Litigation Ruling Related to MHPAEA Noncompliance
On November 21, 2023, the United States 10th Circuit Court of Appeals (Court) published a major decision involving the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, better known by its acronym, MHPAEA. MHPAEA is a federal law that generally prevents group health plans and health insurance issuers that provide mental health and substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical and surgical (M/S) coverage.
This decision is significant because it provides a framework for how plan administrators, claims payors and the courts may apply the law to determine how a claim under MHPAEA should be considered. The decision is also a cautionary warning that plan administrators must review not only how the health plan is written but also, how it operates.
Employer Action Items
Well-established, expert-based claim determination processes of the past should be reviewed and amended, if necessary, in the new age of MHPAEA. The review must be conducted in such a way as to assure that the health plan meets the requirements of MHPAEA not just in how it is written but also, in how it is administered. Although not specifically stated in the District Court’s decision, the review must also verify that claim outcomes for MH/SUD benefits are consistent with the outcomes of M/S benefits.
Summary
The case arose when Health Net Life Insurance Company (Health Net) decided that the care for a dependent daughter at an adolescent residential treatment center was no longer medically necessary. The decision was based upon McKesson InterQual Behavioral Health 2016.3 Child and Adolescent Psychiatry Criteria, a recognized expert resource in the field of psychiatry. According to this criteria, inpatient treatment is medically necessary if the patient satisfies any one of several criteria relevant to either a serious emotional disturbance or an eating disorder. Health Net determined the patient did not satisfy the InterQual Criteria within the relevant period and notified her family of that decision. This decision was later supported by outside, independent experts.
Subsequently, after satisfying the ERISA claims appeal process, the family brought suit against Health Net under ERISA and MHPAEA. The ERISA claim was dismissed after the court granted summary judgement favorable to Health Net, but the MHPAEA claim was advanced for consideration.
The family did not argue that the expert opinion and criteria were invalid or incorrect. Instead, it argued that “the [plan’s] medical necessity criteria for intermediate level mental health treatment benefits are more stringent or restrictive than the medical necessity criteria the [plan] applies to intermediate level medical or surgical benefits.” If correct, it would be a violation of MHPAEA which requires that, “treatment limitations applicable to . . . mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and [that] there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.” 29 U.S.C. § 1185a(a)(3)(A)(ii).
To support its claim, the family alleged that “the [plan’s] medical necessity criteria for intermediate level mental health treatment benefits are more stringent or restrictive than the medical necessity criteria the plan applies to intermediate level medical or surgical benefits.” It argued:
- Comparable benefits offered by the plan for medical/surgical treatment analogous to the benefits the plan excluded for treatment include sub-acute inpatient treatment settings such as skilled nursing facilities, inpatient hospice care, and rehabilitation facilities. For none of these types of treatment does Health Net exclude or restrict coverage of medical/surgical conditions based on medical necessity, geographic location, facility type, provider specialty, or other criteria in the manner Health Net excluded coverage of treatment for this patient.
- The actions of Health Net and the plan requiring that the patient satisfy acute care medical necessity criteria in order to obtain coverage for residential treatment violates MHPAEA because the plan does not require individuals receiving treatment at sub-acute inpatient facilities for medical/surgical conditions to satisfy acute medical necessity criteria to receive Plan benefits.
The Court ruled in favor of the family’s claim under MHPAEA and explained the “test” it utilized to come to that decision. According to the Court, a plaintiff must:
- Provide a valid determination that the health plan is subject to MHPAEA;
- State what the underlying Quantitative/Nonquantitative Treatment Limitation (QTL/NQTL) being used by the plan to deny or limit benefits;
- Name the M/S benefit used to compare to the MH/SUD benefit in question; and
- Explain how the health plan applies the QTL/NQTL differently to the M/S benefit than to the MH/SUD benefit.
Significantly, the Court did not apply any sort of reasoning requiring that outcomes of MHSUD claims be consistent with M/S claims. This policy has been stated by the Department of Labor as a further indicator of a plan’s compliance with MHPAEA.
More Information
For questions regarding this Legislative Update or any other related compliance issues, please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.
This Legislative Update was prepared by the Baldwin Regulatory Compliance Collaborative (the “BRCC”), a partnership of compliance professionals offering client support and compliance solutions for the benefit of the Baldwin Risk Partners organization, which includes: Jason Sheffield, BRP National Director of Compliance; Richard Asensio, Burnham Benefits Insurance Services; Nicole L. Fender, the Capital Group; Bill Freeman, AHT Insurance; Stephanie Hall, RBA/TBA; Caitlin Hillenbrand, AHT Insurance; Paul Van Brunt, Baldwin Krystyn Sherman Partners (BKS); and Natashia Wright, Insgroup.
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