The regulators for the Mental Health Parity and Addiction Equity Act (MHPAEA) have just issued guidance on health plan disclosures for non-quantitative treatment limitations (NQTLs).  This guidance consists of an FAQ and a proposed model form for plan members to request information so they can determine whether their plan’s NQTLs are at parity.

The regulations define NQTLs broadly as non-numerical/non-dollar limits on the duration or scope of plan benefits, such as medical necessity and prior authorization requirements.  Over the past two years, Federal and State regulators have increasingly centered enforcement on NQTLs.  But because the term NQTL is so broad, their examinations are often not well-focused, creating compliance challenges.

The new model form could help limit these wide-ranging regulatory forays.  The form asks the member to identify a claim that was denied and to indicate the specific NQTL the plan cited as the basis for the denial.  It then provides a list of NQTLs that appear to be those the regulators believe are most likely to affect benefits.  This list includes plan rules on medical necessity, experimental/investigational services, prior authorization, step therapy and fail first standards, drug formularies, access to in-network providers, and provider reimbursement rules.

One purpose of the form is to “encourage uniformity among State reviews of health insurers’ compliance with the NQTL standards.”   (FAQ at page 2).  This suggests regulators should focus enforcement efforts on the more significant NQTLs—the items listed on the model form—and not engage in open-ended investigations of other medical management tools.

The model form lists information that plans must provide in response.  The list includes: plan language on the NQTL and the medical/surgical and mental health benefits to which it applies; the factors and evidentiary standards used to develop the NQTL; the methods and analysis used to develop the NQTL; and “any evidence” to establish that the NQTL is applied no more stringently to mental health than medical/surgical benefits.  To clarify that plans are not expected to make a massive document dump in response to the form, it may be helpful for the regulators to create a response form which permits the necessary information to be provided in a summarized manner.

The regulators plan to finalize this form by mid-December, and ask for comments to be submitted by September 13, 2017.

On November 18, 2015, the Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) issued final rules regarding a variety of market reforms under the Affordable Care Act, including grandfathered plans, pre-existing condition exclusions, lifetime and annual limits, rescissions, dependent coverage, claims and appeals procedures and patient protections. This rulemaking—which finalizes the current interim final rules on these matters with very few changes—is effective on the first day of the plan year beginning on or after January 1, 2017. Some key takeaways from the final rules, including some of the changes made by the final rules, are as follows:

  • Grandfathered Plans:
    • Under the final rules, determination of grandfathered status for group health plans or group health insurance policies applies separately with respect to each benefit package offered by the group health plan or group health insurance coverage, and if any benefit package ceases grandfathered status, it will not affect the grandfathered status of the other benefit packages.
    • To maintain status as a grandfathered plan, a group health plan or group health insurance coverage must include, in any summary of benefits provided to participants, a statement that it is a grandfathered plan, as well as contact information for questions or complaints. Prior model notice language has been retained in the final rules.
    • Elimination of “all or substantially all” benefits to diagnose or treat a particular condition will cause a plan to lose its grandfathered status. The Departments declined to establish a bright-line test with regard to what constitutes “substantially all benefits,” leaving it instead to a facts-and-circumstances determination.
    • Although not addressed in the final rules themselves, the preamble to the final rules notes that the imposition of wellness programs, particularly wellness programs that impose penalties, may threaten grandfathered status.

Continue Reading DOL, HHS & Treasury Issue Final Rules on ACA Market Reforms

On April 6, the Centers for Medicare & Medicaid Services (“CMS”) released a proposed rule to implement the 2008 Mental Health Parity and Addiction Equity Act (“MHPAEA”) for coverage offered by Medicaid Managed Care Organizations (“MCOs”), Medicaid Alternative Benefit Plans (“ABPs”) and the Children’s Health Insurance Program (“CHIP”).  MHPAEA requires group health plans and health insurance issuers to ensure that financial requirements or treatment limitations applicable to mental health and substance-use disorder (“MH/SUD”) benefits are comparable to, and are applied no more stringently than, the same financial requirements or treatment limitations applied to medical and surgical (“M/S”) benefits.  Interim final regulations implementing MHPAEA for commercial plans were jointly issued by the Departments of Health and Human Services, Labor and the Treasury (collectively, the “Departments”) in February 2010, and final regulations were jointly issued by the Departments in November 2013 (hereinafter, the “Joint Regulations”).

Since the passage of the Mental Health Parity Act of 1996, parity mandates have been enacted that reach most types of health care coverage, although what is required by “parity” laws can vary greatly.  In 2001, the Federal Employees Health Benefits Program implemented parity for in-network mental health and substance use disorder benefits. MHPAEA was enacted in 2008 to extend the reach and scope of parity (to include, among other factors, substance-use disorder benefits) in large group coverage.  The Affordable Care Act’s Essential Health Benefits requirements now require most individual and small group coverage to include mental health and substance use disorder benefits, and these benefit must be provided in compliance with MHPAEA.  If finalized, this CMS proposed rule would further clarify the application of mental health parity requirements, in this case to Medicaid programs.

