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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7539 Reported in House (RH)]

<DOC>

                                                 Union Calendar No. 575
116th CONGRESS
  2d Session
                                H. R. 7539

                      [Report No. 116-692, Part I]

   To strengthen parity in mental health and substance use disorder 
                               benefits.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              July 9, 2020

  Mr. Kennedy (for himself, Ms. Porter, Mr. Bilirakis, and Mr. Upton) 
 introduced the following bill; which was referred to the Committee on 
  Energy and Commerce, and in addition to the Committees on Ways and 
    Means, and Education and Labor, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

                           December 24, 2020

     Additional sponsors: Mr. Lujan, Mr. Soto, and Mr. Fitzpatrick

                           December 24, 2020

  Reported from the Committee on Energy and Commerce with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                           December 24, 2020

   Committees on Ways and Means and Education and Labor discharged; 
committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on July 9, 
                                 2020]

_______________________________________________________________________

                                 A BILL

 
   To strengthen parity in mental health and substance use disorder 
                               benefits.

 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Strengthening Behavioral Health 
Parity Act''.

SEC. 2. STRENGTHENING PARITY IN MENTAL HEALTH AND SUBSTANCE USE 
              DISORDER BENEFITS.

    (a) PHSA.--
            (1) In general.--Title XXVII of the Public Health Service 
        Act (42 U.S.C. 300gg-11 et seq.) is amended by adding at the 
        end the following new part:

                ``PART D--ADDITIONAL COVERAGE PROVISIONS

``SEC. 2799A-1. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER 
              BENEFITS.

