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The Short Answer: Federal Parity Is Paused. State Enforcement Is Not.
Federal enforcement of the 2024 MHPAEA Final Rule is on hold. State market conduct exams are not. Treatment center operators should stop waiting on Washington and rebuild their parity posture around state departments of insurance, payer contract language, and clean outcome data. The 2013 rule and the CAA, 2021 NQTL comparative analysis requirement still bind every plan and issuer.
On May 15, 2025, the Departments of Labor, Health and Human Services, and the Treasury issued a joint statement. The Departments wrote that they will not enforce the 2024 Final Rule or otherwise pursue enforcement actions, based on a failure to comply that occurs prior to a final decision in the litigation, plus an additional 18 months. That is not a rescission. The American Psychological Association noted that the administration’s current action is a decision of nonenforcement, not a rescission of the 2024 Final Rule itself. Rescinding or revising that rule would necessitate the Administrative Procedure Act’s notice and comment process, a formal rulemaking procedure.
The distinction matters for operators writing 2026 payer strategy. DOL’s own statement says this enforcement relief applies only with respect to those portions of the 2024 Final Rule that are new in relation to the 2013 final rule. The Departments note that MHPAEA’s statutory obligations, as amended by the CAA, 2021, continue to have effect. HHS encourages states that are the primary enforcers of MHPAEA with respect to issuers to adopt a similar approach to enforcement.
Translation for a CEO: the NQTL comparative analysis requirement is still real, the 2013 rule still governs, and state regulators are running the show.
What the 2024 Rule Actually Targeted: NQTLs, Not Copays
The 2024 rule never centered on dollar limits. Attorneys at Sheppard Mullin summarized the underlying framework: the 2010 Interim Rules created a distinction between quantitative treatment limitations (“QTLs”). Those that are “expressed numerically,” such as limits on the number of doctor visits. And nonquantitative treatment limitations (“NQTLs”), which include other limitations such as requirements for a referral from a primary care provider before seeing a specialist.
Prior authorization. Medical necessity criteria. Network composition. Out-of-network reimbursement methodology. That is the plumbing behavioral health operators have been waiting on since 2008.
The pause hurts because federal investigators were already slow. Attorneys at Epstein Becker Green, reading DOL Office of Inspector General findings, reported that it has often taken up to three years for DOL investigators to complete NQTL comparative analysis reviews. The report also noted that funding that supports over one-third of DOL’s frontline investigators will expire in September, 2025. CEOs who counted on federal NQTL pressure to discipline payer behavior in Georgia, Ohio, or Tennessee should plan as if that pressure is not coming.
One nuance behavioral health CFOs keep missing: fully-insured issuers do not get to sit back. Epstein Becker Green also observed that the federal policy of non-enforcement does not apply to state regulators, who interpret and enforce both federal and state laws for mental health parity. Denial rates and prior-auth patterns still matter to a state department of insurance in Georgia, Oregon, or Maryland even if EBSA is quiet.
SAMHSA's $1.9 Billion Whiplash and What It Told Operators About Cash Flow Risk
The grant episode in January 2026 was not a rumor. It was a cash event for thousands of organizations.
On Tuesday, January 13, 2026, SAMHSA sent grant termination letters to awardees across the country. According to NPR, grants are terminated as of Jan.13, adding that “costs resulting from financial obligations incurred after termination are not allowable.” Roughly 24 hours later, HHS reversed course. STAT reported the scope: while the exact funding cuts enacted on Tuesday remained unclear, the scope was vast. Multiple sources told STAT that the number of overall grants originally canceled could number as high as 2,800, with the total dollars affected as high as $1.9 billion. Over one-quarter of the agency’s overall budget.
The damage was not theoretical even after the reversal. Mental health institutions and programs started scrambling. Some sent layoff notices. Groups issued statements calling the terminations “cruel” and “unconscionable.” Boards saw those numbers. Lenders saw those numbers.
Paul Samuels, director and president of the Legal Action Center, put it plainly to Behavioral Health Business: “These terminations, alongside the massive cuts to Medicaid, will completely destabilize the system that supports treatment and harm reduction for individuals with substance use and MH conditions”.
The lesson for founders running grant-dependent programs in Tennessee, Ohio, or Florida: a 24-hour federal action can force layoffs before your board finishes reading the letter. If your pro forma assumes SAMHSA awards renew on schedule, your pro forma is wrong.
What States Are Actually Doing While Washington Reconsiders
The Commonwealth Fund piece by JoAnn Volk and Madison Harden-Stein, dated January 21, 2026, is the cleanest state-by-state summary. As Georgetown’s Center on Health Insurance Reforms puts it, despite this federal step backward, some states are continuing or even expanding their own parity enforcement efforts, some are explicitly embracing the federal rule in state law, and others have paused work and face uncertainty about future federal guidance. That fragmentation is what multi-site operators should model.
Georgia is the loudest enforcer in the country. On January 12, 2026, Commissioner John F. King announced nearly $25 million in fines against health insurance companies for parity violations. That order followed his August 2025 announcement. In King’s words: “These companies are not above the law, and I am taking definitive action to hold them accountable for denying Georgians the care they need.”
Per Arnall Golden Gregory’s summary, the January 2026 orders follow Commissioner King’s August 2025 announcement of more than $20 million in parity-related fines, which arose from Georgia’s first mandatory mental health parity data call and subsequent market conduct examinations of 22 insurers. At that time, the department reported uncovering over 6,000 parity violations, many involving improper prior authorization requirements, inconsistent benefit classification, and unclear post-service medical necessity reviews. 11Alive reported that four of the companies were fined in excess of $2 million. One of them, Oscar Health Insurance, was fined more than $10 million.
