The Puzzle of Parity: Implementing Behavioral Health Parity

The Puzzle of Parity Implementing Behavioral Health Parity

Tara Adams Ragone, J.D.

John V. Jacobi, J.D.

Executive Summary

Peoplewithmentalillnessandsubstanceusedisordersfacemanybarriersto fullparticipationinsociety. One significant barrier long has been the health insurance system’s disparate treatment of behavioral health care. Higher cost-sharing, disparate application of utilization review, and, most starkly, failure to coverbehavioralhealthserviceshave reducedthispopulation’saccesstoneededcare.

InapreviousReportofSetonHallSchoolofLaw’sSentinelProject,wedescribedthehistoryofinsurance coverage of behavioral health services, and the potentially beneficial effects of federal and state statutory and regulatory efforts toward behavioral health parity. We also noted that, notwithstanding these efforts, lingering concerns remain: utilization and “medical necessity” decisions often are controversial, and clear dispute resolution remains elusive; consumers often are confused about when and to what extent parity law applies to coverage decisions; and regulators often struggle to oversee parityimplementation.

At a conference held at Seton Hall School of Law on September 16, 2016, academics, regulators, advocates, and plan representatives came together to share ideason how parity implementation can be achieved. Uncertainty is the enemy of all interested parties, and each participant offered wisdom and experience to the efforts to move forward to fair and appropriate coverage of behavioral health services.

TheSentinelProjectissupportedbya generousgrantfromtheRobertWoodJohnsonFoundation. Copyright©2017SetonHallSchoolofLawCenterforHealth&PharmaceuticalLaw&Policy. Permissionisgranted forreproductionofthisBriefingReport,withattributiontotheCenter.

This Briefing Report details the conference’s proceedings, describes and analyzes the areas of parity concern raised, and provides action items and recommendations to advance the goal of effective and efficientparityimplementation. TheBriefingReportisorganizedasfollows:

 MAJOR THEMES: Therewereanumberofcommonareasoffocusforparticipantsandattendees.

o State approaches to parity implementation and oversight. State regulators are faced with the substantial task of incorporating federal and state statutory and regulatory provisions into their oversight of insurance markets, their guidance of plans, and their protection of consumers. Severalcategoriesofregulatoryorganizationofthesetaskshaveappeared.

 Complaints and appeals. States can rely on reactive responses to consumer complaints and grievances regarding plans, and on appeals from plans’ denials of coverage.

 Complaints and investigations. States also can use information gathered from complaints,grievances,andappealsasthebasisforinitiatingtargetedinvestigations into particularplansorplanpractices.

 Compliance filings. States can actively solicit reports from plans to provide insights into the means by which plans are approaching compliance with parity requirements.

 On-site surveys. Separately or in conjunction with other methods, states can engage in on-site examinations of samples of plans’ documents and reports to assessperformance.

 Regulating the regulators. Some states impose requirements on their regulators to pursueparticularactionsresponsiveto parityneeds.

o Significant common principles. Threethemesemergedfromthevarieddiscussions.

 Need for data. Implementationandoversightofbehavioralhealthparityeffortsare complex, and the details matter. Thoughtful and uniform data requirements will assistregulators,consumers,andplansastheymoveforward.

 Evaluation of plan practices in real time and on-site. The experiences of some participants from regulatory agencies, plans, and consumer groups made clear the dynamic nature of implementation efforts. Evaluation similarly needs to be dynamic.

 Parity is a lawyers’ law. For better or worse, behavioral health integration is complex and technical, and good counsel at important stages of regulatory developmentwillsmooththewayto effectiveimplementation.

o Areas of confusion and debate: important takeaways. Participants identified continuing areas of concern, as to which all participants recognized ambiguity and difficulty in implementation.

 Disclosure. In connection with the hot-button issue of medical necessity review, there has been confusion and dispute regarding the timing and extent of plans’ obligationstodisclosemethodsandother information.

 NQTLs. Many parity requirements are now subject to relatively clear criteria for compliance – although those criteria are neither self-executing nor simple. One area – non-quantitative treatment limits (NQTLs) – has resisted clear description or regulatoryguidance.

 Classifying benefits. Parity fundamentally is comparative – which non-behavioral coverage is the reference point to evaluate a plan’s coverage of a behavioral service? Participantsofferedsubstantiallyhelpfulthoughtsonthisthornyissue.

 Financial requirements. These plan obligations are simpler to evaluate than are NQTLs,buttheyremainsomewhatcomplexinapplication.

 Jurisdictional confusion. Participants noted widespread confusion among consumers and advocates regarding the relative roles and obligations of various regulators,withmanyconcernedthatgenuineissuesslipthroughthecracks.

o Means to achieve further progress. People with behavioral health needs have benefited fromparityimplementationeffortsto date,butadditionaleffortsarenecessary.

 Public education. Progress in advancing parity oversight must be aimed toward improving consumer understanding, both to advance oversight goals and to ensure consumerconnectionwithcoverage.

 Need for active regulators. State regulators are central to implementation. Consistent, thoughtful engagement by state agencies facilitates access to care and ensuresalevelplayingfieldforplans.

 Role for consumer advocates. Advocates in direct contact with consumers, particularly vulnerable populations, are essential intermediaries able to inform regulatorsandplansofemergingproblems.

 Value of ongoing stakeholder dialogue. Behavioral health parity is complex, but the overall goal of equitable treatment in coverage is remarkably uncontroversial. Continueddiscussionamongstakeholdersiscertainto bearfruit.

 RECOMMENDATIONS TO ADVANCE PARITY IMPLEMENTATION: The Briefing Report identifies further actions thatshouldbeundertakento advancethegoalsofbehavioralhealthparity.

o Develop Model Disclosure and Compliance Templates Confusionandinconsistencyinboth disclosure and compliance requirements harm consumers and plans, and impede regulatory oversight. Standardization of the form of disclosure and reporting can benefit all stakeholders. RecentSAMHSAguidanceondisclosureobligationscanadvancethiseffort.

o Identify and train designated parity staff at regulators and plans. The complexity and dynamism of parity requirements pose challenges to busy regulatory agencies and plans. Parity goals, however, simply will not be achieved without sufficient, and sufficiently knowledgeable,administrativeandexecutivestaff.

o Facilitate dialogue among stakeholders and regulators on an ongoing basis. The authors’ interaction with stakeholders, encompassing consumers, their representatives, plan representatives, care providers, and regulators, consistently reinforced the fact that all stakeholders share a desire to achieve equitable implementation of parity requirements. Details and methods often are contested, but the goal remains constant. Deliberation amongpeopleofgoodwillcanadvancealltowardthegoal.

o Issue additional clarifying guidance. Guidance on parity issued by state and federal regulators has been tremendously helpful in advancing parity goals. Certainty is beneficial to all stakeholders. As regulators gain further experience in parity implementation, additionalguidancewillmoveallforward.

o Improve coordination among and between regulators. Officials at various levels of government, and officials responsible for different segments of the insurance market, have common tasks – sometimes at a high level of detail. They sometimes do not coordinate among themselves, thereby both omitting an efficiency opportunity and unnecessarily addingto confusionamongstakeholders.

 BEYOND PARITY: Behavioral health parity laws have improved access to mental health and substance use disorder services, and, with continued collaborative implementation, can foster even greater improvements. Parity laws alone, however, will not cure all deficits in access to care for people with behavioral health needs. As Professor Richard G. Frank and others have observed, equity in insurance rules alone cannot ensure coverage of all needed behavioral health care. Several aspects of insurance market design can supplement parity rules to improve access, particularly for highutilizing,vulnerablepopulations.

o Risk adjustment. A central feature of many insurance reform initiatives has been to encourage measures to align the financial incentives of insurers with the social goal of full access to services for high-cost consumers. High-cost consumers – those with chronic conditionssuchasmentalillnessandsubstanceusedisorder – aremostinneedofcoverage. Insurers’ failure to include high-cost consumers in their books of business hurts vulnerable consumers, and externalizes the cost of their care to other sources – usually public programs. Sound, well-functioning risk adjustment mechanisms can align the financial incentivesofinsurerswithsocialgoals.

o Quality measurement, public reporting, and pay-for-performance. Alignmentof incentives can serve the goal of encouraging socially advantageous behavior in another way. Insurers

and providers can be encouraged to provide services consistent with regulatory requirements through measures that gather, analyze, and publicly disclose the quality of their behavioral health coverage and care. In addition, they can and should be financially rewardedforinnovationandexcellenceinsuchcoverageandcare.

o Improved oversight of provider networks. One issue arose again and again during the course of the work of Seton Hall School of Law’s Sentinel Project: provider network adequacy. In discussions with consumers, advocates, care providers, regulators, and plan representatives, the inadequacy of the networks of caregivers available to people with behavioral health needs was identified as a significant concern. Without adequate networks, health coverage can come up misleadingly, even cruelly, short of the mark. The causes of network inadequacy can be many. Some caregivers are simply unwilling to participate in insurance networks. For some, but not all, improved payment rates would draw them into participation. In some geographic and practice areas, there is simply a dearth of qualified providers to be considered for network membership. In some cases, complex and burdensome plan requirements can be disincentives to join. The extent to which each, or any, of these causes explain network inadequacy in any particular instance is open to fruitful debate. What is not debatable is the provision of behavioral health care through commercial insurance plans will fail of its very purpose if plans are unable to match qualifiedcaregiverswithconsumersinneedofcare.

o Behavioral health integration. People with mental health and substance use disorder concerns, like any consumers, also have physical health needs as well. Research has established that people with behavioral health needs, and in particular people with severe and persistent mental illness, have poorer health access and poorer health outcomes with respect to physical health conditions as compared to the general population. Part of the explanation for these poor outcomes is the historical separation of physical and behavioral health care. The integration of these two forms of care can improve access to necessary careforallconsumers,andcanleadtoefficienciesandlong-termsavings.

o Health insurance literacy The mechanics of health insurance coverage are complex, and consumers are often at a loss in self-advocacy. Friction and conflict between plans and consumers are exacerbated by confusion and misunderstanding. Regulators and plans can collaborateto producehealth insuranceliteracy and consumer informationprograms. Wellinformed consumers will make better choices, and the system will experience improved informationflowwithinformedcommentary anddecision-makingbyinsureds.

The Sentinel Project at Seton Hall School of Law is thankful to all participants in our conference on parity. Opinionsexpressed in thisBriefingReport,andany errorsherein,areourown,and are notthose oftheparticipants.

Overview of the Conference

The parity conference continued the Sentinel Project’s examination of the effect of regulatory changes on consumer’s access to care in commercial insurance markets. It took as a starting point the substantial effects of parity laws and regulations on those markets, and sought to dig deeper into issues ofconcernforparityimplementation.

Recognizing the vital role that states serve as the primary enforcers of parity in individual and fully insured commercial plans, the morning sessions of the conference exposed attendees to a variety of approaches to parity implementation and monitoring in five states. The first panel included Clare McGorrian,SeniorStaffAttorneyandDirectoroftheMentalHealthParityandAddictionEquityInitiative at Health Law Advocates, Massachusetts; Laura Morris, Assistant Healthcare Advocate in the Office of the Healthcare Advocate (OHA) for the State of Connecticut; Michael D. Reisman, Assistant Attorney General in the Health Care Bureau of the New York State Office of the Attorney General; and Ellen Weber, Professor at the University of Maryland Carey School of Law and Vice President for Health InitiativesattheLegalActionCenter.

Following this panel was a presentation on a unique approach to parity oversight undertaken by the State of California. Elizabeth Spring provided a detailed overview of her hands-on monitoring of parity compliance as a regulatory attorney (Attorney IV) with the California Department of Managed Health Care.

Richard G. Frank, the Margaret T. Morris Professor of Health Economics in the Department of Health Care Policy at Harvard Medical School, delivered the luncheon keynote, sharing his perspectives on implementing MHPAEA on the heels of his service as Assistant Secretary for Planning and Evaluation at theU.S.DepartmentofHealth&HumanServices (HHS).

