‘Impossible to Operationalize’: What the New Parity Rule Really Means for Behavioral Health Providers, Payers

The rollout of the final parity rule feels like a much-needed win in an industry that has been muddling through ever-increasing challenges for years. That’s as long as the final rule goes unchallenged in the courts, of course.

Savoring this positive regulatory development is important: Behavioral health professionals need to find proverbial rays of sunshine when the skies are normally filled with clouds. But the industry can’t enjoy the moment for too long.

There always will be more work to do on this issue of parity. So what’s next? Continuing to digest the final rule, released on Sept. 9, is a short-term must, if not a somewhat obvious one.

The final parity rule is a 536-page heap of regulatory and payer bureaucratese. Even our repeated coverage has not totally synthesized the finer details of what the rule impacts. On top of the page count, the final rule evolved from the proposed version of the rule following 9,503 comments on the matter and the death of a longstanding legal precedent: the Chevron doctrine.

And after that?

There are vital realities that behavioral health executives need to recognize. One that some provider organizations won’t like to hear: The final rule truly does change the landscape that payers operate in after a years-long surge in behavioral health utilization. If nothing else, it’s an added burden now to the administration of behavioral health benefits.

In this week’s BHB+ Update, I break down:

— How the benefit of the rule will trickle down to providers

— A few more key nitty-gritty details from the final parity rule

— What the rule won’t likely accomplish

— How things look from the payer side

Benefits are likely to be indirect yet real

Some of the loudest voices in support of parity are provider organizations and their advocates. That makes sense. It’s these organizations that are impacted by payer practices that they allege make it hard for patients to access care.

However, the final parity rule is not for providers; it’s for patients. And the force of the rule is directed exclusively at payers.

Yet, payers, providers and patients are so closely linked in the current manifestation of the industry that a major impact on one will have an impact on the other, no matter how diffused or indirect.

In general, the impact of the rule will be to make it easier for beneficiaries to use their health insurance. It will also likely lead to behavioral health-related benefits being somewhat expanded and used more often. That’s good news for providers and patients alike. But it’s not going to lead to a windfall of new revenue for providers. At best, fewer restrictions on accessing and getting paid for care will make providing behavioral health a little easier.

Take prior authorizations, for example. Prior authorizations introduce lengthy delays to getting care. Or, patients can move forward with care with the risk of being stuck with 100% of the bill — and the risk of that provider missing out on revenue. All this requires the time and attention of a staffer, time that could be spent elsewhere. Are behavioral health companies going to become suddenly and fabulously profitable if there were fewer prior authorizations gumming up the works? Absolutely not. But it will at least provide some relief. And that’s worth a lot to some.

More granular insights

The final rule made some moves to align its language closer with the parity provisions that were passed in the Consolidated Appropriations Act of 2021 and other federal laws.

“This is likely designed to signal close compliance with the recent Supreme Court decision in Loper Bright overturning Chevron deference,” the nonprofit mental health advocacy organization The Kennedy Forum said in a review of the parity rule.

The loss of the Chevron doctrine makes it a lot easier to challenge federal rules that stray from a close reading of federal law.

In its review, The Kennedy Forum also pointed out that there will be penalties for noncompliance with parity. The rule, though, doesn’t spell out what those penalties are beyond forbidding the plan from using that nonquantitative treatment limit (NQTL).

“The final rule also notes that oversight will be a collaborative process,” The Kennedy Forum’s review continued. “Departments will work with plans and issuers to find ways to address potential issues with compliance, rather than taking a strictly punitive approach.”

The rule also did not include special provisions for network adequacy. Rather, network adequacy is considered in the assessment of how plans are complying with NQTLs. It can be considered on its own, but also in the context of other NQTLs.

“This acknowledges that NQTLs may interact in ways to limit access that may not be identifiable from each individual NQTL, and keeps attention focused on the overall goal of equitable access,” The Kennedy Forum explained.

And then there’s the workforce shortage

The rule does nothing to directly address the workforce shortage. From that perspective, its impact appears muted. But keep in mind, the rule wasn’t intended to. The workforce shortage is the biggest threat to the behavioral health industry. It’s more than appropriate to use that as a standard to assess an issue’s significance.

At the margins, this might simplify operations enough for providers to where they can make nominal increases in provider count. But where would those providers come from? Data from the U.S. Health Resources & Services Administration (HRSA) shows that the behavioral health clinician workforce is shrinking and will continue to do so over the next decade.

