State, Federal, and Private Enforcement of Mental Health Parity Compliance

Six months in the past, we cautioned well being plans and plan sponsors that states, the federal authorities, and non-public litigants had been laser targeted on Mental Health Parity and Habit Fairness Act (“MHPAEA”) compliance. The US Division of Labor (“DOL”) investigated and closed 127 health plan investigations related to MHPAEA in FY 2020. Given the changes announced in the Consolidated Appropriations Act, 2021 (“CAA”), and subsequent guidance, we count on heightened scrutiny of MHPAEA compliance from states, the federal authorities, and non-public events.

State and Federal Enforcement

Certainly, this August, the DOL filed a complaint United Behavioral Health and UnitedHealthcare Insurance coverage Firm (collectively “United”) within the U.S. District Courtroom for the Jap District of New York. The grievance alleged that United violated MHPAEA and breached its fiduciary duties beneath ERISA by: (1) reimbursing out-of-network psychological well being providers extra restrictively than out-of-network medical and surgical providers; and (2) making use of concurrent overview to outpatient psychological well being advantages extra broadly and extra aggressively than packages for medical and surgical advantages. The grievance additionally alleged that United didn’t present particulars on the reimbursement fee discount or concurrent overview program to plan sponsors, contributors, or beneficiaries in violation of ERISA’s disclosure necessities. The New York State Legal professional Common (“NYAG”) filed a parallel compliant. The DOL and NYAG complaints alleged that the conduct at problem dated to not less than 2013.

Considerably, that grievance marked the primary federal enforcement motion associated to MHPAEA compliance since enactment. United, DOL, and the New York State Legal professional Common filed a stipulated settlement resolving these claims concurrently with the complaints. United additionally settled putative class actions that alleged MHPAEA violations premised on the identical reimbursement reductions utilized to out-of-network psychological well being providers alleged within the DOL and NYAG complaints. These non-public lawsuits had been filed in 2017 and 2018. The settlement settlement would require United to pay $10 million to resolve the reimbursement claims, $3.6 million to resolve the concurrent overview claims, and a further $2 million in penalties. The non-public events’ attorneys are searching for $3.1 million in attorneys’ charges [see Doe Fee Memo here] along with the $10 million for the reimbursement claims.

The United litigation demonstrates simply how excessive the stakes are for well being plans and plan sponsors. The DOL, state insurance coverage regulators, state attorneys basic, and non-public events have an array of instruments to probe a plan’s compliance with MHPAEA. ERISA’s disclosure obligations require well being plans to supply their comparative evaluation demonstrating MHPAEA compliance to people or their licensed representatives and the DOL beforehand issued a model disclosure request form to facilitate these requests. The CAA additional broadened disclosure and entry necessities for plan beneficiaries to scrutinize compliance evaluation. And the worth transparency guidelines will give one more software for suppliers, beneficiaries, and regulators to judge reimbursement charges for potential parity compliance.

One other Putative Class Motion Difficult Protection Pointers

Final month, a putative class motion was filed towards Aetna Life Insurance coverage Firm (“Aetna”) within the U.S. District Courtroom for the Central District of California, the identical jurisdiction by which the category actions Wit et al. v. United Behavioral Health  and Alexander et al. v. United Behavioral Health (“Wit and Alexander”) had been determined, with considerably comparable allegations. In Wit and Alexander, United Behavioral Health was discovered to have breached its fiduciary duties beneath ERISA to over 50,000 insureds by denying their psychological well being and substance use dysfunction claims allegedly based mostly on pervasively flawed medical necessity standards. Wit and Alexander are at present on enchantment to the Ninth Circuit Courtroom of Appeals.

The complaint filed in Deighton v. Aetna Life Insurance coverage Firm alleges that Aetna breached its fiduciary duties beneath ERISA as a result of its internally developed protection pointers favor Aetna’s pursuits over the plan contributors, and that Aetna applies disparate necessities to cowl residential therapy amenities and rehabilitation amenities in violation of MHPAEA.

Plaintiff Joshua Deighton has a son with autism whom he positioned in a residential therapy facility. Aetna allegedly denied Plaintiff’s declare for reimbursement for the fee of the power, along with two of his subsequent appeals. The grievance alleges Aetna violated MHPAEA by requiring accreditation requirements on behavioral well being residential therapy amenities with no comparable requirement for medical well being rehabilitation amenities. Plaintiff argues that as a result of a behavioral well being residential therapy facility falls beneath the identical degree of care as a medical rehabilitation facility, Aetna can not place extra stringent necessities on behavioral well being amenities providing the identical degree of care with out violating the parity necessities of MHPAEA.

The grievance additionally alleges that Aetna improperly denied advantages when it based mostly its denial, partly, on the power’s failure to fulfill the Aetna Plan’s requirement {that a} behavioral well being supplier be “actively on duty 24 hours per day for 7 days a week.”  Plaintiff argues that this foundation is unjustified as a result of the power did make use of medical and behavioral well being professionals actively on-duty and on-call 24 hours per day, and that Aetna’s overly restrictive interpretation of in any other case ambiguous plan language—particularly that the supplier be on-site—is a breach of its fiduciary responsibility beneath ERISA. Plaintiff additional alleges that Aetna’s requirement that the power keep a behavioral well being supplier on-site 24/7, in addition to different restrictions for protection, violate typically accepted requirements of care.

Finally, with the federal government stepping up and continued non-public motion, well being plans and plan sponsors face mounting strain to look at their practices for compliance with parity necessities within the MHPAEA. Failure to take motion may result in time consuming and pricey litigation, authorities penalties, public shaming, and giant settlements.

Co-authored by Jarrod Brodsky, a regulation clerk within the agency’s Washington, D.C. workplace.

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