    ``(a) In General.--
            ``(1) Aggregate lifetime limits.--In the case of a group 
        health plan or a health insurance issuer offering group or 
        individual health insurance coverage that provides both medical 
        and surgical benefits and mental health or substance use 
        disorder benefits--
                    ``(A) No lifetime limit.--If the plan or coverage 
                does not include an aggregate lifetime limit on 
                substantially all medical and surgical benefits, the 
                plan or coverage may not impose any aggregate lifetime 
                limit on mental health or substance use disorder 
                benefits.
                    ``(B) Lifetime limit.--If the plan or coverage 
                includes an aggregate lifetime limit on substantially 
                all medical and surgical benefits (in this paragraph 
                referred to as the `applicable lifetime limit'), the 
                plan or coverage shall either--
                            ``(i) apply the applicable lifetime limit 
                        both to the medical and surgical benefits to 
                        which it otherwise would apply and to mental 
                        health and substance use disorder benefits and 
                        not distinguish in the application of such 
                        limit between such medical and surgical 
                        benefits and mental health and substance use 
                        disorder benefits; or
                            ``(ii) not include any aggregate lifetime 
                        limit on mental health or substance use 
                        disorder benefits that is less than the 
                        applicable lifetime limit.
                    ``(C) Rule in case of different limits.--In the 
                case of a plan or coverage that is not described in 
                subparagraph (A) or (B) and that includes no or 
                different aggregate lifetime limits on different 
                categories of medical and surgical benefits, the 
                Secretary shall establish rules under which 
                subparagraph (B) is applied to such plan or coverage 
                with respect to mental health and substance use 
                disorder benefits by substituting for the applicable 
                lifetime limit an average aggregate lifetime limit that 
                is computed taking into account the weighted average of 
                the aggregate lifetime limits applicable to such 
                categories.
            ``(2) Annual limits.--In the case of a group health plan or 
        a health insurance issuer offering group or individual health 
        insurance coverage that provides both medical and surgical 
        benefits and mental health or substance use disorder benefits--
                    ``(A) No annual limit.--If the plan or coverage 
                does not include an annual limit on substantially all 
                medical and surgical benefits, the plan or coverage may 
                not impose any annual limit on mental health or 
                substance use disorder benefits.
                    ``(B) Annual limit.--If the plan or coverage 
                includes an annual limit on substantially all medical 
                and surgical benefits (in this paragraph referred to as 
                the `applicable annual limit'), the plan or coverage 
                shall either--
                            ``(i) apply the applicable annual limit 
                        both to medical and surgical benefits to which 
                        it otherwise would apply and to mental health 
                        and substance use disorder benefits and not 
                        distinguish in the application of such limit 
                        between such medical and surgical benefits and 
                        mental health and substance use disorder 
                        benefits; or
                            ``(ii) not include any annual limit on 
                        mental health or substance use disorder 
                        benefits that is less than the applicable 
                        annual limit.
                    ``(C) Rule in case of different limits.--In the 
                case of a plan or coverage that is not described in 
                subparagraph (A) or (B) and that includes no or 
                different annual limits on different categories of 
                medical and surgical benefits, the Secretary shall 
                establish rules under which subparagraph (B) is applied 
                to such plan or coverage with respect to mental health 
                and substance use disorder benefits by substituting for 
                the applicable annual limit an average annual limit 
                that is computed taking into account the weighted 
                average of the annual limits applicable to such 
                categories.
            ``(3) Financial requirements and treatment limitations.--
                    ``(A) In general.--In the case of a group health 
                plan or a health insurance issuer offering group or 
                individual health insurance coverage that provides both 
                medical and surgical benefits and mental health or 
                substance use disorder benefits, such plan or coverage 
                shall ensure that--
                            ``(i) the financial requirements applicable 
                        to such mental health or substance use disorder 
                        benefits are no more restrictive than the 
                        predominant financial requirements applied to 
                        substantially all medical and surgical benefits 
                        covered by the plan (or coverage), and there 
                        are no separate cost sharing requirements that 
                        are applicable only with respect to mental 
                        health or substance use disorder benefits; and
                            ``(ii) the 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.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Financial requirement.--The term 
                        `financial requirement' includes deductibles, 
                        copayments, coinsurance, and out-of-pocket 
                        expenses, but excludes an aggregate lifetime 
                        limit and an annual limit subject to paragraphs 
                        (1) and (2).
                            ``(ii) Predominant.--A financial 
                        requirement or treatment limit is considered to 
                        be predominant if it is the most common or 
                        frequent of such type of limit or requirement.
                            ``(iii) Treatment limitation.--The term 
                        `treatment limitation' includes limits on the 
                        frequency of treatment, number of visits, days 
                        of coverage, or other similar limits on the 
                        scope or duration of treatment.
            ``(4) Availability of plan information.--The criteria for 
        medical necessity determinations made under the plan with 
        respect to mental health or substance use disorder benefits (or 
        the health insurance coverage offered in connection with the 
        plan with respect to such benefits) shall be made available by 
        the plan administrator (or the health insurance issuer offering 
        such coverage) in accordance with regulations to any current or 
        potential participant, beneficiary, or contracting provider 
        upon request. The reason for any denial under the plan (or 
        coverage) of reimbursement or payment for services with respect 
        to mental health or substance use disorder benefits in the case 
        of any participant or beneficiary shall, on request or as 
        otherwise required, be made available by the plan administrator 
        (or the health insurance issuer offering such coverage) to the 
        participant or beneficiary in accordance with regulations.
            ``(5) Out-of-network providers.--In the case of a plan or 
        coverage that provides both medical and surgical benefits and 
        mental health or substance use disorder benefits, if the plan 
        or coverage provides coverage for medical or surgical benefits 
        provided by out-of-network providers, the plan or coverage 
        shall provide coverage for mental health or substance use 
        disorder benefits provided by out-of-network providers in a 
        manner that is consistent with the requirements of this 
        section.
            ``(6) Compliance program guidance document.--
                    ``(A) In general.--Not later than 12 months after 
                the date of enactment of the Helping Families in Mental 
                Health Crisis Reform Act of 2016, the Secretary, the 
                Secretary of Labor, and the Secretary of the Treasury, 
                in consultation with the Inspector General of the 
                Department of Health and Human Services, the Inspector 
                General of the Department of Labor, and the Inspector 
                General of the Department of the Treasury, shall issue 
                a compliance program guidance document to help improve 
                compliance with this section, section 712 of the 
                Employee Retirement Income Security Act of 1974, and 
                section 9812 of the Internal Revenue Code of 1986, as 
                applicable. In carrying out this paragraph, the 
                Secretaries may take into consideration the 2016 
                publication of the Department of Health and Human 
                Services and the Department of Labor, entitled `Warning 
                Signs - Plan or Policy Non-Quantitative Treatment 
                Limitations (NQTLs) that Require Additional Analysis to 
                Determine Mental Health Parity Compliance'.
                    ``(B) Examples illustrating compliance and 
                noncompliance.--
                            ``(i) In general.--The compliance program 
                        guidance document required under this paragraph 
                        shall provide illustrative, de-identified 
                        examples (that do not disclose any protected 
                        health information or individually identifiable 
                        information) of previous findings of compliance 
                        and noncompliance with this section, section 
                        712 of the Employee Retirement Income Security 
                        Act of 1974, or section 9812 of the Internal 
                        Revenue Code of 1986, as applicable, based on 
                        investigations of violations of such sections, 
                        including--
                                    ``(I) examples illustrating 
                                requirements for information 
                                disclosures and nonquantitative 
                                treatment limitations; and
                                    ``(II) descriptions of the 
                                violations uncovered during the course 
                                of such investigations.
                            ``(ii) Nonquantitative treatment 
                        limitations.--To the extent that any example 
                        described in clause (i) involves a finding of 
                        compliance or noncompliance with regard to any 
                        requirement for nonquantitative treatment 
                        limitations, the example shall provide 
                        sufficient detail to fully explain such 
                        finding, including a full description of the 
                        criteria involved for approving medical and 
                        surgical benefits and the criteria involved for 
                        approving mental health and substance use 
                        disorder benefits.
                            ``(iii) Access to additional information 
                        regarding compliance.--In developing and 
                        issuing the compliance program guidance 
                        document required under this paragraph, the 
                        Secretaries specified in subparagraph (A)--
                                    ``(I) shall enter into interagency 
                                agreements with the Inspector General 
                                of the Department of Health and Human 
                                Services, the Inspector General of the 
                                Department of Labor, and the Inspector 
                                General of the Department of the 
                                Treasury to share findings of 
                                compliance and noncompliance with this 
                                section, section 712 of the Employee 
                                Retirement Income Security Act of 1974, 
                                or section 9812 of the Internal Revenue 
                                Code of 1986, as applicable; and
                                    ``(II) shall seek to enter into an 
                                agreement with a State to share 
                                information on findings of compliance 
                                and noncompliance with this section, 
                                section 712 of the Employee Retirement 
                                Income Security Act of 1974, or section 
                                9812 of the Internal Revenue Code of 
                                1986, as applicable.
                    ``(C) Recommendations.--The compliance program 
                guidance document shall include recommendations to 
                advance compliance with this section, section 712 of 
                the Employee Retirement Income Security Act of 1974, or 
                section 9812 of the Internal Revenue Code of 1986, as 
                applicable, and encourage the development and use of 
                internal controls to monitor adherence to applicable 
                statutes, regulations, and program requirements. Such 
                internal controls may include illustrative examples of 
                nonquantitative treatment limitations on mental health 
                and substance use disorder benefits, which may fail to 
                comply with this section, section 712 of the Employee 
                Retirement Income Security Act of 1974, or section 9812 
                of the Internal Revenue Code of 1986, as applicable, in 
                relation to nonquantitative treatment limitations on 
                medical and surgical benefits.
                    ``(D) Updating the compliance program guidance 
                document.--The Secretary, the Secretary of Labor, and 
                the Secretary of the Treasury, in consultation with the 
                Inspector General of the Department of Health and Human 
                Services, the Inspector General of the Department of 
                Labor, and the Inspector General of the Department of 
                the Treasury, shall update the compliance program 
                guidance document every 2 years to include 
                illustrative, de-identified examples (that do not 
                disclose any protected health information or 
                individually identifiable information) of previous 
                findings of compliance and noncompliance with this 
                section, section 712 of the Employee Retirement Income 
                Security Act of 1974, or section 9812 of the Internal 
                Revenue Code of 1986, as applicable.
            ``(7) Additional guidance.--
                    ``(A) In general.--Not later than 12 months after 
                the date of enactment of the Helping Families in Mental 
                Health Crisis Reform Act of 2016, the Secretary, the 
                Secretary of Labor, and the Secretary of the Treasury 
                shall issue guidance to group health plans and health 
                insurance issuers offering group or individual health 
                insurance coverage to assist such plans and issuers in 
