AHLA's Speaking of Health Law
AHLA's Speaking of Health Law
Top Ten 2024: Major Expansion of Federal Regulation of Managed Care Through the Mental Health Parity and Addiction Equity Act
Based on AHLA’s annual Health Law Connections article, this special series brings together thought leaders from across the health law field to discuss the top ten issues of 2024. In the second episode, Kathy Reep, Senior Manager, PYA, speaks with Kevin Malone, Member of the Firm, Epstein Becker & Green PC, about trends and developments related to mental health parity and the Mental Health Parity and Addiction Equity Act (MHPAEA). They discuss the July 2023 proposed rule related to the MHPAEA and its implications, issues related to non-quantitative treatment limitations, and the nature of comments being submitted on the proposed rule. From AHLA's Behavioral Health Practice Group. Sponsored by PYA.
Watch the conversation here.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
A HLA is pleased to present this special series highlighting the top 10 health law issues of 2024, where we bring together thought leaders from across the health law field to discuss the major trends and developments of the year. Support for A HLA in this series is provided by PYA, which helps clients find value in the complex challenges related to mergers and acquisitions, clinical integrations, regulatory compliance, business valuations , and fair market value assessments, and tax and assurance. For more information, visit PYA pc.com.
Speaker 2:Hello and thanks for joining our podcast. I'm Kathy Reap , a senior manager with PYA. I'm honored to speak with Kevin Malone with Epstein Becker Green on issues surrounding Mental health parity, the Mental Health Parity and Addiction Equity Act. Also known, and this is a mouthful for an acronym, the M-H-P-A-E-A provides group health plans and health insurers that , um, offer mental health services. It requires that they provide services and benefits at the same level as they would for , uh, physical health benefits, but there's been a lot of issues over the years since the ACT was originally passed. And so Kevin and his partner , um, have written an article , um, as part of the top 10 related to the Mental Health Parity Act and the provisions that have been , um, recommend , revised or proposed for , um, future years . So, Kevin, can you give me a little bit of information about yourself and your in issu your interest in the issue of mental health parity?
Speaker 3:Thank you so much, Kathy . Um, and it's a pleasure to be on the podcast. Um, I, as you mentioned, I'm a partner at Epstein Becker and Green, and with my colleague David Hilt , my co-author, we co-lead our mental parity practice, and I've been at the firm a little over seven years, and I've worked on parity , uh, since I joined the firm. And my personal background is , uh, I became a lawyer after previous career in public policy roles in the federal government starting , um, back in 2010, early 2010, in the substance abuse and Mental Health Services administration in the Obama administration. And that's really where I was introduced to parity , uh, back in , uh, from a policy perspective, not as a , as a lawyer working on the initial commercial market parody regulations and efforts to inform and educate providers and health plans , uh, about the act under the interim final rules before the first commercial market parody regulations were adopted in 2013. Um, I worked on some of those on behalf of SAMHSA as a , an advisory role to the , uh, tri departments in drafting those regulations. And then I went over to the Centers for Medicare and Medicaid Services, and I participated in drafting , um, the , the very first draft of the Medicaid mental health parity regulations that apply to alternative benefit plans, CHIP and Medicaid managed care. My colleague David Chico came over and he did most of the writing and cleaning up after me , uh, uh, on, on the Medicaid regs. So , um, for me, it's something that I've worked on , um, as a, as a policy person in my first career and now have , um, been deeply involved in it from both a policy and legal perspective , uh, in private practice.
Speaker 2:Thanks, Kevin. We suddenly have a , uh, proposed rule, I think it came out in July of this, of 2023, I almost said of this year, but we're just starting off in January. Um, there have been a lot of updates to the rules since it was originally published, but what makes 2023 July, 2023 different?
