Mental Health and Substance Use: State and Federal Oversight of Compliance with Parity Requirements Varies
Released: 2019-12-13T00:00:00

Letter

Background

The majority of Americans receive their health coverage through private health insurance, either by purchasing health coverage directly or receiving coverage through their employer. Many of those with private coverage are enrolled in plans purchased from state-licensed or state- regulated issuers. Others are covered by plans where their employer sets aside funds to pay for employee health care, known as self-funded plans. In general, those who obtain private health coverage do so in one of three market segments: individual, small group, or large group. Enrollees in the individual market purchase private health insurance plans directly from a state-regulated issuer—not in connection with a group health plan. In the small group and large group markets, enrollees generally obtain health insurance coverage through a group health plan offered through a plan sponsor (typically an employer).

MH/SU Parity Requirements

Health benefits commonly include plan design features that require enrollees to pay for a portion of their health care, limit the amount or number of treatments enrollees can receive, and limit the scope or duration of treatments that enrollees may receive. Prior to the implementation of the MHPAEA, health plans offered through employers covering MH/SU often used plan design features that were more restrictive or provided lower levels of coverage for MH/SU benefits than for medical/surgical benefits. For example, prior to MHPAEA, an employer’s plan could cover unlimited hospital days and outpatient office visits and require 20 percent coinsurance for outpatient office visits for medical/surgical treatment while, for MH/SU, that same plan could cover only 30 hospital days and 20 outpatient office visits per year and impose 50 percent coinsurance for outpatient office visits.

Congress passed MHPAEA in 2008 to help address discrepancies in health care coverage between mental illnesses and physical illnesses. MHPAEA both strengthened and broadened federal parity requirements enacted in 1996, including extending parity to cover the treatment of substance use disorders. MHPAEA requires coverage for MH/SU services—when those services are offered by group health plans sponsored by large employers (generally employers with more than 50 employees)—be no more restrictive than coverage for medical/surgical services. PPACA extended MH/SU parity requirements to individual insurance plans and some small group health plans. See figure 1 for a timeline of the laws and regulations establishing federal parity requirements and the types of plans affected.

In general, MHPAEA requires that the financial requirements and treatment limitations imposed on MH/SU benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical/surgical benefits.

Financial requirements. The most common types of financial requirements include: (1) deductibles, which are required payments of a specified amount made by enrollees for services before the issuer begins to pay; (2) copayments, which are payments made by enrollees and are a specified flat dollar amount—usually on a per-unit-of-service basis—with the issuer reimbursing some portion of the remaining charges; (3) coinsurance, which is a percentage payment made by enrollees after the deductible is met and until an out-of-pocket maximum is reached; and (4) out-of-pocket maximums, which are the maximum amounts enrollees have to pay per year for all covered medical expenses.

Quantitative treatment limitations (QTL). QTLs are treatment limitations that can be expressed numerically, such as annual, episode, and lifetime day and visit limits. For example, QTLs include annual limits on the number of office visits an enrollee can make for a certain condition and lifetime limits on the coverage of benefits for a certain type of treatment.

Non-quantitative treatment limitations (NQTL). NQTLs are non- numerical limitations on the scope or duration of MH/SU services. Common NQTLs include (1) medical management standards that limit or exclude benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative; (2) refusal to pay for higher-cost therapies until it can be shown that lower cost therapy is not effective—known as fail first or step therapy protocols; (3) exclusions based on failure to complete a course of treatment; (4) standards for providers to be admitted to participate in a network, including the factors used to set provider reimbursement rates; and (5) requiring pre-authorization of services—the requirement that an enrollee receives prior approval for care.

The MH/SU parity regulations established a two-part analysis to determine if the financial requirements or QTLs in a plan are in compliance with MH/SU parity requirements. The first test determines if a particular type of financial requirement or QTL (such as a copay) applies to substantially all medical/surgical benefits in the relevant classification of benefits (e.g., inpatient in-network or outpatient out-of- network). Generally, a financial requirement or QTL is considered to apply to “substantially all” medical/surgical benefits if it applies to at least two- thirds of the medical/surgical benefits in the classification, according to the regulations. Once the first test is met, the second test checks for parity in the level or magnitude of the requirement (e.g., copay of $15 or $20 or treatment limit of 21 or 30 inpatient days per episode). Specifically, by regulation, the financial requirement or QTL cannot exceed the predominant level—that is, the level that applies to more than half of the medical/surgical benefits subject to the financial requirement or QTL in the classification. For example, if at least two-thirds of outpatient, in- network, medical/surgical benefits are subject to a copay, and 75 percent (i.e. more than half) of outpatient, in-network visits involving medical/surgical benefits are subject to a copay of $30, the copay for outpatient, in-network visits involving MH/SU benefits cannot exceed $30.

The MH/SU parity regulations extended parity requirements to NQTLs and establish a different test for assessing parity of NQTLs between medical/surgical and MH/SU benefits. Under the regulations, a plan generally cannot apply an NQTL on an MH/SU benefit unless—both as written and in operation—it is comparable to and applied no more stringently than the NQTL applied to medical/surgical benefits. According to guidance issued by HHS, DOL, and Treasury, the NQTL analysis in the regulations focuses on the underlying factors (such as processes, strategies, and evidentiary standards) used to apply the NQTL and ensuring there are not arbitrary or discriminatory differences in how a plan or issuer applies those factors to MH/SU benefits as compared to medical/surgical benefits.

MH/SU Parity Oversight

HHS, DOL, and Treasury share joint oversight responsibilities for certain federal laws applicable to private health coverage, including MHPAEA. The oversight of plans and issuers for compliance with MHPAEA is split between the states, HHS, DOL, and Treasury, depending on the type of coverage and whether the plan is self-funded or fully insured.

Individual and fully insured group plans sold by issuers. States have primary responsibility for regulating insurance, and health insurance products sold within a state must meet both federal and state requirements, including MH/SU parity requirements. States oversee health insurance sold by issuers (1) in the individual market, where individuals purchase private health insurance plans directly from an issuer or through an exchange; and (2) in the group market, where a plan sponsor (typically an employer) purchases coverage from an issuer. Of the estimated 216 million Americans who were enrolled in private health insurance in 2016, the estimated enrollment in these state-regulated markets was 17.3 million in the individual market, 14.2 million in the small group market, and 42.9 million in the large group market. State oversight of health insurance applies only to fully insured health plans offered by state-licensed issuers. Because self-funded plans are financed directly by the plan sponsor, these plans are generally not subject to state law or oversight.

With respect to health insurance issuers selling products in the individual and fully insured group market, HHS has primary enforcement authority over MH/SU parity requirements in two instances: (1) when a state notifies HHS that it does not have the authority to enforce MH/SU parity requirements or the state notifies HHS that it is not otherwise enforcing the requirements, or (2) when HHS determines the state failed to substantially enforce MH/SU parity requirements. States falling into these categories are known as direct enforcement states, and, in these states, the Centers for Medicare & Medicaid Services (CMS) within HHS assumes the responsibility for directly enforcing federal MH/SU parity requirements and other federal health laws covered by PPACA with respect to issuers. CMS is currently responsible for enforcing MH/SU parity requirements against issuers in four states: Missouri, Oklahoma, Texas, and Wyoming. While CMS enforces MH/SU parity requirements and other PPACA requirements for these direct-enforcement states, these states maintain enforcement authority over issuers for state-level regulatory requirements.

