Biden administration aims to improve prior authorizations for mental health services
The Biden administration finalized modifications to the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA), which aims to improve the way insurance companies cover mental healthcare. As the name of the act conveys, the original intent was to improve care delivery and reimbursement for behavioral health services. However, practical implementation of the law has caused it to fail to meet expectations.
The changes were announced Monday and mark the first true update to MHPAEA since 2020. In an announcement, the Biden administration highlighted the key changes to the law, all of which aim to strengthen “consumer protections by reinforcing MHPAEA’s fundamental purpose” by further regulating insurance companies.
For starters, MHPAEA has an inherent loophole that exempts state and local-level insurance and public health programs from complying. This new final rule will close that loophole, the administration said, adding that 200 health plans nationwide will now be required to comply with the law.
States will be given new tools to enforce this change and ensure compliance with MHPAEA regulations, the administration said.
Secondly, in an effort to lower the cost of care delivery related to mental health, payers will be required to evaluate how often they deny coverage based on prior authorization policies, in addition to how much they pay out-of-network providers for reimbursement, presumably to ensure patients aren’t being gouged.
Notably, the announcement does not say what insurance companies have to do with this information and there was no mention of a reporting requirement. In the statement, however, Biden spoke about the intent of the rule change definitively.
“Mental healthcare is healthcare. But for far too many Americans, critical care and treatments are out of reach. Today, my Administration is taking action to address our nation’s mental health crisis by ensuring mental health coverage will be covered at the same level as other health care for Americans,” President Joe Biden said in the announcement. “There is no reason that breaking your arm should be treated differently than having a mental health condition.”
The announced changes do regulate some actions by insurance companies. Under the new rule, health plans "cannot use more restrictive prior authorization, or other medical management techniques, or narrower networks” to reduce patient access to mental health and drug addiction services. It would also require health plans to treat out-of-network providers in behavioral health the same as medical providers when setting reimbursement rates.
“The steps my Administration is taking today will dramatically expand access to mental health care in America,” Biden added.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.