Speaker 3:Yeah, that's a great question, Kathy . And, you know, we, we could have written a lot more , uh, than we did about the implications of , uh, the proposed rule. Um, but you know, as you , as you point out, parity guidance has been , um, steadily evolving since it's , uh, the, the passage of the 2008 act itself. Um, and you know, I think the way that I think about it is that the, the initial commercial market rule that was finalized in 2013 , um, you know, really did a lot of blocking and tackling related to setting up the rubric, then nomenclature, you know, the sort of new set of terminology about the concept of mental parity to many different aspects of insurance benefit design. And , uh, for that reason, it focused a lot on things that were considered to be the, you know, primary problems in insurance market discrimination at that time. Those are things like , um, uh, annual or lifetime dollar limits on mental health or substance use disorder benefits. Things like quantitative caps on the total number of services or days or visits that would be covered under an insurance policy during a calendar year. Um, and things like cost sharing and categorical exclusions. And so much of the 2013 regs focus on , um, quantitative parity testing rules related to , um, insurance benefit design and things like exclusions, annual dollar limits, quantitative caps, et cetera , and set up what at the time was a very novel methodology for , um, performing an actuarial calculation for benefit design for the future year , um, uh, and ensuring that those benefits were not discriminatory and it's, it goes, that's really what most of the 2013 rule about. There's a bunch of other issues in there related to disclosure, but things related to medical management and what came to be referred to as non-quantitative treatment limitations were really included in the initial commercial regulations only as like a , an afterthought or as a sort of a , a safety net to sort of prevent plans from moving discriminatory quantitative limits into soft caps or like, like a really aggressive utilization management. That's sort of why they put forward the NQTL concept, which was not expressly identified in the , uh, 2008 ACT itself. And so in from the 2013 rule until July of , of last year, there was voluminous subregulatory guidance sort of explaining and expanding upon that, that , uh, those interpretations from the, the initial 2013 rule, particularly related to non quantitative treatment limits. And then the Consolidated Appropriations Act sort of caught that back up in the statute, but the regs were then sort of out of sync. So you had, the statute had been revised to sort of catch up with the non quantitative treatment limitation , um, compliance obligations, but the regs were now sort of out of sync. And so 2023 was like really the first full scale rewrite of the , um, actual regulatory regime across the different markets subject to parody at the federal level , um, other than Medicaid. And , um, and, and so as a result, it's, it's a very complex regulation. It's sort of, it , it makes a bunch of technical edits to sort of , uh, catch up from what was done , uh, in the intervening years and subregulatory guidance, but then it actually goes far beyond that, and it , uh, takes into, it makes substantive policy changes related to the , um, the obligation on health insurers and group health plans in proving that their medical management and network management activities are not discriminatory and as whole other domains of compliance obligations that didn't exist prior to the proposed rule . And well , don't exist now , uh, prior to finalization. Um, and so really the , the way that I describe it is that it, it's really taking the focus of parity from being primarily on insurance benefits, cost sharing , quantitative caps , uh, annual lifetime dollar limits, and eliminating discrimination there, and is now focused on the managed care practices of insurance companies, network administration, utilization management, medical necessity criteria, and that is now the front and center focus of parity, and which
Speaker 2:That's where we've seen their issues of denials and prior authorizations and things like that on that end .
Speaker 3:That's, that's where you have seen the biggest deficiencies in the audits that have been mm-Hmm . <affirmative> performed since the Consolidated Appropriations Act , uh, dramatically increased the amount of federal audit activity. Um, and they, they basically found that hardly any plans had , um, comparability truancy analysis ready , uh, to effectively prove that they were not discriminatory. And so the, and there can , there's basically two things that drove the, the focus on NQ tls. One is the, the sort of documented evidence related to access that people continue to have difficulty finding access to network providers and , um, that is ascribed to n network administration activities. And the other is that in audits plans weren't providing , uh, analyses that were satisfactory. And so it's both a documentation issue and a substantive, like epidemiological access issue. And those sort of came together in these new proposed rules. The , uh, I, I tend to be cautious about describing too much weight to , um, uh, sort of complaints about utilization management and denials, because those are things that every provider in every aspect of a healthcare system and every consumer of healthcare services, medical, surgical, you talk to cancer patients and they're gonna be really upset about utilization management and denials. You talk to specialists in every, every field. You talk to hospitals, you talk to anybody. It's not a behavioral health specific complaint about utilization management. Hardly anybody goes through utilization management and says, man, that was awesome. Really loved that <laugh>. Um , and so the, like for me, the , there are a lot of complaints and providers do often raise that their subject to utilization management and denials in ways that medical surgical providers are not. But if you ask medical surgical providers, they would say the same thing. It's sort of everybody feels that they are the , that's , that's they're unfairly treated
Speaker 2:Going into effect this year related to, for example , um, um, me Medicare Advantage and other payers Exactly . Manage payers in terms of prior authorizations and the lot . Yeah ,
Speaker 3:Exactly. Yeah. So to me, I think the , that it , it is part of a, a broader , uh, sort of federal government-wide , uh, increase in scrutiny about managed care techniques in general, which I, I would describe as utilization management, medical necessity criteria, and network administration. Um, and the, the proposed rules for parity in my mind, really constitute the most sweeping effort across the entire insurance industry at regulating those practices like in a generation, because as you me , you mentioned the Medicare Advantage , uh, rules that just went into effect five days ago for utilization management, you know, new committees sort of like DR like really significantly increasing the requirements about documenting the basis of medical necessity criteria for ma, those requirements are much simpler and much less aggressive than what parity is doing. Parity doesn't apply to Medicare Advantage, right? But me , the , uh, mental health parity regulations that are proposed for 20 , like that were proposed this year, if implemented as proposed, would be much more sweeping than what the Medicare Advantage regs were. And they applied to every, every self-funded group health plan, every full insured commercial product in the entire country. And so that , it's really hard to overstate like how sweeping a managed care regulation this is because it's now really focused on the purpose, the basis, the process, the outcomes of everything that an insurance company or managed care organization does. Network administration, utilization management, medical necessity criteria, all of those things that are sort of traditionally under, except for like state utilization management regulations and state network adequacy regulations or like at the discretion of plans . It's like their business judgment for like arms length negotiation, network building, et cetera . And parody now , um, imposes very significant new restrictions on that entire process that are very onerous. You are subject to a presumption of being discriminatory in all those activities unless you're able to maintain comparability and stringency analyses that rebut that presumption. That's what the comparability and stringency analyses are are. And so it's , uh, it's potentially transformative into the way the managed care industry works and gives the tri agencies Department of Labor, treasury and HHS and state departments of insurance , uh, really sort of a , um, a , a a a loophole into which they can reach in and micromanage every aspect of the managed care practices of an insurance company , um, or a group health plan . So , um, it's, it's a big deal.
