OMB Control Number 1210-0138
Notices under the Mental Health Parity and Addiction Equity Act of 2008
July 2019
Justification
Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) was enacted on October 3, 2008 as sections 511 and 512 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (Division C of Public Law 110-343). MHPAEA amends the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act (PHS Act), and the Internal Revenue Code of 1986 (the Code). In 1996, Congress enacted the Mental Health Parity Act of 1996, which required parity in aggregate lifetime and annual dollar limits for mental health benefits and medical and surgical benefits. Those mental health parity provisions were codified in section 712 of ERISA, section 2705 of the PHS Act, and section 9812 of the Code. The changes made by MHPAEA are codified in these same sections and consist of additional requirements as well as amendments to several of the existing mental health parity provisions applicable to group health plans and health insurance coverage offered in connection with a group health plan. MHPAEA and the interim final regulations did not apply to small employers that have between two and 50 employees. The changes made by MHPAEA are generally effective for plan years beginning after October 3, 2009.
.
Additionally, the Department of Health and Human Services (HHS) final regulation regarding essential health benefits (EHB) requires non-grandfathered health insurance coverage in the individual and small group markets (generally coverage offered by employers with 50 or fewer employees) to comply with the requirements of MHPAEA and its implementing regulations in order to satisfy the requirement to cover EHB.1 This information collection has been revised to include these added burdens.
MHPAEA and the final regulations (29 CFR 2590.712(d)) require plan administrators to provide two disclosures regarding Mental Health (MH)/Substance Use Disorder (SUD) benefits--one providing criteria for medical necessity determinations (medical necessity disclosure) and the other providing the reason for denial of claims reimbursement (claims denial disclosure). These disclosures are information collection requests for purposes of the Paperwork Reduction Act and are discussed below.
Medical Necessity Disclosure under MHPAEA
MHPAEA and section 29 CFR 2590.712(d) (1) require a plan administrator to provide, upon request, the criteria for medical necessity determinations made with respect to MH/SUD benefits to current or potential participants, beneficiaries, or contracting providers. Accordingly, any plan that receives a request from a current or potential plan participant, beneficiary, or contracting health care provider must provide that party with a Medical Necessity Disclosure under MHPAEA. The Department of Labor, however, is not proposing that plans or issuers use a specific form.
Claims Denial Disclosure under MHPAEA
MHPAEA and these final regulations (29 CFR 2590.712(d)(2)) also provide that the reason for any denial under a group health plan (or health insurance coverage offered in connection with such plan) of reimbursement or payment for services with respect to MH/SUD benefits in the case of any participant or beneficiary must be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary in a from and manner consistent with the Department’s ERISA claims procedure regulation (29 CFR 2560.503-1). This regulation requires, among other things, plans to provide a claimant who is denied a claim with a written or electronic notice that contains the specific reasons for denial, a reference to the relevant plan provisions on which the denial is based, a description of any additional information necessary to perfect the claim, and a description of steps to be taken if the participant or beneficiary wishes to appeal the denial. The regulation also requires that any adverse decision upon review be in writing (including electronic means) and include specific reasons for the decision, as well as references to relevant plan provisions. Therefore, the final regulations provide that ERISA-covered plans (and health insurance coverage offered in connection with such plans) will be deemed to satisfy the MHPAEA claims denial disclosure requirement if they comply with the ERISA claims procedure regulation.
Requirements in the 21st Century Cures Act Related to MHPAEA Disclosures
Among its provisions, the Cures Act required the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments), by June 13, 2017, to solicit feedback from the public on how the disclosure request process for documents containing information that health plans and health insurance issuers are required under Federal or State law to disclose to participants, beneficiaries, contracting providers or authorized representatives to ensure compliance with existing mental health parity and addiction equity requirements can be improved while continuing to ensure consumers’ rights to access all information required by Federal or State law to be disclosed.2 The Cures Act requires the Departments to make this feedback publicly available by December 13, 2017.3 As part of this public outreach process, the Departments solicited comments on a draft model form that participants, enrollees, or their authorized representatives could use to request information from their health plan or issuer regarding non-quantitative treatment limitations (NQTLs) that may affect their MH/SUD benefits, or to obtain documentation after an adverse benefit determination involving MH/SUD benefits to support an appeal. The Departments received 19 comments and considered those comments in making changes to the model form. OMB then received an additional five comments in response to the 30-day notice on the revised model notice.
Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.
