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Mental Health Parity Act: Provider Guide (2026)

by Peggy Banks

The Mental Health Parity and Addiction Equity Act (MHPAEA) requires insurance plans to provide equal coverage for mental health and substance use disorder services compared to medical and surgical services. For healthcare providers who screen and treat mental health conditions, parity law is one of the most powerful tools available when payers deny claims, impose excessive prior authorization, or reimburse mental health services at rates far below comparable medical services.

Since MHPAEA was signed into law in 2008, it has been expanded and strengthened multiple times — by the ACA in 2010, final implementing regulations in 2013, the Consolidated Appropriations Act (CAA) in 2021, and a major final rule in 2024. Despite these expansions, significant disparities persist. Milliman’s 2019 analysis of 2017 claims data found that out-of-network utilization for mental health office visits was 17.2% — compared to just 3.2% for primary care — reflecting how inadequate network reimbursement pushes patients out-of-network for mental health care. More recent analyses, including Milliman’s 2023 “Access across America” report, continue to document similar or widening disparities at the state level. Understanding your rights under MHPAEA is essential to getting paid fairly for the mental health services you provide.

What MHPAEA Requires

The core principle is straightforward: if a plan covers mental health benefits, the coverage must be on par with medical/surgical benefits. Specifically:

  • Financial requirements (deductibles, copays, coinsurance, out-of-pocket maximums) for mental health services cannot be more restrictive than for medical/surgical services
  • Treatment limitations (visit limits, frequency restrictions, prior authorization) cannot be more restrictive for mental health
  • Separate deductibles for mental health vs. medical services are prohibited — this creates a higher barrier to access
  • Provider reimbursement rates cannot discriminate against mental health providers as a way to limit network participation
  • Medical necessity criteria must be disclosed upon request, and cannot be stricter for mental health

MHPAEA evaluates parity across six benefit classifications:

  1. Prescription drugs
  2. Emergency care
  3. Out-of-network outpatient
  4. In-network outpatient
  5. Out-of-network inpatient
  6. In-network inpatient

Within each classification, insurance plans cannot impose a financial requirement or treatment limitation that is more restrictive than the predominant requirement (more than half) applied to substantially all (defined as two-thirds) medical/surgical benefits in the same classification.

Recent Regulatory Developments

MHPAEA has been significantly strengthened since its original passage:

Consolidated Appropriations Act of 2021 (CAA): The CAA added a statutory requirement for plans to perform and document comparative analyses of their NQTLs. Plans must demonstrate that limitations applied to mental health and substance use disorder benefits are no more restrictive than those applied to medical/surgical benefits — both as written and in operation. Importantly, providers can request these analyses from plans, giving you a powerful tool when challenging denials.

2024 Final Rule: In September 2024, the Departments of Labor, HHS, and Treasury issued the most significant MHPAEA regulatory update since the 2013 final rule. Key provisions include:

  • Plans must measure NQTL effects using outcomes data, not just written policies
  • New fiduciary certification requirements — plan fiduciaries must certify they engaged qualified professionals to perform comparative analyses
  • Strengthened standards for network composition, prior authorization, and reimbursement rate parity
  • A meaningful benefits standard requiring plans to provide benefits in every classification where medical/surgical benefits are provided

Enforcement Pause (May 2025): Following an industry legal challenge (ERIC v. DOL, filed January 2025), the Departments announced in May 2025 that they will not enforce the 2024 final rule’s new provisions until a final court decision plus 18 months. However, all pre-existing statutory MHPAEA obligations, the 2013 regulations, the CAA 2021 comparative analysis requirement, and existing guidance remain fully in effect and enforceable. Providers should continue to exercise their rights under these existing authorities.

Non-Quantitative Treatment Limitations (NQTLs)

NQTLs are the most common source of parity violations. These are non-numerical restrictions that limit benefits, and they must be applied equally to mental health and medical services:

  • Prior authorization requirements — If routine medical screenings don’t require prior auth, mental health screenings shouldn’t either
  • Step therapy requirements — Requiring patients to try lower-cost treatments before others
  • Medical necessity criteria — The standards used to determine whether a service is medically necessary
  • Provider network admission standards — Requirements for providers to join the plan’s network
  • Prescription drug formulary design — How mental health medications are tiered vs. other medications
  • Retrospective review standards — Post-service auditing criteria
  • Reimbursement rate determination — How payment rates are set for mental health vs. medical providers

The Department of Health and Human Services found that while plans are largely in compliance with quantitative limits (visit caps, dollar limits), they routinely impose stricter NQTLs on mental health services. This is where most parity violations occur — and where provider advocacy makes the biggest difference.

