 1182 (Dec. 27, 2020)). In addition, the Departments were required to send Congress an annual report on complaints and investigations concerning compliance with the requirements of MHPAEA from 2017 until 2021.

See

section 13003 of the 21st Century Cures Act (Cures Act), Public Law 114-255, 130 Stat. 1033 (Dec. 13, 2016), as amended by the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act, Public Law 115-271, 132 Stat. 3894 (Oct. 24, 2018).

2022 MHPAEA Report to Congress, available at

https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.

Contemporaneously with these proposed rules, the Departments are issuing the second report to Congress since the enactment of the CAA, 2021, the MHPAEA Comparative Analysis Report to Congress, July 2023 (2023 MHPAEA Report to Congress).

The 2023 MHPAEA Report to Congress details efforts by the Departments to implement and enforce the amendments to MHPAEA made by the CAA, 2021. The 2023 MHPAEA Report to Congress focuses on the Departments' enforcement efforts regarding NQTLs during the second year of CAA, 2021 implementation, looks broadly at the 18-month period since plans and issuers were first required to make their comparative analyses and other applicable information available on request, discusses common deficiencies in comparative analyses submitted by plans and issuers, and explores examples of results that the Departments have achieved through enforcement.

2023 MHPAEA Report to Congress, July 2023, available at

www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf

and

https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity

The 2023 MHPAEA Report to Congress notes that nearly all of the comparative analyses reviewed by the Departments during the relevant time period contained insufficient information upon initial receipt and identifies common deficiencies in the comparative analyses prepared by plans and issuers. Specifically, many initial responders seemed unprepared to submit their comparative analyses upon request and some plans did not complete or start a comparative analysis until after one was requested. Some comparative analyses lacked specific supporting evidence, detailed explanations, or sufficient detail to draw meaningful comparisons. For example, many plans' comparative analyses failed to adequately explain whether or how factors were comparably applied to mental health and substance use disorder benefits and to medical/surgical benefits. Also, many plans and issuers provided supporting documents for which the relevance and probative value was not readily apparent.

Some plans also failed to identify the specific mental health or substance use disorder benefits and medical/surgical benefits or MHPAEA benefit classification to which an NQTL applied. Additionally, some comparative analyses failed to identify or define every relevant factor. In other instances, plans failed to demonstrate the application of identified factors in the design of an NQTL, and most comparative analyses failed to evaluate the relative stringency of how the NQTL was applied to mental health or substance use disorder benefits versus medical/surgical benefits. When data was included in a comparative analysis, the data often lacked meaning because the plan or issuer did not provide a description of its source, how the source was selected, or information about underlying calculations. Many comparative analyses for standards to participate in a network did not adequately address apparent differences in access standards for medical/surgical providers as opposed to mental health and substance use disorder providers, such as different time and distance standards or provider-to-member ratios.

F. MHPAEA Opt Out for Self-Funded Non-Federal Governmental Plans

Prior to the enactment of the Affordable Care Act, PHS Act section 2721(b)(2), as added by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), permitted sponsors of self-funded, non-Federal governmental plans to elect to exempt those plans from (that is, “opt out of”) any or all of the following requirements of title XXVII of the PHS Act:

1. Limitations on preexisting condition exclusion periods under PHS Act section 2701 (redesignated as section 2704 by the Affordable Care Act).

2. Requirements for special enrollment periods under PHS Act section 2701 (redesignated as section 2704 by the Affordable Care Act).

3. Prohibitions against discriminating against individual participants and beneficiaries based on health status (but not including provisions added by the Genetic Information Nondiscrimination Act of 2008) under PHS Act section 2702 (redesignated as section 2705 by the Affordable Care Act).

4. Standards relating to benefits for newborns and mothers under PHS Act section 2704 (redesignated as section 2725 by the Affordable Care Act).

5. Parity in the application of certain limits to mental health and substance use disorder benefits (including requirements of MHPAEA) under PHS Act section 2705 (redesignated as section 2726 by the Affordable Care Act).

6. Required coverage for reconstructive surgery following mastectomies under PHS Act section

2706 (redesignated as section 2727 by the Affordable Care Act).

7. Coverage of dependent students on a medically necessary leave of absence under PHS Act section 2707 (redesignated as section 2728 by the Affordable Care Act).

The Affordable Care Act redesignated PHS Act section 2721 as section 2722 and amended PHS Act section 2722(a)(2) to allow sponsors of self-funded, non-Federal governmental plans to only opt out of requirements categories 4-7 listed above.

In response to the Affordable Care Act amendments, HHS issued guidance on September 21, 2010, indicating that, for plan years beginning on or after September 23, 2010, plan sponsors of non-collectively bargained plans could elect to be exempt only from requirements categories 4-7 listed above and that requirements categories 1-3 were no longer available for exemption.

Group health plans maintained pursuant to a collective bargaining agreement ratified before March 23, 2010, and that had been exempted from any of the first three requirements categories listed above, would not have to come into compliance with those requirements categories until the commencement of the first plan year following the expiration of the last plan year governed by the collective bargaining agreement.

Office of Consumer Information and Insurance Oversight, Amendments to the HIPAA opt-out provision (formerly section 2721(b)(2) of the Public Health Service Act) made by the Affordable Care Act (Sept. 21, 2010), available at

www.cms.gov/CCIIO/Resources/Files/Downloads/opt_out_memo.pdf.

On March 21, 2014, HHS published proposed regulations in the

Federal Register

that proposed to revise the provisions of 45 CFR 146.180 to reflect the amendments made by the Affordable Care Act, consistent with the September 21, 2010, guidance.

On May 27, 2014, HHS finalized those proposed regulations with modifications related to how opt out elections must be filed.

79 FR 15808 (Mar. 21, 2014).

79 FR 30240 (May 27, 2014).

The CAA, 2023,

enacted on December 29, 2022, eliminated the election for self-funded, non-Federal governmental plans to opt out of MHPAEA.

Specifically, PHS Act section 2722(a)(2), as amended by the CAA, 2023, provides that no election to opt out of compliance with the requirements of MHPAEA may be made on or after December 29, 2022 (the date of enactment of the CAA, 2023) and that generally no such election with respect to MHPAEA expiring on or after June 27, 2023 (the date that is 180 days after the date of enactment of the CAA, 2023), may be renewed.

In addition, PHS Act section 2722(a)(2), as amended by the CAA, 2023, includes an exception for certain collectively bargained plans. Specifically, a self-funded, non-Federal governmental plan that is subject to multiple collective bargaining agreements of varying lengths and that has a MHPAEA opt-out election in effect on December 29, 2022, that expires on or after June 27, 2023, may extend such election until the date on which the term of the last collective bargaining agreement expires.

