Legal and Government Relations 

 One Kaiser Plaza, 27th Floor 

 Oakland, CA 94612 

 Kaiser Foundation Health Plan, Inc. 

Program Offices

May 3, 2010 

Submitted electronically via http://www.regulations.gov 

Centers for Medicare & Medicaid Services 

Department of Health and Human Services 

Attention: CMS–4140–IFC 

P.O. Box 8016 

Baltimore, MD 21244–8010 

Office of Health Plan Standards & Compliance Assistance 

Employee Benefits Security Administration (RIN 1210–AB30) 

Room N–5653, 

U.S. Department of Labor 

200 Constitution Avenue NW 

Washington, DC 20210 

CC:PA:LPD:PR (REG–120692–09) 

Room 5205, Internal Revenue Service 

P.O. Box 7604 

Ben Franklin Station 

Washington, DC 20044. 

Re: Interim Final Rules under the Paul Wellstone and Pete Domenici Mental Health Parity and 

Addiction Equity Act of 2008 (Division C of Pub. L. No. 110-343) 

Dear Sir or Madam: 

Kaiser Permanente offers the following comments in response to the Interim Final Rule (“IFR”) 

under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 

2008 (“MHPAEA”) issued February 2, 2010 in the Federal Register (see 75 Fed.Reg. 5410) by 

the Departments of Labor, Health and Human Services and Treasury (“Departments”). 

The Kaiser Permanente Medical Care Program (which offers services to the public under the 

Program’s trade name “Kaiser Permanente”) is America’s largest private integrated healthcare 

delivery system, comprising Kaiser Foundation Health Plan, Inc. (and its local subsidiaries, 

collectively “Health Plan”), the nation’s largest nonprofit health plan; the nonprofit Kaiser 

Foundation Hospitals (“Hospitals”); and the Permanente Medical Groups (“Medical Group”), 

eight independent physician group practices that contract exclusively with Health Plan to meet 

the health needs of Kaiser Permanente’s 8.7 million members in nine states and the District of 

Columbia. 
Kaiser Permanente Comments 

MHPAEA IFR 

May 3, 2010

 2

We support the objectives of MHPAEA to achieve consistent minimum parity for mental health 

and substance use disorder benefits. As an integrated health care delivery system, we also 

recognize the many challenges in meeting the extensive parity requirements under MHPAEA. 

We appreciate the opportunity to comments; our recommendations follow: 

1. We recommend the Departments allow sufficient additional time for health plans to 

comply with MHPAEA. 

The IFR was issued February 2, 2010 with full compliance required within five months (by July 

1, 2010). Most employers, insurers, and plan administrators are already negotiating and 

establishing health plan designs for the 2011 plan year. Translating the complex requirements of 

the IFR into benefits design presents substantial administrative challenges for health insurance 

plans within a very short implementation timeline. 

Many requirements are difficult to administer, in part because they are complicated and not 

clearly defined. The IFR requires a separate parity determination for each plan based on each 

type of financial requirement (e.g., deductible, co-payment or co-insurance), treatment limitation 

(e.g., days or visits); benefit category (e.g., in- or out-patient/in- or out-of-network), and the 

coverage unit (e.g., individual, family, etc.). Calculation must be based on a reasonable estimate 

of the projected premiums and a subsequent application of the “substantially all” test. The plan 

then can determine the predominant level (i.e., the financial or treatment limitation that applies to 

more than one-half of medical/surgical benefits to which the limitation is applicable and apply 

that limitation to mental health and substance use disorder benefits. 

The compliance date should be extended until plan years on or after July 1, 2011 to 

accommodate the significant challenges in interpreting and implementing the regulatory 

provisions in the IFR. 

2. We recommend that a Final Rule clarify how MHPAEA applies to retiree health 

coverage. 

Employers may establish a separate group health plan to provide benefits to retired employees 

and their families. The Employee Retirement Income Security Act, Public Health Service Act, 

and Internal Revenue Code recognize a limited exemption for any group health plan (and health 

insurance coverage offered in connection with a group health plan) where, on the first day of the 

applicable plan year, the plan has less than two participants who are current employees.1

. 

Thus, certain provisions of these laws, such as the mental health parity requirements, do not 

apply to “retiree-only” coverage. The Final Rule should clarify that MHPAEA does not apply to 

plans established separately for retired employees and their families (i.e., “retiree-only” health 

benefit plans.) 

3. We recommend that a Final Rule clearly state that MHPAEA does not apply to 

“nonquantitative” treatment limitations. 

 

1 See 26 U.S.C. §9831(a)(2), 29 U.S.C. §1191a(a), and 42 U.S.C. §300gg-21(a) 
Kaiser Permanente Comments 

MHPAEA IFR 

May 3, 2010

 3

The IFR applies parity requirements to “nonquantitative” treatment limits, which include medical 

management standards. According to the IFR Preamble, these limits may affect the scope or 

duration of benefits under a plan and should be included in a plan’s determination of parity. In 

fact, many nonquantitative limits, such as medical management standards, are designed to ensure 

patients receive appropriate care. 

MHPAEA defines a “treatment limitation” as “limits on the frequency of treatment, 

number of visits, days of coverage, or other similar limits on the scope or duration of 

treatment.” (29 U.S.C. §1185a(a)(3)(B) and 42 U.S.C. §300gg-5(a)(3)(B), emphasis 

added). Congress’ intent was to address parity in numerical limits on benefits, such as 

cost-sharing or treatment limitations. Extending parity requirements to nonquantitative 

treatment limits is inconsistent with the statutory language addressing determination of 

parity.2

 The terms “predominant” and “substantially all” rely on numerical (i.e., 

quantifiable) limits and are not used in the IFR to determine parity for nonquantitative 

limitations. The Congressional intent that the MHPAEA does not extend to 

nonquantitative limits is supported by legislative history. (H. Rep. 110-374, Part 3, 110th

Cong., 2nd Session (2008)).3

 

The IFR requirements for determining parity in the context of nonquantitative treatment limits 

are not clearly defined and will be difficult to administer. No clear rules are provided to guide 

plans in constructing benefit designs in a way that would meet the regulatory expectations. 

Therefore, we recommend the IFR requirements with respect to nonquantitative treatment 

limitations should be withdrawn. 

Conclusion 

We appreciate the opportunity to provide you with information. We would welcome the 

opportunity to discuss these matters with you further. If you have questions or concerns, please 

contact me at 510-271-6694 (email: victor.d.sipos@kp.org). 

 

Sincerely, 

Victor D. Sipos 

Counsel, Legal & Government Relations 

Kaiser Foundation Health Plan, Inc. 

 

2

 (T)he treatment limitations applicable to such mental health or substance use disorder benefits are no 

more restrictive than the predominant treatment limitations applied to substantially all medical and surgical 

benefits covered by the plan (or coverage) and there are no separate treatment limitations that are 

applicable only with respect to mental health or substance use disorder benefits. (26 U.S.C. 

§9812(a)(3)(A)(ii), 29 U.S.C. §1185a(a)(3)(A)(ii), and 42 U.S.C. §300gg-5(a)(3)(A)(ii), emphasis added). 

3

 The version of the MHPAEA (H.R. 1424) approved by the Energy and Commerce Committee and discussed in the 

Committee Report included a requirement that group health plans and group health insurers cover all conditions in 

the Diagnostic and Statistical Manual of Mental Disorders (DSM). This requirement was not included in the final 

version of the legislation.