For the estimate of overall enrollment in private health plans in 2016, see U.S. Census Bureau, “Coverage Numbers and Rates by Type of Health Insurance: 2013 to 2016,” Current Population Survey, 2014 to 2017 Annual Social and Economic Supplements, table 1. products they offer, DOL oversees the plans themselves for compliance through its Employee Benefits Security Administration (see table 1). DOL does not have the authority to enforce MH/SU parity requirements directly against issuers to correct noncompliant health policies that are designed, marketed, and sold by the issuer to numerous employers for the purposes of offering health plans to their employees. DOL has primary authority for overseeing compliance with MH/SU parity requirements for self-funded, private employer-sponsored group plans, as states generally do not have authority over these plans. The Internal Revenue Service (IRS) within Treasury is authorized to impose an excise tax on employers that sponsor private group plans that are not in compliance with MH/SU parity requirements.

Similarly, HHS has primary authority for MH/SU parity requirements over employer-sponsored plans for state and local governments—known as non-federal governmental plans. Within HHS, CMS oversees both fully insured and self-funded non-federal governmental plans. In 2017, an estimated 13 million state and local government employees enrolled in these plans. Sponsors of self-funded, non-federal governmental plans may elect an exemption from, or “opt-out” of, certain federal health care requirements, including MH/SU parity requirements. If a plan elects to opt-out of MH/SU parity requirements, CMS also reviews the plan’s election to ensure they meet requirements for doing so.

Practices for Overseeing Compliance with MH/SU Parity Requirements Vary among State and Federal Agencies

Nearly All States Reported Some Review of Fully Insured Group and Individual Plans for MH/SU Parity Compliance before Consumers Enroll; Post-Enrollment Reviews Vary

Through our survey and interviews with officials from the three selected states, we found that nearly all states conduct some type of review for MH/SU parity compliance as part of their oversight of issuers selling fully insured large and small group plans and individual plans. The reported type and frequency of these reviews vary, particularly for the reviews conducted after consumers enroll in plans.

A product is a discrete package of health insurance coverage benefits that are offered using a particular product network type (e.g., health maintenance organization or preferred provider organization) within a service area. Issuers then sell plans to consumers by pairing health insurance coverage benefits with a particular cost sharing structure, provider network, and service area.

The only two states that did not report that they conduct reviews for MH/SU parity compliance before products are approved for sale in their states are Missouri and Wyoming, which are two of the four states where CMS is directly enforcing MH/SU parity requirements. In the four direct enforcement states, CMS conducts reviews of issuer policies and documentation for compliance with federal MH/SU parity requirements before products are approved for sale in the states. The two other states—Texas and Oklahoma—reported in our survey that they review products for state-level MH/SU parity compliance; however, CMS maintains primary authority for reviewing products for compliance with federal MH/SU parity requirements in those states. consumers enroll in a plan. Additionally, according to CMS officials, the HHS mental health parity tool is not designed to facilitate an evaluation of NQTLs due to the nature of reviewing NQTLs.

State oversight after consumers enroll in plans. In addition to the review they conduct prior to consumers enrolling in plans, 27 states reported in our survey they have conducted some type of review related to MH/SU parity after consumers enroll. The types of reviews states conduct vary. These review types include: targeted reviews based on consumer complaints or other information, random audits, and conducting broad routine reviews of issuers’ compliance with state and federal health insurance laws—called market conduct examinations. Through our interviews of states and stakeholders we identified additional enforcement activities some states are using to assess the issuer compliance with MH/SU parity requirements after consumers enroll. These reviews and additional enforcement activities are described below:

Conducting targeted reviews. Twenty states reported in our survey that they had conducted a targeted review that focused on specific issuers or particular MH/SU parity compliance concerns, while other states reported they had never performed such a review. Consumer complaints were most commonly identified as the reason—at least in part—that these 20 states conducted targeted reviews to assess compliance with MH/SU parity requirements. Thirty-eight states reported in our survey that they track MH/SU parity complaints, which can be submitted by consumers, providers, or advocates. For example, after receiving consumer complaints, Massachusetts examined the accuracy of the information on behavioral health services—services that address mental health or substance use issues—contained in issuers’ provider directories and compared this to the accuracy of medical/surgical provider information in a 2018 report. Officials from another state told us they frequently use targeted reviews in response to complaints because these focus on a specific issue, rely on more recent data, and are less time consuming than more comprehensive market conduct examinations that review an issuer’s compliance with all state health requirements. States reported additional reasons for starting targeted reviews related to MH/SU parity requirements, including reviews initiated after receiving referrals from other departments, reviews driven by predictive analytics or market analyses, and reviews in response to media attention. In 2017 and 2018, the frequency of receiving MH/SU parity-related complaints and conducting targeted reviews varied across states. (See table 2).

Market conduct examinations. Nearly all states conduct market conduct examinations and states have not routinely included a review for MH/SU parity compliance as part of the examinations. Market conduct examinations are a review of an insurer’s marketplace practices. The examination is an opportunity for the state to verify data provided by the insurer and to confirm that companies’ internal controls and operational processes result in compliance with state laws and regulations. Eighteen states reported in our survey that they routinely conduct market conduct examinations (ranging from every 3 or 5 years), and, of those, nine states reported that they usually or always include a review of MH/SU parity compliance. Twenty-nine states reported that their market conduct examinations are not routine; they are conducted on an as-needed basis or in response to risk factors, such as market analysis or complaints. In order to assist states’ ongoing oversight of MH/SU parity compliance, NAIC developed guidance on MH/SU parity for its Market Regulation Handbook, which most states use to guide their market conduct examinations, an NAIC official told us. The guidance includes a data collection tool for mental health parity analysis. While the guidance was finalized in August 2019, an NAIC official told us most states were already using the guidance to conduct their market conduct examinations while it was in draft form.

State-wide comprehensive reviews of issuers. Officials we interviewed from two of the three selected states told us they have conducted reviews of all issuers in their state as part of their oversight of MH/SU parity compliance after consumers enroll in plans. For example, as requested by its state legislature, Maryland conducted three annual MH/SU parity surveys with the state’s major issuers. Maryland officials told us the first two surveys focused on MH/SU parity compliance in the issuers’ plan documentation, and the last survey assessed compliance in plan practices and operations. Maryland officials told us the review of all issuers in the state will give them a baseline understanding of issuer compliance with MH/SU parity requirements reviewed. Officials from Washington told us they are using a CMS grant to evaluate issuer claims data and to understand issuers’ NQTLs in operation, which officials say will enable them to identify statewide MH/SU parity-related concerns.

Annual compliance reporting. At least eight states have established annual requirements for issuers to demonstrate their MH/SU parity compliance through data reporting or self-certifications, according to officials from one of the three selected states in our review and a provider organization. To fulfill the states’ requirements, issuers submit information such as the percentage of claims paid for in- network and out-of-network MH/SU services compared to those paid for medical/surgical services and the number of consumers denied prior authorizations for MH/SU services. For example, in 2012, Massachusetts began requiring issuers to submit annual reports certifying that their plans comply with federal and state MH/SU parity requirements and instructing issuers to compare denials of care for MH/SU and medical/surgical services, among other things. These certifications must be signed by the issuer’s chief executive officer and chief medical officer, which Massachusetts officials told us ensures that issuer leadership is aware of the MH/SU parity requirements. Additionally, an official from NAIC told us that NAIC now includes data reporting requirements related to MH/SU parity, such as requiring information on prior authorizations and denials of care, in its annual nationwide collection of issuers’ post-enrollment information. An NAIC official told us states can use these data to compare information on MH/SU and medical/surgical services and examine issuers that operate in multiple states.

In their survey responses, 47 states identified enforcement actions they can take if they find, through a review, that an issuer violated MH/SU parity requirements. States reported that these enforcement actions include: financial penalties, license termination, orders to pay claims or interest, and orders to pay restitution. However, an official from NAIC told us that in the majority of cases, issuers voluntarily come into compliance after state regulators identify an issue or parity violation.

