3 Questions About DOL’s Mental Health Parity Push

Law 360 (November 18, 2022, 5:44 PM EST) —

The U.S. Department of Labor has vowed to continue its aggressive enforcement of a law requiring employer health plans to provide equal coverage for mental health and addiction treatments and other types of medical care, despite expected political pressure from the Republican-led U.S. House of Representatives.

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 sat on the books for more than a decade before Congress decided federal regulators needed sharper teeth to get plans to comply and tucked powerful new authority for the DOL into a massive December 2020 spending bill.

In particular, the DOL was directed to ask plans to provide analysis showing that their own limitations on care complied with the law — something the DOL gave every group health plan it surveyed a failing grade on in a report to Congress in January.

Now, House Republicans who have vocally criticized the DOL’s enforcement push may conduct additional oversight. But Lisa M. Gomez, assistant secretary of labor for the Employee Benefits Security Administration, said enforcing the mental health parity law was among the DOL’s top concerns.

“Enforcement of the Mental Health Parity and Addiction Equity Act continues to be one of the highest enforcement priorities for the Department of Labor,” Gomez said in a statement to Law360 earlier this week.

Gomez said that “EBSA is pursuing enforcement of the law through various means including investigations into parity violations by plans.”

She also noted that her agency was putting together a proposed rule to “strengthen” the 2008 law. The DOL said in its 2022 spring regulatory agenda it was aiming to put out those regulations in July 2022.

Here are three questions benefits attorneys have about the DOL’s push to enforce the mental health parity law with the GOP in control of the House.

How Hard Will the Republican House Push Back?

A Republican-controlled House will inevitably launch new oversight into the top priorities of President Joe Biden’s administration, including mental health. And with control of the chamber that originates spending bills, the House Republican majority can also attempt to swipe back at the DOL using the budget process, though anything they pass must eventually be negotiated with a Senate narrowly controlled by Democrats.

Some Republican leaders in the chamber have already laid out the contours for debate. For example, during floor debate on a parity-related bill that passed the House in September, Rep. Virginia Foxx, R-N.C., the House Education and Labor Committee’s top Republican, characterized Biden’s enforcement push as punishing employers for failing to comply with unclear policies.

In a statement provided to Law360 on Thursday, Foxx criticized the DOL for failing to give employers and health plans clearer guidance on how to comply with the law.

“The Department of Labor has turned ambiguity into an art form. Employers and plans simply want adequate guidance on how to comply with these laws, and yet, the department opts to throw them in the deep end without instructing them on how to swim,” Foxx said. “Enforcement, without the appropriate level of clarity on what the requirements are, is grossly unfair no matter how you slice it. I hope this rule provides the clarity required by law, but sadly this administration has a track record of rulemaking by litigation.”

As for what parity issues Republicans might focus on in the House if they conduct additional oversight into increased enforcement, attorneys said there is a wide range of issues to potentially probe.

David Shillcutt, senior counsel at Epstein Becker Green, said, “I could imagine Congress taking an interest in the extent to which provider reimbursement itself is considered to be a limit on services that would be subject to parity, as opposed to merely a factor in the design of provider networks.”

Shillcutt explained that’s because there’s “ambiguity about how parity applies to provider networks and the extent to which provider reimbursement rates in particular are subject to parity.”

Oversight priorities aside, others are more broadly pessimistic about the House switch-up’s effect on policy related to parity and other mental health issues, including plaintiff-side attorney Matt Lavin, a partner with Arnall Golden Gregory LLP.

Lavin said the change of control in the House lowers the prospects for enactment of legislation like what passed the Democratic-controlled House in September, which included numerous mental health parity-related items, “given the influence insurance company lobbyists have in Washington and particularly with Republican legislators.”

That bill would have banned certain kinds of discretionary clauses in health plans that change the standard of review for appealing claim denials and also would have seriously beefed up the DOL’s authority to enforce mental health parity laws. Changes included giving the agency requested authority to slap civil fines on insurers for non-compliance, and authorizing millions more for enforcement. The bill hasn’t been taken up in the Senate.

“That was going to give them a sword and give them some ammunition,” Lavin said.

How Will Proposed Rules Clarify Compliance?

A burning question for benefits attorneys, employers and plan sponsors on the proposed rules clarifying parity that Assistant Secretary Gomez referred to has to do with how, and whether, the DOL will make it easier for plans to demonstrate they’re following the law.

Proposed in the form of amendments to final rules implementing the Mental Health Parity and Addiction Equity Act from 2013, the DOL’s own description of the proposal is vague and says it will “clarify plans’ and issuers’ obligations under the law, promote compliance with MHPAEA, and update requirements to take into account experience with MHPAEA in the years since the rules were finalized as well as amendments to the law recently enacted as part of the Consolidated Appropriations Act, 2021,” referring to the December 2020 spending bill that provided the crucial authority changes.

Benefits attorneys say there’s a lot to unpack there, and they hope the proposed rules will provide some much-needed information for plans.

Shillcutt said there’s a “laundry list” of items that plans and issuers want in the proposed rule, but among the most important would be definitions for “factors, sources and evidentiary standards” that plans need to analyze for compliance with parity requirements.

Anne Tyler Hall, managing partner at Hall Benefits Law, said, “It’s exciting to think that we would get clarity” on the new requirements, when asked about the proposed rule the DOL is working on. She said an important question the proposal needs to answer is, from the DOL’s point of view, “What to them is compliance?”

Ideally, Hall said, plans and employers would love to have a safe harbor — “If you’ve satisfied all these certain requirements, that you’re going to be found to be in compliance” — but she conceded that kind of structure was probably unlikely to make it in the proposal.

Hall said another item she’d like to see addressed in the proposal to aid compliance is some kind of consequence for third-party administrators if they refuse to provide information that plans need in order to perform the DOL-required analyses on treatment limits.

“If the service provider is saying, ‘Well, I don’t really have anything that’s obligating me to provide this to you, and I’m going to claim that it’s proprietary,’ there’s a real disconnect there. I mean, the plan sponsors are in a difficult situation,” Hall said.

Are Intellectual and Developmental Disabilities Mental Health Issues?

Another issue attorneys including Shillcutt and Hall said they’d like to see clarified has to do with how the regulator characterizes different kinds of intellectual and developmental disabilities under parity.

“To date, there is no federal guidance that clearly answers that question, and we have seen inconsistency among both federal and state regulators in the extent to which intellectual and developmental disabilities, including autism, in particular, are considered behavioral health conditions,” Shillcutt said.

“Many Medicaid agencies have defined them to be medical/surgical conditions, and [the Centers for Medicare and Medicaid Services] has approved those decisions, but yet the Department of Labor has taken enforcement against plans for limits on benefits for those conditions under parity,” Shillcutt added.

Hall said that questions about the categorization of conditions like autism and anorexia were among the many issues “subsumed” within the call for clarity from plan sponsors about the parity law.

Shillcutt said more broadly, “The open question going forward is, what is the problem that is going to be solved through parity enforcement very specifically?”

“And what types of plan benefit designs or operations are going to be identified as violations that need to be changed, as opposed to more reporting that does not lead to any changes that have any significance to beneficiaries?” Shillcutt asked.

–Editing by Kelly Duncan.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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