Under the CAA 2021, plans are now required to perform and document comparative analyses of every NQTL they impose. As a provider, you have the right to request a plan’s NQTL comparative analysis — and the plan is required to provide it. If a plan cannot demonstrate that its prior authorization, network admission, or reimbursement rate practices are comparable for mental health and medical services, that is strong evidence of a parity violation.

How to Challenge Claim Denials Under Parity

When a payer denies a mental health claim — whether for CPT 96127, 96130, 96136, 96138, or any mental health service — follow this process:

Step 1: Get the Denial in Writing

Request the specific reason for the denial, including the medical necessity criteria the plan used. Under MHPAEA, plans are required to disclose this information upon request.

Step 2: Request the Plan’s NQTL Comparative Analysis

Under the CAA 2021, plans are required to perform and document comparative analyses of their NQTLs. You have the right to request this analysis. Ask the plan to provide its comparative analysis demonstrating that the limitation applied to your claim is no more restrictive than what is applied to comparable medical/surgical benefits. If the plan cannot produce this analysis, that itself is a compliance failure.

Step 3: Compare to Medical/Surgical Treatment

Ask the plan: “Do you require the same authorization, documentation, or frequency limits for comparable medical screening services?” If routine medical screenings (blood panels, cholesterol checks, cancer screenings) do not require prior authorization or face the same restrictions, mental health screenings should not either.

Step 4: Document the Disparity

Gather evidence showing that the plan applies stricter requirements to mental health than medical services in the same benefit classification. Specific comparisons are more effective than general complaints.

Step 5: Appeal Internally

Most plans have an internal appeals process, and federal regulations generally require you to exhaust internal appeals before pursuing external remedies. When appealing, cite MHPAEA specifically and include your comparative analysis request and comparison evidence. Plans that know you understand parity law are more likely to resolve claims favorably.

Step 6: File a Parity Complaint

If the internal appeal does not resolve the denial, file a formal parity complaint:

  • Employer-sponsored plans: File with the Department of Labor (DOL) Employee Benefits Security Administration
  • Individual/small group plans: File with your state insurance commissioner
  • Medicaid managed care: File with the Department of Health and Human Services (HHS)

Parity and Mental Health Screening Codes

MHPAEA has direct implications for the billing codes used in mental health screening:

CPT 96127 (brief behavioral assessment): Payers should not require prior authorization for 96127 if they don’t require it for comparable medical screening codes. If a plan routinely pays for blood glucose screening without prior auth but denies 96127, that disparity may violate parity.

CPT 96130, 96136, 96138 (psychological testing): If a plan covers imaging interpretation and test administration for medical conditions without frequency caps, imposing annual limits on psychological testing codes may violate parity.

Reimbursement rates: According to Milliman’s analysis of 2017 claims data, primary care reimbursements were 23.8% higher than mental health reimbursements — an increase from 20.9% in 2015, indicating the gap has widened over time. If your mental health reimbursement rates are significantly below comparable medical service rates, document the disparity and raise it with the plan.

Who MHPAEA Applies To

Covered by MHPAEA:

  • Employer-sponsored group plans (50+ employees) — Yes
  • Self-funded state and local government plans — Yes (added by CAA 2021)
  • ACA individual market plans — Yes
  • ACA small group plans — Yes
  • Medicaid managed care — Yes
  • CHIP (Children’s Health Insurance Program) — Yes

Not covered by MHPAEA:

  • Medicare — No (separate parity rules under MIPPA)
  • Medicaid fee-for-service — No
  • Very small employer plans (under 50 employees, non-ACA) — Varies by state

Plans can subclassify tiered provider networks and outpatient benefits (office visits vs. other outpatient visits) as long as the subclassifications are applied consistently across mental health and medical benefits.

The Current State of Parity Enforcement

Despite MHPAEA’s protections, enforcement remains uneven. Milliman’s analysis of 2017 claims data documented persistent disparities:

  • 17.2% of mental health office visits were out-of-network, vs. 3.2% for primary care
  • Over 50% out-of-network utilization for mental health residential treatment
  • 23.8% gap between primary care and mental health reimbursement rates
  • These disparities widened compared to 2015, not narrowed

More recent data confirms the problem persists. Milliman’s 2023 “Access across America” report found continued state-by-state disparities in mental health access, and a 2024 Research Triangle Institute study using 2019–2021 commercial claims data documented pervasive disparities in access to in-network mental health care.

Enforcement has been evolving:

  • DOL enforcement reports: Since 2022, the Department of Labor has submitted annual MHPAEA enforcement reports to Congress documenting specific parity violations identified in plan audits
  • CAA 2021 authority: DOL can now request NQTL comparative analyses from plans and has been actively exercising this authority
  • State-level action: Several states — including California, New York, Oregon, Illinois, and Connecticut — have enacted their own parity laws that go beyond federal MHPAEA requirements
  • 2024 final rule (paused): The 2024 regulations would have significantly strengthened enforcement, but are currently not being enforced pending litigation. Pre-existing MHPAEA obligations remain fully enforceable.

