Docket: EBSA-2009-0010 

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 

Comment On: EBSA-2009-0010-0409 

Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and 

Addiction Equity Act of 2008 

Document: EBSA-2009-0010-DRAFT-0705 

Comment on FR Doc # 2010-2167 

Submitter Information 

Name: Elizabeth Y. Leight 

Address: 

Society of Professional Benefit Administrators 

Two Wisconsin Circle, Suite 670 

Chevy Chase, MD, 20724 

Email: elizabeth@spbatpa.org 

Phone: 301-718-7722 

General Comment 

May 3, 2010 

Office of Health Plan Standards and Compliance Assistance 

Employee Benefit Security Administration 

U.S. Department of Labor 

200 Constitution Avenue, N.W., N-5653 

Washington, D.C. 20210 

Centers for Medicare and Medicaid Services 

U.S. Department of Health and Human Services 

Attention: CMS 4140-IFC 

P.O. Box 8016 

Baltimore, MD 21244-1850 

Filed Electronically 

E-OHPSCA.EBSA@dol.gov 

Regulations.gov 

RE: Comment on MHPAEA Interim Final Regulations 

Dear Sir or Madam: 

PUBLIC SUBMISSION

As of: May 03, 2010 

Received: May 03, 2010 

Status: Pending_Post 

Tracking No. 80ae58dd 

Comments Due: May 03, 2010

Submission Type: Web

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The Society of Professional Benefit Administrators appreciates the opportunity to comment on the 

Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) Interim Final Regulations ("IFR") 

under 29 CFR Part 2590 issued on Feb. 2, 2010. 

The Society of Professional Benefit Administrators (SPBA) is the largest national association 

representing independent third party administration firms who are responsible for the 

administration of the employee benefits of nearly forty percent of all United States workers. SPBA 

represents over 90 percent of the firms which make third party contract administration of 

employee benefit plans their primary line of business. 

Third party administrators (TPAs) provide continuing professional outside claims and benefit plan 

administration for employers and benefit plans. TPAs very often become the "employee benefits 

office" for the covered workers of many small employers. The average TPA client employs some 

degree of self-funding and clients range from large Taft-Hartley union/management jointlyadministered plans, customized plans for single employers of all sizes, and cost-effective plans 

designed for related groups of employers in trade associations and other multiple employer 

configurations. 

We commend the Departments on their foresight in seeking information from private industry on 

the impact this change in the law will have on employers, especially small employers who selfinsure their benefit plans. Benefit administrators need immediate guidance from you on how to 

administer requests for coverage. As the preeminent representative of third party contract 

administration firms, SPBA wishes to discuss some of the issues, particularly as they relate to the 

responsibilities of employers, and this letter is meant to highlight those issues. 

Benefit Category Provisions 

MHPAEA and the Interim Final Regulations establish that for each benefit category the financial 

requirements and treatment limitations be equivalent to the same medical and surgical benefit 

category. If a group health plan does not have a network of providers for in-patient and outpatient coverage, all benefits are treated as out-of-network for determining the equivalency of 

coverage. When originally enacted, MHPAEA required group health plans to eliminate caps on the 

number of visits per year and differences between co-payments and co-insurance for mental 

health or substance abuse treatment and medical or surgical benefits. The interim final 

regulations clarify that the "equivalency requirement" reaches further than originally expected to 

include using the same standard for admitting providers to the network. The change places an 

extra burden on employer plan sponsors to be mindful of the depth of the equivalency 

requirement in reviewing insurance and/or administrative services contracts. 

The final regulations should permit employer plan sponsors to apply parity requirements to each 

benefit category under the group health plan. The change would be consistent with Congressional 

intent that does not specify whether the parity requirement applies to the plan as a whole or to 

each different benefit category offered under the plan, such as a consolidated benefit package 

offered under a consolidated benefit plan by many large employers. Under such plans, a variety 

of benefit options are available to different groups of employees to respond to their different 

needs--a single plan might cover union-represented employees with one particular set of health 

benefits and also offer non-union employees with a different set of options; they may offer a 

high-deductible health option combined with health savings accounts; they may offer an HMO 

option or Medicare supplemental option for retirees. These benefit packages provide coverage in 

different geographic regions to address the needs of a diverse employee base with widely 

divergent health options. Employers benefit from being able to offer a single benefit plan through 

reduced administrative costs, filing only one annual report and compliance with other Federal 

statutes. 

