The Six-Step Parity Compliance Guide for Non-Quantitative Treatment Limitation (NQTL) Requirements

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1 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets KENNEDY FORUM ISSUE BRIEF (SEPTEMBER 2017)

2 About the Publishers The America Psychiatric Associatio is a orgaizatio of psychiatrists workig together to esure humae care ad effective treatmet for all persos with metal illess, icludig substace use disorders. It is the voice ad cosciece of moder psychiatry. Its visio is a society that has available, accessible quality psychiatric diagosis ad treatmet. See The Keedy Forum covees cuttigedge thought leaders who are uited by the potetial for reform i behavioral health service delivery made possible by ew ad existig laws, revolutioary techologies ad ehaced uderstadig of effective services ad treatmets. The Keedy Forum is orgaized to drive real, lastig, policy chage i order to achieve true health equity. See The Parity Implemetatio Coalitio members have advaced parity legislatio for over fiftee years i a effort to ed discrimiatio agaist idividuals ad families who seek services for metal health ad substace use disorders. PIC remais committed to full implemetatio ad eforcemet of parity. See Authors: Tim Clemet, MPH, Hery Harbi, MD, Amada Mauri, MPH, Beth A Middlebrook, JD ad Irvi L. Sam Muszyski, JD ad Marily Vado, JD 2017 All Rights Reserved by the America Psychiatric Associatio, The Keedy Forum ad The Parity Implemetatio Coalitio. Sigle copies of this resource guide ca be dowloaded at for idividual use. For more iformatio about the Compliace Guide or for permissio to use multiple copies, please cotact Tim Clemet, MPH, Seior Policy Advisor, The Keedy Forum ( tim@thekeedyforum.org) or Irvi L. Sam Muszyski, JD, Seor Policy Advisor ad Director, Parity Implemetatio ad Eforcemet for the America Psychiatric Associatio ( imuszyski@psych.org).

3 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets The Purpose of this Guide The purpose of this guide ad its accompayig spreadsheet is to provide regulators, health plas, ad issuers with a tool that eables them to perform the comparative aalyses ecessary to determie if a pla or issuer is i compliace with the oquatitative treatmet limitatio (NQTL) requiremets specified i the fial regulatios of the Metal Health Parity ad Addictio Equity Act (MHPAEA). Specifically, this guide ad spreadsheet establish a cohesive structure for performig these aalyses i the cotext of the key terms withi the fial regulatios foud at 26 CFR (c) (4)(i), 29 CFR (c)(4)(i), ad 45 CFR (c)(4)(i). 1 The purpose of this guide ad its accompayig spreadsheet is to provide regulators, health plas, ad issuers with a tool that eables them to perform the comparative aalyses ecessary to determie if a pla or issuer is i compliace with the oquatitative treatmet limitatio (NQTL) requiremets specified i the fial regulatios of the Metal Health Parity ad Addictio Equity Act (MHPAEA). It should be oted that the pla or issuer respose protocol required by this six-step approach reflects ad operatioalizes the NQTL guidace the Federal Departmets of Health ad Huma Services, Labor, ad Treasury are to produce as stipulated by the 21st Cetury Cures Act at Sectio 13001(b), cotaied withi 42 U.S.C. 300gg-26(a)(7)(C). It also provides a defied approach to addressig the model forms for determiig pla/issuer NQTL compliace idetified i Affordable Care Act Implemetatio FAQs Part 34 issued o October 27, 2016 ad restated i FAQs About Metal Health ad Substace Use Disorder Parity Implemetatio ad the 21st Cetury Cures Act Part 38 issued o Jue 16, The first group of terms is processes, strategies, evidetiary stadards, ad factors used i applyig a NQTL to metal health or substace use disorder (MH/SUD) beefits ad medical surgical beefits. The secod group of terms is comparable ad o more strigetly applied. The third group of terms is as writte ad i operatio. The guide ad spreadsheet create a six-step approach for upackig those groups of key terms i a way that facilitates a logical ad structured set of comparative aalyses. The Keedy Forum 1