The afternoon session comprised an extended problem-solving exercise undertaken by well-versed experts representing very different perspectives on the issues. Representatives of industry and advocates collaboratively worked through knotty case studies to identify gaps or ambiguity in federal guidance that need to be addressed. This panel included Garry Carneal, Senior Policy Advisor to The Kennedy Forum and Founder of Schooner Strategies; Adam R. Easterday, Deputy General Counsel at Optum – ConsumerSolutions Group; Bradley E. Lerner, Associate General Counsel andDirectorofParity Compliance at Beacon Health Options, Inc.; and Irvin L. “Sam” Muszynski, Senior Policy Advisor and DirectorofParity Implementation and Enforcement at the American PsychiatricAssociation. The goal of this problem-solving exercise was to examine whether a “case method” approach to contested issues couldpointthewayto alternativedisputeresolutionpossibilities.

Introduction

The Sentinel Project at Seton Hall School of Law has been examining market responses to the Affordable Care Act’s (ACA) expansion and redefinition of coverage. The ACA offers rich improvements in health care access, and realizing these improvements depends on the responsive behavior of market participants. Improving coverage for mental health (MH) and substance use disorder (SUD) care is a centerpiece of the ACA. Some of the most important gains in access in recent years have come in access to behavioral health (BH) care, in part through the strengthening of BH parity. The ACA, by incorporating and expanding on the Federal Mental Health Parity and Addiction Equity Act (MHPAEA), holds great promise for increasingaccessto BHcoverage.

Implementation of MHPAEA, however, remains a challenging puzzle for regulators, carriers, advocates, providers, and patients alike. As reflected in prior Project Reports,1 it became increasingly clear from theProject’sresearchon health care access that, at the level of patient care, problems with parity have persisted. Despite considerable guidance from federal agencies regarding the scope and meaning of parity, practical questions remain about how to analyze and implement the law’s requirements, and persistent regulatory uncertainty is hampering implementation of parity. In particular, there are contested and genuinely difficult disputes over the use of nonquantitative treatment limitations (NQTLs), and how to apply the requirement that the utilization review process for BH be comparable

to and no more stringently applied than cognate processes for medical-surgical (med/surg) treatment. There also are challenging questions about how to analyze network adequacy, provider credentialing and reimbursement, and intermediate levels of treatmentunderparityrules,amongothers.

As we spoke to academics, treating professionals, advocates, regulatory agencies, and plan representatives, two things became clear to us: first, resolution of these issues genuinely is difficult; and second, people on all sidesarewillingtoworktoreachsolutions.

In this spirit, the Project hosted a conference on September 16, 2016 that brought together leading parity experts, including government officials, industry representatives, advocates, and academics, for constructive dialogue surrounding parity implementation. In this Briefing Report, we will highlight important themes from the dialogue at the conference; make recommendations to facilitate parity implementation; and identify additional tools available to policymakers to help realize the ACA’spromiseofgreateraccessto BHservices

Major Themes from the Conference

MHPAEA is an important tool for improving access to quality, affordable BH coverage and services. Building on MHPAEA, the ACA has expanded BH coverage for over 60 million Americans, 2 and “the combined reach of MHPAEA, the ACA and the application of parity in Medicaid plans has touched the health

insurance coverage of approximately 174 million people.”3 As Richard G. Frank, Margaret T. Morris Professor of Health Economics in the Department of Health Care Policy at Harvard Medical School and former Assistant Secretary for Planning and Evaluation at the U.S. Department of Health & Human Services (HHS) reported, more people are accessing covered BH services than in 2007, before the Act was enacted.4

Implementation and enforcement of MHPAEA, however, have been inconsistent.5 Professor Frank argued that it is understandable that this law is hard to implement because MHPHEA is among the first pieces of legislation that went beyondmerely regulatingthe termsof coverage and delved into how plans were managing health care. Assessing parity compliance requires judgment regarding whether comparable methods are being used to determine coverage of BH and med/surg benefits. It is not sufficient to look to clinical outcomes. Rather, it is essential to evaluate the processes and strategies that plans employ in determining which services to cover. Professor Frank further warned that parity compliance is not a simple matter of checking off boxes but rather requires nuanced and deep looks at the data.

The federal government has issued regulations and a number of guidance documents to assist carriers and state regulators with parity implementation.6 A number of states also have taken steps to implement MHPAEA. The morning panels at the conference, in particular, emphasized the variety of ways states, as laboratories of democracy, are experimenting withdifferentstrategiestoimplementparity.7

State Approaches to Parity Implementation and Oversight

Complaints and appeals. Some states have tried to encourage consumers to file complaints and appeal denials of coverage. Advocates in Maryland, for example, pursued this approach for a time. But they were frustrated when results of investigations remained confidential and did not have systemic reach. The Sentinel Project in New Jersey also had difficulty getting consumers to file formal complaints or appeals despite hearing numerous, consistent anecdotes of individuals experiencing barriers to care.

Some at the conference raised concerns with the capacity of federal or state external review processes for adverse benefit determinations to evaluate parity compliance.8 There also was frustration that external review panels may not be bound to apply the same standards as plans. Elizabeth Spring, a regulatory attorney with the California Department of Managed Health Care (DMHC), expressed support for federal or state law to require that external review panels use specific standards. There was broad agreement that there are a number of issues with the external review process in the parity context that need to be addressed, including the scope of review, whether external review panels are competent to conduct parity reviews, and whetherthereviewers canbeimpartial.

Complaints and investigations. New York, however, has found that complaints can be a valuable tool for helping to uncover potential parityviolations.

As Michael D. Reisman, Assistant Attorney General in the Health Care Bureau of the New

York State Office of the Attorney General reported, the Bureau maintains a consumer assistance hotline. In and around 2012, the office noticed a critical mass of complaints relating to MH/SUD health coverage, such as residential treatment exclusions and medical necessity denials of MH/SUD services. As a result, the Bureau used its subpoena power to initiate a number of investigations of potential parity violations in the state based on the complaintsithadreceived.9

As of the conference, the Bureau had settled six enforcement actions with health plans and BH benefit administrators in the state. 10 Enforcement settlements have resulted in millions of dollars in restitution to consumers. Carriers also agreed to change practices and to provide additional data to the Bureau as part of thesettlements.

New York’s parity enforcement work continues. Mr. Reisman reported that his office is vigorously monitoring compliance with the various settlements. The Bureau also has implemented a secure online complaint form that includes the ability to upload supporting documentation.

Subsequent to the conference, the Bureau in October 2016 announced that Cigna had agreed to end its practice of requiring prior authorization for medication assisted treatment for opioid use disorder.11 On January 19, 2017, the Bureau announced that it had reached a similaragreementwithAnthem.12

Compliance filings. Several states, through legislation, regulations, or agency guidance, have required plans to submit compliance filings to state regulators. The specific

requirements of the filing requirements vary broadly. Some simply require plans to certify to compliance.13 Increasingly, however, states are requiring plans to demonstrate in detailed filings how they comply with parity’s technical requirements.

Connecticut 14 and Massachusetts, 15 for example, require plans to file annual compliance filings. Both ask plans to answer a series of questions that aim to get at various aspects of parity. But advocates have concerns with both. As we noted in an earlier Report,16 for example, neither state’s compliance filing requires plans to address how NQTLs are applied.

Laura Morris, Assistant Healthcare Advocate in the Office of the Healthcare Advocate (OHA) for the State of Connecticut, echoed this criticism, telling the audience that Connecticut’s filing does not include all of the elements of parity analysis to support a full review of compliance. The Connecticut Legislature passed legislation in 2014thatwould have required moregranular data from carriers, but the governor vetoed it. Advocates are hoping that regulations will incorporate more specific filing requirements in thenearfuture.

Advocates in Massachusetts also expressed concern that it is unclear what state regulators aredoingwiththeinformationfiled.

In contrast, Elizabeth Spring shared with the audience details regarding California’s notably hands-on approach to monitoring parity compliance. 17 DMHC developed worksheets and instructionsthatwalked plans through each aspect of the parity requirements, including classifying benefits; performing the

substantially all and predominance calculations for financial requirements and quantitative treatment limitations; and identifying the processes, strategies, evidentiary standards, or other factors used to apply the NQTLs for both med/surgandBHbenefits.18

Ms. Spring and another attorney worked with actuaries and clinical consultants to conduct a detailed desk auditofthefilings, which included analyzingtheplans’rationaleforhowtoclassify benefits; method for estimating annual claims; substantially all and predominance calculations; and NQTL review. California regulators then reviewed each plan’s policies and procedures and evidence of coverage (EOC) to see if the descriptions of coverage were consistent with thefilings.

Based on this careful review, DMHC made a number of findings. Overall, it found that many plans did not understand how to analyze financial requirements or NQTLs for parity compliance. Of the 25 plans reviewed, 24 had to lower MH/SUD cost-sharing in one or more products; 3 had to eliminate impermissible day or visit limits on MH/SUD benefits; 12 had to modify or clarify prior or concurrent authorization requirements; and all 25 had to revise their EOC text to more clearly describe MH/SUD benefits. DMHC also found that many plans were including insufficient detail in their denial letters, and several had to modify their medical necessity definitions, add MH/SUD experts to their pharmacy committees, or modify credentialing standards to come into compliance. The compliance filings also let DMHC monitor for compliance with state requirements regarding what services must be covered.

Throughout DMHC’s review of plan filings, the agency engaged in ongoing communications with the plans. It worked to ensure that the plans brought all of the relevant actors to the table, including representatives from all three commercial markets that were subject to the filing requirement, and utilization management (UM) leads for both med/surg and BH services. It developed a webinar for the plans to explain the process and hosted approximately twenty teleconferences with the plans. A plan representative at the September 16 conference noted that although he did not always agree with California regulators’ legal analysis of parity requirements, he appreciated the transparency of the process and the open dialogue.

DMHC sent closing letters to all of the plans, which itemized the changes that regulators deemed necessary. Although only 25 plans had to submit compliance filings, DMHC advised plans to apply the same methodologies in all of their commercial coverage. The compliance filings are public records, with the exception of confidentialreimbursementterms.

On-site surveys. Following its desk audit of plans’ paper compliance filings, in April 2016 California’s DMHC began on-site surveys of these plans. Ms. Spring described the primary task of the surveys as evaluating plans’ UM processes to see how the plan decides whether to authorize or deny services to treat both MH/SUD and med/surg conditions. Given that so many plans had problems with financial requirements during the desk audit, DMHC also isreviewingplancost-sharing.

Clinical consultants, including nurses, psychologists, and licensed clinical social

workers, are in the process of performing onsite auditsofplans’ UM records. By focusing on denied claims, they can assess how plan processes, as described on paper in the compliance filings, are applied in practice. Survey teams also are interviewing clinical, UM, provider relations, and member services directors for both the plan and plan delegates. In addition to the clinical consultants, DMHC has committed three attorneys and one survey analysttotheon-sitesurveyteam.

At the time of the conference, DMHC had completed the first set of surveys. The agency plans to issueapreliminary reportofitsfindings to each of these plans in the first half of 2017. After providing the plans an opportunity to respond and propose a corrective action plan, DMHC will make the final reports available to the public, including by posting them on its web site. DMHC intends to complete the remaining 20 surveysinJune2017.

Although preliminary, Ms. Spring offered some initial findings at the conference. With respect to cost-sharing, the survey teams were dismayed to find that several plans that finally had come into compliance with the quantitative parity analysis for cost-sharing during the desk audit phase of DMHC’s review yet again were getting the analysis wrong in other products. With respect to NQTLs, they noted a disconnect between what plans claim to be using for their UM standards on paper and what standards are being applied in practice. In some cases, there was little evidence that plans used the standards that compliance filings reported. The risk of a disconnect increased when plans outsourced BH services to a behavioral health organization (BHO) or delegated UM to

med/surg groups, who may not have used the standardsthattheplansspecified.

