3 Colo. Code Regs. § 702-4-2-64-7

Current through Register Vol. 48, No. 1, January 10, 2025

Section 3 CCR 702-4-2-64-7 - [Effective 1/30/2025] Non-Quantitative Treatment Limitations

A. All health benefit plans subject to the individual and group laws of Colorado must comply with the non-quantitative treatment limitation requirements of 45 C.F.R. 146.136(c)(4) and successor regulation 45 C.F.R 146.137(a)-(c).

B. Carriers may not impose a non-quantitative treatment limitation with respect to mental health or substance use disorder benefits in any classification that is more restrictive, as written or in operation, than the predominant nonquantitative treatment limitation that applies to substantially all medical/surgical benefits in the same classification. For purposes of this Section 7.B., a nonquantitative treatment limitation is more restrictive than the predominant nonquantitative treatment limitation that applies to substantially all medical/surgical benefits in the same classification if the health benefit plan or carrier fails to meet the requirements of Section 7.C. or D. In such a case, the health benefit plan or carrier will be considered to violate MHPAEA, and the nonquantitative treatment limitation may not be imposed by the health benefit plan or carrier with respect to mental health or substance use disorder benefits in the classification.

C. Requirements related to design and application of a nonquantitative treatment limitation.

1. A health benefit plan or carrier may not impose a nonquantitative treatment limitation with respect to mental health or substance use disorder benefits in any classification unless, under the terms of the health benefit plan, as written and in operation, any processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation to mental health or substance use disorder benefits in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in designing and applying the limitation with respect to medical/surgical benefits in the classification.

2. Prohibition on discriminatory factors and evidentiary standards.

For the purposes of determining comparability and stringency under Section 7.C.1, a health benefit plan or carrier may not rely upon discriminatory factors or evidentiary standards to design a non-quantitative treatment limitation to be imposed on mental health or substance use disorder benefits. A factor or evidentiary standard is discriminatory if the information, evidence, sources, or standards on which the factor or evidentiary standard are based are biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits.

a. Information, evidence, sources, or standards are considered to be biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits if, based on all the relevant facts and circumstances, the information, evidence, sources, or standards systematically disfavor access or are specifically designed to disfavor access to mental health or substance use disorder benefits as compared to medical/surgical benefits. For the purposes of this paragraph C.2.a, relevant facts and circumstances may include, but are not limited to, the reliability of the source of the information, evidence, sources, or standards, including any underlying data; the independence of the information, evidence, sources, and standards relied upon; the analyses and methodologies employed to select the information and the consistency of their application; and any known safeguards deployed to prevent reliance on skewed data or metrics. Information, evidence, sources, or standards are not considered biased or not objective for this purpose if the health benefit plan or carrier has taken the steps necessary to correct, cure, or supplement any information, evidence, sources, or standards that would have been biased or not objective in the absence of such steps.

b. For purposes of Section 7.C.2, historical plan data or other historical information from a time when the plan or coverage was not subject to MHPAEA or was not in compliance with MHPAEA are considered to be biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits, if the historical plan data or other historical information systematically disfavor access or are specifically designed to disfavor access to mental health or substance use disorder benefits as compared to medical/surgical benefits, and the health benefit plan or carrier has not taken the steps necessary to correct, cure, or supplement the data or information.

c. For purposes of Section 7.C.2, generally recognized independent professional medical or clinical standards and carefully circumscribed measures reasonably and appropriately designed to detect or prevent and prove fraud and abuse that minimize the negative impact on access to appropriate mental health and substance use disorder benefits are not information, evidence, sources, or standards that are biased or not objective in a manner that discriminates against mental health or substance use disorder benefits as compared to medical/surgical benefits. However, health benefit plans and carriers must comply with Section 7, as applicable, with respect to such standards or measures that are used as the basis for a factor or evidentiary standard used to design or apply a non-quantitative treatment limitation.