4 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets These six steps are described below ad embedded withi the spreadsheet for 19 differet NQTLs ragig from prior authorizatio, to provider credetialig, to formulary desig, amog others. There certaily are other NQTLs that may be used by a pla or issuer ad should be aalyzed for compliace through this six-step approach. The six steps, which are described i further detail below, are comprised of: 1 Provide the specific pla laguage regardig the NQTL ad describe all services to which it applies i each respective beefits classificatio Idetify the factors ad the source for each factor used to determie that it is appropriate to apply this NQTL to MH/SUD beefits. Idetify ad provide the source for the evidetiary stadard for each of the factors idetified i Step 2 ad ay other evidece relied upo to desig ad apply the NQTL. Provide the comparative aalyses used to coclude that the NQTL is comparable to ad o more strigetly applied, as writte. Provide the comparative aalyses used to coclude that the NQTL is comparable to ad o more strigetly applied, i operatio. Detailed summary explaatio of how the aalyses of all of the specific uderlyig processes, strategies, evidetiary stadards, ad other factors used to apply the NQTL to MH/SUD beefits ad to medical/surgical beefits have led the pla to coclude compliace with MHPAEA. The descriptio below explais the requiremets of each step ad provides examples of thigs that fall withi each of the terms of processes, strategies, evidetiary stadards, ad factors. I the spreadsheet, the steps have bee adapted for each specific NQTL. The steps are idetical for some NQTLs, very similar for others, ad for some, certai steps are omitted or sigificatly reduced. 2 The Keedy Forum

5 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets The Six-Step Approach 1 Provide the specific pla laguage regardig the NQTL ad describe all services to which it applies i each respective beefits classificatio. Idetify ad provide the specific laguage of the NQTL as provided i the pla documets. This shall iclude each step, associated triggers, timelies, forms ad requiremets. 2 Idetify the factors ad the source for each factor used to determie that it is appropriate to apply this NQTL to MH/SUD beefits. Provide the comparative aalysis demostratig that comparable factors were used to determie the applicability of the NQTL for the idetified MH/SUD beefits as were used for medical/surgical beefits, icludig the sources for ascertaiig each of these factors. List factors that were relied upo but subsequetly rejected ad the ratioale for rejectig those factors. Examples of factors for medical maagemet ad utilizatio review iclude (these examples are merely illustrative ad ot exhaustive): Excessive utilizatio Recet medical cost escalatio Lack of adherece to quality stadards High levels of variatio i legth of stay High variability i cost per episode of care Cliical efficacy of the proposed treatmet or service Provider discretio i determiig diagoses Claims associated with a high percetage of fraud Severity or chroicity of the MH/SUD or medical/surgical coditio Examples of sources for medical maagemet ad utilizatio review factors iclude: Iteral claims aalyses Iteral quality stadard studies Expert medical review The Keedy Forum 3

6 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets Examples of factors for provider etwork adequacy iclude: Service type Geographic market Curret demad for services Projected demad for services Practitioer supply ad provider-to-erollee ratios Wait times Geographic access stadards Out-of-etwork utilizatio rates Examples of sources for provider etwork adequacy factors iclude: State ad federal regulatory requiremets Natioal accreditatio stadards Iteral pla market aalyses CAHPS data Examples of factors for provider reimbursemet iclude: Geographic market (i.e., market rate ad paymet type for provider type ad/or specialty) Provider type (i.e., hospital, cliic, ad practitioer) ad/or specialty Supply of provider type ad/or specialty Network eed ad/or demad for provider type ad/or specialty Medicare reimbursemet rates Traiig, experiece, ad licesure of provider Examples of sources for provider reimbursemet factors iclude: Exteral healthcare claims database (e.g., Fair Health) Curret Medicare Physicia Fee Schedule Iteral market ad competitive aalysis Medicare RVUs for CPT codes. As oted above, these are illustratios of factors ad sources are ot exhaustive lists of factors ad sources. While ot illustrated, additioal factors ad sources would apply to differet types of NQTLs. 4 The Keedy Forum

