Enforcement of the Federal Parity Law is handled by several different state and federal agencies. The primary source of enforcement are state insurance departments. Some states have additional departments responsible for enforcing the federal law, such as California’s Department of Managed Health Care (DMHC).
The federal agencies responsible for enforcing the Federal Parity Law are the Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of the Treasury (DoT).
Action in the Regulatory Arena
- It proposes to eliminate Medicare’s 190-day lifetime limit on for inpatient care in psychiatric hospitals at a cost of $2.4 billion over 10 years (page 70)
- It proposes to prohibit self-insured non-federal governmental plans from opting out of the Federal Parity Law (page 116)
The Department of Labor (DOL) released a frequently-asked-questions (FAQ) regarding the Affordable Care Act and the Federal Parity Law. The section about the Federal Parity Law clarified the following about information they must disclose to enrollees, upon request:
- The final regulations (pdf | Get Adobe® Reader®) of the Federal Parity Law make clear that plans must disclose to enrollees the criteria they use when making medical necessity determinations for behavioral health services and the reason for any denial of care
- The preamble of the final regulations of the Federal Parity Lawmake clear that certain provisions of ERISA require plans to disclose to enrollees the criteria they use when making medical necessity determinations for other medical services
- The final regulations of the Federal Parity Law make clear that during the appeals process, enrollees are entitled to the criteria used for making medical necessity determinations for both behavioral health services and other medical services as well as the factors used to apply non-quantitative treatment limitations (NQTLs) to behavioral health care and other medical care
- Plans may not refuse to disclose information about how NQTLsare applied on the grounds that such information is “proprietary” or has “commercial value”
- Plans may, but are not required, to provide a summary written in “layperson’s terms” of the criteria used to make medical necessity determinations for behavioral health care; however, this information “is not a substitute for providing the actual underlying medical necessity criteria, if such documents are requested.”
The Centers for Medicare and Medicaid Services (CMS) proposed a final rule on the federal law regarding Medicaid managed care organizations (MCOs), Medicaid alternative benefit plans (benchmark and benchmark equivalent plans), and the Children’s Health Insurance Program (CHIP). This rule proposes the following requirements:
- Medicaid MCOs to meet parity requirements similarly to what is required of private plans in terms of treatment limitations and financial requirements.
- Medicaid alternative benefit plans must comply with the parity requirements similarly to Medicaid MCOs.
- Medicaid MCOs and Medicaid alternative benefit plans must make available upon request criteria for medical necessitydeterminations for behavioral health coverage.
- Medicaid MCOs and Medicaid alternative benefit plans must make available the reason for any denial of coverage for behavioral health services.
- CHIP plans that provide full coverage of Early and Periodic Screening, Diagnostic and Treatment (EPSDT) services will be meet parity requirements.
- CHIP plans that do not provide full coverage of EPSDT will have to meet parity requirements similarly to private insurance plans.
In November of 2013, DOL, HHS, and the DoT jointly issued the final rule (pdf | Get Adobe® Reader®) on the federal law. The final regulation took effect for plans that began after July 1, 2014. The final regulation incorporates much of what was included in the interim final rules (see below), and adds clarity and specificity to several areas within the law:
- There are six classifications of insurance plan benefits: inpatientin-network ; outpatient in-network; inpatient out-of-network ; outpatient out-of-network; emergency services; and prescription medications. If a plan offers behavioral healthcoverage, it must offer the coverage in all of the same classifications for which it offers other medical coverage.
- The final regulation provides guidance on non-quantitative treatment limitations (NQTLs) and specifies that any NQTLs used for behavioral health coverage must be comparable to and applied no more stringently than they are for other medical coverage. The final regulation also contains an extensive list of NQTLs, but does not contain any sort of mathematical compliance test for NQTLs.
- Anything used by a plan to limit scope or duration of benefits is subject to the NQTL parity requirements.
- Intermediate levels of care for both behavioral health services and other medical services must be identified by plans and have comparable coverage.
- The regulation specifies that all cumulative financial requirements for behavioral health services must count towards the overall financial requirement of the insurance plan. For example, there cannot be a separate deductible for behavioral health coverage.
Previous to this proposed rule, CMS issued a State Health Official (pdf |Get Adobe® Reader®) letter in January of 2013 that offered guidance on the application of the Federal Parity Law for Medicaid MCOs, Medicaid alternative benefit plans, and CHIP plans. This letter contained guidance similar to what is offered in the proposed final rule.
In February 2010, DOL, HHS, and the DoT jointly issued interim final rules (IFR) (pdf | Get Adobe® Reader®) for the Federal Parity Law, which took effect on July 1, 2010. These interim rules were incorporated into the final rule released in 2013 (see above)
Federal Parity Law
The Federal Parity Law includes protections for insurance coverage of mental health conditions and substance use disorders. The Federal Parity Law does not require insurance plans to cover behavioral health treatment, but if they do cover behavioral health treatment, the coverage must be to equal to other medical coverage. The law forbids insurance plans from using quantitative treatment limitationsand financial requirements for behavioral health services that are less favorable than those in place for other medical services. Plans are forbidden from using non-quantitative treatment limitations (NQTLs)more restrictively for behavioral health services than how they are used for other medical services. Examples of NQTLs include prior authorization, step therapy, and various utilization reviewtechniques, among others.
The Federal Parity Law currently applies to most types of health insurance offered in the country. However, there are some notable exceptions, like Medicare, for example. Click here to see which plans are covered by the Federal Parity Law and which plans are not covered.
The Federal Parity Law sets the baseline for protection of parity rights when both the federal law and state parity laws apply to an insurance plan. If a plan is covered by the Federal Parity Law, people will get at least the level of rights afforded by the federal law. If a state law gives even more rights to the consumer, then it supersedes the federal law.