In addition to monitoring for parity compliance in practice, DMHC also is using the on-site reviews as an opportunity to revise its compliance filing worksheets and trainings, so thattheycanimprovetheprocessastheylearn.

Many state insurance regulators, such as New Jersey’s Department of Banking and Insurance (DOBI), have the authority to conduct market conduct surveys. As Ellen Weber, Professor at the University of Maryland Carey School of Law and Vice President for Health Initiatives at the Legal Action Center, advised attendees, advocates in Maryland have been trying to persuade the Legislature to enact a prospective compliance filing similar in many respects to California’s. Although the Legislature thus far has resisted, it agreed to have the Maryland Insurance Administration conduct market conduct studies for three years to help assess whether detailed prospective review is needed to redressparityconcerns

HHS has developed a market conduct examination process to audit plans for parity compliance in Missouri, Oklahoma, Texas, and Wyoming, the four states in which HHS directly is enforcing parity in individual and fully insured group plans because the states either elected not to enforce or failed to substantially enforce MHPAEA.19

Regulating the regulator. Some states have imposed requirements on their insurance regulators, such as requiring them to develop parity training programs and to prepare a report each year regarding their efforts to ensureparitycompliance.

Other mechanisms to improve access to BH services. In addition to focusing on implementation of the specific parity requirements, a number of states have taken steps that work in conjunction with parity to enhance accesstoBHservices.

Connecticut, for example, passed legislation identifying specific BH services that must be covered. Clare McGorrian, Senior Staff Attorney and Director of the Mental Health Parity and Addiction Equity Initiative at Health Law Advocates, Massachusetts, described Massachusetts’ state parity law as akin to a mandated benefits law that requires coverage of a full range of MH/SUD services, including intermediateservices.

Other states require coverage of treatment for conditions in the DSM,20 or related to particular diagnoses, such as eating disorders21 or gender dysphoria.22 States like California also have selectedbenchmarkswithrobustBHcoverage.

Another regulatory strategy has been to curb plan UM discretion through legislation or regulation. For example, several states require plans to use specific clinical criteria, such as those of the American Society of Addiction Medicine (ASAM), when determining medical necessity for SUD services.23 Some states have cabined when plans may require prior authorization. New Hampshire, for example, prohibits prior authorization for the first two routine visits of an episode of SUD care. 24 Another approach is to require that utilization reviewbeoverseenbyaspecialistinthefield.25

Significant Common Principles

The conference surfaced anumberof important insights about parity implementation that

should guide continued efforts to realize the promiseofparity.

Need for data. The need for data was a common theme throughout the conference. The technical analysis demanded by the law requires data. Because parity requires inquiry into the processes that plans employ to manage care, disclosure of those processes can help to advance implementation. It is not possible to assess NQTLs, for example, without data concerningbothmed/surgandBHNQTLs.

Ellen Weber argued that plans must make public all data that demonstrates parity compliance because regulators need uniform and complete data to be able to certify that plans comply with parity; consumers need data to choose among plans and to make sure they are getting the benefits and services for which they paid; and plans already possess the data and should already have conducted analyses to demonstrate that they comply with parity before offering plans for sale, as the law requires.

Michael Reisman talked about the need to look at both macro- and micro- level data. New York used macro-level data such as much higher denial rates for BH than for med/surg services, shorter average lengths of stays approved for BH than med/surg services, and lower spending on BH than med/surg services as indicia of potential parity problems that warrant investigation.

New York also looked at micro-level data, such as the specific denial letters sent to individual consumers. In many cases, investigators found that BH denial letters included generic boilerplate language and failed to explain why

the specific individual’s BH services were denied. In general, they did not find the same lack of specificity in med/surg denial letters. New York investigators also noted numerous discrepancies when they compared the clinical notes entered by plan reviewers with both clinicalcriteriaanddenialletters.

Several speakers also addressed the need to track and aggregate anecdotal data from consumers to help identify trends and potential parityproblems.

These same speakers, however, noted difficulty cultivating sufficient data to be able to track parity issues. Connecticut’s OHA, for example, collects data on all of the cases that it handles, but it only hears from approximately 5 percent of theinsuredmarket inthe state. LauraMorris reportedthatOHAisworkingonlegislationwith national partners, including ParityTrack, Mental Health America, and the Parity Implementation Coalition, to create a robust, centralized MH/SUD data clearinghouse, with data collected from providers, consumers, other agencies, and advocates, to provide a fuller pictureofBHaccessinthestate.

Following the conference, The Kennedy Forum launched the “Parity Complaint Registry and Appeal Resource,” a web site that collects information on parity complaints and refers consumers to state resources that can assist with filing complaints and appeals. 26 The federal government also launched a Parity Consumer Web Portal.27 Although the current betaversion haslimited functionality, the intent is to develop complaint tracking capacity in the future.28

Evaluation of plan practice in real time and on-site. California’s two-phase parity monitoring initiative offers an important insight into the most effective ways for states to monitorandenforceparitycompliance.

California found that the desk audit with worksheets, when combined with careful review and active dialogue with plans, was a helpful screening tool for a number of parity and coverage concerns, including ensuring: benefits are classified according to consistent standards; plans cover all state-required MH/SUD and med/surg benefits; “substantially all” and “predominant” tests are correctly calculated; noncompliant MH/SUD day and visit limits are eliminated; and MH/SUD cost-sharing complies with MHPAEA. Paper filings also could be an appropriate way to monitor compliance with respect to some NQTLs, including fail first requirements, formulary development, credentialing standards, exclusions based on failure to complete a course of treatment, and geographicrestrictionsonservices.

However, California regulators also concluded that on-site surveys were much more effective than desk audits at evaluating plan application ofUM standards,giventheobserveddisconnect between plans’ written standards and how plansortheirdelegateswereactinginpractice.

Based on the market conduct studies that Maryland has completed in recent years, Professor Weber concluded that carriers are enforcing standards through provider rather than member contracts such that reviewing member contracts provides no information or conflictingstandards.

Resource constraints, however, limit many regulators’ ability to audit plan compliance.29 Clare McGorrian, for example, noted that although the Massachusetts Division on Insurance is committed to parity enforcement, inadequate resources limit its ability to conduct detailed market conduct surveys. It is notable that California’s DMHC, which has devoted considerableresourcesto conductdetaileddesk audits and on-site surveys of plans, is funded by assessmentsonindustry.

Parity is a lawyer’s law. Implementation is a challenge because MHPAEA is a lawyer’s –aided by an actuary law, chock-full of technical language that requires granular analysis of insurer processes and data-driven calculations. Whether a plan complies with parity requirements often is not apparent from the surface of plan documents. For example, there needs to be scrutiny of the ways in which the plan classified benefits; actuarial analysis of whether the plan’s method of calculating expected costs is reasonable; analysis of whether the processes, strategies, evidentiary standards, and other factors used to apply a BH NQTL are comparable to and applied no more stringently than those used in applying med/surg NQTLs – and this analysis must be done within each classification. Each of these steps is technical and fraught with legal questions.

Areas of Confusion and Debate: Important Takeaways

Thanks to federal guidancedocumentsand time to wrestle with the issues, parity experts have made headway in analyzing and operationalizing parity’s technical requirements. Yet several contentious and

sometimes thorny issues continue to complicateimplementation.

Disclosure. Despite agreement from various stakeholders that parity analysis requires information about med/surg and BH NQTLs –and that federal law requires comparative disclosure in certain circumstances, including appeals of adverse benefit determinations, regardless of the proprietary nature of the information – numerous speakers and attendees noted their continued struggle to obtain comparative information from plans. Advocates also reported difficulty trying to obtain information about how various policies have been applied in practice, which is part of theparityanalysis.

Clare McGorrian, for example, reported that she has a number of cases, across insurers, where patients enrolled in one-month inpatient SUD treatment programs routinely were denied services after two weeks. Because she finds it suspect that patients with different presenting health concerns all were discharged at precisely the same day of treatment, she has requested information from the plans to help her understand the policies behind these concurrent review decisions to see if they conform to parity requirements. Buteven as an attorney who specializes in insurance appeals and BH parity in particular, she reported that her requests to date have been met with resounding silence from plans, and she has not been able to obtain any information about how limitationsonservicesarebeingapplied.

The problem seems to be less about the right to disclosure than about how to operationalize access. It would be preferable to route calls regarding parity to legal departments that are

familiar with parity requirements. But consumers and advocates reported that they routinely encounter customer service representatives who are not aware of parity’s technicalspecifications.

Garry Carneal, Senior Policy Advisor to The Kennedy Forum and Founder of Schooner Strategies, and Adam Easterday, Deputy General Counsel at Optum – Consumer Solutions Group, among others, also noted that comparative information is not always available. Prior to MHPAEA, information regarding how various UM policies for med/surg services were developed and applied were not maintained, and plans are working nowtomemorializetherequiredinformation.

A corollary open issue is the format that disclosure must or may take. There was some concern that disclosure of all that is required by federal guidance could overwhelm consumers and not be helpful. Bradley E. Lerner, Associate General Counsel and Director of Parity Compliance at Beacon Health Options, Inc., reported that his company has been working to providethereasonsfordenialto consumersina user-friendly fashion. In addition, an audience member who works for MCG Health suggested that utilization management criteria standing alonemaynotbemeaningfultoconsumers.

Professor Frank agreed that there is a risk of information and metric overload if plans provide members with all information about how plans determine benefits. To avoidthis, he recommended that we focus on disclosure of information that is essential to determining fairness and most likely to reveal problems. He believes that the federal government should set

parameters regarding key information and best practices for how plans should communicate thisinformationto consumers.

Irvin L. “Sam” Muszynski, Senior Policy Advisor and Director of Parity Implementation and Enforcement at the American Psychiatric Association, however, wondered about the degree to which plans can take the information requested and repackage it for consumers without first changing the law, noting that the federal guidance does not seem to distinguish between disclosure to regulators and consumers. He queried whether providing information in consumer-friendly language is the same as providing the standards themselves.

NQTLs. Despite additional regulatory guidance, NQTLs continue to pose vexing implementation challenges. Similar to the classification issues discussed above, it is not always clear whether processes, strategies, evidentiary standards, and other factors used in applying a NQTL to MH/SUD benefits are comparable to those applied to med/surg benefits. Nor is it always easy to assess whether these BH standards are being applied nomorestringentlythanmed/surgstandards.

Industry representatives and advocates alike stressed the need for more specific guidance regarding what plans are required to do to demonstrate compliance with the NQTL parity requirement. Laura Morris, for example, called fornationallyacceptedguidelines.

Sam Muszynski suggested that although the NQTL comparability analysis is difficult, it is possible to break it down into a sequential seriesofquestionsthat guidetheanalysis:

(1) What is the NQTL and to what services isitbeingapplied?

(2) What factors were used to test or analyze why this NQTL would be appliedtotheseservices?

(3) What evidentiary standards were actually used in relation to those factors?

(4) What methods or analyses were used or relied upon to further look at the comparability of factors and evidentiary standards, such as evidence-based research?

After establishing comparability, Mr. Muszynski suggests the following questions to probe compliance with the “applied no more stringently” prong of the NQTL parity requirement:

(5) What was done to assess whether the NQTL actually was applied in a similar way to MH/SUD and med/surg services?

(6) Were there any internal guidelines appliedbytheplan?

The specific answers to these questions will vary for each NQTL applied to specific services. The crux of the analysis, though, is to provide a cogent summary analysis of the factors, standards, and methods of analyses that justify finding comparability. Mr. Muzsynski maintained that plans ought to be able to document their answers to these sequential steps to illustrate compliance. In correspondence following the conference, Mr. Muzsynski emphasized that the NQTL test, including its sequential analyses, applies to the NQTLbothaswrittenandinoperation.

