About WISHRM

By Ed Zalewski

The Employee Benefits Security Administration (EBSA) has been stepping up enforcement of the Mental Health Parity and Addiction Equity Act (MHPAEA), and announced plans to continue doing so.

In the last fiscal year, the agency found that nearly half of the MHPAEA plans audited had violations. Of 347 investigations conducted, 187 involved plans subject to MHPAEA. Of those, EBSA cited 92 violations for MHPAEA noncompliance.

In general, MHPAEA requires that the financial requirements (such as coinsurance and copays) and treatment limitations on mental health or substance use disorder benefits be no more restrictive than the requirements and limitations for medical or surgical benefits.

EBSA gets questions from individuals who believe their mental health or substance use disorder benefits were improperly denied, and offers education and compliance assistance. The agency may refer a case for investigation because a violation may impact other covered participants.

Recent enforcement actions include the following:

Impermissible time limit. A plan imposed an impermissible annual day limit on residential treatment for substance use disorders. As a result of the investigation, the plan issued a notice to all participants of a 30-calendar day window for submitting claims affected by the limitation. Four claims with billed amounts totaling $74,165 were submitted, reprocessed, and paid by the plan. The plan also revised its documents to remove the impermissible limitation.

Excessive copayments. A plan charged a copayment of $25 for in-network mental health and substance use disorder outpatient visits, but only a $20 copay for primary care in-network medical or surgical outpatient visits. Following the investigation, the plan adjusted the copayments and reimbursed the $5 difference from 2010 through the 2016 plan years, which totaled $11,340 to more than 200 participants.

Lacking out-of-network coverage. A plan failed to provide out-of-network coverage for inpatient and outpatient mental health and substance use disorder benefits. Based on the investigation, a settlement agreement corrected multiple violations. In addition, 52 mental health and substance use disorder claims were reprocessed, the plan paid $24,152 in denied benefits, and the plan was revised to comply with the parity requirements.

Precertification requirements. A self-funded plan required precertification for some outpatient medical and surgical services, but required precertification for all outpatient psychiatric, chemical dependency, and substance use disorder therapies. EBSA made the plan aware of its responsibilities under MHPAEA, and the plan agreed to remove the impermissible precertification requirement.

Denied claims repaid. A participant had custody and guardianship of his 14-year-old granddaughter, who has multiple mental health issues, including Post Traumatic Stress Disorder (PTSD). The plan precertified 12 counseling visits for the granddaughter’s PTSD as well as an outpatient program through the local children’s hospital. The plan subsequently denied both the counseling and outpatient hospital claims. The participant submitted an appeal, but the plan failed to respond. EBSA contacted the plan’s service provider and the plan sponsor, explained the requirements of the law, and asked that the plan review the claims and the participant’s contacts with the service provider. The service provider determined that there were errors made in the claim administration process and paid approximately $1,700 in claims.

Stringent benefit requirements eliminated. A fully-insured plan required participants to demonstrate, before receiving in-patient treatment of a mental health condition, that the mental illness affected more than one area of daily living to such an extent that he or she was dysfunctional. The plan also required a participant to demonstrate that without inpatient treatment, the participant’s condition would deteriorate. There were no similar requirements for medical or surgical treatment. The plan removed these requirements as a result of the EBSA’s enforcement efforts.

Since EBSA is increasing enforcement of MHPAEA requirements, plan sponsors should review their plan documents to ensure they meet the parity requirements.