DOL and CMS Conduct Targeted Oversight of Employer-Sponsored Group Plans after Receiving Information and Complaints about Possible Noncompliance

Both DOL and CMS oversee employer-sponsored group plans to ensure their compliance with MH/SU parity requirements. Specifically, the agencies conduct what are known as targeted reviews after consumers enroll in these plans. The agencies initiate these reviews after they receive complaints or other information regarding possible noncompliance with either MH/SU parity requirements or other, unrelated issues, such as a plan failing to provide a document explaining the health benefits covered. Unlike states, the agencies do not conduct any type of review of employer-sponsored plans before consumers enroll and do not have the authority to conduct such a review, according to DOL and CMS officials.

DOL oversight. DOL’s targeted reviews are triggered by inquiries, including complaints, or other information that identifies possible noncompliance with MH/SU parity requirements or other applicable federal health care laws. These targeted reviews can also originate from additional techniques DOL uses to target plans for review, such as reviewing bankruptcy filings or financial and operational information filed annually by employers. According to DOL’s enforcement manual, DOL investigators generally identify the reasons for starting each review, obtain relevant information from the plan or issuer, and conduct a full review of compliance with applicable federal health care laws. These reviews which are performed by DOL’s 10 regional offices can focus on specific private, employer-sponsored group plans, service providers (such as third party administrators), or issuers; however, DOL does not have the authority to take direct enforcement actions against issuers for violations of MH/SU parity requirements.

DOL reported that it completed 302 reviews of private, employer- sponsored group plans that included a review for compliance with MH/SU parity requirements in fiscal years 2017 and 2018. According to DOL officials, these reviews can take 2 to 3 years to complete and investigators follow an extensive compliance checklist to conduct these reviews. The checklist includes specific questions to help determine compliance with all applicable requirements, including a section with questions on MH/SU parity. Because investigators complete the compliance checklist for every plan level health investigation, reviews not triggered by a parity complaint may still uncover a parity violation. For example, DOL might review a private employer-sponsored group plan in response to a consumer complaint about how long the plan covered a hospital stay for a mother and her newborn. The review would include a review of compliance with the related law (the Newborns’ and Mothers’ Health Protection Act of 1996), MH/SU parity-related requirements, and all other applicable federal health care requirements.

Nearly all DOL reviews that assess compliance with MH/SU parity requirements originate from sources unrelated to MH/SU parity, including complaints or other information about potential noncompliance with other federal health care laws and DOL reviews of the annual financial and operational information filed by employers, based on data provided by DOL on the reasons targeted reviews were opened. DOL received few MH/SU parity complaints and opened few reviews based on a potential MH/SU parity violation, compared to complaints related to other federal health requirements, in fiscal years 2017 and 2018 (see table 3).

When DOL identifies a violation of MH/SU parity requirements through one of its reviews, investigators first seek to bring the private employer- sponsored group plan or issuer into compliance voluntarily, according to DOL officials. When that is not possible, DOL can sue the plan for equitable relief, which can result in the plan being required to reimburse members whose claims were improperly denied. DOL can also request that the Treasury levy an excise tax on the non-compliant private employer-sponsored group plan, but DOL officials noted that the excise tax goes to the Treasury rather than toward payment of claims for plan members, and DOL’s focus is on obtaining payment of claims. DOL officials told us they have never referred a plan to IRS to levy an excise tax based on an MH/SU parity violation. The 21st Century Cures Act requires DOL to conduct an audit of a private employer-sponsored group plan when DOL has identified five or more MH/SU parity violations; however, DOL officials told us the use of this authority has not been triggered, as of October 2019.

DOL identified audit resources challenges faced by the agency given the universe of plans DOL oversees and reported that the agency is taking steps to better leverage its resources through targeted exams in its September 2019 enforcement report to Congress. Specifically, DOL reported that DOL has less than one investigator for every 12,500 employee benefit plans the agency oversees, including private health, pension, life, and disability insurance. In light of these challenges, DOL officials said they are focusing their targeted reviews on issuers and other service providers to obtain voluntary corrections whenever possible so they can address noncompliance across multiple private employer- sponsored group plans. To date, they have completed at least two investigations at the issuer level and brought an issuer into voluntary compliance after one investigation identified MH/SU parity noncompliance affecting over 4,000 private, employer-sponsored group plans and 7 million consumers. According to DOL officials, focusing on issuers will result in their opening fewer targeted reviews than in prior years, but will have more meaningful results. DOL officials also noted other efforts underway to assist in MH/SU parity oversight. For example, the DOL’s Kansas City Regional Office has convened a task force that focuses on parity in opioid use disorder treatment coverage. DOL officials told us they require senior advisors in each of the 10 regions to identify trends in the types of violations DOL identifies and to identify when a violation could be happening at the issuer level, rather than the individual employer-sponsored group plan level.

CMS oversight. CMS oversight of employer-sponsored, non-federal governmental plans for compliance with MH/SU parity requirements consists of targeted reviews. Like DOL, these targeted reviews originate from complaints or information about noncompliance—about MH/SU parity or issues with other federal health care laws. The reviews are used to assess compliance with all applicable health requirements, and CMS officials told us CMS has broad authority to review or request information as a part of these reviews. However, according to CMS officials, CMS has limited authority to review or request information from these plans outside of these targeted reviews. Specifically, CMS officials said CMS does not have the authority to conduct random audits, reviews, or examinations of employer-sponsored, non-federal governmental plans, or to require the plans to provide documentation to demonstrate compliance with MH/SU parity requirements. CMS officials also said they do not have the authority to review employer-sponsored, non-federal governmental plans for compliance with MH/SU parity requirements prior to enrollment.

While large, self-funded, employer-sponsored, non-federal governmental plans may opt-out of MH/SU parity requirements and certain other federal health requirements, CMS may identify MH/SU parity noncompliance if these plans did not properly opt-out. CMS officials told us that they review documentation for all plans that elect to opt out of MH/SU parity requirements to ensure it was properly submitted. If CMS finds a plan may have opted-out incorrectly, CMS officials said they can request additional information from the plan and can ultimately decide the opt-out was invalid.

CMS reported that it closed five reviews related to MH/SU parity in fiscal years 2017 and 2018. Two targeted reviews originated from MH/SU parity complaints and three reviews were related to plans opting-out of MH/SU parity requirements. CMS officials told us that they received four complaints related to MH/SU parity in employer-sponsored, non-federal governmental plans in fiscal years 2017 and 2018. The officials told us all four complaints resulted in targeted reviews, two of which were ongoing as of September 2019.

When CMS identifies MH/SU parity noncompliance through one of these targeted reviews, the agency takes one of several actions: working with the plan to implement a corrective action plan; initiating a full market conduct examination of the plan; or imposing civil money penalties. Like DOL, the 21st Century Cures Act requires CMS to audit an employer- sponsored, non-federal governmental plan or issuer when CMS has identified noncompliance five or more times. According to CMS officials, as of November 2019, the use of this audit authority has not been triggered.

DOL and CMS Do Not Have Assurance That Their Use of Targeted Reviews to Oversee MH/SU Parity Requirements Is Effective for Ensuring Parity

Under DOL’s and CMS’s oversight through targeted reviews, self-funded employer-sponsored group plans do not undergo review for compliance with MH/SU parity requirements unless the agencies receive complaints or other information about potential noncompliance with an applicable federal health care law, or the review is opened as a result of a targeting technique unrelated to MH/SU parity—such as bankruptcy filing review. Relying on the receipt of such information to trigger a targeted review of MH/SU parity is a concern given the low number of complaints DOL receives related to MH/SU parity when compared to other federal health requirements. For example, as we have noted, DOL received 129 complaints in fiscal year 2018, and most of the noncompliance with MH/SU parity requirements DOL identified was found through reviews triggered by complaints and information unrelated to MH/SU parity in fiscal years 2017 and 2018, based on our review of DOL data. Further, as discussed later in this report, consumer advocates have noted that there is a lack of consumer awareness about MH/SU parity requirements, which may result in fewer complaints than would otherwise be made if consumers understood the requirements.