Mr. Carneal suggested that there is no single, prescribed method for performing the NQTL analysis, and plans have some flexibility. However, he agreed that there should be logic to the analysis.Thekey isto havea transparent, systematic, and logical methodology. Plans must have standards and follow a process so that they are able to articulate the structure of how they interpreted parity compliance. Mr. Muszynski seemed to agree, opining that the lack of disclosure regarding how a NQTL was defined and applied to BH or med/surg benefits is more of a problem than that plans are allowed to be flexible in how NQTL policy is determined.

Bradley Lerner did not object in principle to the sequential NQTL framework suggested by Mr. Muszynski, although he wondered whether it adequately accounts for clinically unique services. He believes the typology should consider evidence of clinical efficacy as relevant to applicationofaNQTLtospecificservices.

This raised another area of tension concerning NQTL analysis, namely, the extent to which plans may employ varying NQTLs for BH and med/surg services based on clinically appropriate standards of care. Plans point to language in the preamble to the final parity rule stating that plans retain “the flexibility contained in the NQTL requirements to take into account clinically appropriate standards of care when determining whether and to what extent medical management techniques and other NQTLs apply to med/surg benefits and MH and SUD benefits, as long as the processes, strategies, evidentiary standards, and other factors used in applying a NQTL to MH and SUD benefits are comparable to, and applied no more stringently than, those with respect to

med/surg benefits.”30 Mr. Lerner noted that there are a number of non-routine services, such as electroconvusive therapy (ECT), that are unique. ECT, for example, involves safety concerns. It thus is important to consider evidence of clinical efficacy when making medical management decisions with respect to thisformoftreatment.

Some advocates, however, questioned the legal force of preamble language, particularly when the proposed exception to permit variation “to the extent that recognized clinically appropriate standards of care may permit a difference” was omitted from the final rule. 31 Mr. Lerner suggested that the role of clinically appropriate standards should be addressed in guidance to resolveanyambiguity.

A related issue concerns the significance of evidence of disparate outcomes. As noted above,NewYorkhasusedevidenceofdisparate denial rates and other macro measures of BH access as the basis, at least in part, for its parity investigations. Plans caution that disparate outcomes alone do not signal parity violations, pointing to language in the preamble to the final rule.32 Michael Reisman queried what the legal significance is of preamble language, however. At a minimum, though, evidence of disparate outcomes can serve as a warning sign that warrants further investigation. Mr. Muszynski also argued that disparate results may illustrate that a NQTL has been applied more stringently to a BH service, in violation of parity.

Another challenge with NQTLs is assessing their application in practice. Even if consumers or advocates gain access to the processes,

strategies, evidentiary standards, and other factors used in applying NQTLs to BH and med/surg benefits, it is not clear how they will evaluate how plans, in practice, are applying these standards. As California’s on-site surveys reveal, there can be a disconnect between standardsaswrittenandapplied.

Provider reimbursement also was cited as a NQTL that can be difficult to assess, at least in places like California, that generally do not reimburse on a fee-for-service basis. As

Elizabeth Spring explained, med/surg services in California generally are compensated on a capitation basis. On the MH/SUD side, however, the plans generally have capitation arrangements with BHOs, but then the BHOs commonly enter fee-for-service arrangements withindividualprovidersandhospitals. Noneof the well more than 100 people attending the conference was able to suggest how the NQTL test applies to these varying reimbursement structures.

Classifying benefits. The case studies helped unearth ongoing uncertainty concerning the foundational issue of how to classify BH and med/surg benefits. To illustrate the issue, Adam Easterday asked the audience whether cars parked in the adjacent garage are comparable to each other. On one level, cars are similar in that they have four tires, a steering wheel, and an engine. But if we drill down, cars are easily distinguished from one another based on a number of features, such as their make, model, and color, whether they are manufactured in America or elsewhere, and a host of other variations. Similarly, how far we drill down will affect whether we find BH and med/surgservicescomparable.

Rather than demanding an apple-to-apple comparison, Mr. Easterday suggested that the comparison should be something like fruit-tofruit, with a focus on grouping services that are similar in nature. He maintained that parity requirements provide insurers some flexibility to determine how to classify benefits as long as the classifications are consistent across med/surg and BH services and based on a reasonable definition. Sam Muszynski and Garry Carneal acknowledged that there is flexibility but emphasized that plans must be able to explain their rationale for how they made classification decisions, back-up their rationale,andbeconsistent.

Some BH services do not have close med/surg analogues, which further frustrates comparisons. For example, Bradley Lerner offered that applied behavioral analysis (ABA) services for patients with autism have no clear med/surganalogue.

As a generalmatter, plan representatives stated that classification especially is challenging in the outpatient context because the vast range of services provided in outpatient settings, including durable medical equipment, blood tests,andMRIs,complicatescomparisons.

Ms. McGorrian noted that there is not much guidance on what constitutes intermediate servicesor howto classifythem. Mr.Easterday, however, noted that he feels constrained by language in the preamble to the final parity rule to consider skilled nursing to be an analogue of residential treatment and partial hospitalization to be an analogue of home health.33 Mr. Lerner echoed Mr. Easterday’s comments, explaining that he feels compelled to recommend that his plans classify residential treatment and skilled

nursing as in-patient, and partial hospitalization and home health as out-patient services, even if such classifications do not result in the right cost-sharing or reflect the best clinical approach.

Financial requirements. Compared to NQTLs, many think of parity’s financial requirements as fairly straightforward, governed by a mathematical test that is easy to apply and objective. But Elizabeth Spring shared an anecdote to illustrate that analysis of financial requirements is not intuitive, leaving carriers,regulators,andconsumersconfused.

11 of 25 plans evaluated in California’s compliance filing offered the same popular individual market product. But because the quantitative parity analysis relies on each plan’s estimated claims in calculating whether a financial requirementsatisfies the “substantially all” and “predominant” tests, the parity analysis resulted in 6 different combinations of costsharing and deductibles for intermediate MH/SUD services in these 11 plans. Small plans were disproportionately represented among the plans that were not able to apply a deductible or cost-sharing to costly BH services, including intensive outpatient services, partial hospitalization, SUD day treatment, and autism treatmentinthehome.

Ms. Spring believes that it will help plans, regulators, and consumers if financial requirements under parity are more intuitive andlessvariable.

Jurisdictional confusion. Attendees highlighted another ongoing challenge – where they should turn to assist them with parity concerns. One consumer shared her frustration

after she contacted DOBI for help when her son’s SUD in-patient treatment was denied and was told that DOBI could not help because she had an ERISA plan. Consumers feel confused and abandoned as they bounce between large federalandstatebureaucracies.

Means to Achieve Further Progress

Public Education. Michael Reisman reported that surveys by the American Psychological Association in 2010 and 2014 found that only 4 percent of Americans were aware of the federal parity law.34 Many of the thousands of public comments submitted to the White House Parity Task Force highlighted the need to raise awareness about parity requirements. These comments clustered around “QTLs and NQTLs, the appeals process for claims denials, and disclosure requirements for plans and insurers.”35 They voiced concerns that patients neither know how to evaluate whether their parity rights have been violated norwhere to go forhelp.36

Another problem is that many parity violations are not facially apparent from documents available to consumers. As a result, even consumers who are aware of the law often do not know that they should raise a parity claim. For example, as noted by Elizabeth Spring, although complaints aboutBH access issues and denied services can involve potential parity violations, consumer complaints rarely allege parityviolations.

Need for an active regulator.

Even with education and full disclosure of all information needed to evaluate parity compliance, it is difficult to imagine how individual consumers

can satisfy a monitoring role given the level of granular analysis required to evaluate if plans are complying with parity and MHPAEA’s highly technical requirements. Detailed regulatory review of plan filings that are carefully keyed to parity’s technical requirements, similar to DMHC’s efforts in California, offers an unparalleled opportunity to detect and correct parity violations and thereby improve access to BH services. AsMs. Springshared, DMHC found problemswithmostplans’initialfilingregarding financial requirements, which generally are considered to be easier to monitor and enforce than NQTLs. Based on this experience, Ms. Spring urged states to review proof of carrier compliance and not rely on insurer affirmations ofcompliance.

The need for an active regulator is especially strong, given the need to evaluate NQTL compliance in practice. As noted above, California learned through its on-site surveys that paper filings are not always effective at detecting plan parity violations in practice. Insurance regulators are uniquely positioned to auditplanperformanceinthefield.

To effectively regulate, the agency and its staff must be well-informed about parity’s granular details. Not all insurance regulators, however, have received adequate training to fulfill this function. Others, though informed and motivated,facesignificantresourceconstraints.

Role for consumer advocates. Given the complex natureof MHPAEA’s requirements and the lack of public knowledge, consumer advocates are an incredibly valuable and arguably necessary resource for consumers as they try to navigate parity’s puzzle. The

conference featured five states that are trailblazers on the parity front. It is not a coincidence that there are resources available to provide consumer assistance in four of these states, and that the regulator in the fifth, California, took an active role on behalf of its consumers. The public needs help translating parity’s technical features into natural language thatconsumerscanunderstand.

The states that participated in the conference demonstrate that consumer assistance can take a variety of forms. Health Law Advocates Massachusetts is a nonprofit legal assistance organization that is funded primarily through private contributions and grant funding. The Office of the Healthcare Advocate is an independent state agency in Connecticut that serves as a consumer watchdog. New York’s Healthcare Bureau is a unit within the Attorney General’s Office, designated to root out corruption and ensure compliance with laws that protect healthcare consumers. Professor Weber’s Drug Policy Clinic at the University of Maryland Carey School of Law provides assistance to health care consumers and seeks to impactpublicpolicyintheirinterest.

In addition to helping to educate and advocate for consumers, these entities also can play a role in aggregating data and looking for patterns that deserve further investigation. Under existing law, however, they are not entitled to full disclosure of comparative plan NQTL standards and thus must rely on consumers to provide information to permit parityanalysis.

Value of ongoing stakeholder dialogue

. The conference illustrated the iterative nature of parity implementation. Working

collaboratively through challenging interpretive and implementation questions helps to crystallize where stakeholders agree, what needs to be clarified, and where genuine disagreement remains. It also invites productive feedback on what is working and where efforts to operationalize legal requirementsneedto beadjusted.

Recommendations to Advance Parity Implementation

The conference offered a menu of possibilities for attendees to consider when thinking about how to pursue parity implementation and monitoring in their respective states. We recognize that parity implementation is not one size fits all. Our hope is that attendees will bring the wide range of ideas back to their respective regulatory agencies, advocacy organizations, insurance plans, and communities to consider what would work best in their states to advance parity implementation.

In this section, we highlight ideas that we believe complement, and increase the chances that,thevariousstrategieswillsucceed.

Develop Model Disclosure and Compliance Templates

There was strong support among speakers for some form of template to standardize plan disclosures to consumers and plan compliance filings.

Prior to the conference, the federal agencies responsible for administering parity already had issued guidance that identifies some of the

types of information that consumers may request and clarified that plans could not refuse to disclose documents based on their proprietary nature. 37 Yet, as noted above, consumers and experienced attorneys like Clare McGorrian have been having a hard time securing disclosure. Perhaps this is due to a lag in implementation, as plans seek to build internal infrastructure to be able to respond to disclosure requests. To clarify any lingering ambiguity, it would be helpful for federal regulators to create a comprehensive template of what plans must disclose, in which circumstances,andto whichentities.

Following the conference, the Substance Abuse and Mental Health Services Administration (SAMHSA) released a helpful CONSUMER GUIDE TO DISCLOSURE RIGHTS. 38 The GUIDE includes a chart of common scenarios that may affect consumers’ MH/SUD benefits and then identifies both the types of information that consumers may find helpful in assessing their coverage as well as when consumers have a right to access these documents. This chart is a positive step towards transparency of disclosure obligations. We note, however, that it is limited to employer-based plans. Federal agencies should develop a similar resource for consumers with individual group plans (and assess the wisdom in having different sets of rules). The White House Parity Task Force recommended coordination with the National Association of Insurance Commissioners (NAIC) to develop “templates and other sample standardized tools . . . to improve consumer accesstoplaninformation.”39

There is no existing federal compliance filing template. Rather, a number of states have

developed their own filings. As discussed above, not all state filings cover the gamut of parity considerations. The variety of formats also poses a challenge for plans that operate in multiplestates.

