A recent settlement by the Trump administration has made it clear that it intends to enforce parity compliance when it comes to proper access to mental health and substance use disorder services. In a suit against the Kaiser Foundation Health Plan, which provides health coverage for the estimated 13 million enrollees in Kaiser Permanente, a nonprofit managed care company, the Employee Benefits Security Administration (EBSA) found that the company failed to maintain adequate behavioral health provider networks. In addition to paying a $32 million settlement, Kaiser has agreed to improve monitoring of its behavioral health network for adequacy.
According to EBSA, Kaiser violated parity regulations by failing to have sufficient mental healthcare and substance abuse treatment providers in its network. The company also allegedly “used patient responses to questionnaires to improperly prevent patients from receiving care.” As a result, Kaiser plan participants paid additional costs for out-of-network behavioral healthcare.
The settlement covers those who participated in the Kaiser plan after January 1, 2021, and who resorted to paying for out-of-network behavioral health services after trying to access in-network behavioral health services. As part of the settlement, Kaiser agreed to pay $28.3 million to plan enrollees and their providers and a $2.8 million penalty to EBSA. Furthermore, Kaiser will more closely monitor the adequacy of its provider network and reduce appointment wait times for plan participants. The company will also take steps to improve its care review process and ensure that plan participants receive medically necessary care.
In its response to the settlement, Kaiser emphasized that the lawsuit covered only previous practices that ended in 2023. They also pointed to the surge in demand for behavioral healthcare services after the COVID-19 pandemic and the accompanying shortage of behavioral health professionals, as well as a 10-week strike by 2,000 mental health clinicians in 2023.
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the 21st Century Cures Act of 2016 require parity in employer-sponsored healthcare coverage for medical care, mental health services, and addiction treatment. More specifically, federal parity laws require these plans to provide equivalent coverage for all these types of services based on both quantitative and non-quantitative treatment limits (NQTLs). Quantitative treatment limits relate to the dollar value of the benefits provided, whereas NQTLs include standards such as the requirements for individuals seeking inpatient care.
EBSA previously announced that it would make behavioral health parity compliance a priority, despite rejecting Biden-era parity regulations focused on NQTLs. Rather, it sought new ways to enforce parity rules by “targeting the most serious violations by plan and service providers that block participants and beneficiaries from accessing their promised mental health and substance use disorder benefits.” EBSA also said that it would take steps to reduce barriers to parity, including overly burdensome claims processes, unfair care exclusions and limits, and incorrect provider lists.
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