New Regulations Would Change the Landscape of Mental and Behavioral Health Coverage

In what may be the most significant updates to mental health parity laws since the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA), the federal government in July 2023 proposed a new rule defining actions health insurers must take to ensure patients have the same access to mental health benefits as they do to medical benefits.

The rulemaking follows a January 2022 report highlighting the government’s increasing focus on mental health parity to care for developmental disabilities including autism spectrum disorder (ASD), and criticized previous failures to address mental health. It is clear, mental health is a high priority for the current administration. Payers have an opportunity to develop new service line strategies that can answer the parity question and address other challenges around access and value.

A History of Mental Health Parity

Mental health has increasingly come into focus as a major need in healthcare. In the 1970s and 1980s, advocacy groups and industry professionals began to raise awareness about the lack of equal coverage for mental health.

But it was not until 1996 that the first significant piece of legislation came into play with the passage of the Mental Health Parity Act (MHPA). The law requires that health plans with over 50 employees that offer mental health benefits provide equal annual or lifetime dollar limits for mental health as they do for medical and surgical benefits.

In 2008, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) was signed into law. MHPAEA expanded on MHPA and closed several loopholes requiring  mental health benefits be provided at parity with medical and surgical benefits – not just in terms of dollar limits, but also in terms of treatment limitations, co-payments and deductibles.¹ These laws made it clear that autism spectrum disorder (ASD) treatment was included under the umbrella of mental health care.

In 2010, the Affordable Care Act (ACA) stipulated mental health benefits need to be offered through expanded Medicaid and ACA marketplace plans. A decade later, the Consolidated Appropriations Act of 2021 added transparency requirements calling for payers to demonstrate compliance. The new rule takes it a step further by laying out specific examples and providing guidance to help payers avoid confusion over requirements.

Proposed Changes to the Mental Health Parity and Addiction Equity Act

The changes proposed in 2023 by the Biden-Harris administration would:

• Require payers to update health plans to ensure equivalent access between mental health and medical benefits, preventing them from using restrictive tactics such as prior authorizations.
• Call on insurance companies to follow evaluation benchmarks to ensure parity.
• Ensure compliance requirements are clear and their enforcement is easier to implement.
• Spread out enforcement responsibility among the department of Labor, Treasury, and Health and Human Services.
• End exemptions for federally provided healthcare, such as Medicaid and ACA marketplace plans.

The rule has thousands of comments and generated much conversation since it was proposed. Mental health advocates have praised the rule, some payer groups have argued it still lacks clarity, while other stakeholders and payers praised it, calling it long overdue.²

Next Steps for Payers

Payers need to prepare for the evolving landscape by documenting their process and fully understanding new requirements as they are rolled out. To ensure you are ready for new regulations and a parity-focused future, payers should:

• Push for greater access. In the fact sheet outlining the proposed changes, plans are called on to expand access when needed with narrow networks specifically called out. But narrow networks aren’t always a result of a failure to add more providers. The provider shortage is real, and payers need to find innovative ways to expand access.
• Support and drive clinical innovation. New treatment options show great promise in helping increase access by expanding the capacity of clinicians and paraprofessionals. For example, lower-hour paraprofessional-led applied behavioral analysis (ABA) and Parent-Mediated ABA are more widely becoming recognized as equally effective as high hour, practitioner-led ABA.³ They lower costs by aligning the treatment to individual needs in order to deliver quality outcomes and wellbeing.
• Ramp up efforts around regulatory readiness. Parity rules are an opportunity to speak up about what’s needed in terms of guidance and clarity. The administration has made it clear that enforcement is a priority. Ensure your networks are in alignment with what that means and are prepared to support and enhance your network management functions.

For years, Catalight has been a partner that supports payers on several key fronts, from regulatory readiness to network management to clinical innovation and beyond. Catalight is always working to be at the forefront of national conversations around parity, compliance, value and quality. It can help your organization with behavioral health care needs, tackling what you need today and preparing you for tomorrow.

[1] ParityTrack. “State Parity Regulatory Enforcement Actions.” (n.d.). Retrieved October 21, 2022.
[2] Behavioral Health Stakeholders Praise New Mental Health Parity Rule
[3] A Multisite Randomized Controlled Trial Comparing the Effects of Intervention Intensity and Intervention Style on Outcomes for Young Children with Autism