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Volume XII, Number 183

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Behavioral Health Trends for 2022

Over the last two years, behavioral health (BH) has been one of the biggest growth areas in the health care ecosystem, fueled by the Public Health Emergency (PHE) but in many ways an ignored, overlooked, understaffed, and underfunded element of care delivery in the United States. Providers, payers, and investors―both public and private―have all taken notice. The coming year will be both an expansion of that growth and to some extent a consolidation of players and strategies across a broad swath of clinical niches. President Biden’s recent State of the Union address gave a decent roadmap of where the year may lead. His “Connect Americans to Care” plan will seek to:

  • Expand and strengthen parity under the 2008 Mental Health Parity and Addiction Equity Act.

  • Integrate mental health and substance use treatment into primary care setting by increasing funding for primary and behavioral health integration programs and using existing authority through the Department of Health and Human Services (HHS) to:

    • Test payment models that support the delivery of whole-person care through behavioral health integration.

    • Authorize Medicaid reimbursement of inter-professional consultations so that primary care providers can consult with a specialist and provide needed care for patients.

    • Expand access to tele- and virtual mental health care options. 

For the coming year ahead, the top opportunities and issues we see rolling off this policy agenda for investors, plans, and providers include:

Integration of Primary Care and Behavioral Health

Plans, providers, and investors have recognized the need for greater accessibility to behavioral health care for reasons that transcend the PHE as evidenced by the substantial funding rounds and growing number of unicorns in the space. However, will all of these companies succeed? Which of them will survive and why?

A growing trend has been for primary care providers and their backers to offer mental health services as part of their core primary service offering, directly, or through networks and affiliations, indirectly. Some are focused on the underserved markets including Medicaid, such as CityBlock, and wrap transportation and other SDOH needs around primary care and integrated behavioral health care. Others are focused on the MA market (e.g., Oak Street) and others on commercial and self-insured employer plans (e.g., One Medical). Finally, plans are becoming increasing active as so-called “payviders” in launching their own integrated BH/primary care offerings. CMMI itself has rolled out a Collaborative Care Model integrating primary and behavioral care.

Rationales for these developments include:

  • Evidence that medical conditions compounded by mental health conditions can dramatically increase the total cost of care.

  • Consumers are demanding BH as a core service offering side-by-side with primary care.

  • Outcomes data for primary care and BH together show a much more powerful outcomes statement than either alone.

  • Alignment with primary care can distinguish BH providers from a crowded field and accelerate growth into new markets and partner relationships.

The fact that BH will be big in ’22 is old news. Primary and behavioral care coordination will emerge as a growing leading edge strategy for forward thinking operators and their investors.

Opening up Parity

The Department of Labor (DOL) has made enforcing the Mental Health Parity and Addiction Equity Act (MHPAEA) a priority. Stemming from new obligations imposed by the Consolidated Appropriations Act, 2021 (CAA) to document MHPAEA compliance with respect to the application of non-quantitative treatment limitations (NQTLs), the DOL has been requesting that health plans and health insurance carriers provide documentation analyzing their NQTL MHPAEA compliance. NQTLs include limitations imposed on the coverage of health benefits such as preauthorization, step therapy, and exclusions of experimental and investigational services. In 2021, the DOL issued 156 letters to plans and carriers requesting this CAA NQTL analysis for 216 unique NQTLs. No plans or carriers satisfied the CAA requirements in their initial responses to the DOL. After providing plans and carriers a chance to supplement their initial submissions, the DOL issued letters to 30 plans and carriers noting an initial determination of non-compliance with the MHPAEA for 48 NQTLs. The five most common NQTLs found non-compliant include:

  1. Limitation or exclusion of applied behavioral analysis therapy or other services to treat autism spectrum disorder.

  2. Requiring Mental Health (MH)/Substance Abuse Disorder (SUD) providers to bill through specific types of other providers.

  3. Limitation or exclusion of drugs for opioid use disorder.

  4. Preauthorization.

  5. Limitation or exclusion of nutritional counseling for MH/SUD conditions.

Given the DOL’s callout of the above NQTLs, plans and carriers should spend additional time reviewing their use of these NQTLs to ensure they are complying with the MHPAEA.