D. Required use of outcome data.

1. To ensure that a nonquantitative treatment limitation applicable to mental health or substance use disorder benefits in a classification, in operation, is no more restrictive than the predominant nonquantitative treatment limitation applied to substantially all medical/surgical benefits in the classification, a health benefit plan or carrier shall collect and evaluate relevant data in a manner reasonably designed to assess the impact of the non-quantitative treatment limitation on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits and carefully consider the impact as part of the health benefit plan's or carrier's evaluation. As part of its evaluation, the health benefit plan or carrier shall not disregard relevant outcomes data that it knows or reasonably should know suggest that a non-quantitative treatment limitation is associated with material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits.

a. Relevant data generally. For the purposes of Section 7.D.1, relevant data could include, as appropriate, but are not limited to, the number and percentage of claims denials and any other data relevant to the nonquantitative treatment limitation required by Colorado law or private accreditation standards.

b. Relevant data for nonquantitative treatment limitations related to network composition. In addition to the relevant data set forth in Section 7.D.1.a, relevant data for nonquantitative treatment limitations related to network composition could include, as appropriate, but are not limited to, in-network and out-of-network utilization rates (including data related to provider claims submissions), network adequacy matric (including time and distance data, and data on providers accepting new patients), and provider reimbursement rates (for comparable services and as benchmarked to a reference standards).

c. Unavailability of data

(1) If a health benefit plan or carrier newly imposes a non-quantitative treatment limitation for which relevant data is initially temporarily unavailable and the health benefit plan or carrier therefore cannot comply with Section 7.D.1, the health benefit plan or carrier must include in its comparative analysis, as required by Section 10.C.12., a detailed explanation of the lack of relevant data, the basis for the health benefit plan's or carrier's conclusion that there is a lack of relevant data, and when and how the data will become available and be collected and analyzed. Such health benefit plan or carrier also must comply with Section 7.D.1 as soon as practicable once relevant data becomes available.

(2) If a health benefit plan or carrier imposes a non-quantitative treatment limitation for which no data exist that can reasonably assess any relevant impact of the non-quantitative treatment limitation on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits, the health benefit plan or carrier must include in its comparative analysis, as required by this Section 10.C.12., a reasoned justification as to the basis for the conclusion that there are no data that can reasonably assess the non-quantitative treatment limitation's impact, why the nature of the non- quantitative treatment limitation prevents the health benefit plan or carrier from reasonably measuring its impact, an explanation of what data was considered and rejected, and documentation of any additional safeguards or protocols used to ensure the non-quantitative treatment limitation complies with Section 7. If a health benefit plan or carrier becomes aware of data that can reasonably assess any relevant impact of the non-quantitative treatment limitation, the health benefit plan or carrier must comply with Section 7.D.1. as soon as practicable.

(3) Sections 7.D.1.c.(1)-(2) of this section shall only apply in very limited circumstances and, where applicable, shall be construed narrowly.

2. Material differences. To the extent the relevant data evaluated under Section 7.D.1. suggest that the non-quantitative treatment limitation contributes to material differences in access benefits in a classification, such differences will be considered a strong indicator that the health benefit plan or carrier violates this Section 7.

a. Where the evaluated relevant data. suggest that the non-quantitative treatment limitation contributes to material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits in a classification, the health benefit plan or carrier must take reasonable action, as necessary, to address the material differences to ensure compliance, in operation, with Section 7. and must document the actions that have been or are being taken by the health benefit plan or carrier to address material differences in access to mental health or substance use disorder benefits, as compared to medical/surgical benefits, as required by Section 10.C.12.

b. For purposes of this Section 7.D.2, relevant data are considered to suggest that the nonquantitative treatment limitation contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits if, based on all relevant facts and circumstances, and taking into account the considerations outlined in this Section 7.D.2.b, the difference in the data suggests that the nonquantitative treatment limitation is likely to have a negative impact on access to mental health or substance use disorder benefits compared to medical/surgical benefits.

(1) Relevant facts and circumstances, for purposes of this Section 7.D.2.b may include, but are not limited to, the terms of the nonquantitative treatment limitation at issue, the quality or limitations of the data, casual explanations and analyses, evidence as to the recurring or non-recurring nature of the results, and the magnitude of any disparities.

(2) Differences in access to mental health or substance use disorder benefits attributable to generally independent professional medical or clinical standards or carefully circumscribed measures reasonably and appropriately designed to detect or prevent fraud or abuse that minimize the negative impact on access to appropriate mental health and substance use disorder benefits, which are used as the basis for a factor or evidentiary standard used to design or apply a nonquantitative treatment limitation, are not considered to be material for purposes of this Section 7.D.2. To the extent a health benefit plan or carrier attributes any differences in access to the application of such standards or measures, the health benefit plan or carrier must explain the bases for that conclusion in the documentation prepared under Section 10.C.12.