Federal internal control standards state that agencies should identify, analyze, and respond to risks related to achieving their defined objectives. DOL has stated that its defined objective is the full implementation of MH/SU parity requirements through vigorous compliance assistance and enforcement. HHS has stated that it is committed to enforcing MH/SU parity requirements through CMS and to providing the sponsors of employer-sponsored, non-federal governmental plans the information needed to ensure that the plans are fully compliant with MH/SU parity requirements.

DOL and CMS officials told us they have not completed any statistical analysis or study regarding the effectiveness of their targeted review approach to MH/SU parity compliance, nor whether this approach increases the risk of noncompliance. Specifically, they have not analyzed whether relying on targeted reviews alone increases the risk of noncompliance with MH/SU parity requirements in employer-sponsored group plans. The risk of noncompliance may be increased because incentives for plans to comply are limited when investigations are initiated only after receiving complaints or information about noncompliance. DOL and CMS officials also said they have not analyzed whether additional strategies, such as the attestation or issuer documentation requirements used by some states, would reduce the risk of noncompliance. For example, such an evaluation could assess whether a sample of health plans reviewed for compliance identified similar types of noncompliance as those identified when plans were reviewed in response to MH/SU parity complaints. According to officials from a provider organization, one such strategy to improve compliance would be to require issuers or plans to affirm that (1) their plans comply with MH/SU parity requirements and (2) they have documentation showing that they analyzed their plans for compliance. According to these officials, requiring this documentation from plans and issuers can increase compliance, even if there is a low probability that a plan will be audited. DOL and CMS officials told us that they currently do not have the authority to conduct oversight activities of this type. Specifically, they told us that for self-funded private or non- federal governmental employer-sponsored group plans they do not currently have the authority to: (1) review plans for compliance with MH/SU parity requirements before coverage is offered to consumers, (2) require plans to develop documentation to demonstrate compliance with MH/SU parity requirements, and (3) monitor or examine plans for compliance with MH/SU parity requirements outside of an investigation.

Without evaluating the effectiveness of their targeted review approach, DOL and CMS do not know whether their oversight is adequate for ensuring compliance with MH/SU parity requirements, or whether they need to adopt additional strategies and seek new authorities, if needed.

Enforcement Activities and Research Identified Some Health Plans Not Compliant with MH/SU Parity Requirements, but the Extent of Compliance Is Unknown

States, DOL, CMS, and Available Research Identified Some Noncompliance with MH/SU Parity Requirements

States, DOL, and CMS identified some plan or issuer noncompliance with specific MH/SU parity requirements in 2017 and 2018 through their various oversight efforts. Specifically, after consumers enrolled in plans:

Seventeen of the 51 states that responded to our survey reported identifying noncompliance a total of 254 times among issuers of individual plans and fully insured, employer-sponsored group plans.

DOL reported identifying noncompliance 113 times among private, employer-sponsored group plans or the issuers of these plans.

CMS reported identifying noncompliance two times among employer- sponsored, non-federal governmental plans.

Both states and DOL most commonly identified noncompliance with MH/SU parity NQTL requirements. Eleven of the 14 states that provided information on the types of MH/SU parity noncompliance in our survey reported that the noncompliance they found was related to NQTLs half the time or more. Similarly, DOL reported that 55 percent of noncompliance the agency found in fiscal year 2018 was related to NQTLs, while 40 percent was related to financial requirements or QTLs. Through our review of DOL letters informing plans of noncompliance, we found that the most common types of noncompliance with MH/SU parity requirements were related to (1) copayments or coinsurance, such as a higher copayments for MH/SU treatment than those generally applied to equivalent medical/surgical treatment (a financial requirement); (2) prior authorizations, such as requiring approval in advance for MH/SU treatment but not requiring it for equivalent medical/surgical treatment (an NQTL); and (3) the total number of treatments allowed, such as a limit on inpatient hospital days for MH/SU treatment that is not applied to equivalent medical/surgical treatment (a QTL).

The scope of noncompliance with MH/SU parity requirements identified by states, DOL, and CMS in 2017 and 2018 varied—both in terms of the number of consumers affected and the steps needed to come into compliance. While MH/SU parity requirements apply to plans, regulators may identify and seek to correct noncompliance in the underlying health policies that issuers use to design, market, and sell as health plans to numerous employers. For example, DOL letters show one particularly widespread violation affected more than 7 million enrollees. Most plans or issuers resolved the noncompliance identified by regulators voluntarily. For example, DOL officials told us that plans or issuers resolved all instances of noncompliance voluntarily. Nine states reported in our survey taking a total of 20 enforcement actions to bring plans or issuers into compliance in 2017 and 2018. See table 4 for examples of noncompliance and steps required to come into compliance.

Additionally, while the literature we reviewed suggested that the individual, small group, and large group plans assessed by the studies were generally compliant with MH/SU parity requirements assessed by the studies, the studies identified some noncompliance or possible noncompliance. For example:

One case study found that, in 25 percent of the total products offered on two state-based health insurance exchanges between October 2013 and March 2014—the first year of operation for the exchanges established by PPACA—the financial requirements and certain NQTLs reviewed appeared to be noncompliant with MH/SU parity requirements. The study also found variation in the types of noncompliance in each of the states. The case study concluded that on one exchange more than half the products appeared inconsistent with MH/SU parity requirements, particularly the NQTLs reviewed; on the other exchange, 11 percent of the products had a financial requirement that violated MH/SU parity requirements.

One study found that 18 percent of benchmark plans were not compliant with MH/SU parity requirements for substance use disorder benefits specifically. For example, five plans had limits on the number of inpatient and/or outpatient visits for substance use disorder services only. (See app. II for additional information about the studies we reviewed.)

Each of the studies we reviewed were limited because they evaluated only selected requirements, with the authors of four studies noting there was insufficient information in plan documents to evaluate additional MH/SU parity requirements. As such, none of the studies could determine the extent of issuer compliance with all MH/SU parity requirements.

A 2018 survey of employer-sponsored group plans suggests that there could be employer-sponsored plans that have not come into compliance with MH/SU parity requirements. Specifically, this nationally representative survey of employers that offer employer-sponsored group plans found that 61 percent of large and midsized employers reported they had taken steps to address compliance with MH/SU parity requirements—such as reviewing plan documents. An additional 13 percent of large and midsized employers reported that they planned to take action to come into compliance and some plans may have already been in compliance.

Stakeholders and Research Reviewed Indicate the Full Extent of Compliance with MH/SU Parity Requirements is Not Known

According to advocacy groups and state and federal officials we interviewed and some of the research we reviewed, the full extent of compliance with MH/SU parity requirements is not known. As NAIC and consumer advocacy stakeholders have reported, regulators often rely on both individual complaints and aggregate consumer complaint statistics to identify problem issuers and problem areas for additional oversight. However, stakeholders from eight consumer advocacy groups told us that complaints are not a good measure of whether MH/SU parity issues exist and do not accurately reflect the number of enrollees facing problems with parity. Further, CMS, DOL, and state officials, as well as stakeholders and researchers, also noted the complexity of assessing plans for MH/SU parity compliance for NQTLs in particular, which may result in inconsistent identification of MH/SU parity violations or the inability to fully assess compliance.