Medical Necessity Disclosure
As discussed above, MHPAEA and the final regulations require plans and issuers to provide a Medical Necessity Disclosure. Receiving this information will enable potential and current participants and beneficiaries to make more informed decisions when choosing their plans and hopefully result in better treatment of their MH/SUD conditions. MHPAEA also requires plan administrators to provide the Medical Necessity Disclosure to current and potential contracting health care providers. Because medically necessary criteria generally indicate appropriate treatment for certain illnesses in accordance with standards of good medical practice, this information should enable physicians and institutions to structure available resources to provide the most efficient mental health care for their patients.
Claims Denial Disclosure
MHPAEA and the final regulations require plans and issuers, upon request, to explain the reason that a specific claim is denied. Most practically, participants and beneficiaries need this information to determine whether they agree with the decision and, if not, whether to pursue an appeal.
Disclosure Request Form
Group health plan participants, beneficiaries, covered individuals in the individual market, or persons acting on their behalf, may use the model form to request information from plans regarding NQTLs that may affect patients’ MH/SUD benefits or that may have resulted in their coverage being denied. The form aims to simplify the process of requesting relevant disclosures for patients and their authorized representatives.
Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration for using information technology to reduce burden.
The regulation does not restrict plans or issuers from using electronic technology to provide either disclosure. The Department of Labor’s regulations under 29 C.F.R. § 2520.104b-1(b) provides that, “where certain material, including reports, statements, notices and other documents, is required under Title I of the Act, or regulations issued thereunder, to be furnished either by direct operation of law or on individual request, the plan administrator shall use measures reasonably calculated to ensure actual receipt of the material by plan participants, beneficiaries and other specified individuals”.” Section 29 CFR 2520.104b-1(c) establishes the manner in which disclosures under Title I of ERISA made through electronic media will be deemed to satisfy the requirement of § 2520.104b-1(b). Section 2520-107-1 establishes standards concerning the use of electronic media for maintenance and retention of records. Under these rules, all pension and welfare plans covered under Title I of ERISA may use electronic media to satisfy disclosure and recordkeeping obligations, subject to specific safeguards.
The Government Paperwork Elimination Act (GPEA) requires agencies to allow customers the option to submit information or transact with the government electronically, when practicable. Where feasible, and subject to resource availability and resolution of legal issues, EBSA has implemented the electronic acceptance of information submitted by customers to the federal government.
Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.
MHPAEA amended ERISA and the Code in addition to the PHS Act. Accordingly, the Departments require plans and issuers to provide, upon request, medical necessity and claims denial disclosures. There will be no duplication of effort with HHS and Treasury, however, because only the Department of Labor oversees ERISA-covered group health plans. Also, the final regulations provide that ERISA-covered plans (and health insurance coverage offered in connection with such plans) will be deemed to satisfy the MHPAEA claims denial disclosure requirement if they comply with the ERISA claims procedure regulation.
If the collection of information impacts small businesses or other small entities, describe any methods used to minimize burden.
While MHPAEA does not apply to plans sponsored by employers with 50 or fewer employees, the ACA Essential Health Benefits Regulation requires non-grandfathered plans in the small group market (generally plans sponsored by employers with 50 or fewer employees) to comply with MHPAEA in order to satisfy the requirement to provide EHB. To help minimize burden, the final regulations provide that ERISA-covered plans (and health insurance coverage offered in connection with such plans) will be deemed to satisfy the MHPAEA claims denial disclosure requirement if they comply with the ERISA claims procedure regulation.
Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.
The information collection arises in connection with the occurrence of individual claims for benefits and consists of third-party notices and disclosures. While no information is reported to the Federal government, if the plans and issuers do not provide the two disclosures or provide those disclosures less frequently, the Federal policy goals underlying MHPAEA would be impeded. Access to information about reasons for denials and medical necessity criteria enables participants, beneficiaries, and health care providers to better utilize health care resources which in turn may result in better treatment for mental health/substance use disorder conditions. At the very least, these disclosures make it easier to determine whether plans are making decisions about MH/SUD conditions in parity to those made regarding medical/surgical conditions.
Explain any special circumstances that would cause an information collection to be conducted in a manner:
requiring respondents to report information to the agency more often than quarterly;
requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;
requiring respondents to submit more than an original and two copies of any document;
requiring respondents to retain records, other than health, medical, government contract, grant-in-aid, or tax records for more than three years;
in connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study;
requiring the use of a statistical data classification that has not been reviewed and approved by OMB;
that includes a pledge of confidentiality that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or
requiring respondents to submit proprietary trade secret, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information's confidentiality to the extent permitted by law.