Public Law 117-328, 136 Stat. 4459.

Division FF, Title I, Subtitle C, Chapter 3, sec. 1321, Public Law 117-328, 136 Stat. 4459. As a result of the CAA, 2023 amendments to PHS Act section 2722(a)(2), self-funded, non-Federal governmental plan sponsors may opt out of only the following three PHS Act requirement categories: Standards relating to benefits for newborns and mothers (PHS Act section 2725), Required coverage for reconstructive surgery following mastectomies (PHS Act section 2727), and Coverage for dependent students on a medically necessary leave of absence (PHS Act section 2728).

PHS Act section 2722(a)(2)(F)(i).

PHS Act section 2722(a)(2)(F)(ii).

HHS issued a Bulletin on June 7, 2023, that informs self-funded, non-Federal governmental plans and other interested parties about the CAA, 2023 amendments to PHS Act section 2722(a)(2), outlines when plans that currently opt out of compliance with MHPAEA are required to come into compliance with these requirements, and specifies the form and manner for submission of opt-out renewal election requests

to operationalize the special rule for certain collectively bargained plans.

See

45 CFR 146.180(b) and (f).

Center for Consumer Information and Insurance Oversight, Insurance Standards Bulletin Series—INFORMATION, Sunset of MHPAEA opt-out provision for self-funded, non-Federal governmental group health plans (June 7, 2023), available at

https://www.cms.gov/files/document/hipaa-opt-out-bulletin.pdf.

II. Overview of the Proposed Rules—Departments of the Treasury, Labor, and HHS

The Departments are proposing these rules to further MHPAEA's fundamental goal of ensuring that limitations on mental health and substance use disorder benefits provided by group health plans or health insurance issuers offering group or individual health insurance coverage are no more restrictive than the predominant limitations applicable to substantially all medical/surgical benefits, and to further implement important new statutory requirements to ensure that plans and issuers document their NQTL comparative analyses and other applicable information to demonstrate whether the processes, strategies, evidentiary standards, and other factors used to apply an NQTL to mental health and substance use disorder benefits are comparable to, and applied no more stringently than, those used to apply the limitation with respect to medical/surgical benefits in the same benefit classification. The goal of these proposed rules is to ensure that individuals with mental health conditions and substance use disorders can benefit from the full protections afforded to them under MHPAEA, while offering clear guidance to plans and issuers on how to comply with MHPAEA's requirements.

These proposed rules would be codified in 26 CFR part 54, 29 CFR part 2590, and 45 CFR parts 146 and 147. Specifically, these proposed rules would amend certain provisions of existing MHPAEA regulations at 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136 to incorporate new and revised definitions of key terms, as well as to specify additional steps that plans and issuers must take to meet their obligations under MHPAEA. These proposed rules also would add a new regulation at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 establishing minimum standards for developing NQTL comparative analyses to assess whether an NQTL, as written and in operation, complies with MHPAEA's requirements. In addition, these proposed rules would set forth the content elements of comparative analyses and the timeframe for plans and issuers to respond to a request from the Departments to submit their comparative analyses. Additionally, HHS proposes an amendment to 45 CFR 147.160 to specify that proposed regulations at 45 CFR 146.137 would apply to individual health insurance coverage offered by a health insurance issuer in the same manner and to the same extent that this proposed provision would apply to health insurance coverage offered by a health insurance issuer in connection with a group health plan in the large group market.

Consistent with the existing text at 45 CFR 147.160(a), HHS also proposes to extend the same requirements and framework outlined in the proposed amendments to 45 CFR

146.136 in these proposed rules to individual health insurance coverage in the same manner and to the same extent as such proposed amendments, if finalized, would apply to group health insurance coverage. Finally, HHS also proposes amendments to 45 CFR 146.180 to reflect the sunset of the election option for self-funded, non-Federal governmental plans to opt out of compliance with MHPAEA, consistent with changes made by the CAA, 2023 to PHS Act section 2722(a)(2).

Non-grandfathered health insurance coverage offered by a health insurance issuer in connection with a group health plan in the small group market is required to comply with the requirements under PHS Act section 2726 to satisfy the requirement to provide coverage for mental health and substance use disorder services, including behavioral health treatment, as part of EHB, and as such would also be required to comply with the comparative analysis requirements proposed under 45 CFR 146.137.

See

45 CFR 156.115(a)(3).

Division FF, Title I, Subtitle C, Chapter 3, sec. 1321, Public Law 117-328, 136 Stat. 4459 (Dec. 29. 2022).

The Departments are soliciting public comment on all aspects of these proposed rules.

A. Amendments to Existing Regulations at 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136

1. Purpose Section—26 CFR 54.9812-1(a)(1), 29 CFR 2590.712(a)(1), and 45 CFR 146.136(a)(1)

In general, the fundamental purpose of MHPAEA, its existing implementing regulations, and these proposed rules is to ensure that participants and beneficiaries in a group health plan or in group health insurance coverage offered by a health insurance issuer that offers mental health or substance use disorder benefits are not subject to greater restrictions, such as more restrictive lifetime or annual dollar limits, financial requirements, or treatment limitations, when seeking those benefits than when they seek medical/surgical benefits under the terms of the plan or coverage. This should serve as the guiding principle for group health plans and health insurance issuers offering group health insurance coverage as they work to comply with MHPAEA and its implementing regulations. While MHPAEA generally does not mandate coverage of mental health or substance use disorder benefits, these proposed rules aim to better ensure that plans and issuers that cover such benefits implement MHPAEA in accordance with its express terms and fundamental purpose.

Accordingly, the Departments propose to add a purpose section to the regulations, specifying that a fundamental purpose of MHPAEA and its implementing regulations is to ensure that participants and beneficiaries covered under a plan or health insurance coverage that offers mental health or substance use disorder benefits are not subject to more restrictive lifetime or annual dollar limits, financial requirements, or treatment limitations with respect to covered mental health and substance use disorder benefits than the predominant dollar limits, financial requirements, or treatment limitations that are applied to substantially all medical/surgical benefits covered by the plan or coverage.

The purpose section would further state that in complying with the provisions of MHPAEA and its implementing regulations, plans and issuers must not design or apply financial requirements and treatment limitations that impose a greater burden on access (that is, are more restrictive) to mental health and substance use disorder benefits under the plan or coverage than plans and issuers impose on access to generally comparable medical/surgical benefits. Further, these proposed rules provide that MHPAEA and its implementing regulations should be interpreted in a manner that is consistent with this purpose. The Departments seek comment on the proposed addition of a purpose section to the implementing regulations and the proposed language.