Limitations of relying on complaints to trigger enforcement activities. Stakeholders and state officials reported on the limitations of relying on complaints to trigger enforcement activities—which contribute to the challenges in determining the full extent of compliance with parity requirements. Stakeholders from eight consumer advocacy groups told us that if regulators rely on complaints to identify possible noncompliance after consumers enroll in plans, they will not know the full extent of compliance with MH/SU parity requirements. These stakeholders identified several reasons complaints do not accurately reflect the number of consumers facing problems related to plan or issuer compliance with MH/SU parity requirements:

Consumers may not be aware of MH/SU parity requirements, such as how to determine if the treatment challenge they are experiencing is a potential parity violation, how to file a parity-related complaint, or which entity they should contact to file a complaint, according to five consumer advocacy stakeholders we spoke to and one professional organization. For example, while a consumer would be aware of a denial for a particular treatment for a mental health condition because the issuer did not consider it to be medically necessary, the consumer could not easily determine if this standard was applied more stringently than to similar medical/surgical benefits and thus signaled a parity issue. Further, in our survey, officials from 21 states reported they do not provide any public information to consumers about MH/SU parity requirements, which may contribute to a general lack of consumer awareness in these states.

Consumers may decide not to file a complaint due to the stigma associated with MH/SU treatment, three consumer advocacy stakeholders and state officials in one state told us. One stakeholder also noted that consumers expect substance use disorder services to be treated differently than medical services and are therefore less likely to file a complaint if they receive disparate treatment.

Consumers may be hesitant to file a complaint that includes sensitive personal details, such as a mental illness diagnosis, two stakeholders told us. One of these stakeholders told us consumers in need of substance use disorder services in particular may not want to raise a complaint that documents their participation in illegal activities, such as drug misuse. In addition, two stakeholders and state officials in one state stated that individuals or families experiencing an immediate crisis associated with MH/SU conditions may not be well-equipped to navigate the complaint process or wait for a complaint resolution.

Providers face barriers helping consumers file complaints or appeals related to MH/SU parity requirements, four consumer advocacy stakeholder groups and one professional organization told us. The barriers identified by these stakeholders include: providers being unable to file complaints on behalf of consumers in some states; the time consuming nature of the appeals or complaint processes; and provider fear that an issuer will drop them from their network if they file a complaint. Two consumer advocacy groups have identified that providers may be in a better position to understand a denial decision and justify a consumer’s need for treatment, but noted that barriers discourage providers from filing an appeal or complaint. One of these consumer advocacy groups reported that providers might be unaware of what issuer actions would violate MH/SU parity requirements.

Officials from the three selected states provided examples of specific efforts taken that may address stakeholder identified challenges consumers face in understanding parity requirements and filing related complaints. For example, Maryland officials told us they developed a webinar to help consumers with filing complaints related to substance use disorder treatment. Officials from Massachusetts told us they review for parity violations any complaint related to coverage of mental health- related services, regardless of whether the consumer indicates that the complaint might be a parity violation. While this process is still dependent on a consumer to make a complaint, it does not rely on the consumer having an in-depth understanding of parity requirements for their complaint to be reviewed for potential noncompliance. In light of concerns about consumers not filing complaints, officials from Washington told us their statewide comprehensive review includes an assessment of how issuers implemented state and federal MH/SU parity requirements and aims to help them assist consumers who are not reaching out directly. Additionally, 30 states reported in our survey that they provide public information—such as frequently asked questions or brochures—for consumers about MH/SU parity requirements.

Complexity of assessing NQTLs for MH/SU parity compliance. CMS, DOL, NAIC, and state officials, as well as some stakeholders and researchers, identified complexities in assessing NQTLs for compliance with MH/SU parity requirements. As a result, regulators may fail to identify noncompliance, or may not always identify noncompliance, making current numbers on noncompliance with MH/SU parity requirements an unreliable indicator of the extent of noncompliance.

Difficult to assess plan implementation of NQTLs. Officials from three states reported in our survey or interviews that it is challenging to determine how an NQTL described in plan documents is actually being implemented and experienced by consumers in practice. This can make it difficult to determine both if noncompliance has occurred and the extent of any noncompliance. Further, some state regulators do not conduct the types of detailed analyses necessary to determine if an NQTL is in compliance with MH/SU parity requirements, according to one consumer advocacy group. Finally, four studies we reviewed identified that researchers were unable to observe the plans’ implementation of NQTLs. Thus, they were unable to draw conclusions about whether or not the way plans implemented the NQTLs complied with MH/SU parity requirements. To address the complexities of these analyses for their own reviews, DOL officials told us that for its targeted reviews of MH/SU parity compliance, DOL uses seasoned investigators, early litigation support, technical guidance from DOL’s regulations office, and outreach to other federal and state agencies.

Lack of documentation on medical/surgical NQTLs. A lack of documentation on the factors used to apply NQTLs to medical/surgical benefits makes it difficult for issuers to demonstrate compliance with MH/SU parity requirements, according to two industry officials. They told us that information on NQTLs—such as when to require prior authorization—has to be created for medical/surgical benefits so that the information can then be compared to the application of NQTLs to MH/SU benefits to assess compliance with MH/SU parity requirements. One industry official noted that this poses an additional hurdle when MH/SU benefits are carved out or separately managed from the rest of a health plan. This lack of explicit information about medical/surgical benefits and difficulty drawing parallels between medical/surgical and MH/SU care also makes it difficult for regulators to determine parity compliance, officials from one of the three selected states told us.

Lack of resources. Eight states reported in our survey that lack of staff resources, staff training, or clinical expertise are additional challenges to assessing compliance with MH/SU parity requirements. Further, states may hesitate to determine an issuer violated federal MH/SU parity requirements due to a lack of confidence or clarity in applying the federal laws and may cite state laws instead, according to officials from one of our three selected states and a provider organization. Officials from the provider organization told us this could result in an undercount of MH/SU parity violations if a state cites a potential violation of an MH/SU parity requirement as a violation of a state law unrelated to federal MH/SU parity requirements. One state official identified consumer protection laws as an alternative to pursuing possible MH/SU parity requirement violations. Officials from one state told us some state laws have more clear cut standards than federal MH/SU parity requirements, due to the lack of clarity regarding federal MH/SU parity requirements. However, different strategies were used in three states to obtain the needed clinical expertise to review NQTLs, including regular meetings with clinicians from the state mental health department and using grant money to contract with physicians with clinical expertise to help with compliance reviews.

HHS, DOL, and Treasury Jointly Develop Guidance and Provide Support to States for Enforcing MH/SU Parity Requirements

HHS, DOL, and Treasury have coordinated on oversight of MH/SU parity requirements by providing support and jointly developing guidance for state regulators, insurance industry officials, providers, and consumers. HHS described several recent and planned coordination activities in its public action plan to improve state and federal coordination of the oversight of MH/SU parity requirements. This plan was required by the 21st Century Cures Act. Recent and ongoing support and coordination activities include:

Formal agreements with states. HHS and DOL officials told us they have established formal agreements—such as collaborative enforcement agreements—with states to help coordinate, share information about, or assist states with MH/SU parity enforcement activities. For example, DOL officials told us they have general enforcement and common interest agreements with nearly 40 states that allow them to share information related to MH/SU parity enforcement. HHS officials told us they have collaborative enforcement agreements with six states that allow HHS to intervene if a state’s efforts to bring an issuer into compliance with MH/SU parity requirements are unsuccessful. In response to our survey, state officials reported few formal referrals between the states and HHS or DOL.

Informal communication with states. HHS and DOL officials told us that state regulators can contact regional coordinators and individuals in their respective headquarters for assistance with MH/SU parity enforcement outside of formal agreements. HHS and DOL officials told us that referrals of specific complaints are informal and infrequent, noting that if a complainant contacted their office by mistake they would provide the contact information for the appropriate state or federal agency.

Technical assistance and outreach. HHS and DOL jointly conduct technical assistance for state regulators and have conducted outreach with stakeholders, including consumers, consumer advocates, providers, issuers, and employers, to improve compliance with MH/SU parity requirements. DOL officials told us that they meet regularly with state regulators and NAIC to provide technical assistance and foster implementation and enforcement coordination. For example, in 2017, HHS and DOL held a commercial market parity policy academy— technical assistance for teams of state officials on strategies to advance MH/SU parity compliance and lessons learned from other states’ implementation efforts. According to the HHS action plan, representatives from 20 states and territories attended. Additionally, DOL held a roundtable discussion with stakeholders to discuss NQTLs, disclosure, and federal-state coordination in January 2019.