Provider advocacy — challenging denials, requesting NQTL comparative analyses, filing parity complaints, and documenting disparities — remains the primary mechanism driving real enforcement.

What You Can Do as a Provider

  1. Know the law. When payers push back on mental health claims, cite MHPAEA and ask for comparable medical benefit treatment
  2. Request NQTL analyses. Under the CAA 2021, you can request a plan’s comparative analysis showing how its NQTLs are applied to mental health vs. medical services. Plans must provide this documentation.
  3. Document everything. Keep records of denials, authorization requirements, and reimbursement rates for both mental health and medical services
  4. Compare systematically. The strongest parity arguments show specific, side-by-side comparisons between how your mental health claims are treated vs. medical claims
  5. File complaints. State insurance commissioners and the DOL take parity violations seriously — a formal complaint often resolves what phone calls cannot
  6. Screen anyway. The clinical need for mental health screening does not diminish because of billing obstacles. Screen patients, bill appropriately, and fight denials systematically

Access to quality care, effective screening, and community support are needed — and with the proper tools and attention, people can move on to recovery and lead productive lives. Holding insurance companies accountable when mental health coverage does not align with medical/surgical benefits is both a legal right and a professional responsibility.

Frequently Asked Questions

What is the Mental Health Parity and Addiction Equity Act (MHPAEA)?

The MHPAEA is a federal law that requires insurance plans to provide equal coverage for mental health and substance use disorder services compared to medical and surgical services. Plans cannot impose stricter financial requirements, treatment limits, or access barriers on mental health benefits than they do on comparable medical benefits.

Does MHPAEA require insurance plans to cover mental health screening?

MHPAEA itself does not mandate that plans offer mental health benefits — it is a parity law, not a coverage mandate. However, the ACA separately requires individual and small group market plans to cover mental health as an Essential Health Benefit. If a plan covers mental health services at all, MHPAEA requires that coverage be on par with medical and surgical benefits in terms of cost-sharing, visit limits, prior authorization requirements, and network access.

Can insurance companies require prior authorization for mental health screening?

Under MHPAEA, payers cannot impose prior authorization requirements for mental health services that are stricter than those for comparable medical services. If routine medical screenings do not require prior authorization, mental health screenings should not either. Providers can challenge excessive requirements through parity enforcement.

What are Non-Quantitative Treatment Limitations (NQTLs)?

NQTLs are non-numerical restrictions that limit the scope or duration of benefits, such as prior authorization requirements, step therapy protocols, medical necessity criteria, standards for provider network admission, and prescription drug formulary design. Under MHPAEA, these limitations must be applied equally to mental health and medical benefits. Since the CAA 2021, plans must perform comparative analyses of their NQTLs and provide them upon request.

How do I challenge a mental health claim denial under parity law?

Request the specific reason for denial in writing, ask for the plan's NQTL comparative analysis (plans are required to provide this under the CAA 2021), compare the denial criteria to what the plan applies for similar medical services, and file a parity complaint with your state insurance commissioner or the Department of Labor if the criteria are more restrictive for mental health.

Are reimbursement rates for mental health services covered by parity?

Yes. MHPAEA regulations clarify that plans cannot discriminate in provider reimbursement rates as a way of discouraging mental health providers from participating in their network. Significantly lower reimbursement rates for mental health services compared to medical services may violate parity requirements.

What six benefit classifications does MHPAEA use?

MHPAEA evaluates parity across six classifications: prescription drugs, emergency care, out-of-network outpatient, in-network outpatient, out-of-network inpatient, and in-network inpatient. Financial requirements and treatment limitations must be equivalent within each classification.

Who enforces MHPAEA?

For employer-sponsored plans, the Department of Labor (DOL) and the Department of Health and Human Services (HHS) enforce parity. For individual and small group plans, state insurance departments enforce parity. Several states have enacted their own parity laws that exceed federal requirements. Providers and patients can file complaints with any of these agencies.

Does MHPAEA apply to all insurance plans?

MHPAEA applies to most employer-sponsored group health plans (with 50+ employees), individual market plans under the ACA, Medicaid managed care plans, CHIP, and — since the CAA 2021 — self-funded state and local government plans. It generally does not apply to Medicare (which has separate parity rules under MIPPA), Medicaid fee-for-service, or very small employer plans not subject to state insurance laws.

How does parity law affect CPT 96127 and other screening codes?

Under parity, payers should not impose additional barriers on mental health screening codes like CPT 96127 that do not exist for comparable medical screenings. If a plan does not require prior authorization for routine medical tests, it should not require prior authorization for 96127 either.