Behavioral Health Regulatory Outlook: Fight Over Parity, Changes to Telehealth Spill into 2024

Parity will likely be the defining regulatory issue of 2024 as the behavioral health industry braces for the impact of the Biden administration’s to-be-finalized rule.

Still, there is plenty to sort out with just 44 days left in 2023. This includes other pending regulatory issues that could be addressed before the end of the year.

“The SUPPORT Act, Part 2, and MHPAEA will remain relevant in 2024,” Maeghan Gilmore, vice president of government affairs for the Association for Behavioral Health and Wellness, told Behavioral Health Business.


MHPAEA is short for the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, the cornerstone of federal parity laws.

What’s more, post-pandemic telehealth and controlled substance regulations could influence addiction treatment and psychiatric care access. Congressional action on electronic health record (EHR) implementation and regulation could likewise impact the tech stacks for all health care operators, especially behavioral health providers.

“Most of these issues have existed for some time and will likely need continued focus in 2024 and beyond,” Andrew Lynch, chief strategy officer for Acadia Healthcare Co. (Nasdaq: ACHC), told BHB.


Reading the tea leaves

Previously, sources told BHB it would be unlikely that Congress would allow the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act to lapse in 2023.

But it did on Sept. 30.

The SUPPORT Act authorized the creation of and funding for several federal programs that spend millions on addiction treatment, prevention and recovery.

A bill reauthorizing it made it out of a U.S. House of Representatives committee in July. But it was lost amid the political turmoil of a near-miss federal government shutdown and the fracas over the leadership of the House.

While new leadership in the House of Representatives could reinvigorate the reauthorization of the SUPPORT Act, partisan tensions in the U.S. Senate need to be resolved before the effort can succeed.

In laying out a roadmap for the rest of the congressional session, newly elected House Speaker Mike Johnson (R-La.) signaled he may push for the reauthorization of expired programs such as the SUPPORT Act, according to Politico.

On the Senate side, Sen. Bernie Sanders (I-Vt.), chairman of the Senate Health, Education, Labor and Pensions Committee, recently told the Washington Post that he has “fundamental disagreements about the way forward” with ranking Republican member Sen. Bill Cassidy (R-La.).

“I’ve been working with a number of my colleagues to think of the best way forward to make the SUPPORT Act as strong as it possibly can: that’s something that I want to do in the very near future,” Sanders told the Washington Post. “So what we want to do is not just reauthorize the existing bill, but we want to substantially improve it. As we speak, we’re working on that right now.”

Cassidy filed a bill in Congress to reauthorize the SUPPORT Act in July “due to a lack of action.”

“Missing these deadlines puts vital resources in jeopardy,” Cassidy said in a news release. “Even if there are some differences in opinion on specific policies to include, we all agree the HELP Committee needs to get the SUPPORT Act reauthorization done.”

The SUPPORT Act was aimed specifically at addressing the opioid epidemic. Opioid-related overdose deaths are up 79% while all drug overdose deaths are up 63% since the start of 2019, according to data from the Centers for Disease Control and Prevention (CDC).

“With the continued increase in the number of overdose deaths, it’s difficult to imagine that Congress would not address this issue through the SUPPORT Act provisions,” Gilmore told BHB.

The impact of not reauthorizing the SUPPORT Act has been minimal: Congress has funded the government since Sept. 30, the end of the previous fiscal year, through continuing resolutions that keep government funding at the previous year’s levels for 45-day chunks.

With approved federal funding set to end on Nov. 17, the House passed another continuing resolution on Nov. 14. The Senate passed the bill on an 87-11 vote late Nov. 15, according to the Associated Press.

Still, without serious consideration by key congressional stakeholders, the SUPPORT Act remains at risk.

The behavioral health parity process

The Biden administration extended the comment period for its proposed rule on parity to end on Oct. 17. Now, more than a month after the end of the comment period, the behavioral health and payer industries are asking themselves two questions.

First: What will the final rule look like after any changes made to it after the comment period? Second: What will industry and advocacy leaders do once the rule is released?

Provider organizations and advocacy groups have been all for the rule. Insurers squarely oppose it.

“We are encouraged by some areas of continued progress, including the Biden administration’s release of a draft rule targeted at improving enforcement of coverage parity rules between physical and behavioral health,” Lynch said. “While it is difficult to predict this rule’s ultimate impact, we view it as a positive step, and are particularly pleased that it is focused enforcement of non-quantitative parity (e.g. parity related to medical necessity reviews and prior auth reviews), which has been an area of need.”