None.
If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency's notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.
Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.
Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years -- even if the collection of information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.
On October 27, 2016, the Departments issued Affordable Care Act Implementation FAQs Part 34, which, among other things, solicited feedback regarding disclosures with respect to MH/SUD benefits under MHPAEA and other laws.4 In the FAQs, the Departments indicated that they had received questions and suggestions regarding disclosures with respect to NQTLs. The feedback included requests from various stakeholders for model forms that group health plan participants, beneficiaries, covered individuals in the individual market, or persons acting on their behalf could use to request relevant disclosures. Stakeholders also requested guidance on other ways in which disclosures, or the process for requesting disclosures, could be more uniform, streamlined, or otherwise simplified.
As discussed above, the Departments solicited comments on a draft model form that participants, enrollees, or their authorized representatives could use to request information from their health plan or issuer regarding NQTLs that may affect their MH/SUD benefits, or to obtain documentation after an adverse benefit determination involving MH/SUD benefits to support an appeal. The Departments published a notice in the Federal Register (82 FR 117, page 28095) on June 20, 2017, providing the public until September 1, 2017 to submit written comments on the draft model notice. In response, the Departments received 19 comment letters. 5 The comment letters did not address the burden estimates. Below is a summary of the comments received.
1. Some commenters emphasized that the model form should be optional, not duplicative, not part of the appeals process, simplified and consumer friendly.
Commenters were generally unified on having the model be optional, but also voiced concern that the Departments should ensure the model is not duplicative of other forms that already existed. Commenters also raised the concern that plan participants using the form could confuse the submission of the request for documents as the request for an appeal.
The Departments specifically asked if there should be one general form or different forms for specific NQTLs. While there were comments supporting each position, more commenters urged a single form in order to provide simplicity and avoid consumer confusion. Some commenters also thought the model was too extensive, while others supported the inclusion of additional information.
Commenters also emphasized that the model needed to be simple for plan participants to understand. Some commenters urged the use of plain English, adding additional examples of NQTLs, simplifying the form, and adding definitions. One commenter expressed the view that a model disclosure could make the disclosure process more understandable for the average consumer.
Response: A single model notice continues to be provided. Clarifying edits were included in the model notice (see Appendix II). Text was added to the model notice telling the participants that they still needed to initiate the appeals process if they wish to submit an appeal.
2. Some commenters also suggested specific edits to the model form.
Response: The model form was revised to include these edits. Appendix II includes a crosswalk of changes.
3. Some commenters suggested that if the form is submitted by an authorized representative, there should be documentation supporting the authorization.
Response: The model form was revised to address this comment.
4. Some commenters had suggestions regarding State regulators’ examinations of plan documents and State compliance review.
Response: The Departments will take these suggestions into consideration for future work in this area.
5. Some commenters suggested additional forms and guidance on MHPAEA implementation, compliance and education.
Response: The Departments will take these suggestions into consideration for future work in this area.
The Departments provided the public with 30 days to comment on the ICR in a notice that was published in the Federal Register on May 2, 2018 (83 FR 19299). Five comments were received that related to the model notice.
Many of the comments focused more on what plans must disclose once they have received a request for disclosure, not on the model form itself. The Departments have issued final regulations, as well as multiple rounds of guidance addressing disclosure obligations under MHPAEA and other federal laws. While commenters raised additional issues about what is required to be disclosed or how they can ensure they are in compliance with disclosure requirements, those topics are outside the scope of the model form IC, but will be considered with future guidance on disclosure.
One commenter was concerned that participants would confuse sending this notice requesting information with submitting an appeal. In response, text was added at the top of the Template stating that submission of the form is not designed to be used to initiate a formal claim for benefits or an appeal. The commenter also suggested adding a place on the Template to report the claim number. In response, EBSA added a line of text where the claim number can be included. Additional text was added to clarify that a request for information may not be associated with a claim.
Commenters also asserted that EBSA’s burden estimates for the Template did not take into account the cost for plans and issuers to respond to the request. A commenter also stated that the model disclosure request form creates new disclosure obligations for plans and issuers beyond those found in MHPAEA or ERISA’s general disclosure requirements. As further discussed below, the addition of the template does not create a new requirement to disclose. Moreover, the burden to disclose the documents that can be requested is already included in the ICR for the Template and in the ICR for the Department’s Claims Regulation under OMB Control Number 1210-0053. Therefore, EBSA does not need to account for any additional burden in estimating the PRA burden for the Template information collection.