                satisfying the requirements of this section, section 
                712 of the Employee Retirement Income Security Act of 
                1974, or section 9812 of the Internal Revenue Code of 
                1986, as applicable.
                    ``(B) Disclosure.--
                            ``(i) Guidance for plans and issuers.--The 
                        guidance issued under this paragraph shall 
                        include clarifying information and illustrative 
                        examples of methods that group health plans and 
                        health insurance issuers offering group or 
                        individual health insurance coverage may use 
                        for disclosing information to ensure compliance 
                        with the requirements under this section, 
                        section 712 of the Employee Retirement Income 
                        Security Act of 1974, or section 9812 of the 
                        Internal Revenue Code of 1986, as applicable, 
                        (and any regulations promulgated pursuant to 
                        such sections, as applicable).
                            ``(ii) Documents for participants, 
                        beneficiaries, contracting providers, or 
                        authorized representatives.--The guidance 
                        issued under this paragraph shall include 
                        clarifying information and illustrative 
                        examples of methods that group health plans and 
                        health insurance issuers offering group or 
                        individual health insurance coverage may use to 
                        provide any participant, beneficiary, 
                        contracting provider, or authorized 
                        representative, as applicable, with documents 
                        containing information that the health plans or 
                        issuers are required to disclose to 
                        participants, beneficiaries, contracting 
                        providers, or authorized representatives to 
                        ensure compliance with this section, section 
                        712 of the Employee Retirement Income Security 
                        Act of 1974, or section 9812 of the Internal 
                        Revenue Code of 1986, as applicable, compliance 
                        with any regulation issued pursuant to such 
                        respective section, or compliance with any 
                        other applicable law or regulation. Such 
                        guidance shall include information that is 
                        comparative in nature with respect to--
                                    ``(I) nonquantitative treatment 
                                limitations for both medical and 
                                surgical benefits and mental health and 
                                substance use disorder benefits;
                                    ``(II) the processes, strategies, 
                                evidentiary standards, and other 
                                factors used to apply the limitations 
                                described in subclause (I); and
                                    ``(III) the application of the 
                                limitations described in subclause (I) 
                                to ensure that such limitations are 
                                applied in parity with respect to both 
                                medical and surgical benefits and 
                                mental health and substance use 
                                disorder benefits.
                    ``(C) Nonquantitative treatment limitations.--The 
                guidance issued under this paragraph shall include 
                clarifying information and illustrative examples of 
                methods, processes, strategies, evidentiary standards, 
                and other factors that group health plans and health 
                insurance issuers offering group or individual health 
                insurance coverage may use regarding the development 
                and application of nonquantitative treatment 
                limitations to ensure compliance with this section, 
                section 712 of the Employee Retirement Income Security 
                Act of 1974, or section 9812 of the Internal Revenue 
                Code of 1986, as applicable, (and any regulations 
                promulgated pursuant to such respective section), 
                including--
                            ``(i) examples of methods of determining 
                        appropriate types of nonquantitative treatment 
                        limitations with respect to both medical and 
                        surgical benefits and mental health and 
                        substance use disorder benefits, including 
                        nonquantitative treatment limitations 
                        pertaining to--
                                    ``(I) medical management standards 
                                based on medical necessity or 
                                appropriateness, or whether a treatment 
                                is experimental or investigative;
                                    ``(II) limitations with respect to 
                                prescription drug formulary design; and
                                    ``(III) use of fail-first or step 
                                therapy protocols;
                            ``(ii) examples of methods of determining--
                                    ``(I) network admission standards 
                                (such as credentialing); and
                                    ``(II) factors used in provider 
                                reimbursement methodologies (such as 
                                service type, geographic market, demand 
                                for services, and provider supply, 
                                practice size, training, experience, 
                                and licensure) as such factors apply to 
                                network adequacy;
                            ``(iii) examples of sources of information 
                        that may serve as evidentiary standards for the 
                        purposes of making determinations regarding the 
                        development and application of nonquantitative 
                        treatment limitations;
                            ``(iv) examples of specific factors, and 
                        the evidentiary standards used to evaluate such 
                        factors, used by such plans or issuers in 
                        performing a nonquantitative treatment 
                        limitation analysis;
                            ``(v) examples of how specific evidentiary 
                        standards may be used to determine whether 
                        treatments are considered experimental or 
                        investigative;
                            ``(vi) examples of how specific evidentiary 
                        standards may be applied to each service 
                        category or classification of benefits;
                            ``(vii) examples of methods of reaching 
                        appropriate coverage determinations for new 
                        mental health or substance use disorder 
                        treatments, such as evidence-based early 
                        intervention programs for individuals with a 
                        serious mental illness and types of medical 
                        management techniques;
                            ``(viii) examples of methods of reaching 
                        appropriate coverage determinations for which 
                        there is an indirect relationship between the 
                        covered mental health or substance use disorder 
                        benefit and a traditional covered medical and 
                        surgical benefit, such as residential treatment 
                        or hospitalizations involving voluntary or 
                        involuntary commitment; and
                            ``(ix) additional illustrative examples of 
                        methods, processes, strategies, evidentiary 
                        standards, and other factors for which the 
                        Secretary determines that additional guidance 
                        is necessary to improve compliance with this 
                        section, section 712 of the Employee Retirement 
                        Income Security Act of 1974, or section 9812 of 
                        the Internal Revenue Code of 1986, as 
                        applicable.
                    ``(D) Public comment.--Prior to issuing any final 
                guidance under this paragraph, the Secretary shall 
                provide a public comment period of not less than 60 
                days during which any member of the public may provide 
                comments on a draft of the guidance.
            ``(8) Compliance requirements.--
                    ``(A) Nonquantitative treatment limitation (nqtl) 
                requirements.--In the case of a group health plan or a 
                health insurance issuer offering group or individual 
                health insurance coverage that provides both medical 
                and surgical benefits and mental health or substance 
                use disorder benefits and that imposes nonquantitative 
                treatment limitations (referred to in this section as 
                `NQTL') on mental health or substance use disorder 
                benefits, the plan or issuer offering health insurance 
                coverage shall perform comparative analyses of the 
                design and application of NQTLs in accordance with 
                subparagraph (B), and, beginning 45 days after the date 
                of enactment of this paragraph, make available to the 
                applicable State authority (or, as applicable, the 
                Secretary), upon request, the comparative analyses and 
                the following information:
                            ``(i) The specific plan or coverage terms 
                        regarding the NQTL, that applies to such plan 
                        or coverage, and a description of all mental 
                        health or substance use disorder and medical or 
                        surgical benefits to which it applies in each 
                        respective benefits classification.
                            ``(ii) The factors used to determine that 
                        the NQTL will apply to mental health or 
                        substance use disorder benefits and medical or 
                        surgical benefits.
                            ``(iii) The evidentiary standards used for 
                        the factors identified in clause (ii), when 
                        applicable, provided that every factor shall be 
                        defined and any other source or evidence relied 
                        upon to design and apply the NQTL to mental 
                        health or substance use disorder benefits and 
                        medical or surgical benefits.
                            ``(iv) The comparative analyses 
                        demonstrating that the processes, strategies, 
                        evidentiary standards, and other factors used 
                        to design the NQTL, as written, and the 
                        operation processes and strategies as written 
                        and in operation that are used to apply the 
                        NQTL for mental health or substance use 
                        disorder benefits are comparable to, and are 
                        applied no more stringently than, the 
                        processes, strategies, evidentiary standards, 
                        and other factors used to design the NQTL, as 
                        written, and the operation processes and 
                        strategies as written and in operation that are 
                        used to apply the NQTL to medical or surgical 
                        benefits.
                            ``(v) A disclosure of the specific findings 
                        and conclusions reached by the plan or coverage 
                        that the results of the analyses described in 
                        this subparagraph indicate that the plan or 
                        coverage is in compliance with this section.
                    ``(B) Secretary request process.--
                            ``(i) Submission upon request.--The 
                        Secretary shall request that a group health 
                        plan or a health insurance issuer offering 
                        group or individual health insurance coverage 
                        submit the comparative analyses described in 
                        subparagraph (A) for plans that involve 
                        potential violations of this section or 
                        complaints regarding noncompliance with this 
                        section that concern NQTLs and any other 
                        instances in which the Secretary determines 
                        appropriate. The Secretary shall request not 
                        fewer than 20 such analyses per year.
                            ``(ii) Additional information.--In 
                        instances in which the Secretary has concluded 
                        that the plan or coverage has not submitted 
                        sufficient information for the Secretary to 
                        review the comparative analyses described in 
                        subparagraph (A), as requested under clause 
                        (i), the Secretary shall specify to the plan or 
                        coverage the information the plan or coverage 
                        must submit to be responsive to the request 
                        under clause (i) for the Secretary to review 
                        the comparative analyses described in 
                        subparagraph(A) for compliance with this 
                        section. Nothing in this paragraph shall 
                        require the Secretary to conclude that a plan 
                        is in compliance with this section solely based 
                        upon the inspection of the comparative analyses 
                        described in subparagraph (A), as requested 
                        under clause (i).
                            ``(iii) Required action.--
                                    ``(I) In general.--In instances in 
                                which the Secretary has reviewed the 
                                comparative analyses described in 
                                subparagraph (A), as requested under 
                                clause (i), and determined that the 
                                plan or coverage is not in compliance 
                                with this section, the plan or 
                                coverage--
                                            ``(aa) shall specify to the 
                                        Secretary the actions the plan 
                                        or coverage will take to be in 
                                        compliance with this section 
                                        and provide to the Secretary 
                                        comparative analyses described 
                                        in subparagraph (A) that 
                                        demonstrate compliance with 
                                        this section not later than 45 
                                        days after the initial 
                                        determination by the Secretary 
                                        that the plan or coverage is 
                                        not in compliance; and
                                            ``(bb) following the 45-day 
                                        corrective action period under 
                                        item (aa), if the Secretary 