In short, the new parity rule gets very specific and prescriptive on how health plans are to track their compliance with federal parity law, chiefly MHPAEA.

It focuses mostly on what are called non-quantitative treatment limitations (NQTLs). These are benefit structures, policies or practices that limit access to care.

The rule refers to prior authorization, peer-to-peer concurrent review requirements and provider network admission standards as examples of NQTLs. Specifically, the rule forbids data measures it prescribes to use to compare NQTLs in physical health care benefits to be out of parity.

The rule also requires non-federal government health plans to be subject to parity requirements.

AHIP, a leading organization among health insurance advocates, said in public comments the Biden administration should “withdraw the proposed rules and re-start the process to create new proposed rules,” essentially starting from scratch.

“Mental health parity is ABHW’s top regulatory priority in 2024, and we aim to collaborate with the Tri-Departments and CMS on their next steps,” Kathryn Cohen, senior director of regulatory affairs for the Association for Behavioral Health and Wellness, told BHB.

The complaints from payers over the new rule are something of a reversal. BHB has previously reported that the chief complaint against existing parity regulations was that they were too vague.

Parity is seen as a systemic root cause of many of the issues in behavioral health, both for providers and for patients. While much of the spotlight is mostly on commercial health plans, parity is also an issue for Medicare and Medicaid.

“We are still nowhere near the reimbursement rates given to medical health providers and we are striving for true parity in this area,” Stuart Archer, CEO of Plano, Texas-based behavioral health facility operator Oceans Healthcare, told BHB.

Archer’s comments focused on parity issues for Medicare patients seeking inpatient psychiatric services, the heart of Oceans Healthcare’s business. Historically, Medicare — the federal safety net health plan for seniors — has simply disregarded behavioral health benefits and limited access to these services.

One such policy includes the 190-day lifetime limit on psychiatric care. Previously, the American Hospital Association (AHA) has called out several regulations related to Medicare and Medicaid that it called “outdated” and “discriminatory.”

“Given the chronic nature of mental health issues, this is a key access problem for many patients, and we hope to see the reversal of this limitation over time,” Lynch said.

Cohen said she expect the final parity rule to be released in the Spring of 2024

Electronic health records in the spotlight

Another systemic challenge within behavioral health is the lack of technology adoption in both clinical and administrative settings. The foundational element of a tech stack in other health care settings is an EHR.

EHR utilization is low across all behavioral health. While it’s difficult to get a specific snapshot of the whole industry, assessments of various pockets of behavioral health show varied levels of adoption.

Private mental health and addiction treatment facilities that accept Medicaid use EHRs at rates of 37% and 32%, respectively. At the same time, the same facility types that are “federally owned” and accept Medicaid use EHR at rates of 81.32% and 79%, respectively, according to a report by the Medicaid and CHIP Payment and Access Commission (MACPAC).

Other research suggests much higher uptake: 84% of mental health facilities use an EHR to store and maintain health and treatment records. Within that figure, private and public psychiatric hospitals use EHRs for this purpose at rates of 52% and 69%, according to the 2020 National Mental Health Services Survey (N-MHSS) Annual Report released in 2021.

These data show that facility types with strong ties to the federal government have the highest adoption rates. The top three rates are seen at certified community behavioral health clinics (CCBHCs) at 96%; Veterans Affairs medical centers at 94%; and community mental health centers (CMHCs) at 91%.

“I am hopeful we see efforts to allow behavioral health providers access to incentive funding for implementing electronic medical record systems and demonstrating meaningful use,” Archer said. “As providers, we also want access to the same type of supplemental funding acute care hospitals have had access to for decades.”

Years ago, behavioral health providers were left out of the 2009 HITECH Act, which gave health care providers funding to encourage the “meaningful use” of EHRs.

In August, Congresswoman Doris Matsui (D-Calif.) again introduced a bill to dedicate $100 million in grant funding to help behavioral health providers buy or upgrade EHR systems.

“With further integration of care, it’s becoming more and more obvious that it’s difficult to integrate behavioral care into general health care when they don’t have access to the electronic health records and interoperable health records that the HITECH Act established on the med-surg side,” Shawn Coughlin, president of the National Association for Behavioral Healthcare, told BHB. 