One commenter disagreed with the Departments’ approach to the form. The commenter suggested limiting the form to two check boxes, medical necessity determination for MH/SUD services and the reasons for denial of MH/SUD. The Departments decline to incorporate this short list of options. Because this is a model, nothing precludes plans from adopting that approach. Instead the Template provides a way for individuals to request information based on a list of situations they may encounter while trying to obtain or learn about their benefits. While plan participants may not know names of documents to request, they are more familiar with the problem they have encountered and are trying to remedy. To address the concern about the volume of documents this approach could generate, the instructions encourage plan participants to talk with their plan about the types of documents they might want to request. When responding to requests that require providing all the medical/surgical and MH/SUD benefits to which the limitation applies, the Departments added text making clear that plans can summarize (categorize) the benefits affected and are not required to furnish an extensive list of all affected benefits.
One commenter suggested removing the examples of evidentiary standards which they believe are overly complicated and unnecessary for a consumer-oriented form. The Departments decline to adopt this suggestion. This referenced part of the form is giving examples to the plan or issuer, who are assumed to be able to understand the information. Further, plans and issuers are not obligated to include any evidentiary standards as part of the form, should they choose to adopt the Template.
One commenter suggested the model form should be more clear with respect to when disclosures are required for different types of plans. The Departments decline to adopt this suggestion because it would likely confuse many plan participants, and the form includes contact information for certain regulatory agencies that can provide this information. Further, the model disclosure request form is intended to help individuals and their authorized representatives request documents and plan information that may be helpful in evaluating their plan’s compliance with MHPAEA. It does not, however, create any new disclosure obligations for group health plans or health insurance issuers and is not limited to documents and information that individuals are entitled to under specific disclosure provisions included in MHPAEA. The Departments have issued final regulations, as well as multiple rounds of guidance addressing disclosure obligations under MHPAEA and other federal laws. For example, in addition to MHPAEA’s disclosure obligations, for plans subject to ERISA, instruments under which the plan is established or operated must generally be furnished to plan participants within 30 days of request. ERISA section 104(b), 29 CFR 2520.104b-1. Instruments under which the plan is established or operated include documents with comparative information on medical necessity criteria for both medical/surgical benefits and MH/SUD benefits, as well as the processes, strategies, evidentiary standards, and other factors used to apply an NQTL with respect to medical/surgical benefits and MH/SUD benefits under the plan.
Additionally, for plans and issuers subject to ERISA as well as those that are not, an individual (or their authorized representative) that appeals an adverse benefit determination (or a final internal adverse benefit determination) is generally entitled to request and must be provided copies of all documents, records, and other information relevant to the claimant's claim for benefits. 29 CFR 2560.503-1; 26 CFR 54.9815-2719; 29 CFR 2590.715-2719; 45 CFR 147.136. This includes documents with comparative information on medical necessity criteria for both medical/surgical benefits and MH/SUD benefits, as well as the processes, strategies, evidentiary standards, and other factors used to apply an NQTL with respect to medical/surgical benefits and MH/SUD benefits under the plan. In the Departments’ view, adding language to the model form explaining how requirements apply to certain types of health plans would cause confusion for many individuals. Furthermore, in addition to the regulations setting forth these disclosure requirements, the Department has issued a separate publication regarding ERISA’s reporting and disclosure obligations that entities responding to requests pursuant to this form may use for guidance. (See Reporting and Disclosure Guide for Employee Benefit Plans, available at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/reporting-and-disclosure-guide-for-employee-benefit-plans.pdf.) The form also includes contact information for which Federal and State agencies may provide assistance if an individual has questions.
Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.
None.
Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.
Not applicable
Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.
Not applicable.
Provide estimates of the hour burden of the collection of information. The statement should indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.
If this request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens in Item 13.
Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not be included here. Instead, this cost should be included in Item 14.
The cost of contracting out or paying outside parties for information collection activities should not be included here. Instead, this cost should be included in Item 14.