Grant funding. HHS has also awarded funding, provided by PPACA, to states to help improve oversight of MH/SU parity requirements. In 2016, CMS awarded $9.3 million to 20 states specifically for enforcement and oversight related to MH/SU parity. Maryland, for example, used these funds to create a position specific to MH/SU parity oversight, which the state made permanent after the funding period ended. In 2018, CMS awarded funding through the State Flexibility to Stabilize the Market Grant Program that focused on supporting state implementation and planning around several PPACA market reforms and consumer protections. Washington, for example, is using this grant to review issuer’s implementation of state and federal MH/SU parity requirements and to assess access to MH/SU treatment.

HHS, DOL, and Treasury also coordinate with state regulators and NAIC to issue guidance for stakeholders in an effort to increase understanding of and compliance with MH/SU parity requirements. From December 2010 to September 2019, the three agencies issued 10 guidance documents that included 58 frequently asked questions and answers specific to MH/SU parity requirements. These guidance documents cover a range of topics, including describing the types of plans covered by MH/SU parity requirements, providing definitions of QTLs and NQTLs, and using specific scenarios to show if a practice—such as requiring prior authorization for certain medications to treat a substance use disorder—is permissible under the law.

HHS, DOL, and Treasury have also developed guidance or support on MH/SU parity aimed specifically at consumers. For example, as part of HHS’s action plan, HHS developed a web-based portal to assist consumers in identifying, based on the consumer’s insurance type, the appropriate entity to contact for filing a parity-related complaint—HHS, DOL, or state insurance regulators. See appendix III for examples of guidance published by the agencies and the target audience.

States have reported that existing guidance and support from the agencies helped states in their reviews of issuers for compliance with MH/SU parity requirements; however, some states and other stakeholders have identified a need for additional guidance. Specifically, officials from 43 states reported in our survey that guidance or other support from the agencies has helped inform state reviews of plans or issuers for compliance with MH/SU parity requirements, and officials from 24 states reported in our survey that additional guidance or support is needed. In written survey responses, state officials most commonly identified the need for additional guidance around reviewing NQTLs. In their comments for the 2017 HHS public listening session, some stakeholders identified the need for additional compliance information. Similarly, two industry stakeholders and one consumer advocacy organization also told us that additional guidance around NQTLs would be helpful to improve compliance with MH/SU parity requirements.

HHS, DOL, and Treasury issued additional guidance after seeking public comment, as required by the 21st Century Cures Act. This guidance covers the types of information plans must release to consumers or providers related to MH/SU parity, known as disclosure requirements, and NQTL requirements. Specifically, the guidance document contains (1) answers to 11 additional frequently asked questions on NQTLs and disclosure requirements and (2) a disclosure template consumers can use to request MH/SU parity-related information from their employer- sponsored health plans and issuers of individual plans. Released in September 2019, the guidance may address the concerns identified by states and stakeholders.

Conclusions

Employer-sponsored group plan and issuer compliance with federal MH/SU parity requirements is important to ensure that individuals seeking MH/SU treatment do not face discriminatory practices. DOL’s and CMS’s oversight of employer-sponsored group plan compliance with federal health care laws is driven by information and complaints they receive about potential noncompliance; however the agencies receive relatively few consumer complaints about MH/SU parity and DOL refers a small percentage of those complaints to its investigators. DOL’s and CMS’s reviews of compliance with relevant federal health care laws—including those related to MH/SU parity even when the origin of the investigation was unrelated to MH/SU parity concerns—has enabled the agencies to identify some plan and issuer violations of MH/SU parity requirements. However, the frequency with which compliance issues are identified in these reviews suggests that noncompliance with MH/SU parity requirements may be common.

Given stakeholder-identified concerns with relying on complaints for MH/SU parity, the complexity of MH/SU parity requirements, and the limited complaints received in this area, DOL and CMS may not be identifying and responding to the risks posed by the agencies’ oversight approach. As a result, consumers may be enrolled in plans that fail to comply with MH/SU parity requirements. Until DOL and CMS evaluate whether the current approach of targeted oversight in response to information received is effective for identifying compliance issues with MH/SU parity, they will not know whether this approach is effective or whether additional strategies are needed to help ensure that their oversight meets their commitment to full implementation of MHPAEA.

Recommendations for Executive Action

We are making a total of two recommendations, including one to DOL’s Employee Benefits Security Administration and one to HHS’s CMS. Specifically: The Assistant Secretary of Labor for the Employee Benefits Security Administration should evaluate whether targeted oversight in response to information received is effective for ensuring compliance with MH/SU parity requirements. If this evaluation determines the current targeted oversight approach results in significant program risks, the Employee Benefits Security Administration should develop a plan to more effectively enforce MH/SU parity requirements and if necessary seek additional oversight authority, as warranted. (Recommendation 1)

The Administrator of CMS should evaluate whether targeted oversight in response to information received is effective for ensuring compliance with MH/SU parity requirements for non-federal governmental plans. If this evaluation determines the current targeted oversight approach results in significant program risks, CMS should develop a plan to more effectively enforce MH/SU parity requirements and if necessary seek additional oversight authority, as warranted. (Recommendation 2)

Agency Comments and Our Evaluation

We provided a draft of this report to DOL, HHS, and Treasury for review and comment. DOL and HHS both concurred with our recommendations. DOL’s comments are reproduced in appendix IV and discussed below. HHS’s comments are reproduced in appendix V and discussed below. DOL, HHS, and Treasury also provided technical comments, which we incorporated as appropriate.

In its written comments, DOL elaborated on its current strategy to review its health enforcement program. Specifically, DOL noted that it reviews all MH/SU parity-related investigation findings and case closings, and all health plan investigations include a review of MH/SU parity requirement compliance, regardless of the source or reason for the investigation. DOL also stated that its current enforcement strategy to identify violations at the plan level and seek corrections of systemic violations at the service provider level has been successful. However, as explained in our report, DOL has not analyzed whether relying on targeted reviews alone increases the risk of noncompliance with MH/SU parity requirements in private, employer-sponsored group plans. Such an evaluation could help DOL identify and determine if additional enforcement strategies related to MH/SU parity requirements are needed.

In its comments, DOL also noted its resource limitations. Specifically, DOL stated that despite the Employee Benefits Security Administration’s small size and limited resources, it is responsible for overseeing 2.4 million health plans, among other things. DOL noted that it will consider GAO’s recommendation in light of its resource constraints. Given these constraints, an evaluation could help ensure DOL’s resources are most efficiently targeted.

In its comments, HHS stated that it is committed to enforcing MH/SU parity requirements. HHS described its responsibilities for enforcement and noted that it works with plans and issuers to help them understand and comply with MHPAEA. HHS also stated that it collaborates with state regulators, DOL, and Treasury in an effort to increase understanding and compliance.

We are sending copies of this report to the appropriate congressional committees, the Secretaries of Health and Human Services, Labor, and Treasury, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-7114 or DickenJ@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix VI.

Appendix I: Mental Health and Substance Use Disorder Parity Requirements in Medicaid and the State Children’s Health Insurance Program (CHIP)

Appendix I: Mental Health and Substance Use Disorder Parity Requirements in Medicaid and the State Children’s Health Insurance Program (CHIP)

In 2016, the Centers for Medicare & Medicaid Services (CMS), an agency within the Department of Health and Human Services, issued a final rule addressing the application of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to Medicaid managed care organizations (MCO), Medicaid Alternative Benefit Plans (ABP), and CHIP. Under this final rule, all beneficiaries enrolled in Medicaid MCOs, ABPs, and CHIP are entitled to mental health and substance use disorder (MH/SU) benefits that comply with certain MH/SU parity requirements of MHPAEA, which generally requires that MH/SU benefits be no more restrictive than medical or surgical benefits when MH/SU benefits are offered.

