Proposed legislation that could impose additional penalties on insurers failing to meet mental health parity requirements has sparked backlash from payers.
If enacted, the new legislation – the Mental Health Matters Act – would give the U.S. Department of Labor (DOL) the authority to enforce provisions from the Mental Health Parity and Addiction Act (MHPAEA) of 2008. Additionally, it would make it easier to sue payers over behavioral health claims and provide a slew of provisions aimed at supporting school-based mental health efforts.
Proponents of the bill say it could add some teeth to parity legislation, which has historically been loosely enforced. Meanwhile, opponents say the legislation would add unfair penalties, when there are already “punitive measures” in place to ensure parity.
While this conversation is happening, payers are calling for more clarity around parity regulations generally, before additional penalties are put in place.
The legislation, which has strong backing from the Democrats and opposition from Republicans, passed the U.S House of Representatives last week. It will now move on to the Senate.
“Our stance is that there have been changes to MHPAEA and the compliance requirements that were in the Consolidated Appropriations Act, and we haven’t seen rules or guidance pursuant to the changes that were made in statute,” Maeghan Gilmore, vice president of government affairs at the Association for Behavioral Health and Wellness (ABHW), told Behavioral Health Business.
Founded in 1994, ABHW is an industry group that calls itself “the national voice for payers that manage behavioral health insurance benefits.” It is dedicated to advancing federal mental health and addiction care policy, it says.
The organization is calling for more clarity around what is expected of insurers before any more monetary penalties are put in place.
“As Congress moves forward at looking at enforcing MHPAEA, our request from ABHW member companies has been, ‘Let’s get the implementation of the CAA [Consolidated Appropriations Act of 2021] provisions done with and [get] clear, comprehensive guidance before we move into adding more enforcement mechanisms,’” Gilmore said.
There are several ways that insurers are already being penalized for being out of compliance with parity laws, Pamela Greenberg, president and CEO of ABHW, told BHB.
For example, the DOL can publish the name of insurers failing to meet parity regulations.
“That alone is actually a huge punishment,” Greenberg said. “In addition, if they are found not compliant, they have to let their customer know, and they have to let all of the beneficiaries of that insurance plan know, which obviously is huge. You let a customer know that you’re not complying with a federal law, there will be some repercussions from that.”
Before more enforcements are put in place, payers are asking for more transparency around expectations.
“We’d like to have robust tools and templates of a complex benefit analysis, even a de-identified example of a violation or analysis so that [payers] can identify and really learn from what worked and what was acceptable as the as compliant analysis,” Gilmore said. “I think the other area that would be helpful to have is … the state governments and federal government aligned in their amount in their review of the analyses as well.”
There are also monetary fines in the books regarding parity. In fact, MHPAEA “violations can result in a breach of fiduciary duty claim under ERISA and an IRS penalty of $100 per covered individual per day,” according to the Leavitt Group.
Are the current enforcements enough?
Several federal agencies have become involved in the issue of behavioral health parity. In January, the DOL along with the U.S Department of Health and Human Services (HHS) and the U.S Treasury filed a report to Congress on the state of parity in America.
The report found that health insurance plans are “failing to deliver parity for mental health and substance-use disorder benefits to those they cover.”
“The report’s findings clearly indicate that health plans and insurance companies are falling short of providing parity in mental health and substance-use disorder benefits, at a time when those benefits are needed like never before,” U.S. Secretary of Labor Marty Walsh said in a statement about the results. “As a person in recovery, I know firsthand how important access to mental health and substance-use disorder treatment is. Enforcement of this law is a top priority for the Department of Labor and an objective I take personally.”
This report put a greater spotlight on the DOL’s ability to enforce behavioral health parity, and what the agency’s role could be in the future.
“So the tri-agency gave its report to Congress in January this year, and they essentially pleaded, that, ‘Yes, we have this increased ability to investigate, and if one of these investigations led to significant parity issues, then that issuer would have to submit notice to all the beneficiaries of the plan, which could lead to class actions and whatnot,’” Jena Grady, a health policy attorney at Nixon Peabody, told BHB. “But all that said, DOL, really was saying, ‘We can’t directly pursue parity violation to these insurers, and these administrative group health plans.’ So they could only do so much.”
The proposed legislation would put the DOL in the driver’s seat for enforcing parity.
The Mental Health Matters Act is supported by the Biden administration, which may come as no surprise given its history of prioritizing behavioral health parity.
“[It] will strengthen the provision of affordable mental and other health care by authorizing critical tools and resources for the Secretary of Labor to enforce provisions of the Employee Retirement Income Security Act, including those added by the Mental Health Parity and Addiction Equity Act of 2008,” the White House said in a statement.
However, Grady said that parity enforcement gaps have caught the attention of previous administrations as well.
“This limited ability [to enforce parity] has been known since the Trump administration. Chris Christie in his report said that there’s a parity violation, but we’re not giving DOL and others the tools to enforce these parity violations,” Grady said. “It was part of Biden’s budget that we need to give DOL the tools [to enforce parity]. I think the most significant impact, at least on the parity side of the Mental Health Matters Act, is the ability to have the Labor Department impose post civil monetary penalties for the first time on plan sponsors and administrators.”
Parity has been a critical issue in the behavioral health space for some time.
Many in the industry are closely watching the Wit v. United Behavioral Health court case. In the lawsuit, the plaintiffs claim that United Behavioral Health ignored generally accepted clinical standards when it developed rules for determining the necessity of behavioral health services. The case has moved through several federal courts over the last decade.
The federal government is also looking to boost parity. HHS created a new road map to improve behavioral health parity at the end of September.
While parity enforcement is one of the most hot-button issues of the Mental Health Matters Act, it is important to note that the legislation also includes provisions to help recruit and retain school mental health providers, expand students’ access to trauma programs and enable students with disabilities to have more access to higher education.
The act could also undergo significant changes in the Senate.