While the Departments recognize the relevant statutory text for dollar limits does not use the term “predominant” and different rules apply, the purpose of MHPA 1996 was similar and therefore the provisions for dollar limits should generally be read and applied in a similar manner.

See, e.g.,

Government Accountability Office (GAO), Mental Health Parity Act, May 2000, at p. 13, available at

https://www.gao.gov/assets/hehs-00-95.pdf

(“To help address the discrepancies in coverage between mental and other illnesses, the Congress passed the Mental Health Parity Act of 1996.”).

2. Meaning of Terms—26 CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2)

The Departments propose to amend the 2013 final regulations to revise several existing definitions, add new definitions of key terms, and add language to specify that, except where the context clearly indicates otherwise, the definitions in 26 CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2) would also apply to the new proposed comparative analysis requirements set forth in proposed 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137, which are discussed in more detail later in this preamble.

To accommodate the proposed addition of the “purpose” provision in paragraph (a)(1), these proposed rules would also redesignate the definitions from paragraph (a) to paragraph (a)(2) of 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136.

Under MHPAEA, the term “medical or surgical benefits” means benefits with respect to medical or surgical services, as defined under the terms of the plan or coverage.

This statutory definition further clarifies that the term does not include mental health or substance use disorder benefits.

The terms “mental health benefits” and “substance use disorder benefits” are defined by the statute to mean benefits with respect to services for mental health conditions or substance use disorders, respectively, as defined under the terms of the plan and in accordance with applicable Federal and State law.

100

The definitions of all three of these terms included in the 2013 final regulations further provide that any condition defined by the plan or coverage as being or as not being a medical/surgical condition, mental health condition, or substance use disorder, respectively, must be defined to be consistent with generally recognized independent standards of current medical practice (for example, the most current version of the Diagnostic and Statistical Manual of Mental Disorders (DSM), the most current version of the International Classification of Diseases (ICD), or State guidelines).

Code section 9812(e)(3), ERISA section 712(e)(3), and PHS Act section 2726(e)(3).

Id.

100

See

Code section 9812(e)(4)-(5), ERISA section 712(e)(4)-(5), and PHS Act section 2726(e)(4)-(5).

The Departments have received questions from interested parties about what it means for a definition of a mental health condition or substance use disorder to be “consistent with” generally recognized independent standards of current medical practice, and whether, for purposes of MHPAEA, a condition is a medical condition, a mental health condition, or a substance use disorder when State insurance law and generally recognized independent standards of current medical practice conflict. In response to these requests for further guidance, the Departments propose to amend the existing regulatory definitions of the terms “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits” to address these questions and help delineate more clearly what is a medical/surgical benefit, a mental health benefit, or a substance use disorder benefit for purposes of complying with MHPAEA.

Specifically, the Departments propose to amend the definition of the term “medical/surgical benefits” to mean benefits with respect to items or services for medical conditions or surgical procedures, as defined under the terms of the group health plan (or health insurance coverage offered by an issuer in connection with such a plan) and in accordance with applicable Federal and State law, but does not include mental health benefits or substance use disorder benefits. These proposed rules

would also amend this regulatory definition of “medical/surgical benefits” to provide that, notwithstanding the first sentence, any condition or procedure defined by the plan or coverage as being or not being a medical condition or surgical procedure must be defined consistent with generally recognized independent standards of current medical practice (for example, the most current version of the ICD). To the extent that generally recognized independent standards of current medical practice do not address whether a condition or procedure is a medical condition or surgical procedure, plans and issuers may define the condition or procedure as medical/surgical benefits, as long as such definitions are in accordance with applicable Federal and State law.

The Departments propose to remove the reference to State guidelines in the definition of medical/surgical benefits. This proposed amendment is more consistent with the statute, and importantly, would no longer allow plans and issuers to rely on standards that are not applicable to the plan or coverage at issue in applying financial requirements or treatment limitations to mental health and substance use disorder benefits.

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Generally recognized independent standards of current medical practice more accurately align with how a plan should characterize benefits for purposes of compliance with MHPAEA, and this provision would minimize situations where contradictions with State guidelines create conflicts and improperly limit the protections under MHPAEA.

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For example, some self-insured ERISA plans have argued that they can rely on State insurance law definitions that characterize a particular condition as a medical condition, mental health condition, or substance use disorder based on State guidelines despite the fact that State insurance law is generally not applicable to self-insured ERISA plans and such plans do not otherwise consistently comply with State insurance law.

The Departments propose to make similar changes to the definitions of “mental health benefits” and “substance use disorder benefits” by amending the first sentences of these definitions, removing the reference to State guidelines, and clarifying that, notwithstanding the terms of a plan or coverage, any condition or disorder defined by the plan or coverage as being or not being a mental health condition or a substance use disorder must be defined to be consistent with generally recognized independent standards of current medical practice. Specifically, under these proposed rules, to be consistent with generally recognized independent standards of current medical practice, the plan's or coverage's definition of “mental health benefits” must include all conditions covered under the plan or coverage, except for substance use disorders, that fall under any of the diagnostic categories listed in the mental, behavioral, and neurodevelopmental disorders chapter (or equivalent chapter) of the most current version of the ICD or that are listed in the most current version of the DSM. Similarly, the plan's or coverage's definition of “substance use disorders” must include all disorders covered under the plan or coverage that fall under any of the diagnostic categories listed as a mental or behavioral disorder due to psychoactive substance use (or equivalent category) in the mental, behavioral, and neurodevelopmental disorders chapter (or equivalent chapter) of the most current version of the ICD or that are listed as a Substance-Related and Addictive Disorder (or equivalent category) in the most current version of the DSM.

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Similar to the proposed revisions to the definition of “medical/surgical benefits,” the proposed amended definitions of “mental health benefits” and “substance use disorder benefits” also provide that, to the extent generally recognized independent standards of current medical practice do not address whether a condition or disorder is a mental health condition or substance use disorder, respectively, plans and issuers may define the condition or disorder in accordance with applicable Federal and State law.

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Substance use disorders that fall under any of the diagnostic categories listed in the mental and behavioral health disorders chapter of the most current version of the ICD or that are listed in the most current version of the DSM would be excluded from the definition of the term “mental health benefits” because they would be included in the definition of the term “substance use disorder benefits.”

The ICD would be defined as the World Health Organization's International Classification of Diseases adopted by HHS through 45 CFR 162.1002 or successor regulations, and the DSM would be defined as the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders. Because the proposed amendments to the definitions of “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits,” refer to the most current version of the ICD or DSM, respectively, these proposed rules also explain how to determine which version is the most current as of a particular date. This serves to provide plans and issuers with clarity on when they would be required to begin to rely on a new version of the ICD or DSM after it is released, and sufficient time after the adoption of an updated version of the ICD or DSM to ensure that the terms of their plan or coverage are consistent with any changes made from the previous version. The definitions would specify that, for purposes of compliance with these proposed rules, the most current version of the ICD or DSM, respectively, would be that which is applicable no earlier than on the date that is 1 year before the first day of the applicable plan year.