3. Nonquantitative treatment limitations related to network composition. For purposes of applying Section 7.D with respect to nonquantitative treatment limitations related to network composition, a health benefit plan or carrier must collect and evaluate relevant data in a manner reasonably designed to assess the aggregate impact of all such nonquantitative treatment limitations on access to mental health and substance use disorder benefits and medical/surgical benefits. Examples of possible actions that a health benefit plan or carrier could take to comply with the requirement under this Section 7.D.2.a to take reasonable action, as necessary, to address any material differences in access with respect to non-quantitative treatment limitations related to network composition to ensure compliance with Section 7, include, but are not limited to:

a. Strengthening efforts to recruit and encourage a broad range of available mental health and substance use disorder providers and facilities to join the carrier's network of providers, including taking actions to increase compensation or other inducements, streamline credentialing processes, or contact providers reimbursed for items and services provided on an out-of-network basis to offer participation in the network;

b. Expanding the availability of telehealth arrangements to mitigate any overall mental health and substance use disorder provider shortages in a geographic area

c. Providing additional outreach and assistance to participants and beneficiaries enrolled in the health benefit plan or coverage to assist them in finding available in-network mental health and substance use disorder providers and facilities; and

d. Ensuring that provider directories are accurate and reliable.

E. Illustrative, non-exhaustive list of non-quantitative treatment limitations. Non-quantitative treatment limitations include, but are not limited to:

1. Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness or based on whether the treatment is experimental or investigative.

2. Utilization management protocols, including but not limited to prior authorization, concurrent review, and retrospective review.

3. Step therapy, fail-first, or the refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective.

4. Exclusions based on failure to complete a course of treatment.

5. Restrictions based on:

a. Geographic location;

b. Facility type;

c. Provider specialty; and

d. Other criteria that limit the scope or duration of benefits for services provided under the plan or coverage.

6. Formulary design for prescription drugs.

7. Network tier design (when the plan has multiple network tiers).

8. Standards related to network composition, including but not limited to:

a. Standards for provider and facility admission to participate in a network or for continued network participation, including recruitment, retention, and contract negotiation processes;

b. Methods for determining reimbursement rates;

c. Credentialing standards, and

d. Procedures for ensuring the network includes an adequate number of providers and facilities to provide services under the plan or coverage;

9. Methods for determining out-of-network rates, such as allowed amounts; usual, customary, and reasonable charges; or application of other external benchmarks for out-of-network rates.

F. Non-Quantitative Treatment Limitation Examples

1. Pursuant to § 10-16-104 (5.5)(a)(V)(A), C.R.S, carriers must comply with the non-quantitative treatment limitation illustrative examples set forth in 45 C.F.R. § 146.136.

2. Carriers shall not use the following medical management processes or strategies when applying limitations to behavioral, mental health, and substance use disorder benefits:

a. The carrier routinely approves a number of days without a treatment plan for medical/surgical inpatient, in-network, services, but approves, on a routine basis, a lesser number of days without a treatment plan for behavioral, mental health, and substance use disorders, inpatient-in-network.

b. The carrier applies concurrent review to inpatient, in-network stays with various lengths of stay due to the medical condition, but reviews all behavioral, mental health, and substance use disorder inpatient, in-network stays using a more restrictive review criteria, reviewing the stay more frequently in all cases than commonly used for medical/surgical benefits.

c. Location of Services

(1) The carrier allows for out-of-state treatment of medical/surgical services, but does not permit out-of-state treatment for behavioral, mental health, and substance use disorder services; or

(2) Permits access to an out-of-network hospital for medical/surgical services, but does not permit access to a non-network hospital for behavioral, mental health, and substance use disorders, when the plan covers non-network services.

d. The carrier does not apply a payment reduction penalty to outpatient medical/surgical services that do not have prior authorization, but applies a penalty to outpatient behavioral, mental health, and substance use disorder benefits when no prior authorization has been obtained.

e. Employee Assistance Programs (Group Plans Only)