As a result, several speakers called for the development of a federal compliance filing template. Ellen Weber, for example, wants to see a standardized, agreed upon template that makes clear what is required of plans to demonstrate parity compliance. A carefully crafted template, designed to solicit information about each of parity’s technical requirements, would facilitate comprehensive, uniform assessment by regulators throughout the country that plans comply with parity before they are offered for sale to consumers, asthelawrequires.

In FAQ 34 released after the conference, the U.S. Departments of Labor, Health and Human Services, and the Treasury (the Departments) requested comments by January 3, 2017 regarding whether model forms would be useful both to help guide disclosure regarding NQTLsand also to assist statesin their reviewof plan compliance with NQTL requirements; and, if they would be, what form these models should take.40 We note that the White House Parity Task Force Final Report again recommends that federal regulators work with the NAIC and the states to develop a standardized template to help states assess paritycompliance.41

If the federal government does not develop model templates, at a minimum states should review their current regulatory filing requirements to ensure they are collecting

information that facilitates assessment of parity compliance. We detailed in an earlier Report a number of ways in which New Jersey’s filing requirement could be improved.42 On January 19, 2017, a bipartisan bill was introduced in New Jersey that, among other things, would require carriers to file an annual parity compliancereportwithDOBI.43

Identify and Train Designated Parity Staff at Regulators and Plans

Plans and federal and state regulators should consider identifying staff who are expert in parity and can serve as points of contact for parity-relatedconcerns.

As Ms. Spring shared, parity implementation in California has required extensive training of plans, regulator staff, and clinical consultants. Her team asked colleagues to help review the filings of plans with which these colleagues normally worked. The team provided parity training, but then these colleagues resumed their normal duties between filing updates. When the team again needed assistance, the colleagues needed to be retrained, given the highly technical nature of parity requirements. As a result, she recommended identifying one ortwolawyerstobecomeparity experts.

Identifying dedicated parity staff also should address consumer frustrations with regulators and plans. Dedicated and trained parity staff at a plan will be familiar with disclosure obligations and know where the plan maintains the required documents. Similarly, designated and trained regulatory staff will know how to assist consumers who call with complaints. Consumers will know whom to contact at the plans and regulatory agencies, thus improving

efficiency and the likelihood of an appropriate andhelpfulresponse.

Notably, the legislation that Ellen Weber and other parity advocates tried to persuade the Maryland Legislature to enact would have required plans to identify something akin to a parity complianceofficer.44

The Parity Consumer Web Portal (http://www.hhs.gov/mental-health-andaddiction-insurance-help) that HHS recently launched seeks to connect consumers to the appropriate agencyto helpthem with questions about parity compliance.45 If consumers know the kind of insurance they have, this web site will help them figure out if they should be contacting federalor stateregulators,whichis a tremendousstart.

But at this Portal, a New Jersey consumer with an individual plan is brought to DOBI’s main complaint page. It would be better if this Portal could connect consumers with regulators who are specifically trained to respond to questions andproblemsconcerningparitycompliance.

The White House Parity Task Force Report announced that the federal government is committing funds to support training of state regulators. CMS willbe awarding $9.3million in grants to States to help state insurance regulators ensure plan compliance with ACA consumer protections including parity requirements.46 Inaddition, SAMHSAwillhosta State Policy Academy on Parity Implementation for State Officials in fiscal year 2017, which will “bring together national experts to conduct technical assistance for teams of state officials on strategies to advance parity compliance and lessons learned from other states’

implementation efforts” in the commercial market.47

Facilitate Dialogue among Stakeholders and Regulators on an Ongoing Basis

Many remarked at the conference and thereafter on the value of continued dialogue among stakeholders. Regulators, plans, BHOs, consumers, providers, and advocates are learning with each new implementation challenge. It is important to be sure that the dialogue continues so that we continue to grow andlearn.

One possibility is to organize working groups of plan and BHO representatives, advocates, and potentially regulators,48 similar to the afternoon case studies panelattheconference,thatmeet, in-person or virtually, on a regular basis. Stakeholders would be invited to submit case studies that illustrate issues that they deem to be unclear or in dispute. The parties could discuss their perspectives. If they do not resolve their concerns, they could submit them to regulatorsforadditionalguidance.

Facilitated dialogue within interest groups also is important. Groups with allied interests should share data and ideas to maximize synergies and efficiency. Clare McGorrian, for example, mentioned the value of convening advocates to gather input from stakeholders regarding the status of implementation and then relaying the information to legislators and the State Division on Insurance. Several states have coalitions working on parity, including NewJersey.

That parity is a hyper-technical lawyer’s law does not mean that consumers are not

stakeholders. As Michael Reisman told the audience, it is important to have real-time channels of communication with consumers, such as hotlines and web-based complaint systems, so that regulators, advocates, and plans are aware of the issues consumers are facingastheytryto accesscare.

To ensure consumers’ voices are part of the ongoing dialogue, consumers must be educated about parity and encouraged to bring concerns to the attention of plans, advocates, and regulators. Consumer-friendly, easy to understand, and concise educational materials need to be developed. These materials need to expose consumers to basic principles of parity; highlight warning signs that may signal a violation; and provide information to consumers regarding how to report concerns to federal and state regulators and appeal denials ofcare.

Although federal agencies developed a number of parity-specific consumer education materials a few years ago,49 the fact that the number of Americans aware of MHPAEA remained a dismal 4 percent from 2010 to 201450 suggests that these resources may not have been effective means of educating consumers. More recent efforts, however, reflect sensitivity to the need to develop accessible training and outreach materials for consumers. The “Warning Signs” document, for example, arms consumerswithspecific examplesofNQTLsthat may violate parity and warrant further investigation.51 Similarly, as mentioned above, SAMHSA’s recently released CONSUMER GUIDE TO DISCLOSURE RIGHTS provides practical information to help consumers know what types of information to request to help them monitor

parity compliance.52 We applaud the White House Parity Task Force’s pledge to partner with consumer groups to continue and expand consumer parity education efforts in this spirit. 53 The Kennedy Forum’s recently launched “Parity Complaint Registry and Appeals Resource” also is an important tool to aggregate consumer experiences and monitor fortrends.54

As noted above, concerns were raised at the conference that the existing appeal routes for consumers who are denied BH services may not be adequate to consider parity arguments. It is important to ensure consumers have a way to raise parity concerns in appeals, both to provide a direct avenue of redress and to signal plans and regulators of potential problems. Bradley Lerner shared that he believes the federal government is revising the applicable standards for external review, including looking at what kinds of experts should sit on Independent Utilization Review Organization (IURO) review boards. Mr. Reisman also reported that external review entities with whom he has shared his concerns are open to addressing theseissues.

Issue Additional Clarifying Guidance

As we noted above, MHPAEA is novel in its requirement to look at plan processes that determine coverage in particular cases. Because parity analysis is technical and factbased, we are learning as we go, and parity implementation has been an iterative process. As discussed above, there are a number of remaining issues that are in dispute or unclear. The Departments that oversee parity implementation need to ensure uniformity across state lines in the interpretation and

application of MHPAEA. Thus, they must continueto issueguidanceas we figureouthow to operationalize parity’s commands in particularfactualsituations.

To their credit, the Departments have included examples of how parity applies to different factual situations in the final parity regulations and in various guidance documents. Sometimes, however, these examples assume material facts, stripping the hypothetical of details that affect the analysis. For example, in question 6 in FAQ 34, the example speaks generally about prescription drugs to treat med/surg conditions that have “similar safety risks;”itdoesnotidentifythespecificdrugs,the specific med/surg conditions that they treat, or the safety risk that the Departments deemed to be similar. 55 It would be helpful to stakeholders, when they have to consider specific coverage questions, to see examples of how the Departments evaluated parity requirements as applied to specific conditions andmedications.

Thus, the Departments should provide guidance that wrestles with knotty, material facts so that stakeholders can start to develop a taxonomy for parity assessment. Guidance that walks stakeholders through the Departments’ detailed analysis of particular parity implementation challenges models for stakeholders what parity analysis entails and helps to shape the contours of parity’s requirements. The Departments might want to consider styling guidance as letters to industry, given the highlytechnical nature ofthe analysis. As suggested above, stakeholders and regulators should maintain an active dialogue so that the Departments can address implementationchallengesinatimelyfashion.56

Improve Coordination among and between Regulators

It is important for federal and state regulators to work together to improve communication and transparency. State regulating agencies should have learning networks so that they can share best practices and track potential areas of concern. Federal and stateregulators also need to engage in ongoing dialogue. Michael Reisman, for example, announced that New York and the U.S. Department of Labor had enteredinto anagreement to share information and collaborate on joint investigations so that consumers have seamless assistance on parity issues, whether they have state-regulated or ERISA plans.57 The White House Parity Task Force Final Report recommends that federal and state regulators coordinate for trainings andtemplatedevelopment.58

Looking beyond Parity to Improve Access to Behavioral Health Services

The conference provided a number of fruitful ideas to improve parity implementation. In addition,however,ithighlightedthe boundaries of parity’s promise. Parity is not a magic pill that alone will cure decades’ old problems in the provision of BH services; it instead is one of several tools available to policy makers to improve access. It is important to acknowledge how and where parity may improve access, but it also is worthwhile to describe means beyond parity to achieve full access to MH and SUD treatment. The conference’s keynote speaker, Professor Frank, most directly spoke to these

issues, and we are indebted to his elegant framingoftheissues.

The high cost of treating chronic BH conditions creates a financial disincentive for insurers to offer a rich array of BH services, beyond any minimum to which they are held by law. An important aspect of this disincentive is that the insurer has an incentive not to become a “sick person magnet.” If an insurer becomes known as the best insurer of patients with high-cost chronic BH needs, patients with chronic BH conditions are likely to choose that coverage, leaving that insurer with a higher proportion of high-cost patients. Other insurers would not have a financial incentive to try to compete for these patients, and thereby can avoid enrolling a class of high-cost consumers. These financial incentives feed a race to the bottom risk,59 fueled by “risk selection by design,”60 whereby insurers develop benefit plans unattractive to high-risk, and attractive to low-risk, patients. Insurers can, if so motivated, thereby avoid attractingthecostliestpatients.61

Parity and essential health benefits requirements alone are inadequate to counter these incentives. Instead, mechanisms should be used that reduce or eliminate the incentive to avoid enrolling patients with chronic BH needs. The right mix of incentives can create a more efficient system that offers better access to higher quality BH services by aligning insurers’ interests with public policy goals. The following policy and regulatory tools can assist inthateffort.

Risk Adjustment

The ACA has a permanent risk adjustment program that seeks to “level the playing field” among insurers by collecting funds from insurers that cover fewer high-cost individuals and distributing these funds to insurers that provide coverage to a disproportionate share of higher cost patients. 62 Risk adjustment programs, when well-constructed, can provide “afurtherdisincentiveforriskselection. ”63

But recent research published in HEALTH AFFAIRS suggests that the Marketplace methodology “does a highly imperfect job of detecting and compensating for costs of care among individuals with mental health and substance use disorders.”64 Adjustments to the federal Marketplace risk adjustment methodology that better account for higher BH costs may mitigate the threat of adverse selection and result in better coverage of BH services.65 States also can consider whether to develop their own riskadjustmentmethodologies.66

Quality Measurement, Public Reporting, and Pay for Performance

A variety of public and private health insurance plans are experimenting with gain sharing and pay-for-performance payment arrangements. By including performance measures that reflect quality MH/SUD care in public reporting, gain sharing, and pay-for-performance arrangements, we will reward plans for providing quality BH care. This creates incentives for providers and insurers to provide betterBHservices.

