Federal Enforcement of Mental Health Parity: Key Updates and Challenges Ahead
By Nicolette Taber
Attorney
Dickinson Wright PLLC
Original Publish Date: March 4, 2025
On January 17, 2025, the U.S. Departments of Labor, Health and Human Services, and the Treasury (“the Departments”) issued their 2024 Report to Congress on the enforcement and implementation of the Mental Health Parity and Addiction Equity Act (“MHPAEA”). This regularly required report follows the Departments’ Final Rules issued in September 2024. (For more information on the September 2024 Final Rules, click here to read my previous article on this topic).
The 142-page report to Congress highlights the Departments’ efforts to strengthen and enforce the protections of MHPAEA, the Departments’ efforts to raise awareness of MHPAEA by working with federal and state partners, and areas of improvement for plans and issuers. Notably, the report reviews the enforcement efforts performed by the Department of Labor’s Employee Benefits Security Administration (“EBSA”) and the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (“CMS”) and their impact on the Departments’ efforts to effectuate mental health parity.
EBSA has primary enforcement jurisdiction over MHPAEA for approximately 2.6 million private, employment-based group health plans covering roughly 136 million Americans. Nearly 25 percent of its enforcement program focuses on MHPAEA nonquantitative treatment limitations (“NQTL”). CMS has enforcement authority over approximately 91 thousand non-federal governmental plans and certain issuers in two states.
Notably, the report states EBSA uncovered concerning disparities within networks between the availability of mental health and substance use disorder (“MH/SUD”) providers and the availability of medical/surgical (“M/S”) providers. While investigations suggested an equal amount of MH/SUD providers and M/S providers may be in network for any particular plan, it was still significantly more difficult to access MH/SUD providers compared to M/S providers. This remains to be a significant issue with no clear-cut resolution, but the Departments’ reaffirmed their priority in addressing the availability of MH/SUD providers in plan networks consistent with the September 2024 Final Rules. EBSA noted that outcomes data continues to be a key indicator of MHPAEA compliance and it is a “red flag” when participants go out of network much more often for MH/SUD treatments than for M/S treatments.
Additionally, EBSA discovered that certain plans and issuers continued to exclude key treatments for covered mental health conditions and substance use disorders, including medication for opioid use disorder and nutritional counseling for eating disorders. These kinds of exclusions are impermissible when a plan or issuer does not apply a comparable limitation to benefits for M/S conditions. When EBSA investigators questioned these discrepancies, plans and issuers often removed the exclusions rather than justifying them to comply with MHPAEA. For this particular reporting period, CMS placed a new emphasis on comparative analyses for provider reimbursement treatment limitations and pharmacy benefit formulary design (including step therapy and “quantity limits,” which CMS defines as how the plan designs and applies its standards for setting quantity limits on prescription drugs). CMS had success with plans and issuers completing various corrective actions based on its initial and final determinations of noncompliance. CMS emphasized the importance of plans and issuers to provide thorough comparative analyses, supporting documentation, and supplemental information in response to CMS’ requests. CMS’ efforts led to one plan implementing a new annual review of inpatient utilization data as part of an updated comparative analysis to demonstrate the comparability and relative stringency of the application of prior authorization requirements for inpatient, in-network services to MH/SUD benefits and M/S benefits.
A recurring theme throughout the report is that EBSA and CMS faced challenges in enforcing MHPAEA’s requirements due to budgetary and personnel restraints. Critically, the Departments issued this report days before President Donald Trump took office. Given President Trump’s recent cuts to the budgets and personnel of many federal agencies, including CMS, these actions suggest his administration may not play as much of a proactive role in MHPAEA enforcement as the Biden administration did.
Simultaneously, the release of the report coincided with the filing of a lawsuit seeking the reversal of the Departments’ Final Rule issued in September 2024. The ERISA Industry Committee (“ERIC”) filed a Complaint, also on January 17, 2025, against the Departments, alleging the Final Rule is unlawful in numerous respects. This may not come as a surprise following the U.S. Supreme Court’s reversal of its longstanding Chevron doctrine of deferring to agencies’ reasonable interpretations of ambiguous laws.
ERIC represents the interests of several large employer health plans. The lawsuit seeks to invalidate the September 2024 MHPAEA final rules, or in the alternative, to invalidate provisions alleged to be particularly problematic, including:
- The meanings benefits requirement;
- The material differences in access standard;
- The rule’s comparative analysis requirements;
- The fiduciary certification; and
- The January 1, 2025 applicability date
ERIC’s basis for these allegations is that the Final Rule exceeds the Departments’ authority under the MHPAEA and the Consolidated Appropriations Act of 2021 (“CAA”), it violates the Due Process Clause of the Fifth Amendment, it is arbitrary and capricious, and it otherwise violates the Administrative Procedure Act. While this lawsuit poses a challenge to gains made in mental health parity enforcement, there is no immediate threat to the rule’s implementation, as ERIC is not seeking an injunction.
It is unclear how the Trump Administration will respond to the legal challenges and whether it will enforce the September 2024 Final Rules. Historically, MHPAEA received bipartisan support, but President Trump has not yet publicly indicated his stance on the issue.
Nicolette Taber is an attorney at Dickinson Wright in Chicago. She represents health care clients in a variety of regulatory and corporate matters. With experience in medical malpractice defense, Nicolette brings a comprehensive understanding of the health care landscape. During law school, she interned in the offices of general counsel at two Chicago hospitals. Growing up in a family of health care providers has equipped her with a unique perspective on her clients' needs. She can be reached at ntaber@dickinsonwright.com.