In the event that an employer maintains both a major medical plan and an Employees Assistance Program, and the Employee Assistance Program provides a limited number of mental health or substance use disorder counseling sessions that are not significant benefits in the nature of medical care, the carrier requires that the member utilize the available Employee Assistance Program benefits prior to utilizing the behavioral, mental health, and substance use disorder benefits under the group plan. The carrier does not require the member to utilize the Employee Assistance Program for any medical/surgical benefits prior to utilizing the group plan.

f. Within the same classification, the carrier applies more restrictive prior authorization requirements in operation for mental health, behavioral health, and substance use disorder benefits than medical/surgical benefits.

g. Within the same classification, the carrier applies more restrictive peer-to-peer review medical necessity standards in and/or deviates from independent professional medical and clinical standards in operation for mental health, behavioral health, and substance use disorder benefits than for medical/surgical benefits.

h. Within the same classification, the carrier applies incomparable and more stringent methods for determining reimbursement rates in operation for mental health, behavioral health, and substance use disorder benefits than for medical/surgical benefits.

i. Within the same classification, the carrier uses more restrictive network admission standards for mental health, behavioral health, and substance use disorder providers than for medical/surgical benefits providers.

j. Within the same classification, in operation, the carrier's exclusions for experimental or investigative treatment are more restrictive when applied to behavior analysis (ABA) therapy for autism spectrum disorder than for a comparable medical/surgical condition.

3. Within the same prescription drug classification, carriers shall not use the following pharmacy benefit design when applying limitations to behavioral, mental health, and substance use disorder benefits:

a. Carrier formulary design for coverage of prescription drugs for medical/surgical conditions is based on FDA approval, clinical studies, peer-reviewed medical literature, recommendations of experts with necessary training and experience and other medical decision criteria which are routinely provided, whereas the exclusion of behavioral, mental health, and substance use disorder drugs is only based on the side effects reported as a part of clinical studies.

b. A carrier regularly provides coverage for medical/surgical prescription drugs on all four (4) tiers of a four (4) tier formulary design, but places all drugs for the treatment of behavioral, mental health, and substance use disorders on the two (2) highest tiers, without regard to it being generic, preferred brand name or non-preferred brand name.

4. Carriers shall not use the following network designs when applying limitations to behavioral, mental health, and substance use disorder benefits for the inpatient, in-network and outpatient, in-network classifications:

a. The carrier regularly allows licensed non-M.D. providers into the network who treat medical/surgical conditions while not permitting licensed non-M.D. providers into the network who primarily treat behavioral, mental health, or substance use disorders.

b. The carriers regularly admits into the network and reimburses for pre-licensure, provisional, and/or delegated medical/surgical providers, while not admitting into the network and reimbursing for pre-licensure, provisional, and/or delegated mental health, behavioral health, and substance use disorder providers.

c. The carrier regularly negotiates rates with a medical/surgical provider while not regularly negotiating rates with behavioral, mental health, and substance use disorder providers.