Continue Reading CMS Proposed Rule Implements Mental-Health Parity Requirements for Medicaid Managed Care and CHIP Plans

According to a new study focusing on consumer information, nearly 25 percent of group health plans provided through Affordable Care Act (“ACA”) exchanges may be violating federal mental-health parity laws.

The study was led by associate professor Colleen Barry of the Johns Hopkins Bloomberg School of Public Health, and is published in the current issue of Psychiatric Services. To conduct the study, Barry and her colleagues reviewed benefit brochures offered in two state-run exchanges during the first ACA enrollment period between 2013 and 2014.

The study alleges two significant problems. First, according to the study plans in the exchange often had financial disparities. For example, the study found that plans would include different co-pays for mental-health and substance-use disorder services from medical/surgical services. Second, according to the study some mental-health and substance-use disorder services had more stringent “prior authorization” requirements than their medical/surgical counterparts. These disparities, the report suggests, can dissuade people from selecting more expensive plans with more generous mental-health and substance-use-disorder benefits. According to the study, because mental-health and substance-use disorder services are often more expensive than medical/surgical services, insurers may benefit when consumers are dissuaded from joining plans with more generous mental-health and substance-use disorder benefits.

Continue Reading Study Suggests Many ACA Exchange Plans Violate Federal Parity Laws

On February 13, the Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) issued Part XXIII of their FAQs about Affordable Care Act implementation. This latest FAQ provides additional guidance regarding “excepted benefits,” i.e., benefits that are exempt from the portability rules under HIPAA as well as various requirements under ERISA (including MHPAEA) and the ACA, including the ACA’s market reforms (such as the prohibition on lifetime and annual limits, etc.). Specifically, the FAQ focuses on a subcategory of excepted benefits known as “supplemental excepted benefits,” which generally are benefits provided under a separate policy, certificate or contract of insurance which are designed to “fill gaps” in primary coverage.

The FAQ notes that, in determining whether insurance coverage sold as a supplement to group health coverage can be considered “similar supplemental coverage” (and hence an excepted benefit), they will continue to apply four criteria previously set forth by the Departments in subregulatory guidance issued in 2007 and 2008:

  1. The policy, certificate, or contract of insurance must be issued by an entity that does not provide the primary coverage under the plan;
  2. The supplemental policy, certificate, or contract of insurance must be specifically designed to fill gaps in primary coverage, such as coinsurance or deductibles;
  3. The cost of the supplemental coverage may not exceed 15 percent of the cost of the primary coverage; and
  4. Supplemental coverage sold in the group insurance market must not differentiate among individuals in eligibility, benefit or premiums based upon any health factor of the individual (or any dependents of the individual)

Continue Reading DOL, HHS & Treasury Issue Additional Guidance Regarding Excepted Benefits

The last several weeks of 2014 brought with them a flurry of guidance from the Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) regarding group-health plan employee benefits issues, including issues under the Affordable Care Act (“ACA”), the Employee Retirement Income Security Act (“ERISA”) and the Mental Health Parity and Addiction Equity Act (“MHPAEA”). As we start into 2015, care should be taken not to overlook these important pieces of guidance that came in at years’ end:

1. No More “Skinny Plans”

On November 4, the Internal Revenue Service (“IRS”), in collaboration with HHS, issued guidance (Notice 2014-69) aimed at shutting the door on the use of so-called “skinny plans,” i.e., plans that provide “minimum value” within the meaning of the ACA, and which cover preventive services, but which exclude substantial hospitalization and/or physician services. (Some consultants have argued that such plans technically satisfied the ACA’s “minimum value” standard). The intent of such “skinny plans” is usually not to provide group health coverage, but to allow employers to partially or fully avoid application of any penalties under the ACA’s “pay or play” provisions (and a consequence of such actions is that employees covered under such “skinny plans” are generally ineligible for premium tax credits on ACA exchanges).

The IRS Notice unequivocally states that “plans that fail to provide substantial coverage for in-patient hospitalization services or physician services (or for both) . . . do not provide minimum value.” The Notice goes on to state that HHS and Treasury will amend the applicable regulations to incorporate this reading. The Notice gives limited grandfathering relief, protecting “skinny plans” adopted (through a binding written commitment) before November 4, 2014, but only as to plan years beginning on or before March 1, 2015 (regardless of such grandfathered coverage, employees offered affordable coverage under one of these plans can turn down such coverage and still be eligible for a premium tax credit on the exchanges). However, employers offering a “skinny plan” under this grandfathering provision must not state or imply that the plan precludes the employee from receiving a premium tax credit, and they must timely correct any disclosures to that effect that have previously been made.

