Mental Health Parity with Less Math Required

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The federal government has finalized significant updates to mental health parity requirements for employer health plans and individual private health insurance. This regulation aims  to ensure that  plan restrictions on coverage  such as prior authorization requirements and restricted network access, are not more burdensome for those seeking covered mental health and substance use services than for those seeking  medical and surgical care.  These so-called, “nonquantitative treatment limits” (NQTL) have been the focus of agency guidance, enforcement  and industry push-back for quite some time. Congress  passed a law in 2020  requiring  employer plans and insurers to “perform and document”  in a written analysis  parity between NQTLs for mental health and substance use disorder services with those for medical and surgical care.

The final regulation removed a requirement from last year’s proposed rules for plans to use  complicated mathematical tests to justify NQTL restrictions for access to mental health and substance use disorder treatment. Even with the mathematical tests removed, employer and insurer groups may still challenge these regulations in court now that federal court standards for reviewing certain agency regulations were changed by the US Supreme Court in June. Some employer and insurer groups continue to question the final rules, calling some of the requirements unworkable and beyond what Congress intended.

The final regulations also require that  all plans and insurers collect and review  “outcomes data” to assess how NQTLs affect consumer access to mental health and substance use disorder care, but contains few specifics about what data indicators should be used. Consumer surveys or provider network analysis might be useful to evaluate access to services.  Data from the KFF 2023 Survey of Consumer Experiences with Health Insurance indicates that 26% percent of those who said their health insurance denied or delayed prior approval for a service in the past year had sought treatment for a mental health condition.  Also, a recent KFF analysis of provider network data for Health Insurance Marketplace plans showed that 25% of enrollees were in plans where there were 16% or fewer nearby psychiatrists in their network.

 While many Medicaid plans have separate but similar parity requirements as commercial coverage, those rules have not yet been updated. However, CMS did release a template tool for documenting compliance with Medicaid parity and is seeking public comment.