The Proposed Rule Change to Mental Health and Substance Use Disorder Parity Regulations Will Negatively Impact Virtual Behavioral Health Companies

The mental health crisis is widespread and deeply entrenched in this country.

• Nearly 1 in 5 adults—more than 50 million people—struggle with a mental health condition.1
• In 2023, more than half of young adults ages 18-24 reported symptoms of anxiety or depression.2
• Black and Hispanic Americans have 31% and 39% lower diagnosis rates of major depression, respectively, compared to white Americans.3

Health plans and employers fully support parity between Mental Health and Substance Use Disorder (MH/SUD) and Medical and Surgical (M/S) benefits (i.e., physical health) and have been working over the past 15 years to implement parity for behavioral health services. 

Despite these efforts, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (DOT) – collectively, “the Tri-Departments” – are proposing changes to the federal parity law that will undermine health plan and employer efforts to continue to achieve parity and offer robust, affordable access to and coverage of MH/SUD care. 

If finalized, the Tri-Departments’ proposed rule will significantly impact patient access to virtual behavioral health providers, particularly through new start-up companies with providers trained to treat eating disorders, obsessive-compulsive disorder (OCD), and SUD.

Parity Law Background:

The Mental Health Parity and Addiction Equity Act (MHPAEA) celebrated its 15th anniversary in 2023. It applies to certain commercial and employer plans, such as self-funded Employee Retirement Income Security Act (ERISA) plans and Medicaid Managed Care Organizations (Medicaid MCOs).

The MHPAEA requires parity between MH/SUD and M/S for treatment limits and financial requirements. The parity standards for financial requirements are known as quantitative treatment limits (QTLs), and examples include copays and deductibles. Health plan procedures that impact the scope or duration of MH/SUD benefits are known as nonquantitative treatment limitations (NQTLs). 

An NQTL is defined as a limitation on the scope or duration of benefits that is not quantitative. Common examples include:

• Prior authorization;
• Concurrent review; and
• Provider admission to a network.

On August 3, 2023, the Tri-Departments issued a proposed rule that applies to certain commercial and employer plans and would significantly modify MHPAEA. If finalized, it would take effect for plan years beginning on or after January 1, 2025. Over 9,500 comments on the proposed rule have been filed, many expressing concerns with the proposal. The new proposed rule could impact health outcomes, patient service quality, cost of care, affordability, and, ultimately, the availability of coverage. 

The Parity Proposed Rule Will Have A Catastrophic Impact on Virtual Behavioral Health Companies:

The MHPAEA proposed regulation will substantially limit, if not eliminate, the ability of health plans to use utilization management tools such as prior authorization and concurrent review, thus hindering a health plan’s ability to inform a provider or a consumer that alternative or virtual treatments are covered and available under their plan. This will mean fewer referrals to virtual behavioral health companies since health plans may not be conversing with the provider or patient before the patient receives inpatient or outpatient care. It may also result in unnecessarily high levels of care for many patients who would be best served by the less acute options virtual health companies can provide. 

For example, suppose the treating provider doesn’t interact with the health plan because there’s no utilization management. In that case, the provider may not know about the virtual behavioral health treatment options available through the patient’s plan. A provider may also have financial incentives not to use these new virtual or digital solutions. A consumer with an eating disorder may be placed in a residential treatment setting when a virtual family-based treatment would be equally effective because the treating provider had an existing relationship with the treatment center and was unaware that the patient’s health plan also covered virtual eating disorder treatment. 

For the above reasons, the proposed rule could also slow the utilization of new home-based therapies for SUD. Without purposeful shaping of care for consumers at the beginning of their treatment, new alternatives to inpatient treatment and the opportunity to be treated at home will occur less frequently. Furthermore, new virtual school-based services, intensive outpatient programs, OCD treatments, and suicide prevention offerings will likely all see a decline in usage under the proposed rule. 

Telehealth and Virtual Service Proliferation Will Be Stifled:

The proposed rule does not count tele-behavioral technologies as part of a health plan’s provider network. Telehealth has proven vital for behavioral health treatment over the last several years. Health plans and other payors have significantly increased access to MH/SUD services during and after the pandemic, in part through these services. In addition, telehealth utilization for MH/SUD services industry-wide increased by 1,019% during the acute phase of the pandemic compared to the pre-pandemic era.4 By the post-acute pandemic period, telehealth utilization had risen by 1,068% compared to the pre-pandemic era, while in-person visits increased by 2.2%.”5

The proposed rule would evaluate health plan behavioral health provider networks and compare them to the health plan’s M/S provider networks. If access to a health plan’s behavioral health network is determined to be “materially different” than access to the plan’s medical/surgical network, the health plan would be out of compliance with the parity law. The proposed rule provides no credit for tele-behavioral health in assessing a network’s adequacy. If the rule is finalized in its current form, and health plans don’t get credit for including telehealth and virtual services in their networks, the growth of telehealth and virtual behavioral health companies could stagnate. 

AHIP, The Association for Behavioral Health and Wellness (ABHW), Blue Cross Blue Shield Association (BCBSA), and The ERISA Industry Committee (ERIC) are dedicated to ensuring equitable coverage of MH and SUD treatment. In the past 15 years, our respective members have worked tirelessly to implement parity for behavioral health services, innovating new approaches and benefits, working to combat provider shortages and lack of access, and driving quality to improve patient outcomes. 

We are asking virtual behavioral health vendors to make their concerns known to the parity regulators by signing a letter sharing the abovementioned concerns. To learn more about the issue and help change the provisions in the proposed rule, please contact Kathryn Cohen, Senior Director of Regulatory Affairs, ABHW, at cohen@abhw.org.

‍

Article written by and sponsored by: AHIP, Association for Behavioral Health and Wellness (ABHW), Blue Cross Blue Shield Association (BCBSA), The ERISA Industry Committee (ERIC).