FAQ A A C A
S  BOUT  FFORDABLE  ARE  CT 
I (P VII) M
MPLEMENTATION  ART   AND  ENTAL 
H P I  
EALTH  ARITY  MPLEMENTATION
November 17, 2011 
 
 
Set out below are additional Frequently Asked Questions (FAQs) regarding implementation of the 
market reform provisions of the Affordable Care Act, as well as FAQs regarding implementation 
of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 
(MHPAEA).  These FAQs have been prepared jointly by the Departments of Health and Human 
Services (HHS), Labor and the Treasury (the Departments).  Like previously issued FAQs (available 
at http://www.dol.gov/ebsa/healthreform/), these FAQs answer questions from stakeholders to 
help people understand the new law and benefit from it, as intended.  
 
The Departments anticipate issuing further responses to questions and issuing other guidance in 
the future.  We hope these publications will provide additional clarity and assistance.  
 
SUMMARY OF BENEFITS AND COVERAGE 
 
Q1:  On August 22, 2011, the Departments issued proposed regulations and 
proposed templates in connection with implementation of the Summary of 
Benefits and Coverage and Uniform Glossary requirements of PHS Act  2715.  
An applicability date beginning March 23, 2012 was proposed.  At the same 
time, the Departments invited comments generally, as well as on a range of 
discrete issues, including the timing of the application of the SBC requirement. 
 
My plan anticipates that preparation of the summary of benefits and coverage 
will take several months and require significant resources.  In light of the 
March 23, 2012 proposed applicability date, we are considering moving forward 
with implementation of the Summary of Benefits and Coverage requirements, 
using the proposed rules and templates, but are concerned that the final rules 
and templates will differ from the proposed rules and templates, which would 
prompt additional implementation costs.  What is the timeline for the issuance 
of future guidance on the summary of benefits and coverage?  What actions 
should my plan be taking now, if any?   
 
The Departments received many comments on the proposed regulations and templates and 
intend to issue, as soon as possible, final regulations that take into account these comments and 
other stakeholder feedback. 
 
PHS Act section 2715 provides that group health plans and health insurance issuers shall provide 
the Summary of Benefits and Coverage and Uniform Glossary pursuant to standards developed by 
the Departments.  Accordingly, until final regulations are issued and applicable, plans and issuers 
are not required to comply with PHS Act section 2715.  
  It is anticipated that the Departments final regulations, once issued, will include an applicability 
date that gives group health plans and health insurance issuers sufficient time to comply.   
 
THE MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT OF 2008 
 
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) supplemented the Mental 
Health Parity Act of 1996 (MHPA).  Generally, MHPAEA specifies that the financial requirements 
and treatment limitations imposed on mental health and substance use disorder benefits cannot 
be more restrictive than the predominant financial requirements and treatment limitations that 
apply to substantially all medical and surgical benefits.1 MHPAEA also prohibits separate financial 
requirements or treatment limitations that are applicable only to mental health or substance use 
disorder benefits.  On February 2, 2010, the Departments published interim final rules 
implementing MHPAEA.2   Previously-issued FAQ guidance was jointly prepared by the 
Departments of Health and Human Services (HHS), Labor and the Treasury (the Departments) and 
published on June 30, 2010 (http://www.dol.gov/ebsa/faqs/faq-mhpaea.html) and December 22, 
2010 (http://www.dol.gov/ebsa/faqs/faq-aca5.html).   
 
Under MHPAEA and the Departments interim final rules, a group health plan or group health 
insurance issuer generally cannot impose a financial requirement (such as a copayment or 
coinsurance) or a quantitative treatment limitation (such as a limit on the number of outpatient 
visits or inpatient days covered) on mental health or substance use disorder benefits in any of 6 
classifications3 that is more restrictive than the financial requirements or quantitative treatment 
limitations that apply to at least 2/3 of medical/surgical benefits in the same classification.  Thus, 
if a plan generally applies a $25 copayment to at least 2/3 of outpatient, in-network, 
medical/surgical benefits, a higher copayment could not be imposed on outpatient, in-network 
mental health or substance use disorder benefits. 
 
In addition to financial requirements and quantitative treatment limitations, plans and issuers 
often impose nonquantitative treatment limitations, such as: 
 
  Medical management standards limiting or excluding benefits based on medical necessity 
or medical appropriateness, or based on whether a treatment is experimental or 
investigative; 
  Formulary design for prescription drugs; 
  Standards for provider admission to participate in a network, including reimbursement 
rates; 
  Plan methods used to determine usual, customary, and reasonable fee charges; 
  Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is 
not effective (also known as fail-first policies or step therapy protocols); and 
  Exclusions based on failure to complete a course of treatment.   
 
The parity standard for nonquantitative treatment limitations does not require applying a simple 
arithmetic test to compare the treatment of mental health or substance use disorder benefits to 
the treatment of medical/surgical benefits.  The Departments interim final rules provide that, 
                                                 
1   MHPAEA does not require plans to cover mental health and substance use disorder benefits.  It applies only if a plan 
chooses to provide those benefits. 
2   75 FR 5410. 
3   The six classifications of benefits defined in the interim final rules are:  (1) inpatient, in-network; (2) inpatient, out-of-
network; (3) outpatient, in-network; (4) outpatient, out-of-network; (5) emergency care; and (6) prescription drugs. 
2 
  under the terms of the plan as written and in practice, any processes, strategies, evidentiary 
standards, or other factors used in applying the nonquantitative treatment limitation with 
respect to mental health or substance use disorder benefits must be comparable to, and applied 
no more stringently than, the processes, strategies, evidentiary standards, or other factors used 
in applying the limitation with respect to medical/surgical benefits, except to the extent that 
recognized clinically appropriate standards of care may permit a difference.   
 
