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Series: States' and MCOs' Compliance With Mental Health Parity Requirements

Announced on  | Last Modified on  | Series Number: W-00-24-31565
Status
Active
Agency
Centers for Medicare and Medicaid Services

OBJECTIVE

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) promotes equal access to treatment for mental health and substance use disorder (MH/SUD) by prohibiting coverage limitations that apply more restrictively to MH/SUD benefits than medical or surgical benefits. Such limitations could include higher copayments, separate deductibles, and stricter preauthorization or medical necessity reviews, as compared to other covered medical treatments. Federal regulations require managed care organizations (MCOs) with plans that provide services to Medicaid enrollees to comply with the parity provisions of MHPAEA. Federal regulations require that States or their MCOs, as applicable, conduct analyses to demonstrate compliance with parity requirements. CMS reviews States' parity analyses as part of its review of States' MCO contracts. We will audit CMS's oversight of States' compliance with Federal parity requirements, including whether States and their MCOs conducted the required parity analyses and whether States ensured that their MCOs complied with certain parity requirements for MH/SUD benefits.

There are 5 projects in this series.

Project titles will remain unpublished until projects are complete and reports are posted.

ACTIVE PROJECTS IN THIS SERIES (2)

Project A-04-24-07115 • Announced on May 28, 2024

Project OAS-24-09-002 • Announced on Sep 27, 2024

COMPLETED PROJECTS IN THIS SERIES (3)

Audit of New York State’s Compliance with Certain Mental Health Parity Requirements by Select Medicaid Managed Care Organizations in New York State

Project A-02-24-01011 • Completed on August 13, 2026

Kansas’s Compliance With Medicaid Managed Care Mental Health and Substance Use Disorder Parity Requirements

Project A-07-24-02842 • Completed on August 10, 2026

Mental Health Parity Oversight

Project A-02-22-01016 • Completed on March 25, 2024

TIMELINE

  • June 21, 2022
    Series Number W-00-24-31565 Assigned
  • June 21, 2022
    Project Announced

    Mental Health Parity Oversight - A-02-22-01016

  • November 30, 2023
    Project Announced

    Kansas’s Compliance With Medicaid Managed Care Mental Health and Substance Use Disorder Parity Requirements - A-07-24-02842

  • March 25, 2024
    Project Complete - A-02-22-01016

    Mental Health Parity Oversight has been marked as complete. This audit resulted in 8 recommendations.

  • May 16, 2024
    Project Announced

    Audit of New York State’s Compliance with Certain Mental Health Parity Requirements by Select Medicaid Managed Care Organizations in New York State - A-02-24-01011

  • May 28, 2024
    Project Announced

    Project A-04-24-07115

  • September 27, 2024
    Project Announced

    Project OAS-24-09-002

  • August 10, 2026
    Project Complete - A-07-24-02842

    Kansas’s Compliance With Medicaid Managed Care Mental Health and Substance Use Disorder Parity Requirements complete. This audit resulted in 3 recommendations.

  • August 13, 2026
    Project Complete - A-02-24-01011

    Audit of New York State’s Compliance with Certain Mental Health Parity Requirements by Select Medicaid Managed Care Organizations in New York State complete. This audit resulted in 2 recommendations.

  • Today
    2 Audits In-Progress
  • Est FY2026
    Estimated Fiscal Year for Series Completion

3 REPORT PUBLISHED

CMS Did Not Ensure That Selected States Complied With Medicaid Managed Care Mental Health and Substance Use Disorder Parity Requirements (A-02-22-01016)

24-A-02-050.01 to CMS - Closed Implemented
Closed on 09/16/2025
We recommend that the Centers for Medicare & Medicaid Services improve its oversight of States' compliance with MH/SUD parity requirements, including strengthening its followup procedures, including regular communication with States, to verify that States perform parity analyses across their MH/SUD delivery systems.

24-A-02-050.02 to CMS - Closed Implemented
Closed on 09/13/2024
We recommend that the Centers for Medicare & Medicaid Services improve its oversight of States' compliance with MH/SUD parity requirements, including requiring States in which MCOs are responsible for the parity analysis to submit information MCOs provided regarding compliance with parity requirements to CMS for its review as part of the contract approval process and, if necessary, seeking additional regulatory authority to do so.

24-A-02-050.03 to CMS - Closed Implemented
Closed on 09/16/2025
We recommend that the Centers for Medicare & Medicaid Services improve its oversight of States' compliance with MH/SUD parity requirements, including following up with any States that have identified any noncompliance with parity requirements to verify that the States have taken actions to address the noncompliance.

24-A-02-050.04 to CMS - Open Unimplemented
Update expected on 11/08/2026
We recommend that the Centers for Medicare & Medicaid Services improve its oversight of States' compliance with MH/SUD parity requirements, including maintaining documentation of its communications with States related to compliance with MH/SUD parity requirements and actions taken to correct any identified deficiencies.

24-A-02-050.05 to CMS - Closed Implemented
Closed on 09/13/2024
We recommend that the Centers for Medicare & Medicaid Services require States to improve their monitoring of MCOs' ongoing compliance with MH/SUD parity requirements by modifying State policies and procedures for reviewing MCOs' compliance with contract provisions to include written procedures for reviewing compliance with MH/SUD parity requirements.