Classification

As more behavioral health organizations rely on a remote work force and the expansion of telehealth to provide services on a national scale, they face new employment considerations and potential pitfalls. Many organizations rely on the engagement of providers as independent contractors because, among other things, it allows for swift growth and additional benefits for both the provider organization and, in some instances, the clinicians and therapists as well. However, misclassification issues can have significant consequences for growing companies.  The Biden administration has withdrawn the prior administration’s independent contractor rules, and workforce issues remain in the forefront. Behavioral health providers are dealing with negative press related to their classification, making recruiting of clinicians in a moment of shortage difficult, as some question whether these organizations understand that the core asset of the care delivery organization is generally the clinical workforce. 

Classification considerations are complicated, especially for providers working across multiple states. There are different tests used by courts and administrative bodies to determine the status, including for tax treatment purposes, wage/hour law, employment discrimination law, and for common law purposes. Like so many other things in the behavioral health space, a state-by-state analysis is required to ensure compliance. Although the factors considered vary from state to state, the most important aspect of determining an employee relationship is generally control—does the organization have the authority to control when, where, and how the job is performed?

Misclassification can lead to employer liability for, among other things, back pay, including overtime compensation, employee benefits (e.g., retirement benefits and health plan coverage), disability payments and workers’ compensation, tax and insurance obligations, liquidated damages, and civil monetary penalties. We expect to see increased enforcement driven by both plaintiff’s counsel and government agencies alike.

The No Surprises Act

The No Surprises Act (the Act) was enacted on December 27, 2020 as part of the Consolidated Appropriations Act of 2021. The Act seeks to protect patients from being surprised by bills for certain health care services and excessive patient cost-sharing payment obligations. The protections provided under the Act are generally aimed at situations where patients (i) receive care from out-of-network (OON) providers who furnish services at in-network facilities, (ii) receive emergency care from OON providers, or (iii) use OON air ambulances. Our Foley colleagues discussed the technical provisions of the Act and its implementing regulations in previous blogs posted July and October of 2021.  One aspect of the Act in particular – the price transparency provisions – is raising confusion and concern among behavioral health providers related to implementation, ethical standards, and treatment access. 

The second part of the implementing regulations under the Act require providers to furnish a “Good Faith Estimate” (GFE) of costs of the likely course of treatment, based on diagnosis and typical costs involved. Provider groups argue that these requirements do not neatly align with the clinical realities and ethical standards of behavioral health and SUD treatment where often a patient’s diagnoses can take time to assess and confirm and can change over the course of treatment. This can lead to treatment plan modifications―both in terms of recommended interventions and duration―which in turn affects final cost. If a provider exceeds the estimate by at least $400, the Act would permit uninsured or self-pay patients to challenge the bills in arbitration. This arguably creates a disincentive for providers to deliver clinically appropriate care, if doing so would potentially exceed the estimate.  From an ethical standpoint, therapists have said that they are obligated to disclose per session fees to self-pay patients, and as such, the Act presents an unnecessary administrative burden for a group of providers already stretched thin. On the flip side, provider groups have argued that if patients are faced with a large estimate tied to a long treatment plan at the outset, they may be overwhelmed and discouraged from entering treatment in the first instance. 

These concerns, among others, were outlined in a January 25, 2022 letter from eleven provider groups (including the American Psychological Association, the American Psychiatric Association, and the National Association of Social Workers) to the Secretary of HHS.  The letter asked the Secretary to exempt routine mental and behavioral health providers from the Act, arguing that mental and behavioral health treatment does not present the pricing and consumer protection issues that the Act seeks to address. The Secretary has not indicated that it is considering any such exemption, but CMS has said that it plans to issue guidance specific to the GFE-related concerns of behavioral health treatment providers.  As the health care industry at large seeks to grapple with the implementation of the Act in 2022, behavioral health and SUD treatment providers in particular should continue to monitor CMS guidance related to the GFE duty, as well as its impact on patient care and access. 

