A key payer group is calling for lawmakers to oppose House legislation that levies hefty fines on insurers if they don’t follow mental health pay parity requirements, even as a congressional scorekeeper estimates very few insurers will face the penalties.
The ERISA Industry Committee (ERIC)—which represents large employer plan sponsors—wrote a letter Monday to all House members calling for them to oppose (PDF) the Mental Health Matters Act when it comes up for a vote later this week. The letter comes as Congress is considering how to improve pay parity between behavioral and physical health amid reports of some insurers not following requirements in the Affordable Care Act.
“This bill includes provisions that weaponize the Department of Labor (DOL) to sue employers rather than helping them come into compliance,” the letter said.
The legislation, introduced in May by Rep. Mark DeSaulnier, D-California, would enable the agency or a plan member to sue a group health plan or issuer to recover any losses for not covering mental health benefits. They can also sue for ensuring “re-adjudication of claims and payment of benefits,” according to a fact sheet on the bill.
It also authorizes the DOL to enforce requirements “regarding mental health and substance use disorder benefits in ERISA.”
The latest version of the bill that cleared the House Rules Committee on Monday included new penalties for not following pay parity requirements mandated in the Affordable Care Act, said James Gelfand, the committee’s president, in an interview with Fierce Healthcare. Gelfand said the penalties are a break from the current process where the DOL works with the plan to fix the issue and then works backward to retrospectively help individuals who wrongly had to make a copay.
“Under this bill, [the first thing] that would happen is DOL would levy a big fine on the employer—millions of dollars—then employers would have to pay restitution to people years and years back to people who may have been affected by the plan,” Gelfand said.
ERIC added that the 21st Century Cures Act and the Consolidated Appropriations Act had mandated the DOL publish “illustrative examples” that can help employers comply with mental health parity requirements, but the agency refuses to do so.
The penalties would start one plan year after enactment of the bill, and an estimate from the Congressional Budget Office (CBO) found that there would be only about 11 violations of mental health parity requirements a year. Only a small portion of those violations would result in penalties, and the CBO estimates the federal government would only collect about $29 million over the next decade for the new penalties.
ERIC was also concerned the legislation would eliminate discretionary and arbitration clauses that “grant a plan administrator the authority to interpret the plan document and resolve disputes pursuant to extensive DOL regulations,” according to the letter. “Upending this process would threaten to gum up the federal courts with expensive and duplicative proceedings.”
The legislation also includes provisions aimed at improving student mental health needs to address challenges exacerbated by the COVID-19 pandemic.
The House is expected to vote on the bill by the end of this week. DeSaulnier said in a statement to Fierce Healthcare that the legislation is intended to help Americans, and there is a temporary exemption for plans that have high costs for compliance to give them more time to meet the requirements. The legislation also doesn’t change the civil enforcement framework in ERISA.
“Plans that are already in compliance with the law should not see their costs go up,” DeSaulnier said. “Most employers already do the right thing, and any penalties imposed would go after a few bad actors.”
If the legislation passes the House, it remains unclear whether the Senate will take it up. The Senate Finance Committee is considering action to tackle pay parity but so far has not released any legislation. Chairman Ron Wyden, D-Oregon, previously told Fierce Healthcare that he is still working on legislation to tackle the issue, including taking aim at “ghost networks” where providers listed in directories don’t take new patients.