New York’s Strict Requirements for Insurers’ Mental Health and Substance Use Disorder Parity Compliance and Oversight Programs May Serve as a Blueprint for Other StatesEmployee Benefit Plan Review February 2021
Kevin J. Malone, David Shillcutt, and Ashley A. Creech, attorneys in the Health Care & Life Sciences practice, in the firm’s Washington, DC, office, co-authored an article in the Employee Benefit Plan Review, titled “New York’s Strict Requirements for Insurers’ Mental Health and Substance Use Disorder Parity Compliance and Oversight Programs May Serve as a Blueprint for Other States.”
Following is an excerpt (see below to download the full version in PDF format):
The Mental Health Parity and Addiction Equity Act (“MHPAEA”) and related state parity laws are some of the most complex and sweeping regulations ever imposed on the health insurance and managed care industry. Although MHPAEA was enacted in 2008 and many states have mental health and substance use disorder (“MH/SUD”) parity laws that are at least that old, federal and state enforcement efforts have ramped up significantly in recent years, especially through the implementation of increasingly granular documentation and reporting requirements.
To date, most regulators have focused oversight efforts on documentation of compliance with non-quantitative treatment limits (“NQTLs”) related to utilization management, provider network management, and pharmacy benefits. The New York State Department of Financial Services (“NYSDFS”) has finalized new regulations that build on these substantive compliance reports by setting forth a detailed set of specifications for the design and operation of the insurer’s compliance and oversight program itself. The regulations, which took effect on December 29, 2020, expand on recent draft guidance from the U.S. Department of Labor (“DOL”) to employer-sponsored health plans on the importance of building formal compliance programs.
However, the New York regulations are far more detailed and prescriptive than the DOL or any other state guidance to date and apply to all insurers and health maintenance organizations offering coverage of MH/SUD requirements under New York’s insurance laws. The NYSDFS regulations require insurers to establish corporate governance for parity compliance, identify discrepancies in coverage of services, and ensure appropriate identification and remediation of improper practices. All insurers must certify compliance with the new requirements on an annual basis, starting December 31, 2021. This article summarizes the new regulations, discusses best practices for building parity compliance programs, and discusses likely next steps for regulators in New York State and around the country.