Speaker 2:Uh , yeah . You know, the , the issue of how the , um, NQ TLS is would change , um, the whole issue of managed care. You've talked about as, you know, just in giving us some background on the rules, but do you see this becoming a final rule?
Speaker 3:Yeah, I do. I mean, I , from all of our conversations with the , like , uh, in , in , in , I wear a number of hats and one of them is I'm the , uh, as a consultant to, to URAC and running their, helping them run their only, the only commercial market accreditation program for , um, uh, health plans to , uh, obtain third party accreditation for mental health parity compliance. Mm-Hmm. <affirmative> . And we've met with folks in the White House and tri agencies about our accreditation standards, and they've been super clear in all of those meetings and in my work as outside counsel to trade associations and , uh, insurers that they have every intention of adopting a final rule before the Congressional Review Act deadline , um, for the next , uh, congress. And so I think that they are absolutely set on finalizing a rule this year when the implementation deadline is, is I think potentially more likely to shift if they feel that there's gonna be a lot of work , uh, on part of the industry to meet the new requirements. But they're definitely, they're definitely very committed to finalizing something this year
Speaker 2:In the past , um, as, as avid reader of the Federal Register. I apologize, but that is one of my favorite pastimes. Um, one of the things I've always liked to do is to go back as that we approached a , um, deadline on comments on a proposed rule and go out and look at what are people saying? Mm-Hmm . <affirmative> and tend to have a, a whole bunch of the same letter. Okay. That often happens. You have the one-liners, I support this or I disagree with this. Um, and then depending upon the various rules, like if we, again go back to that Medicare Advantage rule comments that were addressed from the payers versus the providers. So what kind of comments are you seeing out there as it relates to , uh, the July, 2023 proposal?
Speaker 3:Yeah, I mean, they're , they , they had some of the most number of comments that they've ever received , um, uh, on this proposed rule. And , uh, as you point out, many of them are form letters of support or opposition. But , um, there have been a number of trade association , um, comments from industry and from some national carriers , um, that , um, sort of take a pretty sophisticated approach in , um, pushing back on some of the technical aspects of the rule. Um, and many of them are, are the , they're all available and they're really , uh, amazing reading. Um, the sort of Blue Cross Blue Shield Association, the Association of Be Health and Wellness, all have very sophisticated comments that have been filed that really , and I would think
Speaker 2:That would both be very different, blue Cross Blue Shield Association versus the Behavioral health group.
Speaker 3:Well, the behavioral health and wellness group is a trade association of behavioral health specialty health plans,
Speaker 2:But I would think that their comments would be different than Blue Cross.