Not every state is stepping up. If a treatment center operates sites in Florida, Tennessee, and Colorado, program directors should build a payer playbook that is jurisdiction specific.
What Behavioral Health CEOs Should Do in the Next 90 Days
Atlantic Health Strategies tells clients to stop waiting for federal clarity and run four parallel workstreams.
- Tighten the parity evidence trail. Operators should track authorization turnaround, denial reason categorization, overturn rates on appeal, and network adequacy friction by service line and payer. States, plaintiffs’ lawyers, and employer plan sponsors are already using outcome data. Clean your data before someone else’s data tells your story.
- Renegotiate payer contracts with specificity. Negotiators should push for clarity on medical necessity criteria sources, peer reviewer specialty matching, ASAM Criteria 4th Edition application for SUD level of care decisions, timely filing windows, and appeal pathways. Ambiguity is now a payer asset.
- Run grant continuity drills. CFOs should map which programs are SAMHSA dependent and what a 30-day funding pause would cost in staffing and census. The January 2026 event showed how fast providers moved to layoffs. Plan for the next one, because there will be one.
- Standardize across sites if you run an MSO model. If a treatment center operates four programs in Florida and two in Tennessee, program directors should not be reinventing appeal language or documentation thresholds. Centralized utilization management, templated documentation, and dashboards that flag payer outliers early protect clinical time and revenue.
The bigger point: DOL’s own statement encourages states that are the primary enforcers of MHPAEA with respect to issuers to adopt a similar approach to enforcement. HHS will not consider a state to be failing to substantially enforce MHPAEA, as amended, because the state adopts such an approach. CEOs who built their compliance program around federal enforcement intensity should rebuild it around state market conduct exams, network adequacy reporting, and payer accountability at the contract level. That is the operational backbone that holds up regardless of which way the ERIC litigation breaks.
Frequently asked questions
Is the 2024 MHPAEA Final Rule still in effect?
Yes, the rule remains on the books. On May 15, 2025, the Departments of Labor, HHS, and Treasury stated in a joint statement that they will not enforce the 2024 Final Rule prior to a final decision in the ERIC litigation, plus an additional 18 months. That enforcement relief applies only to portions of the 2024 rule that are new relative to the 2013 final rule. MHPAEA’s statutory obligations under the CAA, 2021, including the NQTL comparative analysis requirement, remain in effect. A formal rescission would require Administrative Procedure Act notice and comment rulemaking, which has not occurred.
Do behavioral health providers and plans still need to complete NQTL comparative analyses?
Yes. The CAA, 2021 NQTL comparative analysis requirement remains in force regardless of the 2024 rule’s enforcement status, and the 2013 final rule still governs. States including Georgia, Maryland, Oregon, and Washington continue to enforce parity using outcome data. Georgia’s market conduct exams of 22 insurers identified more than 6,000 parity violations, leading to more than $20 million in August 2025 fines and nearly $25 million in additional fines announced January 12, 2026.
How exposed is my organization to another SAMHSA-style funding disruption?
The January 2026 episode showed that as many as 2,800 grants totaling up to $1.9 billion, over one-quarter of SAMHSA’s overall budget, were terminated overnight before being reversed within 24 hours (STAT, January 14, 2026). Behavioral Health Business and NPR reported that grantees began preparing layoffs within hours of receiving termination notices. Operators should map every grant-dependent program line by line and model a 30 to 90 day funding pause in their pro forma.
Which states are most aggressive on parity enforcement right now?
According to the Commonwealth Fund’s January 21, 2026 analysis by JoAnn Volk and Madison Harden-Stein, some states are continuing or expanding their own enforcement efforts while others have paused. Georgia is running the most active penalty regime: Commissioner John F. King’s office issued nearly $25 million in fines on January 12, 2026, against 11 insurers, following more than $20 million in fines announced in August 2025. Oscar Health Insurance received the largest single penalty at more than $10 million.
References
- U.S. Department of Labor, HHS, and Treasury. Joint Statement Regarding Enforcement of the 2024 MHPAEA Final Rule (May 15, 2025)
- American Psychological Association Services. Departments Announce Nonenforcement of 2024 Mental Health Parity Rule
- Epstein Becker Green. Mental Health Parity: What Non-Enforcement of the 2024 Parity Rule Means for Employer Plans
- Sheppard Mullin. Enforcement of Mental Health Parity Rules Paused with Further Changes Anticipated
- Georgia Office of Commissioner of Insurance. Commissioner King Issues Nearly $25 Million in Fines for Mental Health Parity Violations (Jan. 12, 2026)
- Arnall Golden Gregory. Georgia Continues Aggressive Mental Health Parity Enforcement, Fining Insurers Nearly $25 Million
- STAT. Trump administration reverses course on $1.9 billion in cuts to addiction and mental health grants (Jan. 14, 2026)
- NPR. Trump administration sends letter wiping out addiction, mental health grants
- Commonwealth Fund. Behavioral Health Parity Takes Step Backward Under Trump Administration (Volk & Harden-Stein, Jan. 21, 2026)
- Behavioral Health Business. Without Warning SAMHSA Cuts $2B in Grants, ‘Destabilizing’ Many SUD Programs