5. The items in this section are not an exhaustive list of non-quantitative treatment limitation violations.

3 CCR 702-4-2-64-7

37 CR 11, June 10, 2014, effective 7/1/2014

37 CR 12, June 25, 2014, effective 7/15/2014

Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/15/2014

37 CR 23, December 10, 2014, effective 1/1/2015

38 CR 03, February 10, 2015, effective 3/15/2015

38 CR 06, March 25, 2015, effective 4/30/2015

38 CR 09, May 10, 2015, effective 6/1/2015

38 CR 13, July 10, 2015, effective 7/30/2015

38 CR 19, October 10, 2015, effective 11/1/2015

38 CR 21, November 10, 2015, effective 1/1/2016

38 CR 23, December 10, 2015, effective 1/1/2016

39 CR 01, January 10, 2016, effective 2/1/2016

39 CR 05, March 10, 2016, effective 4/1/2016

39 CR 08, April 25, 2016, effective 5/15/2016

39 CR 19, October 10, 2016, effective 11/1/2016

39 CR 20, October 25, 2016, effective 1/1/2017

39 CR 22, November 25, 2016, effective 1/1/2017

39 CR 23, December 10, 2016, effective 1/1/2017

39 CR 23, December 25, 2016, effective 1/1/2017

40 CR 03, February 10, 2017, effective 3/15/2017

40 CR 09, May 10, 2017, effective 6/1/2017

40 CR 15, August 10, 2017, effective 9/1/2017

40 CR 17, September 10, 2017, effective 10/1/2017

40 CR 21, November 10, 2017, effective 12/1/2017

41 CR 04, February 25, 2018, effective 4/1/2018

41 CR 05, March 10, 2018, effective 6/1/2018

41 CR 08, April 25, 2018, effective 6/1/2018

41 CR 09, May 10, 2018, effective 6/1/2018

41 CR 11, June 10, 2018, effective 7/1/2018

41 CR 15, August 10, 2018, effective 9/1/2018

41 CR 17, September 10, 2018, effective 10/1/2018

41 CR 18, September 25, 2018, effective 10/15/2018

41 CR 21, November 10, 2018, effective 12/1/2018

41 CR 23, December 10, 2018, effective 1/1/2019

42 CR 01, January 10, 2019, effective 2/1/2019

41 CR 19, October 10, 2018, effective 3/1/2019

42 CR 03, February 10, 2019, effective 4/1/2019

42 CR 04, February 25, 2019, effective 4/1/2019

42 CR 06, March 25, 2019, effective 6/1/2019

42 CR 08, April 10, 2019, effective 6/1/2019

42 CR 15, August 10, 2019, effective 9/1/2019

42 CR 17, September 10, 2019, effective 10/1/2019

43 CR 02, January 25, 2020, effective 12/20/2019

43 CR 02, January 25, 2020, effective 12/23/2019

42 CR 23, December 10, 2019, effective 1/1/2020

43 CR 01, January 10, 2020, effective 2/1/2020

42 CR 24, December 25, 2019, effective 2/2/2020

43 CR 06, March 25, 2020, effective 4/15/2020

43 CR 10, May 25, 2020, effective 8/1/2020

43 CR 14, July 25, 2020, effective 8/15/2020

43 CR 17, September 10, 2020, effective 10/1/2020

43 CR 18, September 25, 2020, effective 11/1/2020

43 CR 22, November 25, 2020, effective 12/15/2020

43 CR 24, December 25, 2020, effective 1/15/2021

44 CR 03, February 10, 2021, effective 3/15/2021

44 CR 08, April 25, 2021, effective 5/15/2021

44 CR 09, May 10, 2021, effective 6/1/2021

44 CR 10, May 25, 2021, effective 6/14/2021

44 CR 10, May 25, 2021, effective 6/15/2021

44 CR 13, July 10, 2021, effective 8/1/2021

44 CR 15, August 10, 2021, effective 9/1/2021

44 CR 19, October 10, 2021, effective 11/1/2021

44 CR 21, November 10, 2021, effective 12/1/2021

44 CR 23, December 10, 2021, effective 12/30/2021

44 CR 21, November 10, 2021, effective 1/1/2022

44 CR 23, December 10, 2021, effective 1/15/2022

44 CR 24, December 25, 2021, effective 1/15/2022

45 CR 03, February 10, 2022, effective 3/2/2022

45 CR 08, April 25, 2022, effective 5/30/2022

45 CR 09, May 10, 2022, effective 5/30/2022

45 CR 10, May 25, 2022, effective 6/14/2022

45 CR 11, June 10, 2022, effective 6/30/2022

45 CR 11, June 10, 2022, effective 7/15/2022

45 CR 19, October 10, 2022, effective 11/1/2022

45 CR 20, October 25, 2022, effective 11/14/2022

45 CR 21, November 10, 2022, effective 11/30/2022

45 CR 24, December 25, 2022, effective 1/14/2023

46 CR 01, January 10, 2023, effective 2/14/2023

46 CR 06, March 25, 2023, effective 2/15/2023

46 CR 03, February 10, 2022, effective 3/2/2023

46 CR 04, February 25, 2023, effective 3/17/2023

46 CR 05, March 10, 2023, effective 4/15/2023

46 CR 09, May 10, 2023, effective 5/30/2023

46 CR 09, May 10, 2023, effective 6/1/2023

46 CR 10, May 25, 2023, effective 6/15/2023

46 CR 11, June 10, 2023, effective 6/30/2023

48 CR 01, January 10, 2025, effective 1/30/2025