As discussed in item 1 above, MHPAEA and the regulations (29 CFR 2590.712(d)) contain two disclosure provisions for group health plans and health insurance coverage offered in connection with a group health plan. The Claims Denial Disclosure (29 CFR 2590.712(d)(2) requires the reason for any denial under a group health plan (or health insurance coverage) of reimbursement or payment for services with respect to mental health or substance use disorder benefits in the case of any participant or beneficiary to be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary in a form and manner consistent with the Department’s ERISA claims procedure regulation (29 CFR 2560.503-1). This regulation requires, among other things, a plan administrator to provide a claimant who is denied a claim with a written or electronic notice that contains the specific reasons for denial, a reference to the relevant plan provisions on which the denial is based, a description of any additional information necessary to perfect the claim, and a description of steps to be taken if the participant or beneficiary wishes to appeal the denial. The regulation also requires that any adverse decision upon review be in writing (including electronic means) and include specific reasons for the decision, as well as references to relevant plan provisions. Therefore, the final regulations (29 CFR 2590.712(d)(2) provide that ERISA-covered plans (and health insurance coverage offered in connection with such plans) will be deemed to satisfy the MHPAEA claims denial disclosure requirement if they comply with the ERISA claims procedure regulation. This ICR does not apply to the claims denial notice, because the costs and burdens associated with complying with the claims denial disclosure requirement already are accounted for under the Department of Labor’s Employee Benefit Plan Claims Procedure under ERISA regulation (OMB Control Number 1210-0053).
MHPAEA and the final regulations (29 CFR 2590.712(d)(1)) also require plan administrators to make the plan’s medical necessity determination criteria available upon request to potential participants, beneficiaries, or contracting providers. The Department is unable to estimate with certainty the number of requests for medical necessity criteria disclosures that will be received by plan administrators; however, the Department has assumed that, on average, each plan affected by the rule will receive one request. The Department estimates that 2,327,339 ERISA-covered health plans are affected by this rule.6 The Department estimates that approximately 93 percent of large plans, which comprise seven percent of total affected plans, will create and distribute the medical necessity disclosures using in-house resources. The remaining large plans and all small plans, will use service providers to create and distribute the disclosures. For PRA purposes, plans using service providers will report the burden as a cost burden (discussed below in Item 13), while plans administering claims in-house will report the burden as an hour burden.
The Department assumes that it will take a medically trained clerical staff member five minutes to respond to each request at a wage rate of $42.55 per hour.7 This results in an annual hour burden of 12,911 hours and an associated equivalent cost of $549,371 for the 154,934 requests done in-house by plans. The remaining 1,782,801 medical necessity criteria disclosures will be provided through service providers resulting in a cost burden reported in Item 13, below.
Model Disclosure Request Form
Group health plan participants, beneficiaries, covered individuals in the individual market, or their authorized representatives may use the model form to request disclosures from plans. Use of this form is optional. For this analysis, DOL assumes that 25 percent of the claims denial disclosure requests will be made using this model form and that providers will complete the form as authorized representatives and submit the form electronically, at minimal cost, to the plan. DOL estimates that it will take a provider approximately 5 minutes to review clinical records and complete this form. Therefore, approximately 498,015 requests will be made using the model form. The burden per response will be 5 minutes with an equivalent cost of $13.55 (at a labor rate of $162.63 per hour). The total burden will be 41,501 hours, with an equivalent cost of approximately $6,749,348.
To meet the PRA requirement, the Department estimated the burden associated with completing the Model Disclosure Request Form, because it is a new ICR. Under the MHPAEA regulations, participants previously had the right to request information regarding NQTLs, but a formalized process was not established to do so. Thus, the Department’s estimate results in a burden increase for the ICR. The Department notes however, that the availability of the form is likely to reduce the overall burden imposed on plan participants to request the information, because it provides a simplified process to do so. Also, because use of the form is voluntary, the Department assumes that participants only will use the form if it reduces their burden to request the information..
Because the Department of Labor and the Department of the Treasury share enforcement jurisdiction of group health plans and employers under the MHPAEA provisions (see section 712 of ERISA and section 9812 of the Internal Revenue Code), the aggregate paperwork burden of this information collection is divided equally between those two Departments. Therefore, the portion of the burden allocated to the Department of Labor is half of the total hours or 27,206 hours with an associated equivalent cost of $3,649,360 These burden hours, along with the cost burden discussed in question 13, are assessed on half of the total respondents or 1,217,875 respondents, and half of the total responses or 1,217,875 responses.
Provide an estimate of the total annual cost burden to respondents or record-keepers resulting from the collection of information. (Do not include the cost of any hour burden shown in Items 12.)