These proposed rules also would permit plans and issuers to use a more current version of the ICD or DSM than the version in effect 1 year before the first day of the applicable plan year. In addition, the Departments recognize that future versions of the ICD or DSM may include revisions to the categories of conditions or disorders or chapters listed in the proposed amended definitions for “mental health benefits” and “substance use disorder benefits,” which could affect the characterization of a benefit under MHPAEA. Therefore, the proposed amended definitions for these two terms also refer to “equivalent categories” and “equivalent chapters” to help plans and issuers understand how they would apply the proposed definitions, if finalized, and how to implement such changes if they are made in the future. The Departments request comments on this aspect of these proposed amended definitions.

To ensure parity between mental health and substance use disorder benefits and medical/surgical benefits, it is critical that plans and issuers define mental health conditions and substance use disorders in a manner consistent with the purposes of MHPAEA. While plans and issuers have some discretion in defining mental health benefits and substance use disorder benefits, this discretion must be exercised in a manner that comports with generally recognized independent standards of current medical practice. Moreover, the proposed amended definitions for “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits” specify that plans and issuers may use applicable State law to inform their definitions, but only to the extent that those laws are consistent with and do not contradict generally recognized independent standards of current medical practice (or to the extent these standards do not address whether a condition or disorder is a medical condition or surgical procedure or a mental health condition or substance use disorder). Under both the

2013 final regulations and these proposed rules, plans and issuers must be prepared to provide supporting documentation to demonstrate that the way the plan or issuer has defined a condition or disorder for purposes of MHPAEA is consistent with generally recognized independent standards of current medical practice. The Departments solicit comments on whether any additional clarification is needed on how State law may interact with the proposed amended definitions for these key terms.

As discussed earlier in this section of the preamble, the Departments are proposing these amendments to the definitions of the terms “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits” in part to ensure that the use of State laws does not prevent the application of MHPAEA's protections with respect to conditions or disorders that are recognized as mental health conditions and substance use disorders under generally recognized independent standards of current medical practice. The Departments recognize that States may enact various laws for different purposes. Therefore, the Departments are proposing to make clear that when a plan or issuer relies upon a State law to inform its definitions for purposes of MHPAEA, the plan or issuer must ensure that definitions operate to apply MHPAEA's protections to mental health conditions and substance use disorders, as they are generally defined by the medical community. The Departments also clarify that under the proposed framework, to the extent a State law or generally recognized independent standards of current medical practice define a condition or disorder as a mental health condition or substance use disorder, plans and issuers must treat all benefits for the condition or disorder as mental health benefits or substance use disorder benefits, respectively, for purposes of analyzing parity and compliance with MHPAEA. The Departments solicit comments on any potential challenges of applying MHPAEA to all benefits for a mental health condition or substance use disorder where items and services can be delivered for both medical conditions or surgical procedures and mental health conditions or substance use disorders, and whether additional clarifications or modifications to the proposed definitions are necessary.

Interested parties also have requested that the Departments confirm whether specific conditions are mental health conditions for purposes of MHPAEA. Under these proposed rules, as under the existing MHPAEA regulations and section 13007 of the Cures Act,

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the Departments confirm that eating disorders, such as anorexia nervosa, bulimia nervosa, and binge-eating disorder, are mental health conditions under generally recognized independent standards of current medical practice.

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Therefore, benefits for treatment of eating disorders are mental health benefits for purposes of MHPAEA and may not be defined as medical/surgical benefits under a plan or coverage.

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Section 13007 of the Cures Act states that, if a plan or an issuer offering group or individual health insurance coverage provides coverage for eating disorder benefits, including residential treatment, such group health plan or health insurance issuer shall provide such benefits consistent with the requirements of MHPAEA.

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See, e.g.,

Diagnostic and Statistical Manual of Mental Disorders (5th ed.), section II, Feeding and Eating Disorders; ICD-10, Chapter 05.

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The Departments previously clarified that eating disorders are mental health conditions, and therefore treatment of an eating disorder is a mental health benefit, in FAQs Part 38, Q1.

See

DSM (5th ed.), section II, Feeding and Eating Disorders.

Similarly, in response to questions from interested parties, these proposed rules would make clear that, for purposes of MHPAEA, ASD is a mental health condition under generally recognized independent standards of current medical practice.

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Therefore, under the proposed amended definition and framework established in these proposed rules, if a plan or issuer generally provides benefits for ASD, ASD may not be defined by the plan or issuer as a medical/surgical condition. In addition, the plan or issuer may not impose any financial requirements or treatment limitations in a classification on benefits for ASD treatment that are more restrictive than the predominant financial requirements or treatment limitations that apply to substantially all medical/surgical benefits in the classification. The plan or issuer also may not impose any financial requirements or treatment limitations, including exclusions for Applied Behavior Analysis (ABA) therapy (one of the primary treatments for ASD), that are separately applicable to ASD benefits in a classification and not to any medical/surgical benefits in the same classification. The Departments propose to incorporate new examples illustrating the application of MHPAEA to eating disorders and ASD, as discussed later in this preamble. The Departments solicit comments on other specific mental health conditions or substance use disorders that may warrant additional clarification for purposes of analyzing parity and compliance with MHPAEA.

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See

DSM (5th ed.), section II, Autism Spectrum Disorder.

In addition to the proposals outlined above to amend certain existing definitions, these proposed rules also would add several new definitions to codify the meaning of terms used in paragraph (c)(4)(i) of the 2013 final regulations, which requires the processes, strategies, evidentiary standards, and other factors used in applying an NQTL to mental health or substance use disorder benefits to be comparable to, and no more stringently applied than those used to apply the NQTL to medical/surgical benefits in the same classification. These terms and the standard were incorporated into MHPAEA's statutory language in the amendments made by the CAA, 2021.

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The Departments propose to add new definitions for the terms “processes,” “strategies,” “evidentiary standards,” and “factors” to the list of definitions for key terms proposed to be included in 26 CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2) of these proposed rules. These new definitions would provide clarity to plans and issuers, as well as to State regulators and participants and beneficiaries, and help facilitate compliance with the provisions of these proposed rules related to NQTLs and the development of sufficient comparative analyses required under the CAA, 2021 and proposed 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137. Although the Departments have issued guidance with examples that demonstrate how these terms apply, interested parties have stated that it can be difficult to determine what constitutes relevant processes, strategies, evidentiary standards, and other factors. The Departments solicit comments on these proposed definitions, including any alternate definitions or additional clarifications that should be considered.