Third party administrators have heard from their client employer plan sponsors who say that it 

would be very difficult to apply the requirements under MHPAEA to a group health plan as a 

whole because of the complications under the new IFRs. The Departments have established that 

employers cannot require employees to exhaust their EAP benefits before they receive mental 

health care unless the plan has a similar requirement for general medical and surgical benefits. 

For example, in the case of a retail chain employer group that has full coverage for mental and 

nervous and substance use disorder benefits in their plan for full-time employees but only offers 

a Mini-Med Plan for part-time employees working for this company. With the new rule, employers 

who want to continue to provide these employees the previous benefits are not sure whether 

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they are permitted to do so. 

Other employer plan sponsors seek guidance on how to treat day treatment centers under the 

new MHPAEA IFR. We request clarification on whether they can treat as an inpatient facility and 

therefore subject to inpatient medical and surgical requirements for co-pay, co-insurance, precertification, etc.? Or will the Departments automatically consider them to be an outpatient 

facility and subject to outpatient medical/surgical requirements? If outpatient surgery requires 

pre-certification, will they be able to equate Day Treatment Center to outpatient surgery and 

require pre-certification even if outpatient medical diagnostic procedures are not required to be 

pre-certified? Further clarification regarding ancillary services is also requested. Recovery of 

persons in services, such as crisis diversion facilities, residential support services, are not 

addressed in the current rules. Some State requirements cover the scope of these services and 

without clarification from the Departments, serious gaps in compliance may exist. 

Changes Required by Interim Final Regulations cause Ripple Effect 

Employers are clamoring to have third party contract administrators review the design of their 

group health plan to determine whether the design complies with the Interim Final Regulations. 

Employer plan sponsors are concerned for two reasons, first if they fail to comply, they become 

subject to an IRS self-reporting excise tax payable by the employer. 

Secondly, many employers proposing to make changes to comply with MHPAEA in time for the 

application date deadline find themselves holding back because they are unsure whether they will 

lose their "grandfather" status under the Patient Protection and Affordable Care Act "PPACA" H.R. 

3590 signed into law on March 23, 2010. 

Conditions Covered 

We ask the Departments to clarify the regulations to allow group health plans to exclude specific 

mental health or substance use diagnoses from coverage. Although MHPAEA requires parity for 

mental health benefits and substance use benefits offered under a group health plan, the statute 

does not limit the employer’s ability to determine which mental conditions or substance use 

disorder conditions the plan chooses to cover. 

MHPAEA defines mental health benefits and substance use disorder benefits as the benefits 

“defined under the terms of the plan.” The statute establishes that a group health plan is not 

required to cover mental health conditions or substance use disorders at all. Accordingly, the 

statute contemplates that employers will continue to determine the scope of the plan’s coverage 

for mental health conditions and substance use disorders, just as employers determine which 

physical health conditions the plan will cover. We ask that the Departments clearly establish in 

the final regulations that an employer may exclude particular diagnoses or groups of diagnoses 

from coverage under its group health plan, without the requirement that it also demonstrate that 

a comparable exclusion exists for physical diagnoses. 

Without this flexibility, many employers may choose to eliminate benefits for mental health 

and/or substance use disorders altogether. A rule that forces employers to curtail their coverage 

of mental health and substance use disorder benefits will not serve the purpose of the MHPAEA, 

which was designed to expand employees’ access to these benefits. The regulations should make 

clear that MHPAEA does not prohibit treatment-based exclusions. 

There is an additional concern by employer plan sponsors who choose to cut mental health and 

substance use disorder benefits on what to do with prescription drugs. Employers want to know 

whether they can cut benefits for mental health and substance abuse, but maintain coverage for 

prescription drugs associated with these conditions? The issue exists because presumably 

mental/nervous drugs can be prescribed for other conditions. If they choose to continue 

prescription drug coverage, can they cover mental/nervous prescription drugs the same as any 

other drug under the plan? 