Licensure

Telemedicine can be used as part of an effective way to treat mental health issues, including anxiety, depression, and substance use disorder, which have seen an unprecedented spike during the COVID-19 emergency. However, there are barriers to the long-term sustainable use of telemedicine to address behavioral and mental health issues, including the federal Ryan Haight Online Pharmacy Consumer Protection Act of 2008. Among other things, the Act required an in-person medical evaluation as a prerequisite to prescribing controlled substances by means of the Internet, except for practitioners engaged in the “practice of telemedicine.” The term “practice of telemedicine” is defined to include seven exceptions in which the prescribing practitioner might be unable to satisfy the Act’s in-person medical evaluation requirement to prescribe a controlled substance for a legitimate medical purpose in the usual course of professional practice.

Starting in March 2020, the Drug Enforcement Administration (DEA) triggered the Act’s PHE exception relating to COVID-19 to waive the in-person exam requirements for the duration of the PHE. This flexibility has purportedly resulted in easier access to critical care needed to combat the spike in mental health and substance abuse. However, this is a temporary relaxation. When the PHE ends, providers will need to adhere to the Act’s in-person requirement. Stakeholders, including providers, industry groups, and congressional leaders are calling to make the COVID-19 telemedicine flexibilities permanent to ensure millions of patients retain access to treatment.

As the PHE appears to be winding down in early 2022, there are a few potential scenarios on the status of the Act and telemedicine prescribing of controlled substances in a post-COVID environment, described below.

DEA Enacts Special Registration: DEA could enact the long-awaited special registration. Under the Act, there is an exception to the in-person requirement for “a practitioner who has obtained from the [DEA Administrator] a special registration under [21 U.S.C. 831(h)].” DEA is required to issue regulations to effectuate this special registration provision. However, since the Act’s enactment in 2008, the DEA has not issued proposed rules to create the special registration. Recently, the DEA has indicated that the telemedicine registration is a priority; the Special Registration to Engage in the Practice of Telemedicine rule is currently in the Proposed Rulemaking Stage in the Unified Agenda.

Legislative Change: Congress could enact one of the following currently pending bills to extend the Act’s flexibilities on telehealth prescribing of controlled substances:

  • The TREATS Act (S.340/H.R.1647) (introduced in the Senate on 2/21/2021) would permanently allow telehealth services for substance use disorders and mental health disorders to be provided via audio-only technology, if a physician or practitioner has already conducted an in-person or video telehealth evaluation. Further, Schedule III or IV controlled substances could be prescribed online if a practitioner has conducted an audio-video telehealth evaluation of the patient.

  • The Telehealth Extension and Evaluation Act (S.3596) (introduced in the Senate on 2/8/2022) would extend, for two years after the last day of the federally declared PHE, certain COVID-19 emergency telehealth waivers, including ability to prescribe controlled substances without a prior in-person examination.

Return to Pre-COVID Operations: If Congress and/or DEA fail to enact meaningful policy changes, providers relying on the temporary telemedicine flexibilities should plan to pivot their current operations to meet the in-person regulatory requirements under the Act.

The Psychedelic Renaissance

Over the last several years, psychedelics have gained more mainstream acceptance from both the public and scientific community as a growing body of evidence suggests that certain psychedelic compounds have potential therapeutic benefits that are just as, if not more, effective than traditional pharmaceutical drugs in the treatment of a variety of mental health conditions. For example, the Food and Drug Administration (FDA) designated psilocybin-assisted-therapies aimed at treating depression and 3, 4-methylenedioxymethamphetamine (MDMA)-assisted psychotherapy for post-traumatic stress disorders (PTSD) as Breakthrough Therapies. The Multidisciplinary Association for Psychedelic Studies (MAPS) reported that in its first Phase 3 clinical trial into the therapeutic potential of MDMA for patients with PTSD disorders, 88% of participants with severe PTSD experienced a clinically significant reduction in PTSD diagnostic scores two months after their third session of MDMA-assisted therapy, and 67% of participants no longer met the criteria for PTSD remission.

