Summary of Nonquantitative Treatment Limitation Under the Mental Health Parity and Addiction Equity Act
The Mental Health Parity and Addiction Equity Act (MHPAEA) requires health plans to establish a level of comparability between the benefits provided for mental health and substance use disorders and the benefits provided for medical and surgical care. The MHPAEA rules require comparability under certain mathematical test for quantitative treatment limitations, such as coinsurance requirements and limits on the number of days covered for inpatient stays. The rules set forth less mathematical standards for nonquantitative treatment limitations (NQTLs), which cannot be so easily measured, such as prior authorization requirements or network composition.
The Departments of the Treasury, Labor, and Health and Human Services published final regulations on NQTLs on September 23, 2024. This summary provides a very brief description of those rules.
The rules governing NQTLs under the MHPAEA generally prohibit plans from imposing an NQTL that is more restrictive for mental health and substance use disorder benefits than the predominant NQTL applicable to substantially all medical and surgical benefits. The final rules remove a specific proposed rule to define and apply the terms predominant and substantially all, but the basic standard remains.
The rules apply to both the design and operation of the plan. Plans must comply with the NQTL rules separately under six different classifications of benefits:
- In-network outpatient benefits
- In-network inpatient benefits
- Out-of-network outpatient benefits
- Out-of-network outpatient benefits
- Prescription drug benefits
- Emergency room benefits.
If a plan provides benefits in a classification for medical or surgical expenses, it must provide meaningful benefits for mental health and substance use disorder expenses in that classification.
A plan may not apply an NQTL that applies only to mental health and substance use disorders.
Health plans must conduct and document an analysis that compares NQTLs for mental health and substance use disorder benefits to NQTLs for medical and surgical benefits in each classification. This comparative analysis needs to:
- Identify and describe each NQTL. A nonexhaustive list is provided in the regulations.
- Assess how the NQTLs were developed and how they are applied. The sources of information used and other underpinnings of the NQTLs need to be considered for reliability, objectivity, and lack of bias.
- Consider whether and how the NQTLs apply to particular benefits.
- Examine data to determine if NQTLs lead to outcomes for mental health and substance use disorder benefits that are materially less favorable than for medical and surgical benefits.
- Evaluate if the outcomes are the product of discrimination in the NQTLs. State your findings and conclusions.
- Take corrective action, as appropriate.
The comparative analysis needs to be detailed. The analysis is required to include the titles and credentials of all individuals involved in its preparation and an assessment of the qualifications of consultants engaged to assist in the process. For Employee Retirement Income Security Act (ERISA) plans, a fiduciary must provide a certification relating to the process of producing the analysis.
Besides the regulations, plan sponsors may find guidance in other government publications, including annual reports to Congress and a periodically updated self-compliance tool.
Plan sponsors need to be prepared to furnish the comparative analysis to a governmental auditor within 10 business days of a request, to supplement that information as requested, and to take corrective action as necessary. The comparative analysis must also be made available on request to any applicable state authority and to plan participants.
Plan sponsors who fail to comply with the NQTL requirements (and fail to establish an appropriate plan for correction) may need to promptly notify plan participants that the plan is out of compliance. In some circumstances, a plan may be prohibited from applying an NQTL that is found to violate the MHPAEA rules.
For some practical pointers on how to comply with the NQTL requirements, click here.