                                        determines that the plan or 
                                        coverage still is not in 
                                        compliance with this section, 
                                        not later than 7 days after 
                                        such determination, shall 
                                        notify all individuals enrolled 
                                        in the plan or coverage that 
                                        the plan or coverage has been 
                                        determined to be not in 
                                        compliance with this section.
                                    ``(II) Exemption from disclosure.--
                                Documents or communications produced in 
                                connection with the Secretary's 
                                recommendations to the plan or coverage 
                                shall not be subject to disclosure 
                                pursuant to section 552 of title 5, 
                                United States Code.
                            ``(iv) Report.--Not later than 1 year after 
                        the date of enactment of this paragraph, and 
                        not later than October 1 of each year 
                        thereafter, the Secretary shall submit to 
                        Congress, and make publicly available, a report 
                        that contains--
                                    ``(I) a summary of the comparative 
                                analyses requested under clause (i), 
                                including the identity of each plan or 
                                coverage that is determined to be not 
                                in compliance after the final 
                                determination by the Secretary 
                                described in clause (iii)(I)(bb);
                                    ``(II) the Secretary's conclusions 
                                as to whether each plan or coverage 
                                submitted sufficient information for 
                                the Secretary to review the comparative 
                                analyses requested under clause (i) for 
                                compliance with this section;
                                    ``(III) for each plan or coverage 
                                that did submit sufficient information 
                                for the Secretary to review the 
                                comparative analyses requested under 
                                clause (i), the Secretary's conclusions 
                                as to whether and why the plan or 
                                coverage is in compliance with the 
                                requirements under this section;
                                    ``(IV) the Secretary's 
                                specifications described in clause (ii) 
                                for each plan or coverage that the 
                                Secretary determined did not submit 
                                sufficient information for the 
                                Secretary to review the comparative 
                                analyses requested under clause (i) for 
                                compliance with this section; and
                                    ``(V) the Secretary's 
                                specifications described in clause 
                                (iii) of the actions each plan or 
                                coverage that the Secretary determined 
                                is not in compliance with this section 
                                must take to be in compliance with this 
                                section, including the reason why the 
                                Secretary determined the plan or 
                                coverage is not in compliance.
                    ``(C) Compliance program guidance document update 
                process.--
                            ``(i) In general.--The Secretary shall 
                        include instances of noncompliance that the 
                        Secretary discovers upon reviewing the 
                        comparative analyses requested under 
                        subparagraph (B)(i) in the compliance program 
                        guidance document described in paragraph (6), 
                        as it is updated every 2 years, except that 
                        such instances shall not disclose any protected 
                        health information or individually identifiable 
                        information.
                            ``(ii) Guidance and regulations.--Not later 
                        than 18 months after the date of enactment of 
                        this paragraph, the Secretary shall finalize 
                        any draft or interim guidance and regulations 
                        relating to mental health parity under this 
                        section. Such draft guidance shall include 
                        guidance to clarify the process and timeline 
                        for current and potential participants and 
                        beneficiaries (and authorized representatives 
                        and health care providers of such participants 
                        and beneficiaries) with respect to plans to 
                        file complaints of such plans or issuers being 
                        in violation of this section, including 
                        guidance, by plan type, on the relevant State, 
                        regional, or national office with which such 
                        complaints should be filed.
                            ``(iii) State.--The Secretary shall share 
                        information on findings of compliance and 
                        noncompliance discovered upon reviewing the 
                        comparative analyses requested under 
                        subparagraph (B)(i) with the State where the 
                        group health plan is located or the State where 
                        the health insurance issuer is licensed to do 
                        business for coverage offered by a health 
                        insurance issuer in the group market, in 
                        accordance with paragraph (6)(B)(iii)(II).
    ``(b) Construction.--Nothing in this section shall be construed--
            ``(1) as requiring a group health plan or a health 
        insurance issuer offering group or individual health insurance 
        coverage to provide any mental health or substance use disorder 
        benefits; or
            ``(2) in the case of a group health plan or a health 
        insurance issuer offering group or individual health insurance 
        coverage that provides mental health or substance use disorder 
        benefits, as affecting the terms and conditions of the plan or 
        coverage relating to such benefits under the plan or coverage, 
        except as provided in subsection (a).
    ``(c) Exemptions.--
            ``(1) Small employer exemption.--This section shall not 
        apply to any group health plan and a health insurance issuer 
        offering group or individual health insurance coverage for any 
        plan year of a small employer (as defined in section 
        2791(e)(4), except that for purposes of this paragraph such 
        term shall include employers with 1 employee in the case of an 
        employer residing in a State that permits small groups to 
        include a single individual).
            ``(2) Cost exemption.--
                    ``(A) In general.--With respect to a group health 
                plan or a health insurance issuer offering group or 
                individual health insurance coverage, if the 
                application of this section to such plan (or coverage) 
                results in an increase for the plan year involved of 
                the actual total costs of coverage with respect to 
                medical and surgical benefits and mental health and 
                substance use disorder benefits under the plan (as 
                determined and certified under subparagraph (C)) by an 
                amount that exceeds the applicable percentage described 
                in subparagraph (B) of the actual total plan costs, the 
                provisions of this section shall not apply to such plan 
                (or coverage) during the following plan year, and such 
                exemption shall apply to the plan (or coverage) for 1 
                plan year. An employer may elect to continue to apply 
                mental health and substance use disorder parity 
                pursuant to this section with respect to the group 
                health plan (or coverage) involved regardless of any 
                increase in total costs.
                    ``(B) Applicable percentage.--With respect to a 
                plan (or coverage), the applicable percentage described 
                in this subparagraph shall be--
                            ``(i) 2 percent in the case of the first 
                        plan year in which this section is applied; and
                            ``(ii) 1 percent in the case of each 
                        subsequent plan year.
                    ``(C) Determinations by actuaries.--Determinations 
                as to increases in actual costs under a plan (or 
                coverage) for purposes of this section shall be made 
                and certified by a qualified and licensed actuary who 
                is a member in good standing of the American Academy of 
                Actuaries. All such determinations shall be in a 
                written report prepared by the actuary. The report, and 
                all underlying documentation relied upon by the 
                actuary, shall be maintained by the group health plan 
                or health insurance issuer for a period of 6 years 
                following the notification made under subparagraph (E).
                    ``(D) 6-month determinations.--If a group health 
                plan (or a health insurance issuer offering coverage in 
                connection with a group health plan) seeks an exemption 
                under this paragraph, determinations under subparagraph 
                (A) shall be made after such plan (or coverage) has 
                complied with this section for the first 6 months of 
                the plan year involved.
                    ``(E) Notification.--
                            ``(i) In general.--A group health plan (or 
                        a health insurance issuer offering coverage in 
                        connection with a group health plan) that, 
                        based upon a certification described under 
                        subparagraph (C), qualifies for an exemption 
                        under this paragraph, and elects to implement 
                        the exemption, shall promptly notify the 
                        Secretary, the appropriate State agencies, and 
                        participants and beneficiaries in the plan of 
                        such election.
                            ``(ii) Requirement.--A notification to the 
                        Secretary under clause (i) shall include--
                                    ``(I) a description of the number 
                                of covered lives under the plan (or 
                                coverage) involved at the time of the 
                                notification, and as applicable, at the 
                                time of any prior election of the cost-
                                exemption under this paragraph by such 
                                plan (or coverage);
                                    ``(II) for both the plan year upon 
                                which a cost exemption is sought and 
                                the year prior, a description of the 
                                actual total costs of coverage with 
                                respect to medical and surgical 
                                benefits and mental health and 
                                substance use disorder benefits under 
                                the plan; and
                                    ``(III) for both the plan year upon 
                                which a cost exemption is sought and 
                                the year prior, the actual total costs 
                                of coverage with respect to mental 
                                health and substance use disorder 
                                benefits under the plan.
                            ``(iii) Confidentiality.--A notification to 
                        the Secretary under clause (i) shall be 
                        confidential. The Secretary shall make 
                        available, upon request and on not more than an 
                        annual basis, an anonymous itemization of such 
                        notifications, that includes--
                                    ``(I) a breakdown of States by the 
                                size and type of employers submitting 
                                such notification; and
                                    ``(II) a summary of the data 
                                received under clause (ii).
                    ``(F) Audits by appropriate agencies.--To determine 
                compliance with this paragraph, the Secretary may audit 
                the books and records of a group health plan or health 
                insurance issuer relating to an exemption, including 
                any actuarial reports prepared pursuant to subparagraph 
                (C), during the 6 year period following the 
                notification of such exemption under subparagraph (E). 
                A State agency receiving a notification under 
                subparagraph (E) may also conduct such an audit with 
                respect to an exemption covered by such notification.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Aggregate lifetime limit.--The term `aggregate 
        lifetime limit' means, with respect to benefits under a group 
        health plan or health insurance coverage, a dollar limitation 
        on the total amount that may be paid with respect to such 
        benefits under the plan or health insurance coverage with 
        respect to an individual or other coverage unit.
            ``(2) Annual limit.--The term `annual limit' means, with 
        respect to benefits under a group health plan or health 
        insurance coverage, a dollar limitation on the total amount of 
        benefits that may be paid with respect to such benefits in a 
        12-month period under the plan or health insurance coverage 
        with respect to an individual or other coverage unit.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include mental 
        health or substance use disorder benefits.
            ``(4) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to services for mental 
        health conditions, as defined under the terms of the plan and 
        in accordance with applicable Federal and State law.
            ``(5) Substance use disorder benefits.--The term `substance 
        use disorder benefits' means benefits with respect to services 
        for substance use disorders, as defined under the terms of the 
        plan and in accordance with applicable Federal and State 
        law.''.
            (2) Sunset.--Section 2726 of the Public Health Service Act 
        (42 U.S.C. 300gg-26) is amended by adding at the end the 
        following new subsection
    ``(f) Sunset.--The provisions of this section shall have no force 
or effect after the date of the enactment of the Strengthening 
Behavioral Health Parity Act.''.
            (3) Administration; conforming amendments.--
                    (A) Application of implementation regulations.--The 
                provisions of sections 146.136 and 147.160 of title 45, 
                Code of Federal Regulations shall apply to section 
                2799A-1 of the Public Health Service Act, as added by 
                paragraph (1), in the same manner as such provisions 