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See, e.g.,

Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A), and PHS Act section 2726(a)(8)(A).

The Departments propose to add a definition of the term “evidentiary standards” to mean any evidence, sources, or standards that a group health plan (or health insurance issuer offering coverage in connection with such a plan) considered or relied upon in designing or applying a factor with respect to an NQTL, including specific benchmarks or thresholds. The proposed definition further provides that evidentiary standards may be empirical, statistical, or clinical in nature, and include sources acquired or originating from an objective third party, such as recognized medical literature, professional standards and

protocols (which may include comparative effectiveness studies and clinical trials), published research studies, payment rates for items and services (such as publicly available databases of the “usual, customary, and reasonable” rates paid for items and services), and clinical treatment guidelines. The proposed definition provides that evidentiary standards would also include internal plan or issuer data, such as claims or utilization data or criteria for assuring a sufficient mix and number of network providers, and benchmarks or thresholds, such as measures of excessive utilization, cost levels, time or distance standards, or network participation percentage thresholds.

Under these proposed rules, evidentiary standards generally would not be considered factors, but instead would be considered or relied upon in designing or applying a factor. Under the framework established in the 2013 final regulations, the terms within the phrase “processes, strategies, evidentiary standards, and other factors” were treated as having overlapping meanings, and specifically, the term “other factors” was treated as a catch-all. The CAA, 2021 codified in the statute the phrase “processes, strategies, evidentiary standards, and other factors.”

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However, the CAA, 2021 added to MHPAEA other references to factors and evidentiary standards that indicate the drafters meant to distinguish between factors and evidentiary standards. For example, Code section 9812(a)(8)(A)(iii), ERISA section 712(a)(8)(A)(iii), and PHS Act 2726(a)(8)(A)(iii) refer to the evidentiary standards

that are used for

the factors to determine that an NQTL will apply to benefits, and those provisions go on to distinguish between factors and any other sources or evidence relied upon to design or apply an NQTL. The proposed definition of evidentiary standards is consistent with the use of these terms by Congress in the CAA, 2021 amendments to MHPAEA and the Departments' goal of clarifying the meanings of these terms to help the regulated community comply with MHPAEA's requirements. The Departments request comments on this approach, including whether there are any circumstances under which an evidentiary standard should also be considered a factor under these proposed rules (such as, for example, when the plan or issuer only relies upon a single evidentiary standard to design or apply an NQTL, and no additional processes, strategies, or other factors).

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Code section 9812(a)(7)(B)(ii)(II) and (8)(A)(iv), ERISA section 712(a)(7)(B)(ii)(II) and (8)(A)(iv), and PHS Act section 2726(a)(7)(B)(ii)(II) and (8)(A)(iv).

The Departments also propose to clarify that the definition of the term “factors” should be read broadly, so that factors are all information, including processes and strategies (but generally not evidentiary standards), that a group health plan (or health insurance issuer offering coverage in connection with such a plan) considered or relied upon to design an NQTL or used to determine whether or how the NQTL applies to benefits under the plan or coverage. The proposed definition of the term “factors” also would include information (but generally not evidentiary standards) that the plan or issuer considered but rejected, consistent with previous guidance on MHPAEA in the context of the documents or plan information the Departments consider relevant to a compliance determination.

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The proposed definition also provides examples of factors, which include, but are not limited to, provider discretion in determining diagnosis or type or length of treatment; clinical efficacy of any proposed treatment or service; licensing and accreditation of providers; claim types with a high percentage of fraud; quality measures; treatment outcomes; severity or chronicity of condition; variability in the cost of an episode of treatment; high cost growth; variability in cost and quality; elasticity of demand; and geographic location.

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See

FAQs Part 31, Q9, which states that a plan must provide documents and plan information to a participant or beneficiary, or their authorized representative, including the specific underlying processes, strategies, evidentiary standards, and other factors (including, but not limited to, all evidence) considered by the plan (including factors that were relied upon and were rejected) in determining that the NQTL will apply to a particular mental health and substance use disorder benefit or any medical/surgical benefits within the benefit classification at issue.

Under these proposed rules, factors would include processes and strategies, but the Departments note that there may be factors that do not satisfy the proposed definitions of “processes” or “strategies.” By defining the term “factor” broadly, the Departments intend to capture any information used to design or apply an NQTL (other than evidentiary standards generally), regardless of whether a plan or issuer believes that information could also be characterized as a process or a strategy, as those terms are proposed to be defined under these proposed rules.

Additionally, the Departments propose to define “processes” and “strategies” as types of factors, in a manner that makes clear the differences between the two terms as they relate to the design and application of an NQTL. Specifically, the Departments would define “processes” as relating to the application of an NQTL, while “strategies” would relate to the design of an NQTL.

The Departments therefore propose to define “processes” to mean actions, steps, or procedures that a plan or issuer uses to apply an NQTL. “Processes” would include requirements established by the plan or issuer for a participant or beneficiary to access benefits, including through actions by a participant's or beneficiary's authorized representative, or a provider or facility. The proposed definition further provides that processes include, but are not limited to: procedures to submit information to authorize coverage for an item or service prior to receiving the benefit or while treatment is ongoing (including requirements for peer or expert clinical review of that information); provider referral requirements; and the development and approval of a treatment plan. The proposed definition also provides that processes include the specific procedures used by staff or other representatives of a plan or issuer (or the service provider of a plan or issuer) to administer the application of NQTLs, such as: how a panel of staff members applies the NQTL (including the qualifications of staff involved, number of staff members allocated, and time allocated); consultations with panels of experts in applying the NQTL; and reviewer discretion in adhering to criteria hierarchy when applying an NQTL.

These proposed rules would define “strategies” as practices, methods, or internal metrics that a plan or issuer considers, reviews, or uses to design an NQTL. The proposed definition provides that examples of strategies include, but are not limited to: the development of the clinical rationale used in approving or denying benefits; deviation from generally accepted standards of care; the selection of information (such as from medical or clinical guidelines) deemed reasonably necessary to make a medical necessity determination; reliance on treatment guidelines or guidelines provided by third-party organizations; and rationales used in selecting and adopting certain threshold amounts, professional protocols, and fee schedules. These proposed rules would further specify that strategies also include the creation and composition of the staff or other representatives of a plan or issuer (or the service provider of a plan or issuer) that deliberates, or otherwise makes decisions, on the design of NQTLs, including the plan's decisions related to

qualifications of staff involved, number of staff members allocated, and time allocated; breadth of sources and evidence considered; consultations with panels of experts in designing the NQTL; and the composition of the panels used to design an NQTL.

