Practitioner Resources

Update on regulatory implementation of federal parity law

This article provides information about the interim final rule concerning the 2008 federal parity law

By Government Relations Staff

May 31, 2010 — On February 2, the Departments of Health and Human Services, Labor and Treasury published an interim final rule (IFR) to implement the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA).

The American Psychological Association Practice Organization (APAPO) supports the IFR, and has urged the departments to ensure its final implementation. This update provides information about the IFR, the APAPO’s efforts in seeking its final implementation, and a legal action that a group of managed behavioral health organizations (MBHOs) has brought to prevent the implementation of the IFR.

The interim final rule

The MHPAEA was enacted into law on October 3, 2008, and became effective one year later, on October 3, 2009. The law, however, requires the departments that published the IFR to promulgate regulations that detail compliance with its provisions. Health insurers have complied with the law since October 3, 2009, based on each insurer’s assessment of its requirements. The IFR will generally apply to health plans for plan years beginning on or after July 1, 2010, which means that most plans will continue to comply with the law as they have been until the beginning of their next plan year. Beginning January 1, 2011, insurers will be required to hew to the published regulations.

The IFR fully implements the statutory requirements of MHPAEA by requiring parity for all financial requirements and treatment limitations. The regulation also prohibits the imposition of separate deductibles and out-of-pocket maximums as applied to mental health and substance use disorder benefits and requires parity for “nonquantitative” treatment limitations, such as those related to benefits management.

Click here for a summary of the statutory requirements of MHPAEA. (This content is accessible to APAPO members)

Comments on the IFR were due on May 3. It is anticipated that the departments will make the rule final at some point later this year. The departments may make changes to the IFR before finalizing it, based on comments received. If they do not, the IFR becomes final.

Advocacy by the Practice Organization

The APA Practice Organization has taken a lead in supporting the departments in the rulemaking process leading to final implementation. On May 3, APAPO filed comments in support of the rule emphasizing the importance of applying parity to prohibit separate deductibles and related cost sharing and for the implementation of the law as it applies to nonquantitative treatment limitations, including benefits management.

APAPO also wrote and garnered signatures for the Mental Health Liaison Group (MHLG) comments in support of the parity interim rule. The MHLG is the most significant mental health and substance use coalition in Washington, DC. Through the Practice Organization’s efforts, 55 national organizations signed their support for the IFR—the most signatories for any MHLG letter in its long history. The MHLG comments in support of the IFR will be made available on the Department of Labor’s website in the coming weeks.

MBHOs request block of IFR

The APA Practice Organization’s efforts have taken on greater significance since April 1, when a group of MBHOs sued the departments, asking the US District Court for the District of Columbia for a temporary restraining order to block the rule and for a preliminary injunction to stop the rulemaking process from moving forward.

The MBHOs argue that the departments violated federal rulemaking procedure in publishing the rule as they did. They also argue that the departments overstepped their rulemaking authority by interpreting the statutory language of the MHPAEA to prohibit separate deductibles and to require parity for nonquantitative treatment limitations, specifically as related to benefits management.

On April 4 the court denied the request and said that it would hear the case regarding issuance of an injunction. The court is expected to hear the request for an injunction shortly in the coming weeks. The court has denied a motion that would allow outside parties to submit amicus curiae briefs and will hear the case as presented only by the parties to the action.

While federal regulatory agencies enjoy wide discretion in their rulemaking authority, should the MBHOs prevail, the rulemaking process could be altered and changes could ultimately be made to the rule before it becomes final.

The APA Practice Organization will keep practitioners informed as the regulatory process moves forward.