The CMS final rule defines the role of the states in evaluating overall compliance of state Medicaid and CHIP programs with MH/SU parity requirements. The final rule establishes the processes by which states must assess and document that their Medicaid and CHIP programs comply with MH/SU parity requirements. CMS guidance provides detailed information to help states assess their compliance with MH/SU parity requirements. These processes vary by program type, as described below.

Medicaid MCOs. The final rule requires either the state or the Medicaid MCO to complete a parity analysis, depending on how Medicaid benefits are provided. In general, CMS guidance requires states or MCOs to assess if a plan’s MH/SU benefits are no more restrictive than medical or surgical benefits for the following items: aggregate lifetime/annual dollar limits, financial requirements, quantitative treatment limitations (QTL), and non-quantitative treatment limitations (NQTL). The MCO must complete this analysis when it provides all Medicaid benefits—both medical and MH/SU benefits. The state must complete the parity analysis if the benefits are provided through multiple delivery systems, such as through multiple MCOs or the state’s fee-for-service Medicaid program, and provide the parity analysis to CMS for review. States are also required to make the documentation of compliance with the final rule available to the general public.

The final rule also requires states to include contract provisions requiring compliance with MH/SU parity requirements in all MCO and other applicable contracts. CMS guidance encourages states to consider including provisions in their contracts with MCOs to ensure adequate oversight of the MCO’s parity-related monitoring and compliance activities, such as ensuring the state can see the MCO’s parity analysis.

ABPs and CHIP. The final rule requires states to document that their ABP and CHIP plans comply with MH/SU parity requirements in the comprehensive state plans that describe the state’s Medicaid and CHIP programs. CMS guidance requires that states conduct a parity analysis demonstrating this compliance as part of the documentation the states submit to CMS to request a change to the state plan, known as a state plan amendment.

In certain CHIP programs and ABPs, the state does not have to complete the full parity analysis, known as deemed compliance. A plan may be deemed to be in compliance with MH/SU parity requirements for plan members aged 20 and under if Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefits are provided to those individuals, because EPSDT benefits include MH/SU services. CMS guidance requires that states demonstrate that EPSDT benefits are covered by their CHIP plans through documents such as member handbooks. (The state or MCO would still be required to conduct a parity analysis to ensure that plan benefits for those not eligible for EPSDT benefits satisfy parity requirements.)

To ensure state Medicaid and CHIP benefits comply with MH/SU parity requirements, CMS must review states’ documentation of compliance. For Medicaid managed care, CMS must review state contracts with managed care plans to ensure they are compliant with CMS requirements. CMS reviews the parity provisions in MCO contracts and the state’s parity analysis as part of the normal contract review process. Additionally, for states in which some but not all benefits are provided by an MCO, CMS reviews documentation of the state’s parity analysis to ensure the full scope of services being provided complies with MH/SU parity requirements. For ABP and CHIP, CMS staff are required to review the state plan amendments submitted by the states and supporting documentation for compliance with MH/SU parity requirements.

See figure 2 for a map of the parity compliance review process by program type.

Appendix II: Literature Review

We conducted a literature review to identify information about compliance with federal mental health/substance use disorder (MH/SU) parity requirements by individual and employer-sponsored small and large group health plans. We identified literature through keyword searches of several bibliographic databases, including ProQuest, MEDLINE, Scopus, and WorldCat. We focused our review on literature published between January 2011 and May 2019. Of the 828 study citations we identified, we reviewed 77 full studies; of those, we determined there were six relevant studies. We also identified four additional studies through web searches, interviews with stakeholders, and citations included in the literature we reviewed. Our review included studies that contained information collected about compliance by individual and employer-sponsored group health plans with federal MH/SU parity requirements by assessing compliance, comparing MH/SU plan benefits and requirements to medical/surgical benefits, or by assessing changes in MH/SU plan benefits over time. Our review excluded studies that focused on the effects of federal MH/SU parity requirements on consumer utilization of MH/SU services, consumer spending on MH/SU services, and plan spending on MH/SU services. The 10 studies are described in more detail below.

Berry, Kelsey N., et al. “A Tale of Two States: Do Consumers See Mental Health Insurance Parity When Shopping on State Exchanges?” Psychiatric Services, vol. 66, no. 6 (2015): pp. 565–567.

Methodology: The case study reviewed documents for all small group and individual health insurance products offered on two state health insurance exchanges between October 2013 and March 2014 and assessed compliance with observable quantitative treatment limitations (QTL) and non-quantitative treatment limitations (NQTL).

Examples of key findings: The case study found that for 75 percent of products offered, the financial requirements and certain NQTLs reviewed appeared to be compliant with MH/SU parity requirements, but compliance varied by state. On one state health insurance exchange (with fewer products) more than half the products appeared inconsistent with the parity requirements reviewed, particularly the NQTLs. On the other state health insurance exchange, 11 percent of the products contained a financial requirement that violated MH/SU parity requirements. The case study was not able to assess all aspects of NQTL requirements because the available documents did not provide information about all NQTLs, such as whether or not a specific MH/SU treatment would be considered medical necessary.

Cowell, Alexander J., et al. Changes in Individual and Small Group Behavioral Health Coverage Following the Enactment of Parity Requirements: Final Report. A report prepared for the United States Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Office of Disability, Aging and Long-Term Care Policy. January 2017.

Methodology: The study reviewed plan documents for a sample of individual and small group plans and assessed changes in MH/SU and medical/surgical benefits before implementation of MH/SU parity requirements in 2013 and after implementation in 2014.

Examples of key findings: The study found that in 2014 most plans’ financial requirements and QTLs were compliant with MH/SU parity requirements. However, the plans included different limits on the quantity of prescription drugs covered for medications used for MH/SU treatments and those used for other chronic health conditions. This difference indicated possible noncompliance with MH/SU parity requirements for NQTLs, and the study noted that differences in NQTLs between MH/SU and other health conditions is an issue in need of additional study. The study stated that plan documents did not contain all information necessary to fully assess NQTLs.

Friedman, Sarah, et al. “The Mental Health Parity and Addiction Equity Act Evaluation Study: Impact on Mental Health Financial Requirements among Commercial ‘Carve-In’ Plans.” Health Services Research, vol.51, no. 1 (2018) pp.366-388.

Methodology: The study analyzed a sample of health benefit design data from 2008 to 2013. This data on large group plans was obtained from a managed behavioral health organization and was analyzed for changes in cost-sharing requirements for plan members before and after parity requirements were implemented.

Examples of key findings: The study found that there were both increases and decreases in cost-sharing after MH/SU parity requirements went into effect. For example, among plans that covered both in-network and out-of-network benefits and required coinsurance for inpatient stays, the likelihood of using coinsurance increased by 4 percentage points, and the coinsurance rate increased by .75 percentage points. However, outpatient copayments were reduced by $3.88 among plans that offered only in-network benefits.

Goplerud, Eric. Consistency of Large Employer and Group Health Plan Benefits with Requirements of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. A report prepared for the United States Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Office of Disability, Aging and Long-Term Care Policy. November 2013.

Methodology: The study summarized the results of multiple assessments of compliance with MH/SU parity between 2009 and 2011 based on both plan data available from private databases and the Department of Labor, and survey data and interviews with health plan representatives.

Examples of key findings: The study found that between 2009 and 2011 large group health plans made substantial changes to their plan designs to meet the parity requirements. By 2011, most large group health plans had removed most financial requirements that did not meet MH/SU parity requirements, although 20 percent still had a non- compliant copayment for outpatient services. Nearly all had eliminated the use of separate deductibles for MH/SU treatment and medical/surgical treatment. The study also noted that assessing consistency with NQTLs was difficult based on document reviews.