                applied to section 2726 of the Public Health Service 
                Act (42 U.S.C. 300gg-26) before the date of the 
                enactment of this Act.
                    (B) Conforming amendments.--
                            (i) Section 2722 of the Public Health 
                        Service Act (42 U.S.C. 300gg-21) is amended--
                                    (I) in subsection (a)(1), by 
                                inserting ``and part D'' after 
                                ``subparts 1 and 2'';
                                    (II) in subsection (b), by 
                                inserting ``and part D'' after 
                                ``subparts 1 and 2'';
                                    (III) in subsection (c)(1), by 
                                inserting ``and part D'' after 
                                ``subparts 1 and 2'';
                                    (IV) in subsection (c)(2), by 
                                inserting ``and part D'' after 
                                ``subparts 1 and 2'';
                                    (V) in subsection (c)(3), by 
                                inserting ``and part D'' after ``this 
                                part''; and
                                    (VI) in subsection (d), in the 
                                matter preceding paragraph (1), by 
                                inserting ``and part D'' after ``this 
                                part''.
                            (ii) Section 2723 of the Public Health 
                        Service Act (42 U.S.C. 300gg-22) is amended--
                                    (I) in subsection (a)(1), by 
                                inserting ``and part D'' after ``this 
                                part'';
                                    (II) in subsection (a)(2), by 
                                inserting ``or part D'' after ``this 
                                part'';
                                    (III) in subsection (b)(1), by 
                                inserting ``or part D'' after ``this 
                                part'';
                                    (IV) in subsection (b)(2)(A), by 
                                inserting ``or part D'' after ``this 
                                part''; and
                                    (V) in subsection (b)(2)(C)(ii), by 
                                inserting ``and part D'' after ``this 
                                part''.
                            (iii) Section 2724 of the Public Health 
                        Service Act (42 U.S.C. 300gg-23) is amended--
                                    (I) in subsection (a)(1)--
                                            (aa) by striking ``this 
                                        part and part C insofar as it 
                                        relates to this part'' and 
                                        inserting ``this part, part D, 
                                        and part C insofar as it 
                                        relates to this part or part 
                                        D''; and
                                            (bb) by inserting ``or part 
                                        D'' after ``requirement of this 
                                        part'';
                                    (II) in subsection (a)(2), by 
                                inserting ``or part D'' after ``this 
                                part''; and
                                    (III) in subsection (c), by 
                                inserting ``or part D'' after ``this 
                                part (other than section 2704)''.
    (b) ERISA.--Section 712(a) of the Employee Retirement Income 
Security Act of 1974 (1185a(a)) is amended by adding at the end the 
following new paragraphs:
            ``(6) Compliance program guidance document.--
                    ``(A) In general.--Not later than 12 months after 
                the date of enactment of the Helping Families in Mental 
                Health Crisis Reform Act of 2016, the Secretary, the 
                Secretary of Health and Human Services, and the 
                Secretary of the Treasury, in consultation with the 
                Inspector General of the Department of Health and Human 
                Services, the Inspector General of the Department of 
                Labor, and the Inspector General of the Department of 
                the Treasury, shall issue a compliance program guidance 
                document to help improve compliance with this section, 
                section 2799A-1 of the Public Health Service Act, and 
                section 9812 of the Internal Revenue Code of 1986, as 
                applicable. In carrying out this paragraph, the 
                Secretaries may take into consideration the 2016 
                publication of the Department of Health and Human 
                Services and the Department of Labor, entitled `Warning 
                Signs - Plan or Policy Non-Quantitative Treatment 
                Limitations (NQTLs) that Require Additional Analysis to 
                Determine Mental Health Parity Compliance'.
                    ``(B) Examples illustrating compliance and 
                noncompliance.--
                            ``(i) In general.--The compliance program 
                        guidance document required under this paragraph 
                        shall provide illustrative, de-identified 
                        examples (that do not disclose any protected 
                        health information or individually identifiable 
                        information) of previous findings of compliance 
                        and noncompliance with this section, section 
                        2799A-1 of the Public Health Service Act, or 
                        section 9812 of the Internal Revenue Code of 
                        1986, as applicable, based on investigations of 
                        violations of such sections, including--
                                    ``(I) examples illustrating 
                                requirements for information 
                                disclosures and nonquantitative 
                                treatment limitations; and
                                    ``(II) descriptions of the 
                                violations uncovered during the course 
                                of such investigations.
                            ``(ii) Nonquantitative treatment 
                        limitations.--To the extent that any example 
                        described in clause (i) involves a finding of 
                        compliance or noncompliance with regard to any 
                        requirement for nonquantitative treatment 
                        limitations, the example shall provide 
                        sufficient detail to fully explain such 
                        finding, including a full description of the 
                        criteria involved for approving medical and 
                        surgical benefits and the criteria involved for 
                        approving mental health and substance use 
                        disorder benefits.
                            ``(iii) Access to additional information 
                        regarding compliance.--In developing and 
                        issuing the compliance program guidance 
                        document required under this paragraph, the 
                        Secretaries specified in subparagraph (A)--
                                    ``(I) shall enter into interagency 
                                agreements with the Inspector General 
                                of the Department of Health and Human 
                                Services, the Inspector General of the 
                                Department of Labor, and the Inspector 
                                General of the Department of the 
                                Treasury to share findings of 
                                compliance and noncompliance with this 
                                section, section 2799A-1 of the Public 
                                Health Service Act, or section 9812 of 
                                the Internal Revenue Code of 1986, as 
                                applicable; and
                                    ``(II) shall seek to enter into an 
                                agreement with a State to share 
                                information on findings of compliance 
                                and noncompliance with this section, 
                                section 2799A-1 of the Public Health 
                                Service Act, or section 9812 of the 
                                Internal Revenue Code of 1986, as 
                                applicable.
                    ``(C) Recommendations.--The compliance program 
                guidance document shall include recommendations to 
                advance compliance with this section, section 2799A-1 
                of the Public Health Service Act, or section 9812 of 
                the Internal Revenue Code of 1986, as applicable, and 
                encourage the development and use of internal controls 
                to monitor adherence to applicable statutes, 
                regulations, and program requirements. Such internal 
                controls may include illustrative examples of 
                nonquantitative treatment limitations on mental health 
                and substance use disorder benefits, which may fail to 
                comply with this section, section 2799A-1 of the Public 
                Health Service Act, or section 9812 of the Internal 
                Revenue Code of 1986, as applicable, in relation to 
                nonquantitative treatment limitations on medical and 
                surgical benefits.
                    ``(D) Updating the compliance program guidance 
                document.--The Secretary, the Secretary of Health and 
                Human Services, and the Secretary of the Treasury, in 
                consultation with the Inspector General of the 
                Department of Health and Human Services, the Inspector 
                General of the Department of Labor, and the Inspector 
                General of the Department of the Treasury, shall update 
                the compliance program guidance document every 2 years 
                to include illustrative, de-identified examples (that 
                do not disclose any protected health information or 
                individually identifiable information) of previous 
                findings of compliance and noncompliance with this 
                section, section 2799A-1 of the Public Health Service 
                Act, or section 9812 of the Internal Revenue Code of 
                1986, as applicable.
            ``(7) Additional guidance.--
                    ``(A) In general.--Not later than 12 months after 
                the date of enactment of the Helping Families in Mental 
                Health Crisis Reform Act of 2016, the Secretary, the 
                Secretary of Health and Human Services, and the 
                Secretary of the Treasury shall issue guidance to group 
                health plans and health insurance issuers offering 
                group or individual health insurance coverage to assist 
                such plans and issuers in satisfying the requirements 
                of this section, section 2799A-1 of the Public Health 
                Service Act, or section 9812 of the Internal Revenue 
                Code of 1986, as applicable.
                    ``(B) Disclosure.--
                            ``(i) Guidance for plans and issuers.--The 
                        guidance issued under this paragraph shall 
                        include clarifying information and illustrative 
                        examples of methods that group health plans and 
                        health insurance issuers offering group or 
                        individual health insurance coverage may use 
                        for disclosing information to ensure compliance 
                        with the requirements under this section, 
                        section 2799A-1 of the Public Health Service 
                        Act, or section 9812 of the Internal Revenue 
                        Code of 1986, as applicable, (and any 
                        regulations promulgated pursuant to such 
                        sections, as applicable).
                            ``(ii) Documents for participants, 
                        beneficiaries, contracting providers, or 
                        authorized representatives.--The guidance 
                        issued under this paragraph shall include 
                        clarifying information and illustrative 
                        examples of methods that group health plans and 
                        health insurance issuers offering group or 
                        individual health insurance coverage may use to 
                        provide any participant, beneficiary, 
                        contracting provider, or authorized 
                        representative, as applicable, with documents 
                        containing information that the health plans or 
                        issuers are required to disclose to 
                        participants, beneficiaries, contracting 
                        providers, or authorized representatives to 
                        ensure compliance with this section, section 
                        2799A-1 of the Public Health Service Act, or 
                        section 9812 of the Internal Revenue Code of 
                        1986, as applicable, compliance with any 
                        regulation issued pursuant to such respective 
                        section, or compliance with any other 
                        applicable law or regulation. Such guidance 
                        shall include information that is comparative 
                        in nature with respect to--
                                    ``(I) nonquantitative treatment 
                                limitations for both medical and 
                                surgical benefits and mental health and 
                                substance use disorder benefits;
                                    ``(II) the processes, strategies, 
                                evidentiary standards, and other 
                                factors used to apply the limitations 
                                described in subclause (I); and
                                    ``(III) the application of the 
                                limitations described in subclause (I) 
                                to ensure that such limitations are 
                                applied in parity with respect to both 
                                medical and surgical benefits and 
                                mental health and substance use 
                                disorder benefits.
                    ``(C) Nonquantitative treatment limitations.--The 
                guidance issued under this paragraph shall include 
                clarifying information and illustrative examples of 
                methods, processes, strategies, evidentiary standards, 
                and other factors that group health plans and health 
                insurance issuers offering group or individual health 
                insurance coverage may use regarding the development 
                and application of nonquantitative treatment 
                limitations to ensure compliance with this section, 
                section 2799A-1 of the Public Health Service Act, or 
                section 9812 of the Internal Revenue Code of 1986, as 
                applicable, (and any regulations promulgated pursuant 
                to such respective section), including--
                            ``(i) examples of methods of determining 
                        appropriate types of nonquantitative treatment 
                        limitations with respect to both medical and 
                        surgical benefits and mental health and 
                        substance use disorder benefits, including 
                        nonquantitative treatment limitations 