7 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets 3 Idetify ad provide the source for the evidetiary stadard for each of the factors idetified i Step 2 ad ay other evidece relied upo to desig ad apply the NQTL. Provide the comparative aalysis demostratig that the evidetiary stadard(s) used to defie factors idetified i Step 2 ad ay other evidece relied upo to establish the NQTL for MH/SUD beefits are comparable to ad applied o more strigetly tha the evidetiary stadard(s) used to defie factors ad ay other evidece relied upo to establish the NQTL for medical/surgical beefits. Describe evidetiary stadards that were cosidered, but rejected ad the ratioale for rejectig those evidetiary stadards. Please ote the term evidetiary stadards is ot limited to a meas for defiig factors. Evidetiary stadards also iclude all evidece a pla cosiders i desigig ad applyig its medical maagemet techiques, such as recogized medical literature, professioal stadards ad protocols (icludig comparative effectiveess studies ad cliical trials), published research studies, treatmet guidelies created by professioal medical associatios or other third-party etities, publicly available or proprietary cliical defiitios, ad outcome metrics from cosultig or other orgaizatios. Examples of evidetiary stadards to defie the factors idetified i Step 2, their sources, ad other evidece cosidered iclude: Two stadard deviatios above average utilizatio per episode of care may defie excessive utilizatio based o iteral claims data. Medical costs for certai services icreased 10% or more per year for 2 years may defie recet medical cost escalatio per iteral claims data. Not i coformace with geerally accepted quality stadards for a specific disease category more tha 30% of time based o cliical chart reviews may defie lack of adherece to quality stadards. Claims data showed 25% of patiets stayed loger tha the media legth of stay for acute hospital episodes of care may defie high level of variatio i legth of stay. Episodes of outpatiet care are 2 stadard deviatios higher i total costs tha the average cost per episode 20% of the time i a 12-moth period may defie high variability i cost per episode. More tha 50% of outpatiet episodes of care for specific disease etities are ot based o evidece-based itervetios (as defied by treatmet guidelies published by professioal orgaizatios or based o health services research) i a medical record review of a 12-moth sample (may defie lack of cliical efficacy or icosistecy with recogized stadards of care). The Keedy Forum 5

8 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets Two published RCTs required to establish a treatmet or service is ot experimetal or ivestigatioal. Professioally recogized treatmet guidelies used to defie cliically appropriate stadards of care such as ASAM criteria or APA treatmet guidelies. State regulatory stadards for health pla etwork adequacy. Health pla accreditatio stadards for quality assurace. As oted above, these are illustratios of evidetiary stadards ad are ot a exhaustive list of evidetiary stadards. While ot illustrated, additioal evidetiary stadards would apply to differet types of NQTLs. 4 Provide the comparative aalyses used to coclude that the NQTL is comparable to ad o more strigetly applied, as writte. Provide the comparative aalyses demostratig that the processes ad strategies used to desig the NQTL, as writte, for MH/SUD beefits are comparable to ad o more strigetly applied tha the processes ad strategies used to desig the NQTL, as writte, for medical/ surgical beefits. Processes ad strategies used to desig NQTLs as writte iclude, but are ot limited to, the compositio ad deliberatios of decisio-makig staff, i.e. the umber of staff members allocated, time allocated, qualificatios of staff ivolved, breadth of sources ad evidece cosidered, deviatio from geerally accepted stadards of care, cosultatios with paels of experts, ad reliace o atioal treatmet guidelies or guidelies provided by third-party orgaizatios. Iclude the results ad coclusios from these aalyses that clearly substatiate the NQTL regulatory tests of comparability ad equitable applicatio have bee met. Examples of comparative aalyses iclude: Results from aalyses of the health pla s paid claims that established that the idetified factors ad evidetiary stadards (e.g., recet medical cost escalatio which exceeds 10%/year) were preset i a comparable maer for both MH/SUD ad medical/surgical beefits subject to the NQTL. Iteral review of published iformatio (e.g., a iformatio bulleti by a major actuary firm) which idetified icreasig costs for services for both MH/SUD ad medical/surgical coditios ad a determiatio (e.g., a iteral claims aalyses) by the pla that this key 6 The Keedy Forum

9 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets factor(s) was preset with similar frequecy ad magitude for specific categories of the health pla s MH/SUD ad medical/surgical services. A defied process (e.g., iteral claims aalysis) for aalyzig which medical/surgical ad MH/SUD services withi a specified beefits classificatio had high cost variability (defied by idetical factors ad evidetiary stadards for all services) ad, therefore, are subject to a prior authorizatio, cocurret review ad/or retrospective review protocols. A market aalysis of various factors to establish provider rates for both MH/SUD ad medical/surgical services ad to establish that the fee schedule ad/or usual ad customary rates were comparable. Iteral review of published treatmet guidelies by appropriate cliical teams to idetify covered treatmets or services which lack cliical efficacy. Iteral review to determie that the issuer or health pla s pael of experts that determie whether a treatmet is medically appropriate were comprised of comparable experts for MH/SUD coditios ad medical/surgical coditios, ad that such experts evaluated ad applied atioally-recogized treatmet guidelies or other criteria i a comparable maer. Iteral review to determie that whether the process of determiig which beefits are deemed experimetal or ivestigative for MH/SUD beefits is comparable to the process for determiig which medical/surgical beefits are deemed experimetal or ivestigatioal. As oted above, these are illustratios of comparative aalyses ad are ot a exhaustive list of comparative aalyses. While ot illustrated, additioal comparative aalyses would apply to differet types of NQTLs. 5 Provide the comparative aalyses used to coclude that the NQTL is comparable to ad o more strigetly applied, i operatio. Provide the comparative aalysis demostratig that the processes ad strategies used i operatioalizig the NQTL for MH/SUD beefits are comparable to ad o more strigetly applied tha the processes ad strategies used i operatioalizig the NQTL for medical surgical beefits. Please idetify each process employed for a particular NQTL (e.g., cosultatios with expert reviewers, cliical ratioale used i approvig or deyig beefits, the selectio of iformatio deemed reasoably ecessary to make a medical ecessity determiatio, etc.) ad the aalyses which supports comparability ad appropriate applicatio strigecy. The Keedy Forum 7