2. Premium Reimbursement Plans

On November 6, the Departments issued additional FAQs (Part XXII) on ACA Implementation, specifically addressing premium reimbursement arrangements. The Departments clarified that an employer may not offer employees cash to reimburse the purchase of an individual market health policy, regardless of whether the cash is paid as taxable compensation or not. Any such reimbursement plan or arrangement would be considered by the Departments to be a “group health plan” within the meaning of ERISA and the Public Health Service Act (“PHSA”), and hence would be subject to the market reform provisions of the ACA. In keeping with prior guidance on integration of employer health care arrangements with individual coverage, the Departments stated that such a premium reimbursement plan fails to comply with the ACA’s market reforms because it could not be integrated with an individual market policy (and the reimbursement plan could not, on its own, satisfy the market reforms).

Continue Reading HHS, Labor, and Treasury Issue Flurry of Rulemakings and Guidance on Employee Benefits to Close 2014 with a Bang

This year Crowell & Moring’s Healthcare Ounce of Prevention Seminar, (HOOPS), will focus on important legal and regulatory developments and their impact on the healthcare industry. Join us on October 27th and October 28th in Washington, DC as our healthcare attorneys and outside speakers share their perspectives on the latest developments in areas of interest including:

  • Providers becoming Payors and Payors becoming Providers – Key Legal Considerations
  • False Claims Act and Government Investigations: How to Survive a CID
  • Hot Issues in Payor/Provider Litigation
  • Changing Landscape of Healthcare: A Panel Discussion
  • Focus on Fraud, Waste and Abuse: Audits, Enrollment and Certification
  • Key Issues in Advertising and Marketing in the Healthcare Industry
  • Medicare Advantage/Prescription Drug Plan Developments and Changes
  • “Don’t Sign that Yet”: Tools and Tips for Identifying and Avoiding Common Traps in Commercial Contracting.
  • Exchanges, Mental Health Parity and Addiction Equity Act and More
  • Antitrust in an Era of Healthcare Reform
  • New Liability Trends in Data Privacy and Security
  • Recovery Action Scene

HOOPS 2014 is a complimentary event.

Please click here to register and to see the complete agenda.

On October 1, 2014, the Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) published regulations finalizing a proposed amendment to the “excepted benefit” rules, i.e., the rules that govern when certain types of benefits are exempt from HIPAA’s portability rules as well as various requirements under ERISA (including applicability of the Mental Health Parity and Addiction Equity Act) and the Affordable Care Act (“ACA”), including the ACA’s market reforms (such as the prohibition on lifetime and annual limits, etc.). These final rules largely adopted proposed rules from December 2013, with a few clarifications and changes.

After the enactment of the ACA, various stakeholders became increasingly concerned about whether or not an employee assistance program (“EAP”) would be considered to be a “group health plan” under the ACA, and thus subject to all of the ACA’s market reforms. Because the benefits provided under an EAP are generally very limited, most (if not all) EAPs would have difficulty meeting these market reforms (including, particularly, the ACA’s prohibition on annual dollar limits). The final rules largely adopted the provisions of the proposed rule that specify that EAPs will be considered to be excepted benefits (and thus not subject to the ACA’s market reforms) if they meet four criteria (which, the Departments make clear, are intended to ensure that EAPs are supplemental to other coverage offered by employers):

Continue Reading HHS, Labor, and Treasury Issue Proposed Amendments to “Excepted Benefit” Rules

The Congressional Research Service published a report detailing more than a dozen pending ACA-related rulemakings. The report comes on the heels of the Spring 2014 Unified Agenda and identifies 14 proposed rules and 17 final rules regarding the ACA that are expected during the next twelve months. Notable expected proposed rules include:

  • CY 2016 Notice of Benefit and Payment Parameters (CMS-9933-P) (0938-ASI9)—Expected in November 2014, this rule would provide the CY 2016 payment parameters for Exchanges, including cost-sharing reductions, advance premium tax credits, reinsurance, and risk adjustment.
  • Application of the Mental Health Parity and Addiction Equity Act to Medicaid Programs (CMS-2333-P) (0938-AS24)—Expected in December 2014, this rule would specify how MHPAEA would apply to Medicaid (including managed care), CHIP, and other benefit programs.
  • Nondiscrimination Under the Patient Protection and Affordable Care Act (0945-AA02)—Expected in August 2014, this rule would implement the ACA Section 1557’s prohibitions against discrimination in health programs and activities by covered entities on the basis of race, color, national origin, sex, age, and disability.
  • State Option to Provide Health Homes for Enrollees With Chronic Conditions (CMS-2331-P) (0938-AQ48)—Expected in October 2014, this proposed rule would provide guidance for development of a Medicaid State Plan option to provide health homes for enrollees with chronic conditions.

Continue Reading ACA Regulatory Preview: CRS Teases Upcoming ACA Rulemakings

On Friday, November 8, the the Departments of Labor, Treasury and Health and Human Services (collectively, the “Departments”) issued final regulations under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). (The rules are scheduled to be published in the Federal Register on November 13, 2013.)

The final rules largely adopt the interim final rules (IFRs) that were issued in February 2010, along with subregulatory changes made in several frequently asked questions (FAQs) issued by the Departments over the last few years. A high-level summary of the important changes in the final rules follows: 

Please click here to read the full version of this article on Crowell.com.