Tri-Agencies Release Third Mental Health Parity Report to Congress

On January 17, 2025, the Departments of Labor, Health and Human Services, and Treasury (the “Tri-Agencies”) released the 2024 Mental Health Parity and Addiction Equity Act (“MHPAEA”) Report to Congress (the “Report”). The Report is the third report made by the Tri-Agencies to Congress in accordance with the mandate set forth in the 2021 Consolidated Appropriations Act (“CAA”). The CAA requires that, each year starting in 2021, the Tri-Agencies submit a report to Congress summarizing their activity in the prior year to collect comparative analyses from plans and issuers and any findings made with respect to noncompliance with MHPAEA.[1] Under the CAA, the Report is due by October 1 of each year. This year’s version was published on the last working day of the Biden Administration.

Notably, the enforcement period covered in the Report ended on July 31, 2023, with the Tri-Agencies indicating that an additional report is forthcoming covering the period from August 1, 2023 through July 31, 2024.[2]  During the reporting period, the Employee Benefits Security Administration (“EBSA”) at the Department of Labor and the Centers for Medicare and Medicaid Services (“CMS”) at the Department of Health and Human Services together issued:

• 39 initial letters requesting comparative analyses,
• 55 insufficiency letters,
• 32 initial determination letters, and
• 3 final determinations of noncompliance concerning network participation and prior authorization (with all three issued to one health insurance issuer by CMS).

These numbers are considerably lower than the first and second reports to Congress, in which EBSA and CMS reported requesting more than 150 and 200 comparative analyses respectively.

In the current report, the Tri-Agencies reinforced that a top priority in enforcement will be to address disparities between the availability of mental health and substance use disorder (“MH/SUD”) and medical/surgical (“M/S”) providers in plan networks. This priority is consistent with the guidance in the final regulations promulgated last year and reflected in the final determinations issued by CMS, two of which relate to provider network non-quantitative treatment limitations (“NQTLs”). Notably, EBSA reported that reviewing a plan’s or issuer’s comparative analysis related to network composition is only a “starting point,” and network composition investigations can involve interviews of plan officials and service provider representatives, claims data analysis, and extensive document review. EBSA noted that outcomes data is, and will continue to be, a key indicator of MHPAEA compliance, and clarified that they consider it a “red flag” when participants go out of network significantly more often for MH/SUD treatments than for medical/surgical treatments.

EBSA also emphasized its focus on exclusions of key treatments for MH/SUD conditions. Examples include exclusions of ABA therapy for autism spectrum disorder, nutritional counseling for eating disorders, and medication-assisted treatment for opioid use disorder. EBSA reported that when EBSA’s investigators ask for information regarding these exclusions, plans and issuers often removed the exclusions.

CMS noted that it is placing a new emphasis on provider reimbursement and pharmacy benefit formulary design (including step therapy and quantity limits). Utilization management NQTLs continued to make up the highest percentage of CMS’ initial determinations of noncompliance, however, and CMS also provided guidance on specific data metrics for analysis of prior authorization.

The Report notes that the Tri-Agencies intend to issue additional guidance on MHPAEA compliance, including by providing a sample comparative analysis and information “on the type, form and manner of collection and evaluation for the data required and the lists of examples of data that are relevant across the majority of NQTLs.”  EBSA also intends to update the MHPAEA Self-Compliance Tool to help plans and issuers determine which data to collect and evaluate, and to assist with compliance with the final regulations. 

The Report provides insight into the enforcement resources of the Tri-Agencies, noting that 302 investigators at EBSA and 15 investigators at CMS are conducting reviews relating to MHPAEA compliance.[3] While MHPAEA compliance makes up nearly 25% of EBSA’s enforcement program, the Report highlights that EBSA continues to face budget constraints, and says that it will be unable to sustain the pace of enforcement without additional funding. It emphasizes that evaluating compliance with MHPAEA requires “full reviews of plan and issuer operations,” which may include “multiple rounds of interviews, depositions, document requests, data requests, and subpoenas.”

Lastly, the Report includes a settlement agreement between EBSA and the Boilermakers National Health & Welfare Fund (the “Fund”) to address MHPAEA violations for an NQTL relating to network composition and network adequacy. Specifically, EBSA found that the Fund (1) used non-comparable processes and evidentiary standards to evaluate the adequacy of its MH/SUD and medical/surgical provider networks; (2) did not respond comparably to network deficiencies; (3) did not apply its practices for addressing network deficiencies comparably; and (4) did not submit a sufficient comparative analysis. The Report noted that plans and issuers should take note of the Fund’s compliance obligations in the settlement agreement, which include providing six quarterly reviews of its network, using and reporting on specific data metrics to EBSA, and taking affirmative, documented steps to close network gaps. The agreement also included detailed methodologies and tables for the network adequacy metrics the Fund is required to track.    

Coincidentally, the release of the Report coincided with the filing of a lawsuit by the ERISA Industry Committee in the United States District Court for the District of Columbia challenging the final MHPAEA regulations issued in September 2024 on the grounds that the regulations contravene the statute, are arbitrary and capricious, and violate due process.[4]