The following FAQs answer questions from stakeholders regarding nonquantitative treatment 
limitations, and one other common question, to help people understand the law and benefit 
from it, as intended.  In addition to publishing these clarifying FAQs, the Departments will 
continue to investigate complaints by providers, consumers, and others and will take 
enforcement action for violations to ensure compliance with current law.   
 
Q2:  For all mental health and substance use disorder benefits, my group health 
plan requires prior authorization from the plans utilization reviewer that a 
treatment is medically necessary, but the plan does not require such prior 
authorization for any medical/surgical benefits.   Is this permissible? 
 
No.  The plan is applying a nonquantitative treatment limitation to mental health and substance 
use disorder benefits that is not applied to medical/surgical benefits.  This violates MHPAEAs 
prohibition on separate treatment limitations that are applicable only to mental health or 
substance use disorder benefits.   
 
Q3:  My group health plan requires prior authorization from the plans utilization 
reviewer that a treatment is medically necessary for all inpatient 
medical/surgical benefits and for all inpatient mental health and substance use 
disorder benefits.  In practice, inpatient benefits for medical/surgical conditions 
are routinely approved for seven days, after which a treatment plan must be 
submitted by the patients attending provider and approved by the plan.  On the 
other hand, for inpatient mental health and substance use disorder benefits, 
routine approval is given for only one day, after which a treatment plan must be 
submitted by the patients attending provider and approved by the plan.  Is this 
permissible? 
 
No.  The plan is applying a stricter nonquantitative treatment limitation in practice to mental 
health and substance use disorder benefits than is applied to medical/surgical benefits.  While 
some differences in prior authorization practices with respect to individual conditions or 
treatments might be permissible based on recognized clinically appropriate standards of care, 
the interim final regulations do not permit a plan to apply stricter nonquantitative treatment 
limitations to all benefits for mental health or substance use disorders than those applied to all 
medical/surgical benefits.  The application of nonquantitative treatment limitations -- both with 
respect to the plans benefits and its care management practices -- must comply with the 
nonquantitative treatment limitation rules.   
 
3 
  Q4:  My group health plan considers a wide array of factors in designing medical 
management techniques for both mental health/substance use disorder 
benefits and medical/surgical benefits, such as cost of treatment; high cost 
growth; variability in cost and quality; elasticity of demand; provider discretion 
in determining diagnosis, or type or length of treatment; clinical efficacy of any 
proposed treatment or service; licensing and accreditation of providers; and 
claim types with a high percentage of fraud.  Based on application of these 
factors in a comparable fashion, prior authorization is required for some (but 
not all) mental health and substance use disorder benefits, as well as for some 
medical/surgical benefits, but not for others.   
 
For example, under my plan, prior authorization is required for: outpatient 
surgery; speech, occupational, physical, cognitive and behavioral therapy 
extending for more than six months; durable medical equipment; diagnostic 
imaging; skilled nursing visits; home infusion therapy; coordinated home care; 
pain management; high-risk prenatal care; delivery by cesarean section; 
mastectomy; prostate cancer treatment; narcotics prescribed for more than 
seven days; and all inpatient services beyond 30 days.  The evidence 
considered in developing its medical management techniques includes 
consideration of a wide array of recognized medical literature and professional 
standards and protocols (including comparative effectiveness studies and 
clinical trials). This evidence and how it was used to develop these medical 
management techniques is also well documented.   
 
Has my plan complied with the nonquantitative treatment limitation rules? 
 
Yes.  It appears that, under the terms of the plan as written and in practice, the processes, 
strategies, evidentiary standards, and other factors considered by the plan in implementing its 
prior authorization requirement with respect to mental health and substance use disorder 
benefits are comparable to, and applied no more stringently than, those applied with respect to 
medical/surgical benefits.   
 
Q5:  I am an employer considering several health insurance policy options.  One 
health insurance policy requires prior authorization for all outpatient mental 
health benefits but only a few types of outpatient medical/surgical benefits 
(outpatient surgery; speech, occupational and physical therapy; and skilled 
home nursing visits.)  Is this permissible?   
 
While some differences in plan requirements for prior authorization might be permissible based 
on recognized clinically appropriate standards of care, it is unlikely that the processes, strategies, 
evidentiary standards, and other factors considered by the plan in determining that those three 
(and only those three) outpatient medical/surgical benefits require prior authorization would also 
result in all outpatient mental health and substance use disorder outpatient benefits needing 
prior authorization.  
 
4 
  Q6:  A plan applies concurrent review to inpatient care where there are high levels 
of variation in length of stay (as measured by a coefficient of variation 
exceeding 0.8).  In practice, the application of this standard affects 60 percent 
of mental health conditions and substance use disorder conditions, but only 30 
percent of medical/surgical conditions.  Is this permissible?   
 
Yes.  The evidentiary standard used by the plan is applied no more stringently for mental health 
and substance use disorder benefits than for medical/surgical benefits, even though it results in 
an overall difference in the application of concurrent review for mental health conditions or 
substance use disorders than for medical/surgical conditions.   
 
Q7:  Is my group health plan always limited in the amount that it can charge for all 
mental health/substance use disorder providers to the same rate as 
medical/surgical generalists? 
 
No.  The standard for determining the maximum copayment that can be applied to mental 
health/substance use disorder benefits is determined by the predominant copayment that applies 
to substantially all medical/surgical benefits within a classification. If the copayment that meets 
this standard is the one charged for a medical/surgical specialist, that copayment can be charged 
for all mental health/substance use disorder benefits within that classification.  On the other 
hand, if the copayment that meets this standard is the one charged for a medical/surgical 
generalist, then that is the copayment that can be charged to all mental health/substance use 
disorder benefits within that classification.   
5