Although quality measures are not as developed for BH services as they are for

med/surg conditions, such as diabetes, Professor Frank expressed optimism. For one, he urged that some measures are better than none. Moreover, he reported that CMS, SAMHSA, and others are investing considerable resources to develop these measures, so there is good reason to expect improved measures in the near term. Garry Carneal argued that technology improvements permit better tracking of patient quality of care throughout the healthcare process, which should help get patients the right care at the right time. Attendees specifically noted theneedforrobust BH indicators in accountable care organizations andMedicaidmanagedcare.

Regulating Provider Networks

Speakers and attendees alike frequently noted the inadequacy of BH provider networks. Although network adequacy is a NQTL that is subject to parity analysis,67 network inadequacy is not always the product of a parity violation. Other market forces, including the supply of BH providers in particular geographic regions and increaseddemand forservicesdueto theopioid epidemic and Medicaid expansion, for example, may mean that BH networks are inadequate to satisfy patient needs even when plans use comparable credentialing and reimbursement processes for BH and med/surg networks. Adam Easterday recalled that a secret shopper survey in New Jersey a few years ago found that a network was inadequate to meet demand for BH services even though 85 percent of licensed psychiatristscontractedwiththenetwork.

As a result, it is critical to employ additional tools to tackle BH network inadequacies. For example, Garry Carneal suggested that telemedicine offers promise as a means of

getting BH services to patients in underserved regions. Targeted policy reform to address pipeline supply and reimbursement issues for BH providers also may help to address chronic network inadequacy issues. The federal government and states also should continue to consider how to strengthen network adequacy requirements. In this regard, it is notable that the National Association of Insurance Commissioners recently revised its model networkadequacylaw.68

In addition to adopting network standards, it is vital to improve monitoring and enforcement of those standards.69 Consumers also need to be educated that they have a right to in-plan or innetwork exceptions when plans cannot provide appropriate in-network providers to meet their needs.70 Because such one-off exceptions do not address systemic network deficiencies, federal or state regulators should consider tracking how often plans are granting innetwork exceptions and for what types of services as another indicator of network inadequacy.

Mr. Muszynski reported that some state Attorneys General are evaluating whether it violates state consumer protection laws for insurers to sell plans that have inadequate networksofproviders.71

Faced with inaccurate provider directories, the Connecticut legislature tasked OHA with developing a Behavioral Health Clearinghouse, which has been described as “an information and referral service to help residents and providers receive behavioral health care information, timely referrals and access to behavioral health care providers.” 72 Rather

than relying on plan network directories, OHA staff has been reaching out to BH providers to confirm whether they are accepting new patients and what insurance they accept. A goal is to partner with a BH advocacy group to staff a call center to help consumers connect to care. The Mental Health Association in New Jersey hasexpressedinterest ina similarproject inNewJersey,withappropriateresources.

Behavioral Health Integration

Many patients have comorbid BH and physical health care needs, but often care remains siloed. Patients seeking treatment of severe and persistent mental illness often have unaddressed or under-addressed physical health needs, and patients being treated in primary care clinics often have unmet BH needs. Despite a strong clinical consensus that integrating behavioral and physical health services holds the promise of improved patient outcomes and stable if not reduced costs, significant licensing, reimbursement, and privacy barriers are frustrating integration efforts.73

Efforts are underway in a number of states to facilitate the integration of care. New York, for example, has established the licensure category, “Integrated Outpatient Services,” which created a regulatory pathway to provide integrated services by providers licensed by the Office of Mental Health, the Office of Alcoholism and Substance Abuse, or the Department of Health. 74 In Arizona, an outpatient treatment center may provide be authorized to provide physical and behavioral health services under one license.75 Seton Hall School of Law’s Center for Health &

Pharmaceutical Law & Policy in 2017 will provide consultation and regulatory implementation assistance in furtherance of BH integration to the New Jersey Departments of HealthandHumanServices.

Integration holds great promise for expanding accesstoBHservices.

Health Insurance Literacy

Health insurance is complicated, and many consumers do not understand their coverage.76 A 2011 roundtable of experts developed the following working definition of health insurance literacy:

Health insurance literacy measures the degree to which individuals have the knowledge,ability,andconfidenceto find and evaluate information about health plans, select the best plan for their own (or their family’s) financial and health circumstances, and use the plan once enrolled.77

The more consumers understand the intricacies of coverage, the better they will be able to select appropriate coverage, access their benefits, and know when to raise concerns with advocates and regulators about potential marketfailures.

Several states are developing health insurance literacy programs to empower consumers. 78

Laura Morris, for example, told the audience that Connecticut is forming a health insurance literacy coalition. Rutgers University Behavioral Health Care’s Research and Training Institute is forming a Center for Behavioral Health and Insurance Literacy to help educate individuals managing BH issues and complex, chronic medical conditions about how to choose appropriate health plans and access their benefits. States should work together to developbestpracticesandshareresources.

Conclusion

There are reasons to celebrate parity’s important role in expanding access to BH services while also identifying ways to improve its impact and efficacy. More individuals have health care with more access to BH services and less financial hardship than prior to MHPAEA’s passage in 2008. The law is working, albeit slowly, given the complexities in its implementation, in particular the comparative decisions that must be made at the medical necessitystage.

This Briefing Report identifies opportunities to facilitate parity’s implementation to maximize its impact. We also must be sure not to neglect additional valuable tools, in addition to mental health parity laws, that promote fairness and accesstoqualityBHcare.

ACKNOWLEDGEMENTS

The Center for Health & Pharmaceutical Law & Policy at Seton Hall School of Law thanks the Robert Wood Johnson Foundation for funding the Sentinel Project. Senior Program Officer Deborah Bae consistently asks thoughtful questions that challenge our thinking and enrichouranalysis.

This Briefing Report would not have been possible without the involvement of our esteemed speakers and panelists at our September 16, 2016 conference: Garry Carneal, Adam R. Easterday, Richard G. Frank, Bradley E. Lerner, Clare McGorrian, Laura Morris, Irvin L. “Sam” Muszynski, Michael D. Reisman, Elizabeth Spring, and Ellen Weber. We deeply appreciate the expertise and rich dialogue that each contributed. We also thank Tim Clement of ParityTrack for the many and varied ways that he contributed to the program.

Seton Hall Law alumna Danielle King and student Lindsay Sheely provided excellent and valuedresearchassistancetotheProject.

While each of these individuals enhanced the substance of this Briefing Report, its conclusions, recommendations, and any errors remaintheresponsibilityoftheauthors.

Endnotes

1 See JOHN V.JACOBI &TARA ADAMS RAGONE,CENTER FOR HEALTH & PHARMACEUTICAL LAW & POLICY, SETON HALL LAW SCHOOL, ACCESS TO BEHAVIORAL HEALTH SERVICES IN MARKETPLACE PLANS IN NEW JERSEY: THE PUZZLE OF PARITY (July 2016), available at https://issuu.com/setonhall-law-school/docs/sentinel-project-reportjuly2016; JOHN V. JACOBI, TARA ADAMS RAGONE, & KATE GREENWOOD, CENTER FOR HEALTH & PHARMACEUTICAL LAW &POLICY,SETON HALL LAW SCHOOL, THE SENTINEL PROJECT: THE ACA’S MARKETPLACE REFORMS AND ACCESS TO CARE (Sept. 2014), available at http://law.shu.edu/HealthLaw/upload/RWJF-Sentinel-Project-Report09102014.pdf.

2 See U.S. DEP’T OF HEALTH & HUMAN SERVS., MENTALHEALTH.GOV, Health Insurance and Mental Health Services, https://www.mentalhealth.gov/gethelp/health-insurance/(lastvisitedNov.25,2016).

3 EXEC. OFFICE OF THE PRESIDENT OF THE U.S., THE MENTAL HEALTH & SUBSTANCE USE DISORDER PARITY TASK FORCE FINAL REPORT, at 3 (Oct. 2016), available at http://www.hhs.gov/sites/default/files/mentalhealth-substance-use-disorder-parity-task-forcefinal-report.PDF [hereinafter PARITY TASK FORCE FINAL REPORT].

4 Seeid. at11-12.

5 See Sarah Goodell, Health Policy Brief: Enforcing Mental Health Parity, HEALTH AFFAIRS (Nov. 9, 2015), available at http://healthaffairs.org/healthpolicybriefs/brief_pdf s/healthpolicybrief_147.pdf.

6 See CTRS FOR MEDICARE & MEDICAID SERVS., THE CTR FOR CONSUMER INFO. & INS. OVERSIGHT, The Mental Health Parity and Addiction Equity Act (MHPAEA), https://www.cms.gov/CCIIO/Programs-andInitiatives/Other-InsuranceProtections/mhpaea_factsheet.html (last visited Nov. 26, 2016) (providing links to federal parity regulations,FAQs,factsheets,andotherresources).

7See also SUBSTANCE ABUSE & MENTAL HEALTH SERVS ADMIN., Approaches in Implementing the Mental HealthParityandAddictionEquityAct:BestPractices from the States, HHS Publication No. SMA-16-4983 (2016), available at

http://store.samhsa.gov/shin/content//SMA164983/SMA16-4983.pdf; ParityTrack, https://www.paritytrack.org/ (last visited Nov. 28, 2016) (tracking state and federal efforts to implementparityrequirements).

8 See, e.g., Letter to U.S. Dep’t of Health & Human Servs., U.S. Dep’t of Labor, and Internal Revenue Service from Irvin L. Muszynski & Carol McDaid, Parity Implementation Coalition, Re: Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes, dated July 25, 2011, available at https://parityispersonal.org/media/photos/FinalParity-Implementation-Coalition-External-ReviewComments.pdf. An adverse benefit determination that involves a question of whether a plan is complying with parity’s NQTL standard is eligible for federal external review. See 45 C.F.R. § 147.136(d)(1)(i)(A); U.S.DEP’TS OF THE TREASURY,LABOR, & HEALTH & HUMAN SERVS , Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes; Final Rule, 76 Fed. Reg. 37,208, 37,216 (June 24, 2011), available at https://www.gpo.gov/fdsys/pkg/FR-2011-0624/pdf/2011-15890.pdf. Where the application of the NQTL is separately eligible for external review, “such as whether a treatment is medically necessary, experimental or investigational, or whether a certain level of care is appropriate,” participants may seek external review “of both the accuracy of the determination and whether the plan is processing determinations in a manner that complies with the parity requirements.” U.S.DEP’T OF LABOR, REPORT TO CONGRESS: IMPROVING HEALTH COVERAGE FOR MENTAL HEALTH AND SUBSTANCE USE DISORDER PATIENTS:INCLUDING COMPLIANCE WITH THE FEDERAL MENTAL HEALTH AND SUBSTANCE USE DISORDER PARITY PROVISIONS, at 13 (Jan. 2016), available at https://www.dol.gov/sites/default/files/ebsa/lawsand-regulations/laws/mental-healthparity/parityeducationreport.pdf

9 Michael Reisman elaborated on the legal basis for New York’s federal parity enforcement actions in emailcorrespondencewiththeauthors:

We used our general law enforcement statute, N.Y. Executive Law 63(12), as

authority to pursue our investigations regarding compliance with both the N.Y. and federal MH parity laws. It’s important to recognize that states have primary enforcement jurisdiction over the Public Health Service Act codification of MHPAEA with respect to health insurance issuers, 42 U.S.C. § 300gg-22(a)(1), and both USDOL and SAMSHAhaveissuedguidancetothiseffect.

Email correspondence dated Oct. 21, 2016 (on file withauthors).

