Biden Administration Releases ‘Historic’ Final Rule on Behavioral Health-Physical Health Parity

The Biden administration has released its final rule updating mental health parity compliance for group and individual health plans.

Released Monday, the final rule updates how federal agencies oversee whether health plans treat behavioral health benefits differently than physical health benefits. In short, it requires and spells out how health plans are to analyze nonquantitative treatment limitations (NQTL) for both types of benefit and requires plans to remedy and disparity.

The rule updates previous rules that enforce the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The administration released the proposed version of the rule in July 2023.

“Today, my administration is taking action to address our nation’s mental health crisis by ensuring mental health coverage will be covered at the same level as other health care for Americans,” President Joe Biden said in a statement. “There is no reason that breaking your arm should be treated differently than having a mental health condition.”

The rules apply to group health plans with new plan years starting after Jan. 1, 2025, with other, more technical aspects of the rule going into effect a year later. The new final rule applies to individual health plans starting on Jan. 1, 2026.

NQTLs are non-numerical limits of benefits and include things such as prior authorization and other medical management techniques.

Behavioral health executives and advocates have long argued that they and their patients are mistreated by health plans. They often point to practices that make it harder to get and stay in treatment. On top of that, providers often maintain that they are underpaid by health plans when providing services that are equivalent to physical health services.

While the final rule released on Monday does not address the financial aspect of advocates’ concerns, some maintain that it will have a financial impact on patients. When the proposed rule was released, behavioral health advocates lauded stronger enforcement provisions, while insurance industry advocates said the new rule was vague and onerous.

“The cost of the status quo is simply too high for the country to continue to pay,” Rebecca Bagley, president and CEO of nonprofit advocacy group The Kennedy Forum, said in a statement. “The economic impacts of inequitable mental health and substance use care have national and global economic implications for the United States, and we call on insurers and employers to work with The Kennedy Forum and the Administration to find a way forward to make [parity] a reality.”

The Kennedy Forum points to research by RTI International that finds patients go to out-of-network providers 3.5 times as often for all behavioral health services on average compared to physical health. It also finds that all physical health office visits garner 22% more reimbursement than behavioral health visits.

Disparities are much more glaring for specialist care in behavioral health. Patients are nine times more likely to go out of network for visits with a psychiatrist than they are for a physician visit. Average reimbursement for a physician assistant visit is 19% higher than for a psychiatrist visit.

Vice President and Democratic nominee for president Kamala Harris said in a statement that the move was “a historic rule that will expand mental health care across our nation so more of our loved ones, neighbors, coworkers, and classmates receive the care they deserve.”

What’s in the final rule?

Group and individual health plans are forbidden from imposing NQTLs on behavioral health benefits that are more restrictive than physical health benefits. The rule uses the language of “mental health and substance use disorder benefits” and “medical/surgical benefits.”

Plans are required to collect data to assess the impact of NQTLs on behavioral health access and access to physical health care, compare the data between each type of care and act to remedy disparities.

It also requires that group and individual health plans conduct comparative analyses, as dictated by the Consolidated Appropriations Act of 2021. These comparative analyses must be made available to the Department of the Treasury (Treasury), the Department of Labor (DOL), and the Department of Health and Human Services (HHS) as well as state regulators and plan members.

The rule also describes the content of these analyses. The must include:

— Description of the NQTL and the affected benefit

— The evidentiary standards used to design the NQTL

— How these standards are applied

— A demonstration of the comparability between NQTLs for behavioral health and physical health benefits.

Plans that are deemed to be out of compliance will be required by the three federal agencies to stop using that noncompliant NQTL.

Other elements of ensuring that NQTLs don’t limit access to behavioral health care include ensuring “essential” mental health and addiction treatment services are covered. Analysis of NQTLs are also required to assess things like network composition and out-of-network.

The final rule also specifically ends the ability of self-funded, non-federal governmental plans to opt out of MHPAEA compliance.

“As someone who has watched insurers’ blatant disregard for federal parity regulations for years, I am thrilled to see this rule finalized. It is a critical step to holding insurance companies accountable and ending discriminatory denials of care,” Chief Policy Officer David Lloyd for the mental health advocacy organization Inseparable said in a statement.

This is a developing story. Please return to later today and this week for updates.