10 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets Illustrative aalyses icludes: Medical Maagemet Audit results that demostrate that the frequecy of all types of utilizatio review for medical/surgical vs. MH/SUD, where applicable, are comparable. Audit results that demostrate physicia-to-physicia utilizatio reviews for prior or cotiuig coverage authorizatio were similar i frequecy ad cotet (e.g., review itervals, legth of time, documetatio required, etc.) of review for medical/surgical vs. MH/SUD withi the same classificatios of beefits. Audit results that demostrate the process of cosultig with expert reviewers for MH/ SUD medical ecessity determiatios is comparable to ad o more striget tha the process of cosultig with expert reviewers for medical/surgical medical ecessity determiatios, icludig the frequecy of cosultatio with expert reviewers ad qualificatios of staff ivolved. Audit results that demostrates utilizatio review staff follow comparable processes for determiig which iformatio is reasoably ecessary for makig medical ecessity determiatios for both MH/SUD reviews ad medical/surgical reviews. Audit results that demostrate that frequecy of ad reaso for reviews for the extesio of iitial determiatios (e.g., outpatiet visits or ipatiet days) for MH/SUD beefits were comparable to the frequecy of reviews for the extesio of iitial determiatios for medical/surgical beefits. Audit results that demostrate that reviews for the extesio of iitial determiatios (e.g., outpatiet visits or ipatiet days) for MH/SUD beefits were of equivalet strigecy to the reviews for the extesio of iitial determiatios for medical/surgical beefits. Audit/review of deial ad appeal rates (both medical ad admiistrative) by service type or beefit category. Audit/review of utilizatio review documetatio requiremets. Audit results that idicate that coverage approvals ad deials correspod to the pla s criteria ad guidelies. A compariso of iter-rater reliability results betwee MH/SUD reviewers ad medical/ surgical reviewers. 8 The Keedy Forum

11 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets Network Adequacy Aalyses to determie whether out-of-etwork ad emergecy room utilizatio by beeficiaries for MH/SUD services are comparable to those for out-of-etwork utilizatio for similar types of medical services withi each beefits classificatio. Aalyses of provider i-etwork participatio rates (e.g., wait times for appoitmets, volume of claims filed, types of services provided). As oted above, these are illustratios of comparative aalyses ad are ot a exhaustive list of comparative aalyses. While ot illustrated, additioal aalyses would apply to differet types of NQTLs. 6 Detailed summary explaatio of how the aalyses of all of the specific uderlyig processes, strategies, evidetiary stadards, ad other factors used to apply the NQTL to MH/SUD beefits ad to medical/surgical beefits have led the pla to coclude compliace with MHPAEA. Based o the resposes provided i the steps above, clearly summarize the basis for the pla or issuer s coclusio that both as writte ad i operatio, the processes, strategies, evidetiary stadards, ad factors used to impose the NQTL o MH/SUD beefits are comparable to ad applied o more strigetly tha the processes, strategies, evidetiary stadards, ad factors used to impose the NQTL o medical/surgical beefits i each classificatio of beefits i which the NQTL is imposed. The Keedy Forum 9

12 The Six-Step Parity Compliace Guide for No-Quatitative Treatmet Limitatio (NQTL) Requiremets Notes 10 The Keedy Forum

13 Edote 1 (4) Noquatitative treatmet limitatios (i) Geeral rule. A group health pla (or health isurace coverage) may ot impose a oquatitative treatmet limitatio with respect to metal health or substace use disorder beefits i ay classificatio uless, uder the terms of the pla (or health isurace coverage) as writte ad i operatio, ay processes, strategies, evidetiary stadards, or other factors used i applyig the oquatitative treatmet limitatio to metal health or substace use disorder beefits i the classificatio are comparable to, ad are applied o more strigetly tha, the processes, strategies, evidetiary stadards, or other factors used i applyig the limitatio with respect to medical/surgical beefits i the classificatio.

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