New Issue Brief re: Federal Parity Laws and Provider Reimbursement

June 8, 2022

Attached and excerpted below please find an issue brief from the Mental Health Treatment and Research Institute (MHTRI) entitled “Federal Parity Law (MHPAEA): Non Quantitative Treatment Limitation of In-Network Reimbursement Rates: Non-Comparable Use of Factors of Provider Leverage a/k/a Bargaining Power and Workforce Shortages“.    

This Issue Brief analyzes how some plans define and use the factor of “provider leverage” a/k/a “bargaining power” in different and inconsistent manners in setting network reimbursement rates for Medical / Surgical (M/S) providers as compared to MH/SUD providers – and how and why the non-comparable use of this factor is non-compliant with the Mental Health Parity and Addiction Equity Act (MHPAEA).


Key quotes from the issue brief include: 

  1. “The ability to refuse low reimbursements exemplifies provider leverage (bargaining power).

  1. “To comply with MHPAEA, plans and issuers must take measures that are comparable to and no more stringent than those applied to medical/surgical providers to help ensure an adequate network of MH/SUD providers.” DOL Self-Compliance Tool. 

  1. “As reported by Kaiser Family Foundation…national data as of Sept. 30, 2021 shows more shortages for PCPs than for mental health providers (7447 vs. 5930 shortage areas).” 

  1. “Nationally, the average in-network reimbursement for primary care professional office visits from commercial insurers was approximately 20% above Medicare reimbursement, and Out Of Network (OON) use of such visits was approximately 3% (i.e., 3% of all claims were paid to OON providers).”

  1. “So, even though there is an overall shortage of primary care providers in our country, within insurer networks there was no evidence of a shortage.”

  1. “Nationally, the average in-network reimbursement for MH/SUD professional office visits from commercial insurers was approximately 2.5% below Medicare reimbursement, and OON use of such visits was approximately 17%, i.e., 5.4 times higher than for primary care providers. In several states, this disparity was 10 times higher. For adolescents nationally, OON use of adolescent MH/SUD providers was 10 times higher than for pediatric providers.”

  1. “The fact that some plans define and utilize the factor of provider leverage a/k/a bargaining power differently for M/S as compared to MH/SUD providers, leading to opposite approaches to in-network reimbursement rates, results in a non-comparable and more stringent reimbursement methodology and rates for MH/SUD providers.”