To illustrate the interaction of the definitions of these terms, a plan might rely on various combinations of processes, strategies, evidentiary standards, and other factors in designing and applying a prior authorization NQTL for in-network, non-hospital-based, inpatient/residential facilities for non-emergency medical/surgical or mental health or substance use disorder treatment. For example, the

strategies

used by the plan to design the NQTL could include the development of the clinical rationales the plan used in determining when to approve or deny benefits for the facility, and the composition of the staff of the plan that chose what information would be deemed necessary to determine whether a participant or beneficiary has an immediate, clinically valid need for treatment at the facility. The

processes

the plan used in applying the NQTL could include the specific steps a participant or beneficiary (or their authorized representative, including their provider or the facility) would need to take to obtain prior authorization, such as obtaining a written treatment plan. The processes would also include the procedures used by staff or other representatives of the plan (or the service provider of the plan) in determining whether a particular request for prior authorization would be approved. These processes and strategies would also be considered

factors,

as would the licensing and accreditation requirements for non-hospital-based, inpatient/residential facilities and the severity or chronicity of a patient's condition when they are seeking treatment at such a facility. Finally, the

evidentiary standards

used to design or apply the factors would include, for example, the benchmarks or thresholds the plan uses to inform the number of days of treatment at the facility that would be authorized at one time, as well as published research studies on the efficacy of the treatment in this particular facility setting.

Finally, the Departments propose to amend the definition of “treatment limitation” to clarify that the illustrative list of NQTLs to which the definition refers is non-exhaustive, and to amend the last sentence to state that a complete exclusion of all benefits for a particular condition or disorder is not a treatment limitation for purposes of this definition. By changing the existing reference in the definition from a “permanent” exclusion to a “complete” exclusion, the proposed amended definition of “treatment limitation” would better reflect a plan's or issuer's ability to amend the terms of their plan or coverage and affirm that this part of the definition refers to an exclusion of all benefits for a particular condition or disorder.

While NQTLs are generally defined as treatment limitations that are not expressed numerically, the application of an NQTL in a numerical way does not modify its nonquantitative character simply because the NQTL sometimes involves numerical standards. For example, standards to participate in a network would be NQTLs because such standards are treatment limitations that typically are not expressed numerically. Nevertheless, these standards sometimes rely on or involve numerical standards, such as reimbursement rates. In this case, the numerical expression of a reimbursement rate does not modify the nonquantitative character of the standards related to network composition. Therefore, such standards would still be evaluated in accordance with the rules for NQTLs under the statute and these proposed rules.

The Departments solicit comments on all aspects of these proposed amendments to existing definitions, as well as the new proposed definitions. The Departments also request comment on what additional clarifications or examples might be helpful in understanding these amended and new proposed defined terms.

3. Nonquantitative Treatment Limitations—26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4)

As explained earlier in this preamble, the Departments are proposing changes that are designed to prevent plans and issuers from designing and implementing NQTLs that impose greater limits on access to mental health and substance use disorder benefits as compared to medical/surgical benefits. These proposed rules would add additional requirements for plans and issuers that apply NQTLs with respect to mental health and substance use disorder benefits, to prevent the imposition of a greater burden on participants and beneficiaries accessing those benefits, while preserving the ability of plans and issuers to impose those NQTLs to the extent they are consistent with generally recognized independent professional medical or clinical standards or standards related to fraud, waste, and abuse. Subject to those two narrow exceptions, these proposed rules provide that plans and issuers would not be permitted to impose an NQTL unless (1) the NQTL is no more restrictive as applied to mental health and substance use disorder benefits than to medical/surgical benefits (also referred to in this preamble as the no more restrictive requirement);

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(2) the plan or issuer satisfies requirements related to the design and application of the NQTL (also referred to in this preamble as the design and application requirements);

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and (3) the plan or issuer collects, evaluates, and considers the impact of relevant data on access to mental health and substance use disorder benefits relative to access to medical/surgical benefits; and subsequently takes reasonable action as necessary to address any material differences in access shown in the data to ensure compliance with MHPAEA (also referred to in this preamble as the relevant data evaluation requirements).

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110

Proposed 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i).

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Proposed 26 CFR 54.9812-1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii).

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Proposed 26 CFR 54.9812-1(c)(4)(iv), 29 CFR 2590.712(c)(4)(iv), and 45 CFR 146.136(c)(4)(iv).

The proposed rules do not require or suggest a particular sequence to the analysis for evaluating compliance, and no inferences should be drawn from the order in which each of these independent requirements appear in the proposed regulatory text. For example, a plan or issuer designing or applying an NQTL with respect to mental health or substance use disorder benefits could begin analyzing compliance with MHPAEA by looking at the design and application requirements under these proposed rules before fully evaluating whether the NQTL with respect to mental health or substance use disorder benefits complies with the no more restrictive requirement. Additionally, if a plan or issuer, in the process of complying with the relevant data evaluation requirements, identifies material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, those differences would be considered a strong indicator that the plan or issuer violated the proposed no more restrictive requirement or the design and application requirements.

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In such

instances, if the plan or issuer took the additional steps required under the material differences requirement at 26 CFR 54.9812-1(c)(4)(iv)(B), 29 CFR 2590.712(c)(4)(iv)(B), or 45 CFR 146.136(c)(4)(iv)(B) (and the special rule for NQTLs related to network composition at 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 2590.712(c)(4)(iv)(C), or 45 CFR 146.136(c)(4)(iv)(C) did not apply), then the plan or issuer would meet all three independent requirements.

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The Departments solicit comments on this proposed approach.

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But see

the special rule for NQTLs related to network composition at proposed 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 2590.712(c)(4)(iv)(C), and 45 CFR 146.136(c)(4)(iv)(C), which states that, when designing and applying one or more NQTLs related to network composition standards, a plan fails to meet the no more restrictive requirement and the design and application requirements, in operation,

if the relevant data show material differences in access to in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits in a classification.

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The plan or issuer would also be required to document any steps taken in accordance with the material differences requirement (and the special rule for NQTLs related to network composition, if applicable) as part of its comparative analyses. Even if the plan or issuer had assessed compliance prior to the steps taken in accordance with the material differences requirement and the special rule for NQTLs related to network composition, the plan or issuer would be required to re-evaluate whether the no more restrictive requirement and the design and application requirements are met with respect to the adjusted NQTL.

If a plan or issuer fails to meet any of the three requirements with respect to an NQTL in a classification, these proposed rules state that the NQTL would violate MHPAEA and may not be imposed on mental health or substance use disorder benefits in the classification. Where a plan or issuer fails to satisfy the requirements of one part of these proposed rules for NQTLs, the plan or issuer must make changes to the terms of the plan or coverage or the way the NQTL is designed or applied to ensure compliance with MHPAEA.

