Health Reform WK-EDGE State, federal oversight of compliance with mental health, substance use treatment parity requirements
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Friday, December 20, 2019

State, federal oversight of compliance with mental health, substance use treatment parity requirements

By Donielle Tigay Stutland, J.D.

States vary in the frequency and type of reviews they conduct after consumers enroll in plans and DOL and HHS only review parity after consumers enroll in plans according to the GAO.

In December 2019, the Government Accountability Office (GAO) released a report highlighting state and federal oversight compliance with mental health and substance abuse parity requirements. Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), large group health plans must ensure parity between the mental health and substance use (MH/SU) benefits offered and medical/surgical benefits. The 21st Century Cures Act provided for GAO to review federal and state oversight to ensure compliance with the parity requirements. The goals of the report are to: (1) examine how the Department of Labor (DOL), HHS, and states oversee health plan compliance with MH/SU parity requirements; and (2) describe what is known about the extent to which health plans are complying with MH/SU parity requirements (GAO Report, GAO-20-150, December 13, 2019).

Background. The GAO noted that as of 2018, approximately 19.1 percent of U.S. adults were diagnosed with a mental illness and approximately 15.0 percent received mental health services. Further, among individuals aged 12 and over, an estimated 7.8 percent had a substance use disorder, with approximately 1.4 percent receiving substance use treatment. In 2008, Congress passed the MHPAEA. The MHPAEA generally requires large group health plan sponsors, including employers, that chose to offer MH/SU benefits to ensure that coverage of MH/SU treatment is no more restrictive than coverage for medical/surgical treatment. To complete this report, GAO reviewed the DOL and HHS policies, guidance and reports, as well as conducted a survey and received responses from all 50 states about oversight practices.

Findings. The report 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. Nearly all states reported in the survey that they review issuer documentation for compliance with MH/SU parity requirements before they approve the issuer’s plans for sale to consumers in their state.

However, states do vary in frequency in their reviews they conduct after consumers enroll in plans. In addition to the review they conduct prior to consumers enrolling in plans, 27 states reported in the survey indicated that they have conducted some type of review related to MH/SU parity after consumers enroll.

With respect to enforcement, 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.

States identified some plan or issuer noncompliance with specific MH/SU parity requirements in 2017 and 2018 through their review of oversight efforts. Seventeen states reported identifying noncompliance a total of 254 times among issuers of individual plans and fully insured, employer-sponsored group plans.

In contrast to states, reviews by the DOL and HHS of employer-sponsored group plans only occur after consumers are enrolled in plans. For instance, DOL and HHS reported conducting targeted reviews when they receive information about possible non-compliance, such as a consumer complaint. In fiscal years 2017 and 2018, DOL completed 302 reviews that included a review of MH/SU parity in 2.2 million plans.

The report noted that more work needs to be done to determine whether relying on targeted reviews alone increases the risk of noncompliance with MH/SU parity requirements in employer-sponsored group plans. Without such an evaluation, the DOL and HHS do not know if their oversight is effective or whether they need to adopt additional strategies. Moreover, the report suggests that relying on complaints alone is an ineffective strategy, as consumers may not know about MH/SU parity requirements or may have privacy concerns related to submitting a complaint.

Recommendations. The report made recommendations to the DOL and HHS. GAO recommends that DOL and HHS evaluate whether the targeted oversight is sufficient to ensure compliance with MH/SU parity requirements, or whether alternative approaches are needed in this arena.

The DOL and HHS concurred with GAO’s recommendations.

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