                        pertaining to--
                                    ``(I) medical management standards 
                                based on medical necessity or 
                                appropriateness, or whether a treatment 
                                is experimental or investigative;
                                    ``(II) limitations with respect to 
                                prescription drug formulary design; and
                                    ``(III) use of fail-first or step 
                                therapy protocols;
                            ``(ii) examples of methods of determining--
                                    ``(I) network admission standards 
                                (such as credentialing); and
                                    ``(II) factors used in provider 
                                reimbursement methodologies (such as 
                                service type, geographic market, demand 
                                for services, and provider supply, 
                                practice size, training, experience, 
                                and licensure) as such factors apply to 
                                network adequacy;
                            ``(iii) examples of sources of information 
                        that may serve as evidentiary standards for the 
                        purposes of making determinations regarding the 
                        development and application of nonquantitative 
                        treatment limitations;
                            ``(iv) examples of specific factors, and 
                        the evidentiary standards used to evaluate such 
                        factors, used by such plans or issuers in 
                        performing a nonquantitative treatment 
                        limitation analysis;
                            ``(v) examples of how specific evidentiary 
                        standards may be used to determine whether 
                        treatments are considered experimental or 
                        investigative;
                            ``(vi) examples of how specific evidentiary 
                        standards may be applied to each service 
                        category or classification of benefits;
                            ``(vii) examples of methods of reaching 
                        appropriate coverage determinations for new 
                        mental health or substance use disorder 
                        treatments, such as evidence-based early 
                        intervention programs for individuals with a 
                        serious mental illness and types of medical 
                        management techniques;
                            ``(viii) examples of methods of reaching 
                        appropriate coverage determinations for which 
                        there is an indirect relationship between the 
                        covered mental health or substance use disorder 
                        benefit and a traditional covered medical and 
                        surgical benefit, such as residential treatment 
                        or hospitalizations involving voluntary or 
                        involuntary commitment; and
                            ``(ix) additional illustrative examples of 
                        methods, processes, strategies, evidentiary 
                        standards, and other factors for which the 
                        Secretary determines that additional guidance 
                        is necessary to improve compliance with this 
                        section, section 2799A-1 of the Public Health 
                        Service Act, or section 9812 of the Internal 
                        Revenue Code of 1986, as applicable.
                    ``(D) Public comment.--Prior to issuing any final 
                guidance under this paragraph, the Secretary shall 
                provide a public comment period of not less than 60 
                days during which any member of the public may provide 
                comments on a draft of the guidance.
            ``(8) Compliance requirements.--
                    ``(A) Nonquantitative treatment limitation (nqtl) 
                requirements.--Beginning 45 days after the date of 
                enactment of this paragraph, in the case of a group 
                health plan or a health insurance issuer offering group 
                health insurance coverage that provides both medical 
                and surgical benefits and mental health or substance 
                use disorder benefits and that imposes nonquantitative 
                treatment limitations (referred to in this section as 
                `NQTL') on mental health or substance use disorder 
                benefits, the plan or issuer offering health insurance 
                coverage shall perform comparative analyses of the 
                design and application of NQTLs in accordance with 
                subparagraph (B), and make available to the applicable 
                State authority (or, as applicable, the Secretary), 
                upon request, the following information:
                            ``(i) The specific plan or coverage terms 
                        regarding the NQTL, that applies to such plan 
                        or coverage, and a description of all mental 
                        health or substance use disorder and medical or 
                        surgical benefits to which it applies in each 
                        respective benefits classification.
                            ``(ii) The factors used to determine that 
                        the NQTL will apply to mental health or 
                        substance use disorder benefits and medical or 
                        surgical benefits.
                            ``(iii) The evidentiary standards used for 
                        the factors identified in clause (ii), when 
                        applicable, provided that every factor shall be 
                        defined and any other source or evidence relied 
                        upon to design and apply the NQTL to mental 
                        health or substance use disorder benefits and 
                        medical or surgical benefits.
                            ``(iv) The comparative analyses 
                        demonstrating that the processes, strategies, 
                        evidentiary standards, and other factors used 
                        to design the NQTL, as written, and the 
                        operation processes and strategies as written 
                        and in operation that are used to apply the 
                        NQTL for mental health or substance use 
                        disorder benefits are comparable to, and are 
                        applied no more stringently than, the 
                        processes, strategies, evidentiary standards, 
                        and other factors used to design the NQTL, as 
                        written, and the operation processes and 
                        strategies as written and in operation that are 
                        used to apply the NQTL to medical or surgical 
                        benefits.
                            ``(v) A disclosure of the specific findings 
                        and conclusions reached by the plan or coverage 
                        that the results of the analyses described in 
                        this subparagraph indicate that the plan or 
                        coverage is in compliance with this section.
                    ``(B) Secretary request process.--
                            ``(i) Submission upon request.--The 
                        Secretary shall request that a group health 
                        plan or a health insurance issuer offering 
                        group health insurance coverage submit the 
                        comparative analyses described in subparagraph 
                        (A) for plans that involve potential violations 
                        of this section or complaints regarding 
                        noncompliance with this section that concern 
                        NQTLs and any other instances in which the 
                        Secretary determines appropriate. The Secretary 
                        shall request not fewer than 20 such analyses 
                        per year.
                            ``(ii) Additional information.--In 
                        instances in which the Secretary has concluded 
                        that the plan or coverage has not submitted 
                        sufficient information for the Secretary to 
                        review the comparative analyses described in 
                        subparagraph (A), as requested under clause 
                        (i), the Secretary shall specify to the plan or 
                        coverage the information the plan or coverage 
                        must submit to be responsive to the request 
                        under clause (i) for the Secretary to review 
                        the comparative analyses described in 
                        subparagraph(A) for compliance with this 
                        section. Nothing in this paragraph shall 
                        require the Secretary to conclude that a plan 
                        is in compliance with this section solely based 
                        upon the inspection of the comparative analyses 
                        described in subparagraph (A), as requested 
                        under clause (i).
                            ``(iii) Required action.--
                                    ``(I) In general.--In instances in 
                                which the Secretary has reviewed the 
                                comparative analyses described in 
                                subparagraph (A), as requested under 
                                clause (i), and determined that the 
                                plan or coverage is not in compliance 
                                with this section, the plan or 
                                coverage--
                                            ``(aa) shall specify to the 
                                        Secretary the actions the plan 
                                        or coverage will take to be in 
                                        compliance with this section 
                                        and provide to the Secretary 
                                        comparative analyses described 
                                        in subparagraph (A) that 
                                        demonstrate compliance with 
                                        this section not later than 45 
                                        days after the initial 
                                        determination by the Secretary 
                                        that the plan or coverage is 
                                        not in compliance; and
                                            ``(bb) following the 45-day 
                                        corrective action period under 
                                        item (aa), if the Secretary 
                                        determines that the plan or 
                                        coverage still is not in 
                                        compliance with this section, 
                                        not later than 7 days after 
                                        such determination, shall 
                                        notify all individuals enrolled 
                                        in the plan or coverage that 
                                        the plan or coverage has been 
                                        determined to be not in 
                                        compliance with this section.
                                    ``(II) Exemption from disclosure.--
                                Documents or communications produced in 
                                connection with the Secretary's 
                                recommendations to the plan or coverage 
                                shall not be subject to disclosure 
                                pursuant to section 552 of title 5, 
                                United States Code.
                            ``(iv) Report.--Not later than 1 year after 
                        the date of enactment of this paragraph, and 
                        not later than October 1 of each year 
                        thereafter, the Secretary shall submit to 
                        Congress, and make publicly available, a report 
                        that contains--
                                    ``(I) a summary of the comparative 
                                analyses requested under clause (i), 
                                including the identity of each plan or 
                                coverage that is determined to be not 
                                in compliance after the final 
                                determination by the Secretary 
                                described in clause (iii)(I)(bb);
                                    ``(II) the Secretary's conclusions 
                                as to whether each plan or coverage 
                                submitted sufficient information for 
                                the Secretary to review the comparative 
                                analyses requested under clause (i) for 
                                compliance with this section;
                                    ``(III) for each plan or coverage 
                                that did submit sufficient information 
                                for the Secretary to review the 
                                comparative analyses requested under 
                                clause (i), the Secretary's conclusions 
                                as to whether and why the plan or 
                                coverage is in compliance with the 
                                requirements under this section;
                                    ``(IV) the Secretary's 
                                specifications described in clause (ii) 
                                for each plan or coverage that the 
                                Secretary determined did not submit 
                                sufficient information for the 
                                Secretary to review the comparative 
                                analyses requested under clause (i) for 
                                compliance with this section; and
                                    ``(V) the Secretary's 
                                specifications described in clause 
                                (iii) of the actions each plan or 
                                coverage that the Secretary determined 
                                is not in compliance with this section 
                                must take to be in compliance with this 
                                section, including the reason why the 
                                Secretary determined the plan or 
                                coverage is not in compliance.
                    ``(C) Compliance program guidance document update 
                process.--
                            ``(i) In general.--The Secretary shall 
                        include instances of noncompliance that the 
                        Secretary discovers upon reviewing the 
                        comparative analyses requested under 
                        subparagraph (B)(i) in the compliance program 
                        guidance document described in paragraph (6), 
                        as it is updated every 2 years, except that 
                        such instances shall not disclose any protected 
                        health information or individually identifiable 
                        information.
                            ``(ii) Guidance and regulations.--Not later 
                        than 18 months after the date of enactment of 
                        this paragraph, the Secretary shall finalize 
                        any draft or interim guidance and regulations 
                        relating to mental health parity under this 
