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When you break a bone and receive medical treatment as a result, you expect your health insurer will provide coverage and payment for the treatment rendered. The same can be said for many other physical injuries, ailments, and conditions. However, the reality is vastly different for those seeking coverage for mental health (including substance use disorder) services, despite years of federal and state level efforts to address and resolve coverage inequities.

In an effort to rectify ongoing coverage parity, the Biden Administration recently unveiled a proposed rule which, in short, builds on the fifteen-year-old federal Mental Health Parity and Addiction Equality Act (MHPAEA) to address gaps in current legislation, provide clarity as to coverage expectations, and close loopholes — all in an effort to increase much-needed access to mental and behavioral health services.

The MHPAEA generally prevents group health plans and health insurance issuers that provide mental health (MH) or substance use disorder (SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical benefits. The MHPAEA does not require health insurers to provide MH and SUD coverage. However, if a group health plan or health insurance issuer does cover MH or SUD services, the MHPAEA prohibits the plan or issuer from imposing on MH and SUD services qualitative or quantitative limits that are more restrictive than limits on medical or surgical care.

In brief overview, the proposed rule seeks to accomplish the following:

Address the Gap in the 2020 MHPAEA Update

Effective February 2021, the federal Consolidated Appropriations Act (CAA) established mandatory reporting requirements for group health plans and other applicable health issuers that cover both MH/SUD and medical and surgical benefits to demonstrate compliance with parity by and through comparative coverage analyses of these services. In theory, the CAA was designed to shed light on inequities and strengthen the impact of the MHPAEA. However, the 2021 CAA stopped short of requiring any meaningful post-reporting obligations, which Biden’s proposed rule seeks to rectify by not only requiring additional outcomes-based analyses to uncover where plans are failing to provide equitable coverage but, requiring applicable health issuers to use these reports to improve access to MH and SUD care.

Create Clear Expectations

The proposed rule further provides that applicable health plans cannot engage in practices that make it more difficult for covered members to receive MH/SUD treatment then physical health services, by providing clear examples of prohibited practices — specifically, for example, barring restrictive prior authorization practices.

Close Loopholes

As initially enacted, the MHPAEA did not extend to non-federal governmental health plans (i.e.., those offered to state and local government employees); however, the newly proposed rule closes this coverage gap. The result is that more than 200 additional health plans covering nearly 90,000 members must ensure compliance.

The window for public comments on the proposed rule is expected to open soon and remain open for 60 days.

During this timeframe, potentially impacted parties can take a number of proactive steps including, for example, formally responding to the proposed rule and/or preparing for the proposed changes by reviewing current parity policies and procedures, adopting a clear, written compliance plan, and engaging in comparative coverage analyses, which soon may be required.

For questions regarding the implications of Biden’s proposed rule, assistance in drafting a public comment to the same, or guidance assessing compliance with the proposed legislation, please do not hesitate to contact BMD Member Daphne Kackloudis at dlkackloudis@bmdllc.com or BMD Attorney Monica Andress at mbandress@bmdllc.com.