10 See ATTORNEY GENERAL ERIC T.SCHNEIDERMAN,N.Y. STATE OFFICE OFTHE ATTORNEY GENERAL, PressReleases, A.G.SchneidermanOffersAssistanceForIndividuals AndFamiliesSeekingSubstanceAbuseAndMental HealthTreatment (May11,2016), availableat http://www.ag.ny.gov/press-release/agschneiderman-offers-assistance-individuals-andfamilies-seeking-substance-abuse-and;ATTORNEY GENERAL ERIC T.SCHNEIDERMAN,N.Y.STATE OFFICE OF THE ATTORNEY GENERAL, PressReleases,A.G.Schneiderman AnnouncesSettlementWithHealthnowNewYork OverWrongfulDenialOf$1.6MillionInOutpatient MentalHealthTreatmentAndEnsuresCoverageFor NutritionalCounselingForPatientsWithEating Disorders (Aug.22,2016), availableat http://www.ag.ny.gov/press-release/agschneiderman-announces-settlement-healthnownew-york-over-wrongful-denial-16

11 See ATTORNEY GENERAL ERIC T.SCHNEIDERMAN,N.Y.

STATE OFFICE OFTHE ATTORNEY GENERAL, PressReleases, A.G.SchneidermanAnnouncesNationalSettlement WithCignaToDiscontinuePre-AuthorizationFor OpioidAddictionTreatmentDrugs (Oct.21,2016), availableat https://ag.ny.gov/press-release/agschneiderman-announces-national-settlementcigna-discontinue-pre-authorization.

12 See ATTORNEY GENERAL ERIC T.SCHNEIDERMAN,N.Y.

STATE OFFICE OFTHE ATTORNEY GENERAL, PressReleases, A.G.SchneidermanAnnouncesNationalSettlement WithAnthemToDiscontinuePre-AuthorizationFor OpioidAddictionTreatmentDrugs (Jan.19,2017), availableat https://ag.ny.gov/press-release/agschneiderman-announces-national-settlementanthem-discontinue-pre-authorization

13 See, e.g., Alabama Group Mental Health ("MH") Parity Cost Report, available at

http://www.aldoi.gov/PDF/Companies/MentalParity Form.pdf.

14 See STATE OF CONN., INS DEP’T., BULLETIN MC-20: MENTAL HEALTH PARITY ANNUAL COMPLIANCE SURVEY (Jan. 2, 2014), available at http://www.ct.gov/cid/lib/cid/Bulletin_MC20_MHP_Annual_Compliance_Survey.pdf.

15 See COMMONWEALTH OF MASS., S. 2395, § 254, available at http://b.3cdn.net/pcouncil/31a679da6f61e5d047_7 hm6b01ou.pdf; MASSACHUSETTS OFFICE OF CONSUMER AFFAIRS AND BUSINESS REGULATION,DEP’T OF INS., Bulletin 2013-06; Disclosure and Compliance Requirements for Carriers, and Process for Handling Complaints for Non-Compliance with Federal and State Mental HealthandSubstanceUseDisorderParityLaws (May 31, 2013), available at http://www.mass.gov/ocabr/insurance/providersand-producers/doi-regulatory-info/doi-regulatorybulletins/2013-doi-bulletins/bulletin-2013-06.html

16 JACOBI &RAGONE, supra note1,at64-66.

17 See Ca. Dep’t of Managed Health Care, The Mental Health Parity and Addiction Equity Act of 2008, https://www.dmhc.ca.gov/LawsRegulations/Mental HealthParityandAddictionEquityActof2008(MHPAEA) .aspx#.VifJ6H6rS70(lastvisitedNov.26,2016).

18 See Workbook that Includes Index and Tables 1-4 (Table 1: Financial Requirements – Deductibles; Table 2: Financial Requirements - Out-of-Pocket Maximums; Table 3: Financial RequirementsCopayments and Coinsurance; Table 4: Quantitative Treatment Limitations), https://www.dmhc.ca.gov/Portals/0/LawsAndRegula tions/MentalHealth/Workbook_including_Index_and _Tables_1_through_4.pdf (last visited Nov. 26, 2016); Table 5: Non-Quantitative Treatment Limits, https://www.dmhc.ca.gov/Portals/0/LawsAndRegula tions/MentalHealth/Table_5Non_Quantitative_Treatment_Limitations.pdf (last visited Nov. 26, 2016); Table 6: List of Exhibits, Supporting Documentation, https://www.dmhc.ca.gov/Portals/0/LawsAndRegula tions/MentalHealth/Table_6List_of_Exhibits,Supporting_Documents.pdf (last visited Nov. 26, 2016); Instructions for the Federal Mental Health Parity and Addiction Equity Act Compliance Filing, at 2,

https://www.dmhc.ca.gov/Portals/0/LawsAndRegula tions/MentalHealth/Instructions_for_Federal_MHPA EA_Compliance_Filing.pdf (last visited Nov. 26, 2016).

19 In the individual and fully insured group markets, the U.S. Department of Health and Human Services has primary enforcement authority with respect to MHPAEA when a state chooses not to enforce or fails to substantially enforce the Act. See PARITY TASK

FORCE FINAL REPORT, supra note 3, at 15. According to this provision, HHS is enforcing MHPAEA in Missouri, Oklahoma,Texas,andWyoming. Seeid.

20 See, e.g., O.A.R § 836-053-1404(1)(a) (defining "Mental or nervous conditions" for purposes of the state parity law to mean “any mental disorder covered by diagnostic categories listed in the "Diagnostic and Statistical Manual of Mental Disorders, DSM-IV-TR, Fourth Edition" (DSM-IV) or the "Diagnostic and Statistical Manual of Mental Disorders,FifthEdition"(DSM-5).”).

21 See R.S.Mo§376.845.

22 See, e.g. VERMONT DEP’T OF FINANCIAL REG’N, DIV OF INS., Ins. Bulletin No. 174, Guidance Regarding Prohibited Discrimination on the Basis of Gender Identity Including Medically Necessary Gender Dysphoria Surgery and Related Health Care (Apr. 22, 2013), available at http://www.dfr.vermont.gov/sites/default/files/Bull etin_174.pdf

23 See, e.g., N.H.R.S.A. § 420-J:16 (effective Jan. 1, 2017).

24 See N.H.R.S.A. §§ 420-J:15, 420-J:17 (effective Jan. 1,2017).

25 See N.YC.L.S.Ins.§4900(b).

26 See THE KENNEDY FORUM, Parity Complaint Registry and Appeal Resource, www.parityregistry.org (last visitedNov.28,2016).

27 U.S. DEP’TS OF LABOR, HEALTH & HUMAN SERVS., & TREASURY, FAQs about Affordable Care Act Implementation Part 34 and Mental Health and Substance Use Disorder Parity Implementation, at 6 (Q.2) (Oct. 27, 2016), available at https://www.dol.gov/sites/default/files/ebsa/aboutebsa/our-activities/resource-center/faqs/aca-part34.pdf[hereinafter FAQ34].

28 See PARITY TASK FORCE FINAL REPORT, supra note 3, at 23.

29 See also id. at 27 (discussing federal resource constraints).

30 U.S. DEP’TS OF TREASURY, LABOR, & HEALTH & HUMAN SERVS., FINAL RULES UNDER THE PAUL WELLSTONE AND PETE DOMENICI MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT OF 2008;TECHNICAL AMENDMENT TO EXTERNAL REVIEW FOR MULTI-STATE PLAN PROGRAM; FINAL RULE, 78 Fed. Reg. 68,240, 68,245 (Nov. 13, 2013), available at http://webapps.dol.gov/FederalRegister/PdfDisplay. aspx?DocId=27169 [hereinafter FINAL PARITY RULE PREAMBLE,78Fed.Reg.at*].

31 Id. at68,241,68,245.

32 Seeid.

33 Seeid. at68,247.

34 See AM’N PSYCHO’L ASSOC’N, Few Americans Aware of Their Rights for Mental Health Coverage (May 20, 2014), http://www.apa.org/news/press/releases/2014/05/ mental-health-coverage.aspx (last visited Nov. 28, 2016).

35 PARITY TASK FORCE FINAL REPORT, supra note3,at17.

36 Seeid.

37 See U.S. DEP’TS OF LABOR, HEALTH & HUMAN SERVS.,& TREASURY, FAQs about Affordable Care Act Implementation Part 31, Mental Health Parity Implementation, and Women’s Health and Cancer Rights Act Implementation, Q.9 at 12-13 (Apr. 20, 2016), available at https://www.dol.gov/ebsa/faqs/faq-aca31.html

38 See SUBSTANCE ABUSE &MENTAL HEALTH SERVS.ADMIN., CONSUMER GUIDE TO DISCLOSURE RIGHTS: MAKING THE MOST OF YOUR MENTAL HEALTH AND SUBSTANCE USE DISORDER BENEFITS, HHS Publication No. (SMA)16-4992 (2016), available at https://www.dol.gov/sites/default/files/ebsa/lawsand-regulations/laws/mental-healthparity/disclosure-guide-making-the-most-of-yourmental-health-and-substance-use-disorderbenefits.pdf[hereinafterCONSUMER GUIDE].

39 PARITY TASK FORCE FINAL REPORT, supra note3,at23.

40 FAQ34, supra note27,at5-6.

41 PARITY TASK FORCE FINAL REPORT, supra note3,at26.

42 See JACOBI &RAGONE, supra note1,at50-54.

43 See StateofN.J.,AssemblyBillNo.4498,217th Legislature(introducedJan.19,2017), availableat http://www.njleg.state.nj.us/2016/Bills/A4500/4498 _I1.HTM.

44 See Maryland Senate Bill 586, Health Insurance –Federal and State Mental Health and Addiction Parity Laws – Report on Compliance (introduced Feb. 6, 2015), available at http://mgaleg.maryland.gov/2015RS/bills/sb/sb0586 f.pdf

45 SeeFAQ34, supra note27,at6(Q.2).

46 See PARITY TASK FORCE FINAL REPORT, supra note 3, at 26. Although the Task Force Final Report uses language suggesting that the funding opportunity remainslive,itappearsthatthedeadlinetoapply for the CMS funding opportunity was July 6, 2016. See U.S. DEP’T OF HEALTH & HUMAN SERVS., CTRS FOR MEDICARE &MEDICAID SERVS.,CTR. FOR CONSUMER INFO.& INS OVERSIGHT,THE HEALTH INSURANCE ENFORCEMENT AND CONSUMER PROTECTIONS GRANT PROGRAM, Grants to States for Planning and Implementing the Insurance Market Reforms under Part A of Title XXVII of the Public Health Service Act, Cycle I Announcement, Invitation to Apply for 2016, Funding Opportunity Number: PR-PRP-17-001, CFDA: 93.881 (June 15, 2016), available at https://www.cms.gov/CCIIO/Resources/FundingOpportunities/Downloads/The-Health-InsuranceEnforcement-and-Consumer-Protections-Grant-FOA6-15.pdf.

47 PARITY TASK FORCE FINAL REPORT, supra note3,at26.

48 Cf. id. at 28 (recommending that DOL and HHS annually release information on their investigations and cited violations “to ensure compliance and informfuturepolicymakingefforts”).

49 Seeid. at14.

50 See AM’N PSYCH’L ASSOC’N, supra note34.

51 See U.S. DEP’T OF LABOR, Warning Signs – Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance (undated), available at https://www.dol.gov/ebsa/pdf/warning-signs-planor-policy-nqtls-that-require-additional-analysis-todetermine-mhpaea-compliance.pdf

52 See CONSUMER GUIDE, supra note38

53 See PARITY TASK FORCE FINAL REPORT, supra note 3, at 24.

54 SeeTHE KENNEDY FORUM, supra note26.

55 See FAQ 34, supra note 27, at 12 (Q.6); see also Self-Compliance Tool for Part 7 of ERISA: Health Care-Related Provisions, Q.27, available at

https://www.dol.gov/sites/default/files/ebsa/aboutebsa/our-activities/resourcecenter/publications/cagappa.pdf (providing additionalillustrationsofNQTLparityanalysis).