Scope of Services 

Under the new IFR, employer health plans will make determinations on whether their plan 

policies will be consistent with generally recognized independent standards of current medical 

practice across six classifications of benefits. To further clarify the law's stated intention that 

limitations are not more restrictive for mental health or substance use benefits, additional 

guidance is necessary to establish the "categories" of treatment services, where services for 

mental health or substance use treatments are provided. The treatment categories generally 

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include treatment services and rehabilitative services which are routinely associated with mental 

health and substance use. We note that the regulations do not address whether the employer 

health plan has responsibility to provide coverage for court-ordered treatments, involuntary holds 

or State hospital stays as a covered service. If a medical provider has established that a person 

poses an imminent threat to others, the current rules do not provide guidance to employers on 

whether the scope of services or benefit categories include coverage in these situations. 

Another issue of confusion is that of providers within the six service classification categories. We 

would like to see the MHPAEA regulations clarified on the issue of whether providers delivering 

services within the same classification fall under the scope of services. For example if a medical 

and surgical provider's scope of service for out-of-network and in-network and outpatient 

services are covered by MHPAEA, are the same services by mental health and substance use 

providers that mirror the scope of services permitted to offer in out-of-network and innetwork/outpatient settings. 

In light of the diversity of State laws, employers and group health plans that provide benefits 

across State boundaries have considerable work to do in order to assure compliance with MHPAEA 

given the labyrinth of complexity working within the State mandates structure. In order to 

achieve the purpose of MHPAEA, the regulations should also make clear how employers should 

interpret the parity requirements when "scope of services" will be covered and health services will 

be offered to persons receiving services in the various States that do not mandate mental health 

or substance abuse benefits. For plans in states with mandated mental health or parity applying 

to specific conditions and disorders, it is clear that fully-insured plans must comply. It is more 

problematic for self-insured plans and ERISA groups who aren't subject to State law and 

employer health plans operating in those states with no mandates for mental health and or 

substance benefits. The challenge lies in deciding which diagnosis, conditions and disorders to 

cover and which treatment services, providers, etc. to extend benefits to. 

Management Techniques 

SPBA requests that the Departments clarify the definition of "generally accepted medical criteria" 

which establishes that parity is required for benefits, but not for management techniques. 

MHPAEA requires parity in the financial terms and treatment limitations that apply to mental 

health and substance use disorder benefits. We maintain, however that the management of 

benefit delivery is not a “financial term” or a “treatment limitation,” and thus should not come 

within the scope of the parity requirement. The regulations should make clear that a group health 

plan does not violate the parity rules if it uses different techniques for managing medical/surgical 

conditions and mental health/substance use disorders, or even if it applies case management 

techniques to one category of benefits and not to the other category. The regulations should 

confirm that MHPAEA does not require parity in the management of benefits. Employers use a 

number of techniques to manage the delivery of health care in order to control costs and ensure 

that participants receive effective treatment. 

Third party administrators assert that management techniques such as prior authorization of 

services, concurrent review of services, treatment plans, case management, discharge planning, 

retrospective review, and similar methods to manage participants’ health care apply to a 

particular condition and are specific to that condition. Furthermore, mental health conditions or 

substance use disorders might require specific management techniques that are unique and 

different enough from the techniques applicable to physical conditions. Third party administrators 

have shared with us their concerns that the nature of some mental health conditions and 

substance use disorders require more closely-managed or intensive period, in order to achieve a 

positive outcome for the patient. Because techniques for managing the delivery of benefits are 

tailored to a particular condition and/or a particular patient, we strongly urge that the 

Departments clarify that MHPAEA does not require parity in the management of care provided 

under a group health plan. 

Disclosure and Compliance under ERISA 

The ERISA claims review procedures are extensive and well established that all participant rights 

must be set forth in writing to inform all participants of the terms of the group health plan. The 

existing regulation also sets out requirements that must be met under a time deadline in order to 

protect the rights of plan participants. 

The extensive protections under the ERISA's claim review procedures provide significant 

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protection as it applies to mental health and substance use disorder benefit as well as to medical 

and surgical benefits provided under an employer group health plan. As such it is unnecessary to 

layer yet another requirement under MHPAEA imposing new requirements that impose a burden 

on plan sponsors while achieving essentially the same purpose. 