Solving this is a problem that is going to take a titanic investment on the part of providers, payers, state governments and the federal government. Governments and public and private educational institutions are going to need to put enormous amounts of resources into educational infrastructure that encourages and enables young people to get the degrees and certifications required to get into the behavioral health workforce.

Providers generally already have programming and partnerships in place to allow hopeful and new providers the time and experience they need to get into the industry. To speak frankly, the industry leans hard on these young professionals and sometimes exploits their inexperience to pay them less and, in some cases, to not pay them at all. While patently undesirable, it’s a manifestation of the incentives in front of many provider organizations in an environment with payer rates that constrain margins.

It also remains unclear what payers are willing to do to fix the workforce shortage. Industry groups could push plans universally to compensate providers in training and pay proctoring organizations more for their investment in the workforce. Payers are also beneficiaries of an expanded behavioral health workforce. But you wouldn’t expect that approach based on how the insurance industry uses the workforce shortage as a rhetorical tool.

The payer side of parity

The law firm Foley & Lardner wrote on its website: “The takeaway for plan sponsors is that the bar for an NQTL analysis has been raised.” In the same analysis, Foley & Lardner concluded that health plans “may need to” increase the size of their provider networks, the scope of behavioral health benefits and start now on complying with the new rule’s reporting requirements. 

What’s more, providers and payers have not yet reconciled on how to address the highly elevated levels of behavioral health utilization health plans face. For the most part, health plans are for-profit operations that make money based on how they handle money. Unexpected or sustained increases in outlays require action.

Overall utilization of all behavioral health is up about 18% compared to pre-pandemic levels, according to data by Trilliant Health. A RAND Corp. study shows that mental health services spending by commercial health plans was up 54% in August 2022 compared to the prepandemic era. The same study said that the onset of COVID and the resultant explosion of telehealth use drove a 39% increase in mental health utilization. 

The RAND Corp. study suggested that payers may somehow push back against the elevated rates of utilization. So far, payers are reacting to the new rule in this context with the confidence that comes from a presumed position of power that allows for pushback.

A coalition of potent insurance industry lobbying groups issued a statement that promised “severe unintended consequences that will raise costs and jeopardize patients’ access” to behavioral health care following the finalization of the rule. AHIP, the Association for Behavioral Health and Wellness (ABHW), the Blue Cross Blue Shield Association (BCBSA), and the ERISA Industry Committee (ERIC) signed onto this statement.

The statement goes so far to suggest that commercial coverage of behavioral health is at stake following the implementation of the new rule, claiming that “employers may be forced to drop mental health care coverage entirely — coverage that is currently provided voluntarily.”

What a way to present a cooperative posture! to remind everyone they don’t have to work with you if they don’t want to.

Additionally, the statement also says that “the final rule will complicate compliance so much that it will be impossible to operationalize, resulting in worse patient outcomes.”

It’s this kind of overwrought PR/lobbyist rhetoric that makes rules like this seem like long-overdue comeuppance for the insurance industry. For one narrow instance, the shoe is on the other foot for health plans. And the industry notorious for benefiting from overly complicated processes doesn’t like getting a taste of its own medicine.

In the joint statement and in their own statements, these insurance groups all use the workforce shortage as their primary whataboutism, and, as is often the case with those comments, they failed to advance a solution on that front.

Let’s assess the state of behavioral health access through health plans today to contextualize what these advocacy organizations are predicting.

In recent weeks, the investigative reporting outfit ProPublica has unveiled the unflattering reality of the insurance-covered outpatient mental health and addiction treatment. In one article, the heartbreaking journey of one patient’s death from his behavioral health conditions is detailed in excruciating detail, which was largely driven by an insurance plan’s ghost network.

In another, the lived experience of over 500 behavioral health providers spells out the dysfunction, clinical interference and financial drain that come with working with health plans. 

The patient experience with health insurance is already not affordable. Survey data from the Kaiser Family Foundation shows that 21% of insured adults have foregone care due to costs. Just affording insurance is a dicey proposition for many: 48% of insured adults say they worry about affording premiums. On top of that, most patients are irked with having to pay for health care twice, in premiums and cost-sharing provisions. Half of the respondents that have an employer-sponsored insurance plan said they have a fair or poor assessment of the amount of out-of-pocket cost they face to see a doctor. That number jumps to 55% for individual health plan members. 

Health plans have been handed a problem. It came at a time when they are spending more than ever on behavioral health. I can’t predict what will happen next. But the insurance industry will react. They have to. Recognizing this reality is vital for all behavioral health leaders.

I suppose a lawsuit is most likely. But could plans and their employer partners truly so dramatically respond as to fundamentally alter access to behavioral health via a health plan? Time will tell.