                        section. Such draft guidance shall include 
                        guidance to clarify the process and timeline 
                        for current and potential participants and 
                        beneficiaries (and authorized representatives 
                        and health care providers of such participants 
                        and beneficiaries) with respect to plans to 
                        file complaints of such plans or issuers being 
                        in violation of this section, including 
                        guidance, by plan type, on the relevant State, 
                        regional, or national office with which such 
                        complaints should be filed.
                            ``(iii) State.--The Secretary shall share 
                        information on findings of compliance and 
                        noncompliance discovered upon reviewing the 
                        comparative analyses requested under 
                        subparagraph (B)(i) with the State where the 
                        group health plan is located or the State where 
                        the health insurance issuer is licensed to do 
                        business for coverage offered by a health 
                        insurance issuer in the group market, in 
                        accordance with paragraph (6)(B)(iii)(II).''.
    (c) IRC.--Section 9812 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new paragraphs:
            ``(6) Compliance program guidance document.--
                    ``(A) In general.--Not later than 12 months after 
                the date of enactment of the Helping Families in Mental 
                Health Crisis Reform Act of 2016, the Secretary, the 
                Secretary of Labor, and the Secretary of Health and 
                Human Services, in consultation with the Inspector 
                General of the Department of Health and Human Services, 
                the Inspector General of the Department of Labor, and 
                the Inspector General of the Department of the 
                Treasury, shall issue a compliance program guidance 
                document to help improve compliance with this section, 
                section 712 of the Employee Retirement Income Security 
                Act of 1974, and section 2799A-1 of the Public Health 
                Service Act, as applicable. In carrying out this 
                paragraph, the Secretaries may take into consideration 
                the 2016 publication of the Department of Health and 
                Human Services and the Department of Labor, entitled 
                `Warning Signs - Plan or Policy Non-Quantitative 
                Treatment Limitations (NQTLs) that Require Additional 
                Analysis to Determine Mental Health Parity Compliance'.
                    ``(B) Examples illustrating compliance and 
                noncompliance.--
                            ``(i) In general.--The compliance program 
                        guidance document required under this paragraph 
                        shall provide illustrative, de-identified 
                        examples (that do not disclose any protected 
                        health information or individually identifiable 
                        information) of previous findings of compliance 
                        and noncompliance with this section, section 
                        712 of the Employee Retirement Income Security 
                        Act of 1974, or section 2799A-1 of the Public 
                        Health Service Act, as applicable, based on 
                        investigations of violations of such sections, 
                        including--
                                    ``(I) examples illustrating 
                                requirements for information 
                                disclosures and nonquantitative 
                                treatment limitations; and
                                    ``(II) descriptions of the 
                                violations uncovered during the course 
                                of such investigations.
                            ``(ii) Nonquantitative treatment 
                        limitations.--To the extent that any example 
                        described in clause (i) involves a finding of 
                        compliance or noncompliance with regard to any 
                        requirement for nonquantitative treatment 
                        limitations, the example shall provide 
                        sufficient detail to fully explain such 
                        finding, including a full description of the 
                        criteria involved for approving medical and 
                        surgical benefits and the criteria involved for 
                        approving mental health and substance use 
                        disorder benefits.
                            ``(iii) Access to additional information 
                        regarding compliance.--In developing and 
                        issuing the compliance program guidance 
                        document required under this paragraph, the 
                        Secretaries specified in subparagraph (A)--
                                    ``(I) shall enter into interagency 
                                agreements with the Inspector General 
                                of the Department of Health and Human 
                                Services, the Inspector General of the 
                                Department of Labor, and the Inspector 
                                General of the Department of the 
                                Treasury to share findings of 
                                compliance and noncompliance with this 
                                section, section 712 of the Employee 
                                Retirement Income Security Act of 1974, 
                                or section 2799A-1 of the Public Health 
                                Service Act, as applicable; and
                                    ``(II) shall seek to enter into an 
                                agreement with a State to share 
                                information on findings of compliance 
                                and noncompliance with this section, 
                                section 712 of the Employee Retirement 
                                Income Security Act of 1974, or section 
                                2799A-1 of the Public Health Service 
                                Act, as applicable.
                    ``(C) Recommendations.--The compliance program 
                guidance document shall include recommendations to 
                advance compliance with this section, section 712 of 
                the Employee Retirement Income Security Act of 1974, or 
                section 2799A-1 of the Public Health Service Act, as 
                applicable, and encourage the development and use of 
                internal controls to monitor adherence to applicable 
                statutes, regulations, and program requirements. Such 
                internal controls may include illustrative examples of 
                nonquantitative treatment limitations on mental health 
                and substance use disorder benefits, which may fail to 
                comply with this section, section 712 of the Employee 
                Retirement Income Security Act of 1974, or section 
                2799A-1 of the Public Health Service Act, as 
                applicable, in relation to nonquantitative treatment 
                limitations on medical and surgical benefits.
                    ``(D) Updating the compliance program guidance 
                document.--The Secretary, the Secretary of Labor, and 
                the Secretary of Health and Human Services, in 
                consultation with the Inspector General of the 
                Department of Health and Human Services, the Inspector 
                General of the Department of Labor, and the Inspector 
                General of the Department of the Treasury, shall update 
                the compliance program guidance document every 2 years 
                to include illustrative, de-identified examples (that 
                do not disclose any protected health information or 
                individually identifiable information) of previous 
                findings of compliance and noncompliance with this 
                section, section 712 of the Employee Retirement Income 
                Security Act of 1974, or section 2799A-1 of the Public 
                Health Service Act, as applicable.
            ``(7) Additional guidance.--
                    ``(A) In general.--Not later than 12 months after 
                the date of enactment of the Helping Families in Mental 
                Health Crisis Reform Act of 2016, the Secretary, the 
                Secretary of Labor, and the Secretary of Health and 
                Human Services shall issue guidance to group health 
                plans and health insurance issuers offering group or 
                individual health insurance coverage to assist such 
                plans and issuers in satisfying the requirements of 
                this section, section 712 of the Employee Retirement 
                Income Security Act of 1974, or section 2799A-1 of the 
                Public Health Service Act, as applicable.
                    ``(B) Disclosure.--
                            ``(i) Guidance for plans and issuers.--The 
                        guidance issued under this paragraph shall 
                        include clarifying information and illustrative 
                        examples of methods that group health plans and 
                        health insurance issuers offering group or 
                        individual health insurance coverage may use 
                        for disclosing information to ensure compliance 
                        with the requirements under this section, 
                        section 712 of the Employee Retirement Income 
                        Security Act of 1974, or section 2799A-1 of the 
                        Public Health Service Act, (and any regulations 
                        promulgated pursuant to such sections, as 
                        applicable).
                            ``(ii) Documents for participants, 
                        beneficiaries, contracting providers, or 
                        authorized representatives.--The guidance 
                        issued under this paragraph shall include 
                        clarifying information and illustrative 
                        examples of methods that group health plans and 
                        health insurance issuers offering group or 
                        individual health insurance coverage may use to 
                        provide any participant, beneficiary, 
                        contracting provider, or authorized 
                        representative, as applicable, with documents 
                        containing information that the health plans or 
                        issuers are required to disclose to 
                        participants, beneficiaries, contracting 
                        providers, or authorized representatives to 
                        ensure compliance with this section, section 
                        712 of the Employee Retirement Income Security 
                        Act of 1974, or section 2799A-1 of the Public 
                        Health Service Act, as applicable, compliance 
                        with any regulation issued pursuant to such 
                        respective section, or compliance with any 
                        other applicable law or regulation. Such 
                        guidance shall include information that is 
                        comparative in nature with respect to--
                                    ``(I) nonquantitative treatment 
                                limitations for both medical and 
                                surgical benefits and mental health and 
                                substance use disorder benefits;
                                    ``(II) the processes, strategies, 
                                evidentiary standards, and other 
                                factors used to apply the limitations 
                                described in subclause (I); and
                                    ``(III) the application of the 
                                limitations described in subclause (I) 
                                to ensure that such limitations are 
                                applied in parity with respect to both 
                                medical and surgical benefits and 
                                mental health and substance use 
                                disorder benefits.
                    ``(C) Nonquantitative treatment limitations.--The 
                guidance issued under this paragraph shall include 
                clarifying information and illustrative examples of 
                methods, processes, strategies, evidentiary standards, 
                and other factors that group health plans and health 
                insurance issuers offering group or individual health 
                insurance coverage may use regarding the development 
                and application of nonquantitative treatment 
                limitations to ensure compliance with this section, 
                section 712 of the Employee Retirement Income Security 
                Act of 1974, or section 2799A-1 of the Public Health 
                Service Act, as applicable, (and any regulations 
                promulgated pursuant to such respective section), 
                including--
                            ``(i) examples of methods of determining 
                        appropriate types of nonquantitative treatment 
                        limitations with respect to both medical and 
                        surgical benefits and mental health and 
                        substance use disorder benefits, including 
                        nonquantitative treatment limitations 
                        pertaining to--
                                    ``(I) medical management standards 
                                based on medical necessity or 
                                appropriateness, or whether a treatment 
                                is experimental or investigative;
                                    ``(II) limitations with respect to 
                                prescription drug formulary design; and
                                    ``(III) use of fail-first or step 
                                therapy protocols;
                            ``(ii) examples of methods of determining--
                                    ``(I) network admission standards 
                                (such as credentialing); and
                                    ``(II) factors used in provider 
                                reimbursement methodologies (such as 
                                service type, geographic market, demand 
                                for services, and provider supply, 
                                practice size, training, experience, 
                                and licensure) as such factors apply to 
                                network adequacy;
                            ``(iii) examples of sources of information 
                        that may serve as evidentiary standards for the 
                        purposes of making determinations regarding the 
                        development and application of nonquantitative 
                        treatment limitations;
                            ``(iv) examples of specific factors, and 
                        the evidentiary standards used to evaluate such 
                        factors, used by such plans or issuers in 
                        performing a nonquantitative treatment 
                        limitation analysis;
                            ``(v) examples of how specific evidentiary 
                        standards may be used to determine whether 
                        treatments are considered experimental or 
                        investigative;
                            ``(vi) examples of how specific evidentiary 