It would however, be very useful for the Departments to reiterate the existing claims regulations 

requirements under ERISA and clarify that a group health plan may establish separate claim 

review procedures for medical and surgical benefits and for mental health and substance use 

disorder benefits , as long as the review procedures each comply with the requirements under 

ERISA and are designed to protect participant rights. (Section 503 of ERISA and the Department 

of Labor's regulations at 29 C.F.R. Section 2560.503-1 et seq.) 

Complicated Regulatory Changes Require Longer Application Date 

Third Party Administrators work vigorously to maintain employer regulatory compliance, however, 

as service contractors, additional time is required in order to adequately review current practices 

by their client employers and adequately apprise employees of their responsibilities under 

MHPAEA. Given the window of opportunity for compliance with the release of regulations, 

employee benefit plans have fewer than six months to reconfigure plan policies, processes and 

systems and come into compliance. Some plans may find that aspect of this effort challenging at 

best. 

The MHPAEA Interim Final Regulations create a very complex method of determining benefits and 

the criteria for compliance for mental health and substance use disorders is unduly complicated. 

Employer benefit plans and Third Party Administration firms will have a considerable 

communication challenge to write benefit design changes addressing financial factors and 

underwriting of benefits that may result in premium increases while explaining the necessary 

changes to employees and plan participants. The test of a regulation is in its implementation and 

in this case, employers and professional both have determined that it's complicated and 

confusing structure leads more employers to eliminate coverage rather than to implement 

coverage incorrectly and face a violation penalty. 

SPBA respectfully requests a generous "good faith" provision be provided to encourage employer 

plan sponsors to amend their plan documents to comply with the changes set forth in the final 

regulations. Further, we request that it be made clear that employers who act in good faith to 

make regulatory changes are not be penalized for modifying their plans to be in compliance with 

both health care reform and MHPAEA as discussed previously. 

The provisions of MHPAEA apply for plan years beginning after October 3, 2009. However, the IFR 

established a later "application date" of July 1, 2010 for the financial and treatment limitations 

changes. Employer plan sponsors of all sizes find it difficult to comply with this short application 

date because they must begin working with the plan administrator well in advance to get the 

necessary design changes the health plan. After coordinating the final plan design, the TPA must 

also program software systems, revise employee handbooks and train customer service 

representatives to be able to administer the benefits properly. Each of these steps must be taken 

in each geographic region and with each separate plan design. We all agree that the goal is to 

educate employers to ensure proper implementation and administration of the regulatory 

changes, this cannot be done unless the implementation and application date of the new changes 

takes place at least 12 months into the future. Compliance is complicated and requires cost 

comparisons, benefit analyses, etc. sometimes with various parties. To do less will place 

employers in the precarious position of having to face potential violation for enforcement or 

application of the new regulations. In addition, with the IRS' new regulations which require selfreporting of violations to regulations, the employer would be subject to a tax based on a violation 

that he was unable to comply with at the outset and designed to ensure failure and guarantees a 

tax assessment. For these reasons, we believe that an applicability date of July 1, 2011 would 

provide the best opportunity to preserve the aims and goals under MHPAEA and give employer 

plan sponsors an opportunity for orderly transition and success in understanding the new 

regulations and full compliance with them; something that is not possible with an application date 

prior to 2011. 

SPBA recommends that any final regulation interpreting the MHPAEA become effective and apply 

no earlier than the first plan year beginning at a minimum of 12 months after the final regulation 

is published in the Federal Register. Unless there is a change to the Applicability Date, the final 

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regulations will lead to large-scale disruption to health benefit administration with a consequence 

of potentially reducing access and quality of benefits and treatment for many Americans covered 

through their employer sponsored health plans. 

On behalf of third party contract administration firms, the Society of Professional Benefit 

Administrators appreciates the opportunity to express our comments on this issue. It is 

respectfully requested that the recommendations cited above be considered in the final 

regulations. SPBA would like to reserve the opportunity to provide future comments when the 

final regulations are released. Additionally, if a hearing is scheduled, SPBA requests the 

opportunity to testify. As the preeminent representative of third party contract administration 

firms, SPBA would be happy to provide you with additional information or to respond to any 

additional questions arising as a result of this submission. Please contact me at 301-718-7722 if 

we can be of further assistance. 

Sincerely, 

Elizabeth Ysla Leight 

Director of Government Relations and Legal Affairs 

Society of Professional Benefit Administrators 

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