56 See also PARITY TASK FORCE FINAL REPORT, supra note 3, at 27 (“The Task Force recommends the development of a “Warning Signs 2.0” document to address additional potentially problematic nonquantitative treatment limitations and well as the development of a similar document illustrating appropriate application of comparable nonquantitative treatment limitations and other actions that would reflect best practices in compliance with parity.TheTaskForcerecommendstheDepartments consider the inclusion of network adequacy issues in the development of these documents, given the considerable feedback it received on this topic throughout itswork.”).

57 See ATTORNEY GENERAL ERIC T.SCHNEIDERMAN,N.Y. STATE OFFICE OFTHE ATTORNEY GENERAL, PressReleases, A.G.SchneidermanAndU.S.DeparmentOfLabor JoinForcesToEnsurePrivate-SectorEmployeesGet HealthCareBenefitsDueByLaw (Oct.5,2015), availableat http://www.ag.ny.gov/press-release/agschneiderman-and-us-deparment-labor-join-forcesensure-private-sector-employees-get.

58 See PARITY TASK FORCE FINAL REPORT, supra note 3, at 26.

59 See SherryA.Glied,&RichardG.Frank,Shuffling towardParity BringingMentalHealthCareunder theUmbrella, 259NEW ENG.J.MED.113,114-15(Jul. 10,2008), availableat http://www.nejm.org/doi/pdf/10.1056/NEJMp0804 447

60 See TomBaker, HealthInsurance,Risk,and ResponsibilityafterthePatientProtectionand AffordableCareAct,159U.PENN L.REV 1577,1608 (2011).

61 See Moral Hazard and Adverse Selection in Health Insurance, YALE JOURNAL OF MEDICINE & LAW (Nov. 1, 2009), available at http://www.yalemedlaw.com/moral-hazard-andadverse-selection-in-health-insurance/;seegenerally NAT’L ASSOC’N OF INS COMM’RS,ADVERSE SELECTION ISSUES AND HEALTH INSURANCE EXCHANGES UNDER THE AFFORDABLE CARE ACT (2011), available at http://www.naic.org/store/free/ASE-OP.pdf.

62 See JohnBertko, WhatRiskAdjustmentDoes – The Perspective Of A Health Insurance Actuary Who Relies On It, HEALTH AFFAIRS BLOG (Mar. 29, 2016, available at http://healthaffairs.org/blog/2016/03/29/what-riskadjustment-does-the-perspective-of-a-healthinsurance-actuary-who-relies-on-it/.

63 Timothy Jost, CMS White Paper Examines The ACA Risk Adjustment Methodology (Update), HEALTH AFFAIRS BLOG (Mar. 29, 2016), available at http://healthaffairs.org/blog/2016/03/29/cmswhite-paper-examines-the-aca-risk-adjustmentmethodology/

64 Ellen Montz et al., Risk Adjustment Simulation: Plans May Have Incentives To Distort Mental Health and Substance Use Coverage, HEALTH AFFAIRS, 1022, 1025 (June 2016), available at http://content.healthaffairs.org/content/35/6/1022. abstract.

65 See, e.g., id. at 1022, 1027 (suggesting that adding mental health and substance use diagnoses that are used in Medicare Part D risk adjustment methodologies or incorporating prescription drug usage in risk adjustment are potential ways to address Marketplace risk adjustment undercounting of behavioral health risks); cf. U.S.DEP’T OF HEALTH & HUMAN SERVS , PATIENT PROTECTION AND AFFORDABLE CARE ACT; HHS NOTICE OF BENEFIT AND PAYMENT PARAMETERS FOR 2018; PROPOSED RULE, 81 Fed. Reg. 61,456, 61,468-71 (Sept. 6, 2016), available at https://www.gpo.gov/fdsys/pkg/FR-2016-0906/pdf/2016-20896.pdf (proposing a number of revisions to the Marketplace risk adjustment programtobetterestimateriskandmitigateadverse selection,includingusingprescriptiondrugdatafora limited number of conditions such as HIV/AIDS, chronic Hepatitis C, diabetes, and end stage renal disease but notably not for any behavioral health conditions); cf. generally CTRS FOR MEDICARE & MEDICAID SERVS., CTR. FOR CONSUMER INFO. & INS. OVERSIGHT, MARCH 31, 2016, HHS-OPERATED RISK

ADJUSTMENT METHODOLOGY MEETING: DISCUSSION PAPER (Mar. 24, 2016), available at https://www.cms.gov/CCIIO/Resources/FormsReports-and-Other-Resources/Downloads/RAMarch-31-White-Paper-032416.pdf (identifying potential changes that CMS was considering for the

Marketplace risk adjustment methodology, including addingprescriptiondrugstothemodel).

66 See, e.g., KATE GREENWOOD, CENTER FOR HEALTH & PHARMACEUTICAL LAW & POLICY,SETON HALL LAW SCHOOL, THE AFFORDABLE CARE ACT’S RISK ADJUSTMENT AND OTHER RISK-SPREADING MECHANISMS: NEEDED SUPPORT FOR NEW JERSEY’S HEALTH INSURANCE EXCHANGE,at28 (Aug. 2012), available at http://law.shu.edu/HealthLaw/upload/affordable-care-act-risk-adjustment9520.pdf (suggesting that New Jersey could convene an expert advisory group, comprised of Exchange personnel, staff from the Departments of Human Services and Banking and Insurance, insurance and reinsurance experts, consumers, and navigators, to help identify options with respect to developing a riskadjustmentmethodologyandprogram).

67 See FINAL PARITY RULE PREAMBLE, supra note 30, 78 Fed.Reg.at68,246.

68 See NAT’L ASSOC’N OF INS COMM’RS, HEALTH BENEFIT PLAN NETWORK ACCESS AND ADEQUACY MODEL ACT, § 9(A)(2)(b) (4th Quarter 2015), available at http://www.naic.org/store/free/MDL-74.pdf

69 See, e.g., JACOBI &RAGONE, supra note 1, at 16-20, 39-42, 47-53, 57-60 (identifying reported and observed network adequacy concerns in New Jersey despite fairly detailed network adequacy regulations); id. at 70-71 (reporting results of secret shopper surveys in California, Maryland, and Washington, D.C. that suggest significant phantom networkproblems).

70 See, e.g., N.J. DEP’T OF BANKING & INS., APPEAL AND COMPLAINT GUIDE FOR NEW JERSEY CONSUMERS, at 1 (“It is also a UM denial if an insurance company denies a covered person’s request to obtain services from an out-of-network provider, when the person made that request because the insurance company’s network does not have any providers who are qualified, accessible and available to perform the specific medically necessary service. This type of request is known as an in-plan exception.”), http://www.state.nj.us/dobi/division_consumers/ins urance/appealcomplaintguide.pdf (last visited Nov. 25, 2016); N.J. ASSOC’N OF HEALTH PLANS, In-Network Exceptions for Insured Health Benefits Plans in New Jersey, http://njahp.org/network-exceptions/ (last visited Nov. 25, 2016); see generally JACOBI &RAGONE, supra note 1, at 19-20 (discussing in-network exceptions).

71 See generally Irvin L. “Sam” Muszynski, AMERICAN PSYCHIATRIC ASSOC’N, Mental Health Network Adequacy: Discrimination and Deceptive Practices, NAAG Summer Meeting (June 23, 2016) (on file with authors).

72 STATE OF CONN., OFFICE OF THE HEALTHCARE ADVOCATE, Connecticut's Behavioral Health Clearinghouse: A Bridge to Counseling & Behavioral Health Services, http://www.ct.gov/oha/cwp/view.asp?a=4363&q=5 56946(lastvisitedNov.28,2016).

73 See, e.g., JOHN V.JACOBI,TARA ADAMS RAGONE,&KATE GREENWOOD, SETON HALL CENTER FOR HEALTH & PHARMACEUTICAL LAW & POLICY, INTEGRATION OF BEHAVIORAL AND PHYSICAL HEALTH CARE: LICENSING AND REIMBURSEMENT BARRIERS AND OPPORTUNITIES IN NEW JERSEY (March31,2016)(Reportsupportedbyagrant from The Nicholson Foundation), available at https://issuu.com/seton-hall-lawschool/docs/integration-of-behavioral-andphysi?e=19054437/34560793; TARA ADAMS RAGONE, SETON HALL CENTER FOR HEALTH &PHARMACEUTICAL LAW & POLICY, INTEGRATING BEHAVIORAL AND PHYSICAL HEALTH CARE IN NEW JERSEY:LEGAL REQUIREMENTS FOR THE SHARING OF PATIENT HEALTH INFORMATION AMONG TREATMENT PROVIDERS (June 2016) (Report supported by Funding Opportunity Number CMS-1G1-12-001 from the U.S. Department of Health and Human Services (HHS), the Centers for Medicare & Medicaid Services (CMS) under Cooperative Agreement No. 1G1CMS33138601-07), available at https://issuu.com/seton-halllaw-school/docs/behavioral-physical-health-care-in?e=19054437/36892034

74 See N.Y.DEPT. OF HEALTH,OFFICE OF MENTAL HEALTH,& OFFICE OF ALCOHOLISM & SUBSTANCE ABUSE SERVS., INTEGRATED OUTPATIENT SERVICES – IMPLEMENTATION GUIDANCE, available at https://www.oasas.ny.gov/legal/CertApp/document s/IOSGuid.pdf.

75 Seegenerally AZDEPT OF HEALTH SERVCS , Arizona RegulatoryReform,ASSOC’NOF HEALTH FACILITY SURVEY AGENCIES 2014ANNUAL CONFERENCE (Sept.22,2014), availableat https://www.google.com/url?sa=t&rct=j&q=&esrc=s &source=web&cd=&cad=rja&uact=8&ved=0ahUKEw iJ3ZzBleDRAhUB04MKHYNxAUwQFggbMAA&url=htt p%3A%2F%2Fwww.ahfsa.org%2Fapp%2Fdownload% 2F758724334%2F2014%2BConference%2BPresentat ion%2B(A3)%2BAZs%2BRegulatory%2BReform%2B-

%2BMcCanna.pdf&usg=AFQjCNEr1C_PRlwWRaZPYF N69fVUg3PTjQ&sig2=iWG1eTrZj1cNj1DF2pMIg&bvm=bv.145063293,d.amc

76 See MEASURING HEALTH INSURANCE LITERACY: A CALL TO ACTION: A REPORT FROM THE HEALTH INSURANCE LITERACY EXPERT ROUNDTABLE, at 1 (Feb. 2012) (sponsored by Consumers Union, in partnership with University of Maryland College Park and American Institutes for Research), available at http://consumersunion.org/pub/Health_Insurance_L iteracy_Roundtable_rpt.pdf; see, e.g., TARA ADAMS RAGONE, THE SENTINEL PROJECT, CENTER FOR HEALTH & PHARMACEUTICAL LAW & POLICY,SETON HALL LAW SCHOOL, A GUIDE TO ASSIST NEW JERSEY CONSUMER SELECTION OF HEALTH INSURANCE PLANS FOR 2015, at 14 (Dec. 2014), available at http://law.shu.edu/Health-

Law/upload/sentinel-project-guide-assist-njconsumer-health-insurance.pdf (reviewing variety of factorsbeyondpremiumthatconsumersshouldtake into consideration in selecting a health insurance plan).

77 MEASURING HEALTH INSURANCE LITERACY, supra note 76,at7.

78 See ZSOFIA A. PARRAGH, ET AL , ALLIANCE FOR HEALTH REFORM,HEALTH LITERACY AND HEALTH INSURANCE LITERACY: DO CONSUMERS KNOW WHAT THEY ARE BUYING?, at 3 (Jan. 6, 2015) (reporting that Kentucky, Minnesota, New York, and Pennsylvania, as well as some private carriers, have health insurance literacy programs), available at http://www.allhealth.org/publications/Private_healt h_insurance/Health-Literacy-Toolkit_163.pdf.

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