                        standards may be applied to each service 
                        category or classification of benefits;
                            ``(vii) examples of methods of reaching 
                        appropriate coverage determinations for new 
                        mental health or substance use disorder 
                        treatments, such as evidence-based early 
                        intervention programs for individuals with a 
                        serious mental illness and types of medical 
                        management techniques;
                            ``(viii) examples of methods of reaching 
                        appropriate coverage determinations for which 
                        there is an indirect relationship between the 
                        covered mental health or substance use disorder 
                        benefit and a traditional covered medical and 
                        surgical benefit, such as residential treatment 
                        or hospitalizations involving voluntary or 
                        involuntary commitment; and
                            ``(ix) additional illustrative examples of 
                        methods, processes, strategies, evidentiary 
                        standards, and other factors for which the 
                        Secretary determines that additional guidance 
                        is necessary to improve compliance with this 
                        section, section 712 of the Employee Retirement 
                        Income Security Act of 1974, or section 2799A-1 
                        of the Public Health Service Act, as 
                        applicable.
                    ``(D) Public comment.--Prior to issuing any final 
                guidance under this paragraph, the Secretary shall 
                provide a public comment period of not less than 60 
                days during which any member of the public may provide 
                comments on a draft of the guidance.
            ``(8) Compliance requirements.--
                    ``(A) Nonquantitative treatment limitation (nqtl) 
                requirements.--Beginning 45 days after the date of 
                enactment of this paragraph, in the case of a group 
                health plan that provides both medical and surgical 
                benefits and mental health or substance use disorder 
                benefits and that imposes nonquantitative treatment 
                limitations (referred to in this section as `NQTL') on 
                mental health or substance use disorder benefits, the 
                plan shall perform comparative analyses of the design 
                and application of NQTLs in accordance with 
                subparagraph (B), and make available to the applicable 
                State authority (or, as applicable, the Secretary), 
                upon request, the following information:
                            ``(i) The specific plan terms regarding the 
                        NQTL, that applies to such plan or coverage, 
                        and a description of all mental health or 
                        substance use disorder and medical or surgical 
                        benefits to which it applies in each respective 
                        benefits classification.
                            ``(ii) The factors used to determine that 
                        the NQTL will apply to mental health or 
                        substance use disorder benefits and medical or 
                        surgical benefits.
                            ``(iii) The evidentiary standards used for 
                        the factors identified in clause (ii), when 
                        applicable, provided that every factor shall be 
                        defined and any other source or evidence relied 
                        upon to design and apply the NQTL to mental 
                        health or substance use disorder benefits and 
                        medical or surgical benefits.
                            ``(iv) The comparative analyses 
                        demonstrating that the processes, strategies, 
                        evidentiary standards, and other factors used 
                        to design the NQTL, as written, and the 
                        operation processes and strategies as written 
                        and in operation that are used to apply the 
                        NQTL for mental health or substance use 
                        disorder benefits are comparable to, and are 
                        applied no more stringently than, the 
                        processes, strategies, evidentiary standards, 
                        and other factors used to design the NQTL, as 
                        written, and the operation processes and 
                        strategies as written and in operation that are 
                        used to apply the NQTL to medical or surgical 
                        benefits.
                            ``(v) A disclosure of the specific findings 
                        and conclusions reached by the plan that the 
                        results of the analyses described in this 
                        subparagraph indicate that the plan is in 
                        compliance with this section.
                    ``(B) Secretary request process.--
                            ``(i) Submission upon request.--The 
                        Secretary shall request that a group health 
                        plan submit the comparative analyses described 
                        in subparagraph (A) for plans that involve 
                        potential violations of this section or 
                        complaints regarding noncompliance with this 
                        section that concern NQTLs and any other 
                        instances in which the Secretary determines 
                        appropriate. The Secretary shall request not 
                        fewer than 20 such analyses per year.
                            ``(ii) Additional information.--In 
                        instances in which the Secretary has concluded 
                        that the plan has not submitted sufficient 
                        information for the Secretary to review the 
                        comparative analyses described in subparagraph 
                        (A), as requested under clause (i), the 
                        Secretary shall specify to the plan the 
                        information the plan or coverage must submit to 
                        be responsive to the request under clause (i) 
                        for the Secretary to review the comparative 
                        analyses described in subparagraph(A) for 
                        compliance with this section. Nothing in this 
                        paragraph shall require the Secretary to 
                        conclude that a plan is in compliance with this 
                        section solely based upon the inspection of the 
                        comparative analyses described in subparagraph 
                        (A), as requested under clause (i).
                            ``(iii) Required action.--
                                    ``(I) In general.--In instances in 
                                which the Secretary has reviewed the 
                                comparative analyses described in 
                                subparagraph (A), as requested under 
                                clause (i), and determined that the 
                                plan is not in compliance with this 
                                section, the plan--
                                            ``(aa) shall specify to the 
                                        Secretary the actions the plan 
                                        will take to be in compliance 
                                        with this section and provide 
                                        to the Secretary comparative 
                                        analyses described in 
                                        subparagraph (A) that 
                                        demonstrate compliance with 
                                        this section not later than 45 
                                        days after the initial 
                                        determination by the Secretary 
                                        that the plan is not in 
                                        compliance; and
                                            ``(bb) following the 45-day 
                                        corrective action period under 
                                        item (aa), if the Secretary 
                                        determines that the plan still 
                                        is not in compliance with this 
                                        section, not later than 7 days 
                                        after such determination, shall 
                                        notify all individuals enrolled 
                                        in the plan or coverage that 
                                        the plan has been determined to 
                                        be not in compliance with this 
                                        section.
                                    ``(II) Exemption from disclosure.--
                                Documents or communications produced in 
                                connection with the Secretary's 
                                recommendations to the plan or coverage 
                                shall not be subject to disclosure 
                                pursuant to section 552 of title 5, 
                                United States Code.
                            ``(iv) Report.--Not later than 1 year after 
                        the date of enactment of this paragraph, and 
                        not later than October 1 of each year 
                        thereafter, the Secretary shall submit to 
                        Congress, and make publicly available, a report 
                        that contains--
                                    ``(I) a summary of the comparative 
                                analyses requested under clause (i), 
                                including the identity of each plan 
                                that is determined to be not in 
                                compliance after the final 
                                determination by the Secretary 
                                described in clause (iii)(I)(bb);
                                    ``(II) the Secretary's conclusions 
                                as to whether each plan submitted 
                                sufficient information for the 
                                Secretary to review the comparative 
                                analyses requested under clause (i) for 
                                compliance with this section;
                                    ``(III) for each plan that did 
                                submit sufficient information for the 
                                Secretary to review the comparative 
                                analyses requested under clause (i), 
                                the Secretary's conclusions as to 
                                whether and why the plan or coverage is 
                                in compliance with the requirements 
                                under this section;
                                    ``(IV) the Secretary's 
                                specifications described in clause (ii) 
                                for each plan that the Secretary 
                                determined did not submit sufficient 
                                information for the Secretary to review 
                                the comparative analyses requested 
                                under clause (i) for compliance with 
                                this section; and
                                    ``(V) the Secretary's 
                                specifications described in clause 
                                (iii) of the actions each plan hat the 
                                Secretary determined is not in 
                                compliance with this section must take 
                                to be in compliance with this section, 
                                including the reason why the Secretary 
                                determined the plan or coverage is not 
                                in compliance.
                    ``(C) Compliance program guidance document update 
                process.--
                            ``(i) In general.--The Secretary shall 
                        include instances of noncompliance that the 
                        Secretary discovers upon reviewing the 
                        comparative analyses requested under 
                        subparagraph (B)(i) in the compliance program 
                        guidance document described in paragraph (6), 
                        as it is updated every 2 years, except that 
                        such instances shall not disclose any protected 
                        health information or individually identifiable 
                        information.
                            ``(ii) Guidance and regulations.--Not later 
                        than 18 months after the date of enactment of 
                        this paragraph, the Secretary shall finalize 
                        any draft or interim guidance and regulations 
                        relating to mental health parity under this 
                        section. Such draft guidance shall include 
                        guidance to clarify the process and timeline 
                        for current and potential participants and 
                        beneficiaries (and authorized representatives 
                        and health care providers of such participants 
                        and beneficiaries) with respect to plans to 
                        file complaints of such plans or issuers being 
                        in violation of this section, including 
                        guidance, by plan type, on the relevant State, 
                        regional, or national office with which such 
                        complaints should be filed.
                            ``(iii) State.--The Secretary shall share 
                        information on findings of compliance and 
                        noncompliance discovered upon reviewing the 
                        comparative analyses requested under 
                        subparagraph (B)(i) with the State where the 
                        group health plan is located or the State where 
                        the health insurance issuer is licensed to do 
                        business for coverage offered by a health 
                        insurance issuer in the group market, in 
                        accordance with paragraph (6)(B)(iii)(II).''.
    (d) Implementation.--The Secretary of Health and Human Services, 
the Secretary of Labor, and the Secretary of the Treasury may implement 
the paragraph (8) of section 2799A-1(a) of the Public Health Service 
Act, added by subsection (a), the paragraph (8) of section 712(a) of 
the Employee Retirement Income Security Act of 1974, as addedby 
subsection (b), and the paragraph (8) of section 9812(a) of the 
Internal Revenue Code of 1986, as added by subsection (c), by program 
instruction, guidance, or otherwise.
                                                 Union Calendar No. 575

116th CONGRESS

  2d Session

                               H. R. 7539

                      [Report No. 116-692, Part I]

_______________________________________________________________________

                                 A BILL

   To strengthen parity in mental health and substance use disorder 
                               benefits.

_______________________________________________________________________

                           December 24, 2020

  Reported from the Committee on Energy and Commerce with an amendment

                           December 24, 2020

   Committees on Ways and Means and Education and Labor discharged; 
committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed
```