Hodgkin, Dominic, et al. “Federal Parity and Access to Behavioral Health Care in Private Health Plans.” Psychiatric Services, vol. 69, no. 4, (2018): pp. 396–402.

Methodology: The study reported results of surveys of senior executives at commercial health plans regarding changes to MH/SU benefits over time. The surveys were conducted between September 2010 and June 2011, and again between August 2014 and April 2015. The study did not independently verify the self-reported data from senior executives.

Examples of key findings: The study did not find significant noncompliance with MH/SU parity requirements. It found that fewer plans required prior authorization for outpatient MH/SU treatment than medical treatment. This suggests compliance with the requirement that NQTLs applied to MH/SU treatment be no more restrictive than those for medical/surgical treatment. The study also found that 6 percent of products used coinsurance for MH/SU treatment and copayments for other medical care. While this is not necessarily noncompliant, this could result in noncompliant higher cost-sharing for MH/SU treatment than other medical care in some cases, because coinsurance may result in higher cost-sharing than a copayment.

Horgan, Constance M., et al. “Health Plans’ Early Response to Federal Parity Legislation for Mental Health and Addiction Services.” Psychiatric Services, vol. 67, no. 2 (2016): pp. 162–168.

Methodology: The study reported results of surveys of senior executives at commercial health plans regarding changes to MH/SU benefits over time. The surveys were conducted between September 2010 and June 2011. The study did not independently verify the self- reported data from senior executives.

Examples of key findings: The study found that plans complied with MH/SU parity requirements by lifting QTLs that only applied to MH/SU benefits, although 4 percent of plans had QTLs that applied to mental health treatment that did not apply to medical/surgical treatment. This study also found that fewer plans had prior authorization requirements for outpatient MH/SU treatment than outpatient medical treatment, which suggests compliance with the requirement that NQTLs applied to MH/SU treatment be no more restrictive than those for medical/surgical treatment. The study was not able to assess if prior authorization requirements were implemented differently between MH/SU and medical/surgical treatment.

Huskamp, Haiden A., et al. “Coverage of Medications That Treat Opioid Use Disorder and Opioids for Pain Management in Marketplace Plans, 2017.” Medical Care, vol.56, no 6(2018) pp.505-509.

Methodology: The study compared coverage for medications used to treat opioid use disorder (an MH/SU benefit) and opioids used to treatment pain management (a medical/surgical benefit) in 2017 health insurance marketplace exchange plans, using publicly available data for a sample of 100 plans.

Examples of key findings: The study found that most plans covered at least one of the four primary medications intended for opioid use disorder treatment, while 100 percent of plans cover short-acting opioid pain medications. For example, 80 percent of plans cover a generic combination of buprenorphine and naloxone for treatment of opioid use disorder, while 100 percent of plans cover the generic version of Oxycodone and Fentanyl for treatment of pain disorder. The study states that additional monitoring is needed to ensure that plan coverage of MH/SU medications complies with MH/SU parity requirements.

Thalmayer, Amber Gayle, et al. “The Mental Health Parity and Addiction Equity Act Evaluation Study: Impact on Nonquantitative Treatment Limits for Specialty Behavioral Health Care.” Health Services Research, vol. 53, no. 6 (2018): pp. 4584–4608.

Methodology: The study analyzed a sample of health benefit design data from 2008 to 2013. This data on large group plans was obtained from a managed behavioral health organization and was analyzed for changes in NQTL requirements for plan members before and after parity requirements were implemented.

Examples of key findings: The study found plans were less likely to require NQTLs, such as prior authorization and financial penalties for failure to obtain prior authorization for MH/SU treatments after MH/SU parity requirements were implemented, among plans that manage MH/SU benefits separately from other medical benefits. However, the study also found that plans were more likely to include a penalty for failing to obtain prior authorization for MH/SU treatments after MH/SU parity requirement implementation if the MH/SU benefits were managed by the same plan that managed other health benefits. The study was limited in that it did not assess how NQTLs were implemented by plans and so could not determine if there were differences in how MH/SU and medical requirements were applied.

Thalmayer, Amber Gayle, et al. “The Mental Health Parity and Addiction Equity Act (MHPAEA) Evaluation Study: Impact on Quantitative Treatment Limits.” Psychiatric Services, vol. 68, no. 5 (2017): pp. 435–42.

Methodology: The study analyzed a sample of health benefit design data from 2008 to 2013. This data on large group plans was obtained from behavioral health organizations and was analyzed for changes in QTL requirements for plan members before and after MH/SU parity requirements were implemented

Examples of key findings: The study found that QTLs were nearly eliminated after MH/SU parity requirements were implemented. This suggests that plans became compliant with parity requirements because if a QTL does not exist it cannot be more stringent than a medical/surgical QTL. The study noted that plans that continued to have QTLs might be noncompliant with MH/SU parity requirements, but did not assess that.

Center on Addiction, Uncovering Coverage Gaps II: A Review and Comparison of Addiction Benefits in ACA Plans, (New York: March 2019).

Methodology: The study reviewed plan documents to assess compliance with MH/SU parity requirements from a sample of 2017 benchmark plans and plans sold on health insurance exchanges.

Examples of key findings: The study identified nine benchmark plans and 10 states that sold plans that were not compliant with MH/SU parity requirements (where this could be identified through plan documents). The study was able to identify non-compliant financial requirements in three benchmark plans and non-compliant QTLs in six benchmark plans, and found one state that sold a plan to with a possible non-compliant QTL. The study also identified two benchmark plans that had possibly noncompliant NQTLs, and 21 states that had either NQTL violations or indications of possible NQTL violations that could not be fully assessed with the available information. The study noted that plan documentation did not contain sufficient information to fully assess compliance with MH/SU parity requirements related to NQTLs.

Appendix III: Examples of Mental Health and Substance Use Disorder Parity-Related Guidance from HHS, DOL, and Treasury

Summary This October 2016 publication provides an overview of federal disclosure laws affecting private-sector, employer-sponsored group health plans and health insurers.

Between December 2010 and September 2019, the three agencies issued 10 guidance documents with 58 frequently asked questions about MH/SU parity requirements. These frequently asked questions are designed to help people understand the law, and benefit from it as intended through examples that illustrate the requirements. Topics include the types of plans covered by MH/SU parity requirements and specific examples of how to determine if a practice or policy is permissible under the law.

This June 2016 brochure gives a high-level overview of MH/SU parity requirements and lists common limits placed on MH/SU services that are subject to parity.

This April 2018 action plan released by HHS covers recent and planned actions related to HHS, DOL, and Treasury’s implementation of MH/SU parity requirements. The plan, required by the 21st Century Cures Act, includes information about a public listening session the agencies held in July 2017.

This February 2016 publication describes MH/SU parity requirements for people with employer-sponsored health plans who need MH/SU treatment. It describes why some MH/SU benefit claims are denied and how to file a claim, the denial of a claim, and the appeals process.

Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA)

DOL issued this self-compliance tool in April 2018 to help both issuers and regulators determine if a plan or issuer complies with MH/SU parity requirements and other related federal health care laws.

In May 2016, DOL and HHS published this brief guide of examples of plan provisions that—absent similar restrictions on medical/surgical benefits—could be “red flags” that a plan or issuer may be imposing an NQTL that is out of compliance with MH/SU parity requirements and should be reviewed.

Appendix IV: Comments from the Department of Labor

Appendix V: Comments from the Department of Health and Human Services

Appendix VI: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Kristi Peterson (Assistant Director); Summar C. Corley (Analyst-in-Charge); Kerry Casey; and Eric J. Schwab made key contributions to this report. Also contributing were Leia Dickerson, Cynthia Khan, Laurie Pachter, Ethiene Salgado- Rodriguez, and Emily Wilson Schwark.