24-A-02-050.06 to CMS - Closed Implemented
Closed on 09/13/2024
We recommend that the Centers for Medicare & Medicaid Services require States to improve their monitoring of MCOs' ongoing compliance with MH/SUD parity requirements by requiring MCOs to update parity analyses when benefits change or deficiencies are corrected.

24-A-02-050.07 to CMS - Closed Implemented
Closed on 09/13/2024
We recommend that the Centers for Medicare & Medicaid Services require States to improve their monitoring of MCOs' ongoing compliance with MH/SUD parity requirements by requiring newly added MCOs to conduct parity analyses.

24-A-02-050.08 to CMS - Closed Implemented
Closed on 09/13/2024
We recommend that the Centers for Medicare & Medicaid Services require States to improve their monitoring of MCOs' ongoing compliance with MH/SUD parity requirements by conducting followup in a timely manner with MCOs that have identified noncompliance with parity requirements to verify that the MCOs take corrective actions to address the noncompliance.

View in Recommendation Tracker

New York Did Not Ensure That Selected Medicaid Managed Care Organizations Complied With Mental Health and Substance Use Disorder Parity Requirements Related to Prior Authorization (A-02-24-01011)

Although New York implemented a parity compliance program, it did not ensure that all three selected Medicaid MCOs complied with parity requirements related to the prior authorization for MH/SUD services. We found that:

  • The selected MCOs’ analyses comparing denial rates for MH/SUD services to M/S services in the same benefit classification were not sufficiently supported or indicated that denial rates for MH/SUD services were not comparable to denial rates for M/S services, which could indicate potential noncompliance with parity requirements.
  • The selected MCOs’ denial rates for MH/SUD services exceeded New York’s established threshold.
  • The selected MCOs continued to be noncompliant with MH/SUD parity requirements related to prior authorization more than 6 years after the October 2017 compliance deadline.

26-A-02-092.01 to CMS - Open Unimplemented
Update expected on 02/12/2027
We recommend that the State agency improve its policies and procedures for monitoring MCOs' compliance with parity requirements, including: (1) collecting and reviewing supporting data from MCOs for their comparative analyses; (2) providing clear, uniform guidance to MCOs regarding maintaining and providing accurate and consistent data to support and complete their comparative analyses, and correcting issues of noncompliance with parity requirements; and (3) establishing a formal, written policy that includes its denial rate threshold and indicates what actions MCOs are to take when denial rates exceed the threshold.

26-A-02-092.02 to CMS - Open Unimplemented
Update expected on 02/12/2027
We recommend that the State agency continue to utilize available corrective action measures, such as imposing sanctions, to address instances in which MCOs do not consistently meet parity requirements related to prior authorization.

View in Recommendation Tracker

Kansas Did Not Ensure That Its Medicaid Managed Care Organizations Complied With Mental Health and Substance Use Disorder Parity Requirements Related to Prior Authorization (A-07-24-02842)

Kansas did not ensure that the three MCOs in the State complied with parity requirements related to prior authorization for MH/SUD services provided to their Medicaid enrollees.

  • None of the three MCOs performed, or provided Kansas with, a complete parity analysis (which assesses whether MH/SUD benefits are covered in a way that is no more restrictive than M/S benefits) for our audit period, and Kansas did not request a complete parity analysis from any of the MCOs.
  • For outpatient out-of-network services, one MCO denied prior authorization requests for MH/SUD services at a higher rate than it denied prior authorization requests for M/S services for the same type of services. We also identified potential data reliability issues at another MCO.
  • Kansas did not provide clear guidance regarding parity analyses to the MCOs and did not have policies and procedures in place to provide adequate monitoring of the MCOs. Access to MH/SUD services may therefore have been limited compared to access for M/S services—a disparity that may have impacted enrollees’ health and wellness by delaying lifesaving or life-enhancing MH/SUD treatments.

26-A-07-091.01 to CMS - Open Unimplemented
Update expected on 02/09/2027
We recommend that the State agency enhance its oversight of the MCOs by ensuring they: (1) complete and submit the parity analyses annually for each of the four benefit classifications—inpatient, outpatient, prescription drugs, and emergency care—as required in the MCO contracts, (2) maintain and submit complete and accurate data to support those analyses, and (3) correct issues of identified noncompliance with the MHPAEA.

26-A-07-091.02 to CMS - Open Unimplemented
Update expected on 02/09/2027
We recommend that the State agency develop and disseminate clear and detailed instructions to the MCOs explaining how to conduct the parity analyses.

26-A-07-091.03 to CMS - Open Unimplemented
Update expected on 02/09/2027
We recommend that the State agency improve its monitoring of the MCOs by developing and implementing policies and procedures that: (1) formally identify whether the State agency or KDADS is responsible for oversight of MCOs' compliance with parity requirements, and (2) formalize procedures for the collection and review of the MCOs' submitted supporting data for the parity analyses.

View in Recommendation Tracker
Work Plan Type
Office of Audit Services
HHS Agencies
Centers for Medicare and Medicaid Services
Issue Areas
Hospitals Managed Care Mental Health Substance Abuse Disorder
Target Groups
-
Financial Groups
Medicaid