These proposed rules also would prohibit plans and issuers from relying upon any factor or evidentiary standard if the information, evidence, sources, or standards on which the factor or evidentiary standard is based discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits.

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Additionally, the proposed rules would require plans and issuers to collect and evaluate relevant outcomes data and address any material differences in access between mental health and substance use disorder benefits and medical/surgical benefits as necessary to ensure compliance. This proposed provision also would impose a special rule for NQTLs related to network composition.

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115

Proposed 26 CFR 54.9812-1(c)(4)(ii)(B), 29 CFR 2590.712(c)(4)(ii)(B), and 45 CFR 146.136(c)(4)(ii)(B).

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Proposed 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 2590.712(c)(4)(iv)(C), and 45 CFR 146.136(c)(4)(iv)(C).

Finally, these proposed rules would make clear that a plan or issuer that has received a final determination of noncompliance under the comparative analysis review process established by the CAA, 2021, including a final determination of noncompliance based on failure to provide a sufficient comparative analysis, also could be in violation of the substantive requirements that apply to NQTLs under MHPAEA, as determined by the Departments. Upon such a determination, the Departments would direct the plan or issuer to not impose the NQTL that is the subject of the comparative analysis, unless and until the plan or issuer can demonstrate compliance or take appropriate action to remedy the violation.

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The Departments request comments on all aspects of these proposed amendments and additions to the rules regarding NQTLs.

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Proposed 26 CFR 54.9812-1(c)(4)(vii), 29 CFR 2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii).

a. Requirement That NQTLs be No More Restrictive for Mental Health and Substance Use Disorder Benefits—26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i)

These proposed rules, if finalized, would redesignate, from what is currently 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i) to 26 CFR 54.9812-1(c)(4)(ii)(A), 29 CFR 2590.712 (c)(4)(ii)(A), and 45 CFR 146.136(c)(4)(ii)(A), the general rule for evaluating NQTLs, and add new language to these paragraphs to impose additional requirements for NQTLs. As noted elsewhere in the preamble, these proposed rules would provide that a plan or issuer may not apply any NQTL to mental health or substance use disorder benefits in any classification that is more restrictive, as written or in operation, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification.

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While the 2013 final regulations largely relied on an analysis of the processes, strategies, evidentiary standards, and other factors used in the application of NQTLs, proposed 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i) is consistent with the fundamental purpose of MHPAEA and more closely mirrors the statutory language in Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act 2726(a)(3)(A), which states that plans and issuers “. . . shall ensure that . . . the treatment limitations applicable to . . . mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan ([or coverage]) . . . .”

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As explained later in this preamble, the Departments are also proposing to add clarifying language to these proposed rules to make clear that any references to the term “classifications” in MHPAEA's implementing regulations also includes permissible sub-classifications, including with respect to NQTLs.

To that end, the proposed rules provide an explanation of how the terms “restrictive,” “substantially all,” and “predominant” would apply in the context of the no more restrictive requirement in proposed 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i). To comply with these proposed rules, if finalized, plans and issuers would be required to follow similar steps to those that apply when analyzing parity with respect to financial requirements or quantitative treatment limitations under the 2013 final regulations. These steps would involve determining the portion of plan payments for medical/surgical benefits subject to an NQTL in a classification; whether the NQTL applies to substantially all medical/surgical benefits in the classification; the predominant variation of the NQTL that applies to medical/surgical benefits in the classification; and whether the NQTL, as applied to mental health and substance use disorder benefits in the classification, is more restrictive than the predominant variation of the NQTL as applied to substantially all medical/surgical benefits.

First, in determining whether an NQTL applies to substantially all medical/surgical benefits in a classification, plans and issuers would be required to determine the portion of plan payments for medical/surgical benefits expected to be subject to the NQTL based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan or coverage for the plan year (or the portion of the plan year after a change in benefits that affects the applicability of the NQTL). Similar to the longstanding rules for financial requirements and quantitative treatment limitations, these proposed rules would provide that for NQTLs, any reasonable method may be used to determine the dollar amount expected to be paid under the plan or coverage for medical/surgical benefits. In the Departments' view, for a method to be reasonable with respect to large group market and self-insured group health plans, a plan or issuer would be

required to consider group health plan-level claims data to perform the substantially all and predominant analyses, and must rely on such data if it is credible to perform the required projections.

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Similarly, for small group market plans, an issuer would be required to consider “plan”-level (as opposed to the “product”-level) claims data to perform the substantially all analysis, using the definitions of “plan” and “product” in 45 CFR 144.103, and would be required to rely on such data if it is credible to perform the required projections.

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However, if an actuary who is subject to and meets the qualification standards for the issuance of a statement of actuarial opinion regarding health plans in the United States,

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including having the necessary education and experience to provide the actuarial opinion, determines that a group health plan or issuer does not have sufficient data at the plan level for a reasonable projection of future claims costs for the “substantially all” analyses, the group health plan or issuer should utilize other reasonable claims data to make a projection to conduct actuarially-appropriate analyses. As part of using a “reasonable method” to make these projections, plans and issuers should document the assumptions used in choosing a data set and making projections. Plans and issuers would not be required to perform the parity analysis under proposed 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712 (c)(4)(i), and 45 CFR 146.136(c)(4)(i) each plan year unless there is a change in plan benefit design or utilization that would affect an NQTL within a classification. The Departments solicit comments on whether there are any challenges or other considerations with this approach regarding which level of data plans and issuers should look to in performing this prong of the analysis, and whether there should be a different standard given the different nature of NQTLs.

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See

FAQs Part 34, Q3 (interpreting the reasonable method requirement with respect to financial requirements and quantitative treatment limits).

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45 CFR 144.103 generally defines “product” as a discrete package of health insurance coverage benefits offered using a particular product network type within a service area, and “plan” as the pairing of the health insurance coverage benefits under the product with a particular cost-sharing structure, provider network, and service area. In this context, the term “plan” is not synonymous with the term “group health plan.” This approach would also apply to individual health insurance coverage under HHS regulations that incorporate the group market rules by reference.

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The U.S. Qualification Standards apply to members of the six U.S.-based organizations who issue Statements of Actuarial Opinion in the United States. The organizations are the American Academy of Actuaries, American Society of Pension Professionals and Actuaries, American Society of Enrolled Actuaries, Casualty Actuarial Society, Conference of Consulting Actuaries, and Society of Actuaries.

