The Final Rules of the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA) contain detailed requirements for health insurance plans and issuers in terms of how their designs and applications of “nonquantitative treatment limitations” (NQTLs) for mental health and substance use disorder (MH/SUD) benefits must compare to those for medical and surgical (M/S) benefits. NQTLs are plan features or protocols that, while not expressed numerically like “financial requirements” and “quantitative treatment limits” set forth in the Final Rules, nonetheless limit the scope or duration of benefit coverage in significant ways.
Milliman has completed a considerable amount of MHPAEA compliance testing for our clients, focusing mostly on financial requirements and quantitative treatment limits (QTLs). That testing requires understanding the plan’s or issuer’s definition of MH/SUD benefits, mapping the M/S benefits into the six allowed benefit classifications under the Final Rules,1 and building actuarial cost models for performing the “Substantially All” and “Predominant” tests for each benefit classification for each of the plan’s or issuer’s health products. While there has been much less progress on NQTL compliance testing to date, this is changing rapidly as more state departments of insurance and other regulators and agencies turn their MHPAEA compliance focus onto NQTL testing. Over the past year, Milliman has been retained by a number of state agencies to advise them on appropriate methods by which to conduct parity compliance analyses and audits for NQTLs.