As reported above in Item 12, plans using service providers will report the costs associated with the medical necessity disclosure as a cost burden. The Department estimates that most claims are processed using a service provider with 1,771,139 medical necessity criteria disclosures being provided through service providers.8 The Department assumes that it will take a medically trained clerical staff member five minutes to respond to each of the 1,782,801 requests at a labor rate of $42.55 per hour. This results in a cost burden of $6,321,514.
The Department also calculated the cost to deliver the requested medical necessity criteria disclosures (regardless of whether the disclosure is prepared in-house or by service providers). Many insurers and plans already may have the information prepared in electronic form, and the Departments assume that 56.4 percent of requests will be delivered electronically resulting in a de minimis cost.9 The Departments estimate that the cost burden associated with distributing the 844,85210 medical necessity criteria disclosures sent by paper will be $633,639. This estimate is based on an average document size of four pages, five cents per page material and printing costs, and 55 cents postage costs.
Based on the foregoing, the preparation and delivery of the medical necessity disclosures is estimated to have a total cost burden of $6,955,154.11 Because the Department of Labor and the Department of the Treasury share enforcement jurisdiction with respect to group health plans and employers under the MHPAEA provisions (see section 712 of ERISA and section 9812 of the Internal Revenue Code), the aggregate paperwork burden of this information collection is divided equally between those two Departments. Therefore, the portion of the cost burden allocated to the Department of Labor is $3,477,577.
Provide estimates of annualized cost to the Federal government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), and any other expense that would not have been incurred without this collection of information. Agencies also may aggregate cost estimates from Items 12, 13, and 14 in a single table.
Explain the reasons for any program changes or adjustments reporting in Items 13 or 14
The increase in hour burden is associated with the ICRs related to the new draft model disclosure request form the Department is issuing in order to meet the MHPAEA-related requirements in the 21st Century Cures Act.
For collections of information whose results will be published, outline plans for tabulation, and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.
There are no plans to publish the results of this collection of information.
If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.
N/A
Explain each exception to the certification statement identified in Item 19,
None.
Not applicable.
1 See 45 CFR 147.150 and 156.115 (78 FR 12834, February 25, 2013).
2 Cures Act section 13001(c)(1).
3 Cures Act section 13001(c)(2). The Departments must also share this feedback with the National Association of Insurance Commissioners (NAIC) to the extent the feedback includes recommendations for the development of simplified information disclosure tools to provide consistent information to consumers. Such feedback may be taken into consideration by the NAIC and other appropriate entities for the voluntary development and voluntary use of common templates and other sample standardized forms to improve consumer access to plan information. See Cures Act section 13001(c)(3).
4 See Affordable Care Act Implementation FAQs, Part 34, Q&A-1, available at https://www.dol.gov/ebsa/faqs/faq-aca19.html and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-part-34_10-26-16_FINAL.PDF.
5 Comments can be viewed at https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/faq-38
6 Grandfathered plans with less than 50 participants are not required to comply with the medical necessity requirement.
7 For a description of the Department’s methodology for calculating wage rates, see
811,662 large plans+ 305,386 plans with between 50 to 100 participants + 1,465,653 non-Grandfathered plans with less than 50 participants.
9 According to data from the National Telecommunications and Information Agency (NTIA), 37.7 percent of individuals age 25 and over have access to the Internet at work. According to a Greenwald & Associates survey, 84 percent of plan participants find it acceptable to make electronic delivery the default option, which is used as the proxy for the number of participants who will not opt-out of electronic disclosure that are automatically enrolled (for a total of 31.7 percent receiving electronic disclosure at work). Additionally, the NTIA reports that 40.5 percent of individuals age 25 and over have access to the internet outside of work. According to a Pew Research Center survey, 61 percent of internet users use online banking, which is used as the proxy for the number of internet users who will affirmatively consent to receiving electronic disclosures (for a total of 24.7 percent receiving electronic disclosure outside of work). Combining the 31.7 percent who receive electronic disclosure at work with the 24.7 percent who receive electronic disclosure outside of work produces a total of 56.4 percent who will receive electronic disclosure overall.
10 (1-0.564)*[166,596 large plans+305,486 plans between 50-100 participants + 1,465,653 non-grandfathered plans with less than 50 participants]
11 The number is calculated as the sum of the mailing costs and the cost of the labor hours that are outsourced.
| File Type | application/vnd.openxmlformats-officedocument.wordprocessingml.document |
| File Title | SUPPORTING STATEMENT FOR PAPERWORK REDUCTION ACT 1995 SUBMISSIONS |
| Author | KellyC |
| File Modified | 0000-00-00 |
| File Created | 2021-01-22 |