Second, plans and issuers would be required to determine whether the NQTL applies to substantially all medical/surgical benefits in the classification, based on the plan payments for medical/surgical benefits subject to an NQTL as a portion of the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan for the plan year. An NQTL would be considered to apply to substantially all medical/surgical benefits in a classification if it applies to at least two-thirds of all medical/surgical benefits in that classification. Whether the NQTL applies to at least two-thirds of all medical/surgical benefits would be determined without regard to whether the NQTL was triggered based on a particular factor or evidentiary standard. For example, if a plan or issuer applies a general exclusion for all benefits in a classification that are for experimental or investigative treatment, and defines experimental or investigative treatment to be treatments with less than a certain number of peer-reviewed studies demonstrating efficacy, the exclusion would be treated as applying to all of the benefits in the classification—not just those that may be subject to the general exclusion for experimental or investigative treatment because they lack the requisite number of peer-reviewed studies (that is, those that actually triggered the NQTL based on the evidentiary standard). These proposed rules further provide that if an NQTL does not apply to at least two-thirds of all medical/surgical benefits in a classification, then that NQTL would not be permitted to be applied to mental health or substance use disorder benefits in that classification.

The Departments request comment on whether any additional clarification is needed for plans and issuers to determine whether an NQTL applies to substantially all medical/surgical benefits in a classification. The Departments acknowledge that there are significant differences between financial requirements or quantitative treatment limitations and NQTLs and therefore also request comments on whether plans and issuers maintain systems capable of making such determinations and the potential administrative burdens that would be associated with such determinations. Specifically, the Departments are interested in feedback on the approach under these proposed rules for determining substantially all medical/surgical benefits in a classification with respect to certain NQTLs, including those that are used to exclude benefits under the plan or coverage (such as exclusions for experimental or investigational treatment). The Departments also solicit comments on the interaction of this approach with other statutory requirements for plans and issuers prohibiting certain NQTLs on medical/surgical benefits (such as the prohibition on prior authorization for any minimum hospital length of stay after childbirth under the Newborns' and Mothers' Health Protection Act

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Code section 9811, ERISA section 711, and PHS Act sections 2725 and 2751; 26 CFR 54.9811-1, 29 CFR 2590.711, and 45 CFR 146.130 and 148.170.

If an NQTL applies to substantially all medical/surgical benefits in a classification, the third step would require plans and issuers to determine the predominant variation of the NQTL that is applied to substantially all medical/surgical benefits subject to the NQTL in the classification. The Departments propose that the term “predominant” would, for this purpose, mean the most common or most frequent variation of an NQTL within a benefit classification. For example, if a plan applies inpatient concurrent review commencing 1 day, 3 days, or 7 days after admission, depending on the reason for a stay in a hospital or other inpatient facility, or the procedure performed during such a stay, the plan imposes three different variations of the NQTL within the benefit classification. Under this example, to determine which variation is predominant, the plan would determine the portion of inpatient benefits subject to each of the three different variations of the NQTL based on the dollar amount of all plan payments expected to be paid under the plan or coverage for the plan year (or the portion of the plan year after a change in benefits that affects the applicability of the NQTL). Similarly, if a plan applies an NQTL such as prior authorization in a manner that differs based on the manner of review (auto-adjudication vs. manual review) and the number of levels of review (first-level review vs. first-level review and peer-to-peer review), the plan would regard each unique combination as a separate variation. If the plan or issuer imposes only one variation of an NQTL, that variation is considered the predominant NQTL for purposes of the no more restrictive requirement.

Variations of an NQTL for purposes of the determination of which is

“predominant” are different than levels of a type of financial requirement or quantitative treatment limitation. Because of the nature of NQTLs, the same mathematical principles for combining plan payments to get to more than one-half for a financial requirement or quantitative treatment limitation may not always be transferrable when determining which variation of an NQTL is predominant. Therefore, for purposes of NQTLs, the “predominant” variation would be the most common or frequent variation of the NQTL. The most common or frequent variation would be the variation that applies to the highest portion of all medical/surgical benefits within a classification that are subject to the NQTL based on expected plan payments. This proposed definition mirrors the statutory definition of the term “predominant” in Code section 9812(a)(3)(B)(ii), ERISA section 712(a)(3)(B)(ii), and PHS Act section 2726(a)(3)(B)(ii). However, it is different in some ways from the 2013 final regulations for financial requirements and quantitative treatment limitations, because the distinct nature of NQTLs necessitates looking to the most common or frequent

variation

rather than comparing and combining numerical

levels.

Using the inpatient concurrent review example described earlier in this section of the preamble, if the plan had determined that applying concurrent review 7 days after admission was the predominant variation, the plan would be prohibited from applying a more restrictive variation of that NQTL to mental health or substance use disorder benefits in the classification.

The Departments request comment on this approach and any additional clarifications or specificity that is necessary for plans and issuers to determine the predominant NQTL that applies to substantially all medical/surgical benefits in a classification, including what characteristics of a particular NQTL should be considered when determining the predominant variation when a plan or issuer imposes multiple variations, and how to distinguish between what might be a single NQTL without any variations versus what might be variations of a single NQTL. The Departments also request comment on what should be considered the predominant variation of an NQTL when multiple variations are equally common or frequent. Additionally, the Departments are interested in alternative approaches to determining the predominant variation of an NQTL that would provide clarity across a wide variety of NQTLs and ways that plans and issuers design and apply NQTLs to various types of benefits.

Fourth, under these proposed rules, an NQTL applied to mental health or substance use disorder benefits cannot be more restrictive than the predominant NQTL applied to substantially all medical/surgical benefits in the same classification. An NQTL is restrictive if it imposes conditions, terms, or requirements that limit access to benefits under the terms of the plan or coverage. For purposes of determining whether an NQTL is restrictive, “conditions, terms, or requirements” would include, but would not be limited to, those that compel an action by or on behalf of a participant or beneficiary (including by their authorized representative or a provider or facility) to access benefits and those that limit access to the full range of treatment options available for a condition or disorder under the plan or coverage. Thus, if an NQTL applied to mental health or substance use disorder benefits is determined to be more restrictive, as written or in operation, than the predominant NQTL applied to substantially all medical/surgical benefits in the same classification, the NQTL would violate MHPAEA, subject to certain exceptions for independent professional medical or clinical standards and standards related to fraud, waste, and abuse, discussed in more detail later in this preamble.

The Departments recognize that the term “restrictive” is not specifically defined in MHPAEA or the 2013 final regulations in the context of the parity analysis for financial requirements and quantitative treatment limitations. The Departments are of the view that it is generally apparent when one financial requirement or quantitative treatment limitation is more restrictive than another. For example, a $25 copayment is clearly more restrictive than a $15 copayment, and a 5-visit limit is more restrictive than a 10-visit limit. However, due to the nature of NQTLs, which generally do not allow for such straightforward comparison, and the fact that many plans and issuers have designed and applied NQTLs to mental health and substance u

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