Biden admin mandates mental health parity in final rule; critics foreshadow legal challenge

The Biden administration is strengthening private health coverage for individuals seeking mental health and substance use disorder (SUD) care in a final rule unveiled Monday.

Released by the departments of Labor, Health and Human Services and the Treasury, the rule (PDF) bolsters the Mental Health Parity and Addiction Equity Act of 2008. This requires group health plans to offer mental health and SUD care on the same level as physical health benefits, an issue that has not been fully eradicated.

“The final rules are critical steps forward to making sure that people in need of services can get the care they need without jumping through hoops that they don’t face when trying to get medical or surgical care,” said Department of Labor Assistant Secretary for Employee Benefits Security Lisa M. Gomez in a news release. “Ending the stigma around mental health conditions and substance use disorders calls for a unified effort, and we appreciate the valuable feedback we received from stakeholders—plans, care providers and participants—in shaping these final rules.”

Specifically, the rule tackles protections around nonquantitative treatment limitations, or requirements that restrict scope or duration of benefits, the rule explains. This includes prior authorization, step therapy and provider network standards that can be utilized by health plans to make it harder for individuals to access healthcare.

Plans will not be allowed to use “biased or non-objective information and sources” when creating these nonquantitative treatment limitations. Insurers will be required to collect and evaluate data on treatment limitations and make changes as necessary.

The rule also closes loopholes that allowed nonfederal governmental health plans to skirt the 2008 mental health legislation, effectively providing more protections to 120,000 members within 200 health plans, the White House explained.

Mental healthy advocacy organization Inseparable praised the administration’s final rule.

“As someone who has watched insurers’ blatant disregard for federal parity regulations for years, I am thrilled to see this rule finalized,” said David Lloyd, chief policy officer, in a statement shared with Fierce Healthcare. “It is a critical step to holding insurance companies accountable and ending discriminatory denials of care.”

Health plans have voiced concerns in the past that new requirements won't improve mental health access but will lead to compliance issues and burden. The ERISA Industry Committee (ERIC) also released ads opposing the regulations in April, arguing employers would rethink mental health coverage altogether. On Monday, the group hinted at possibly filing litigation.

"As ERIC evaluates this rule and assesses the implications for its member companies, we will consider all possibilities to prevent further harm to employer offering behavioral health benefits, and the employees and families who count on them—up to and including litigation," said Mellissa Bartlett, senior vice president of health policy for ERIC.

A joint statement from the ERIC, Blue Cross Blue Shield Association, AHIP and the Association of Behavioral Health and Wellness said the feds should instead be focusing on workforce shortages and education for physicians.

The rule will take effect in January 2025, though some requirements won’t be implemented until 2026.

“The departments anticipate that these final rules will improve network composition by making mental health and substance use disorder provider networks more robust, and making it easier for individuals seeking mental health and substance use disorder care to actually receive it by cutting red tape, with fewer and less restrictive prior authorization requirements and other medical management techniques to navigate,” according to a fact sheet.

Less than half of all adults with mental illness received treatment in 2020, a study from the Journal of Health Politics, Policy and Law found. The White House points the finger at health insurers for making accessing treatment difficult, particularly in behavioral health.