Another pending rule that has been a long time coming could further smooth out the use of EHRs when it comes to addiction treatment in 2024.

For years, addiction treatment providers have called for reforms to better align patient privacy regulations established by the iconic Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the HITECH Act. The specific regulation in question is known by the legal code as 42 CFR Part 2, or Part 2 for short.

These regulations require stringent nondisclosure and data compartmentalization for those in addiction treatment. They are seen as a hangup to providing care across settings for those struggling with addiction.

“We anticipate that the final regulation will prioritize streamlined coordination between HIPAA and Part 2 to enable well-informed diagnosis, treatment, and care coordination for individuals with SUD,” Cohen said.

The industry has been awaiting these changes for over three years.

The legislative language to change this regulation passed as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. The U.S. Department of Health and Human Services (HHS), along with the Substance Abuse and Mental Health Services Administration (SAMHSA), released a proposed rule a year ago. Its comment period ended at the end of January 2023.

“Given the importance of [EHRs] for patient care, clinical data sharing, and integration of behavioral and physical health, we hope to see this gap addressed,” Lynch said.

The digital divide in behavioral health

Late next year, the Drug Enforcement Administration (DEA) will release a final rule that dictates how controlled substances, especially those used in addiction treatment, may be prescribed in the context of telehealth.

Historically, the Ryan Haight Act of 2008 required an in-person examination before a patient could receive controlled substances as part of the care provided via telehealth. The Trump administration rolled out sweeping telehealth flexibilities in the face of the coronavirus pandemic, which led to a huge uptake in telehealth overall and provided a years’ long experiment in greater telehealth use when it comes to controlled substances.

On the whole, telehealth with controlled substances — especially in treating opioid use disorder (OUD) — has been seen as safe and effective.

However, the DEA’s first take at post-COVID telehealth regulations brought back the in-person exam and put forth other regulations that telehealth providers balked at and facility-based incumbents cheered. A tsunami of backlash ensued in the rule’s comment period.

Since then, the DEA has twice delayed the implementation of its rule, putting off the release of the final rule until next fall.

“Telehealth has created a massive opportunity to expand health care access to the most vulnerable Americans, improving health outcomes and lowering costs,” Zack Gray, CEO of digital OUD care provider Ophelia Health, told BHB.

While it’s not clear what the DEA will release, it has signaled that it’s open to creating a special registration process for telehealth providers. Gray maintains that the deal has been extended “while the DEA formalizes a permanent special registration process” that was originally called for in the Ryan Haight Act and again reiterated by Congress in the SUPPORT Act.

Similarly, Archer hopes HHS will make permanent changes to Medicare telehealth policy to allow behavioral health services to be administered over the phone or in an “audio-only” format.

“That change is set to expire at the end of 2024,” Archer said. “For some of our geriatric patients, use of an iPad or video conference service can be a deterrent to treatment, and we support enacting this policy change permanently.”

ABHW will lobby Congress to quickly address those flexibilities via legislation in 2024, Gilmore said.

“Payers will require time to make adjustments to plans before the 2025 plan year, and providers and patients need to understand these changes to make informed decisions,” she added.

Apart from behavioral health care itself, how behavioral health providers get people to the front door may become increasingly fraught.

“[Digital marketing standards for health care companies] are evolving in real-time as pre-existing laws are interpreted and challenged in the courts,” Gray said. “I expect that digital marketing policy will become the hot button issue in 2024, as it impacts every health care provider, including large legacy health systems with influential lobbyist groups, and it implicates the biggest tech companies in the world (e.g. Meta, Google).”

On Nov. 2, the AHA and three Texas health care organizations sued HHS Office for Civil Rights (OCR) over guidance it released in December 2022. The guidance laid out HHS’ view that organizations regulated by HIPAA were forbidden from using certain digital tracking tools and techniques, especially when partnering with third-party entities for those services.

The OCR and the Federal Trade Commission (FTC) warned hospitals and telehealth providers in March about the use of digital tracking: “OCR continues to be concerned about impermissible disclosures of health information to third parties and will use all of its resources to address this issue.”

The federal government has done more than warn health care organizations about the use of digital tracking and data sharing.

In March, the FTC announced a settlement agreement with BetterHelp over its alleged mishandling of patient data.

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