Speaker 3:There's a , there's some differences and some overlaps. Um, yeah, but I think that the , the, the big takeaway for me, like from reading the comments is that industry feels that we're, we've sort of reached the point of diminishing returns with regards to the current approach of NQTL enforcement, which is that the approach on documenting these complex anal analytical documents for like very complex operational requirements in rebuttal of a presumption of discrimination don't necessarily result in substantive changes to the results with regards to outcomes, access, quality, et cetera. But they do , uh, uh, they are extremely labor intensive and expensive to produce and maintain. Um, and it , they are unique in the field of discrimination law in the United States. Um, and so people, like a lot of the comments are sort of like, we should focus on results like quality measures. Kinda like the, the, a lot of people point to the way CMS oversees Medicare Advantage plans with like stars measures, for example, or ratings Yeah, yeah. Where like they're really focusing on like outcomes and like the , they spend an enormous amount of time producing like very clear technical guidance that's refined every year by very sophisticated administrators of outcomes measures and process measures that are used to evaluate whether plans are doing the right thing. And , um, there's a lot of the comments say that parity oversight should shift kind of in that direction where you have , um, a real focus on things like, like access , uh, things like , um, um, uh, things like denial rates, things like overturn rates, things like , like sort of real specific like results that impact actual people's lives, like real participant , uh, experience. And then have the analytic documents, the sort of voluminous 40, 50 page documents that explain why things were developed, why they were implemented, like the sort of composition of the committees that developed them, all of the evidence behind each like technical decision and the design of it, that those are only constructed. Um, when the results show a disparate result, sort of like a , the burden shifts to the plan once the results show that that's one of the, some something that the plans have pushed for . But in general, there's , uh, there's a lot of pushback about the amount of , um, upfront documentation necessary that has to be maintained at all times for everything that constitutes a non quantitative treatment limit. Um, you know , if , if you have an NQTL analysis that's like 40 pages for , um, prior authorization for the inpatient in-network classification, and you have to maintain that for the prior authorization , uh, in-network, pardon me, in-network outpatient office in-network, outpatient other , uh, <laugh> , your , your out-of-network classifications, you end up having, you know, something in the, in the range of, you know , uh, a thousand pages just for prior authorization that have to be maintained at all times for every market. Um , and
Speaker 2:That is one of the , uh, nq tls
Speaker 3:And that's a single NQ tl. So you haven't the , in some cases you can have, like, depending on how you're interpreting the NQ tls, you can have dozens of NQ tls. Um, give us a couple. What's that ?
Speaker 2:Give us a couple of more. We've got prior ,
Speaker 3:So other NQ tls of course, like the , the way that I tend to categorize it is sort of into four buckets. So you have your, like clinical policy, nq , tls, like medical necessity criteria, clinical policies , uh, uh, uh, clinical coverage guidelines that are not clearly medical necessity criteria. Those are the things that are used across all different aspects of coverage and really are developed in a , in , in an independent way from utilization management. Second is utilization management itself. So prior auth, concurrent review, retrospective review instances where you have plans that are like any aspect where you're having an independent review of medical necessity in an individual case against those criteria. That's the second bucket. And then the third is sort of network administration, and that's gonna be everything from provider reimbursement methodologies, credentialing , uh, recruitment plan development, network adequacy criteria. Um, those are all your network administration in QT halls . And then the fourth is gonna be sort of , uh, everything else like your coding edits , um, potentially your , um, uh, exclusions, coverage exclusions. Um, those may be covered in your medical assess criteria, clinical guidelines, or may be somewhere else. Um, and those all, you need to have NQTL analyses prepared to defend all of those things to show that they're, they're developed in administered in a non-discriminatory way. Um, and the new rules, like that's current state, like under the Consolidated Appropriations Act in 2013 regs and Subregulatory guidance, you have to have those analyses ready on request at all times. The proposed rules like significantly increase the complexity of maintaining them, the composition of them, the, the actual technical rules about their structure and composition become more like much more intense. Um, so it's , uh, it's a big undertaking and I think that the feedback in a lot of the comments is like, look, we're trying, we don't, you're , you're really unhappy with everything that we're doing. We are sort of not seeing this making a big difference and costing a ton, like for everybody involved, regulators like the auditors plans. And it doesn't seem like it's producing like, dramatic results with regards to differences in access. And maybe we should go back to the drawing board and think of a different way of addressing this.
Speaker 2:Wow . Kevin, I wanna thank you for your time and I wanna thank you and , uh, David Sheko for doing the article because I think it really brings to light the issue of parody and what we've got facing us coming forth in 2024 in terms of a final rule. Hope we continue the conversation once we get a final rule and actually see what they do to us implementation deadlines and the like. But with that, thank you very much for your time .
Speaker 3:Oh , Kathy , it's my pleasure. It's , uh, it's very important, you know, the, the , we have public health issues related to substance use disorders, mental health crises are like something that everyone agrees are a really significant problem. And parody right now is where behavioral health policy is being made in, in a big way at the federal level. And so it's , uh, it's super important to everybody. And so it's , uh, it's a pleasure to talk to you about it
Speaker 2:And we need more people like you to be passionate about it.
Speaker 3:Oh ,
Speaker 2:Thank you.
Speaker 3:Thank you so much.
Speaker 1:Thank you for listening. If you enjoy this episode, be sure to subscribe to a HLA speaking of health law wherever you get your podcasts. To learn more about AHLA and the educational resources available to the health law community, visit American health law.org.