In addition, the regulatory landscape is beginning to shift as psychedelics are more widely accepted as a potential behavioral health therapy option. A number of U.S. cities and states have made efforts at decriminalizing or regulating psychedelics such as psilocybin, MDMA, lysergic acid, and diethylamide (LSD) for therapeutic and even recreational purposes in some jurisdictions. For example, in 2019 Denver was the first city to deprioritize criminal penalties for the possession of psychedelics for personal use (Denver Code of Ordinances, Sec. 28-302). In 2020, through Ballot Measure 109, Oregon became the first state to legalize psilocybin-assisted therapy and to decriminalize the personal possession of drugs.  The Oregon Health Authority’s new Psilocybin Services Section will license and regulate the manufacturing, transportation, delivery, sale, and purchase of psilocybin products and the provision of psilocybin services.  Applications for licenses will be accepted beginning on January 2, 2023. While the psychedelic decriminalization may resemble the trajectory of cannabis, a key difference is the current clinical research being conducted on psychedelic use in the mental health space. We predict that additional states and municipalities will seek to decriminalize and/or regulate psychedelics.

In light of the foregoing, we anticipate a continuing interest and new opportunities in the emerging psychedelic behavioral health space. In the United States alone, there are at least 50 public companies and nearly as many private companies operating in the psychedelics space. The psychedelics renaissance is well underway.

Hannah R. Demsien contributed to this article.

© 2022 Foley & Lardner LLPNational Law Review, Volume XII, Number 90
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About this Author

Christopher J. Donovan, Foley Lardner, Partner, Litigation Lawyer
Partner

Christopher J. Donovan is a partner with Foley & Lardner LLP. He focuses his practice on advising companies and their investors and lenders in mergers and acquisitions, recapitalizations, buyouts and restructurings as well as advising on a broad range of commercial arrangements. Mr. Donovan has particular experience in the health service, particularly post-acute, and life sciences sectors. He has a unique blend of deep regulatory as well as corporate and finance experience to bring to a transaction as a result of his consummating dozens of health and life science...

617.226.3101
Alexis Bortniker, Health Care Attorney, Foley Lardner Law Firm
Partner

Alexis Bortniker is a Partner and health care lawyer with Foley & Lardner LLP. Her practice focuses on transactional and regulatory matters with an emphasis on counseling health systems, hospitals, and other providers in managed care and physician contracting. Ms. Bortniker is a member of the firm’s Health Care Industry Team.

Previously, Ms. Bortniker was an associate with Choate Hall & Stewart LLP where she gained experience working directly with health care organizations on regulatory and corporate compliance issues, including the...

617.226.3177
Hannah E. Zaitlin, Foley, health care providers lawyer, mergers acquisitions attorney
Senior Counsel

Hannah E. Zaitlin is an associate and health care business lawyer with Foley & Lardner LLP. Her practice focuses on advising health care providers and companies on mergers, acquisitions and affiliations, entity formation and restructurings, corporate and non-profit governance, debt and equity financings, and commercial contracting. She frequently counsels clients on a range of health care compliance and regulatory matters, including state and federal fraud and abuse laws, HIPAA, professional and facility licensure, and payor/reimbursement issues. Ms. Zaitlin is a...

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Sunny Levine Health Care Lawyer Foley Lardner
Associate

Sunny J. Levine is a health care lawyer with Foley & Lardner LLP, and member of the firm’s Telemedicine & Digital Health and Health Care Industry Teams working with hospitals and health systems, physician practice groups, and technology companies across the country. Sunny’s practice focuses on federal and state regulatory compliance and business issues in the health care industry. She also works with companies offering highly regulated consumer products, such as medical marijuana and alcohol beverages.

Telemedicine & Digital Health Experience

Sunny’s practice...

813.462.7712
Lauren P. Carboni Health Care Regulatory Attorney and Litigator Foley and Lardner
Associate

Lauren P. Carboni is an associate with Foley & Lardner LLP. She is based in the firm’s Denver office. Lauren is a member of the Foley Health Care Industry Team and the Foley Cannabis Industry Team, focusing on health care and cannabis regulatory and litigation matters.

As both a health care regulatory attorney and litigator, Lauren brings a unique perspective to counseling clients with respect to business strategy, fraud and abuse protection, regulatory compliance matters, and investigation defense. Lauren’s experience includes advising clients on a variety of complex federal...

720.437.2008
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