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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 accelerating. 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. Attorneys at Sheppard Mullin note the current action is a decision of nonenforcement, not a rescission of the 2024 Final Rule itself, and rescinding or revising the rule would require the Administrative Procedure Act’s notice and comment process.
The distinction matters for operators writing 2026 payer strategy. The enforcement relief applies only to portions of the 2024 Final Rule that are new in relation to the 2013 final rule, MHPAEA’s statutory obligations under the CAA, 2021 continue in effect, and HHS notes that states are the primary enforcers of MHPAEA with respect to issuers. Translation for a CEO: the NQTL comparative analysis requirement is still real, the 2013 rule still governs, and states are running the show.
What the 2024 Rule Actually Targeted: NQTLs, Not Copays
The 2024 rule never centered on dollar limits. Payer counsel at Groom Law Group described the rule as one that “imposed new requirements related to parity, including the documentation and justification of nonquantitative treatment limitations” (NQTLs). 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, and that funding supporting more than one-third of DOL’s frontline investigators was set to 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 noted 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. Your 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, SAMHSA sent grant termination letters to awardees across the country, informing them that their funding was being canceled effective immediately; more than 2,000 grants totaling nearly $2 billion were affected, and the form letters cited “non-alignment with SAMHSA priorities” as the reason. Roughly 24 hours later, HHS reversed course.
The scope, per STAT: 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. NPR reported that roughly 2,000 organizations were affected and that official notice of grant restoration began reaching organizations Thursday morning under language that stated the termination was “hereby rescinded.”
The damage was not theoretical even after the reversal. Behavioral Health Business reported that Centerstone, one of the largest nonprofit behavioral health organizations in the country, received notification late on Tuesday, January 13, that 28 programs across seven states (Missouri, Tennessee, Indiana, Illinois, Oklahoma, North Carolina, and Florida) would no longer be funded, totaling roughly $14.3 million. Boards saw those numbers. Lenders saw those numbers.
Dr. Yngvild Olsen, an addiction treatment physician who served as the director for the Center for Substance Abuse Treatment inside SAMHSA until July 2025, told NPR: “These were decisions made without the input of experts in these programs and experts in this [addiction and mental health] field.” 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. Providers across the country had already begun laying off staff, canceling trainings, and shutting down services within hours of receiving termination notices. 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. Volk and Harden-Stein wrote that the Trump administration’s failure to defend or enforce the 2024 rule undermines the progress made in federal enforcement efforts and has thwarted some states’ plans to move forward. That fragmentation is what multi-site operators should model.
Several states took the opposite tack. Washington enacted legislation that requires insurers to comply with the federal rule as published in 2024, anchoring state law to a strong set of parity protections that will remain in place even if the federal rule is rescinded. Colorado also used the rule to strengthen its own statutory protections. Maryland adopted stricter requirements for insurers’ parity analyses. Other states are pulling data. West Virginia issued a request for insurers to report data such as number of denied claims and the outcome of prior authorization requests, and Oregon issued its fourth annual parity report, noting disparities in claims denials, provider reimbursement, and documentation required for prior authorization and utilization review of behavioral health services.
Georgia is now 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 violations of Georgia’s Mental Health Parity laws. That order followed his August 2025 announcement of more than $20 million in fines arising from earlier parity reviews. 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 of the two waves, the department’s earlier data call and market conduct exams of 22 insurers had uncovered over 6,000 parity violations. Georgia parity penalties now approach $45 million across the two enforcement waves. 11Alive reported that four insurers were fined in excess of $2 million each, with Oscar Health Insurance alone 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: HHS encourages states that are the primary enforcers of MHPAEA with respect to issuers to adopt a similar approach to enforcement. That framing is a tell. CEOs who built their compliance program around federal enforcement intensity need to 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 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 in relation 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 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 Washington, Colorado, Maryland, Oregon, West Virginia, and Georgia continue to enforce parity using outcome data, claims denial rates, and prior authorization patterns. 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, bringing combined penalties to roughly $45 million.
How exposed is my organization to another SAMHSA-style funding disruption?
The January 2026 episode showed that as much as $1.9 billion across up to 2,800 grants, roughly one-quarter of SAMHSA’s overall budget, was terminated overnight before being reversed within 24 hours. Centerstone alone received notice that 28 programs across seven states would lose approximately $14.3 million in funding. Providers across the country began laying off staff and shutting down services within hours of receiving termination notices. Operators should map every grant-dependent program line by line and model a 30 to 90 day pause in their pro forma.
Which states are most aggressive on parity enforcement right now?
According to the Commonwealth Fund’s January 2026 analysis by JoAnn Volk and Madison Harden-Stein, Washington has adopted the 2024 federal rule directly into state law, Colorado and Maryland have strengthened their own statutory parity requirements, Oregon issued its fourth annual parity report, West Virginia is collecting insurer denial and prior authorization data, and Georgia is running the most active penalty regime, with Commissioner John F. King issuing more than $20 million in August 2025 fines and nearly $25 million more in January 2026 for combined penalties of roughly $45 million.
References
- U.S. Department of Labor, Statement of DOL, HHS, and Treasury Regarding Enforcement of the 2024 MHPAEA Final Rule (May 15, 2025)
- Groom Law Group, Departments Pause Enforcement of MHPAEA Final Rule and Reconsider MHPAEA Enforcement Program
- Epstein Becker Green, Mental Health Parity – What Non-Enforcement of the 2024 Parity Rule Means for Employer Plans
- JoAnn Volk & Madison Harden-Stein, Behavioral Health Parity Takes Step Backward Under Trump Administration, Commonwealth Fund (Jan. 21, 2026)
- Georgia Office of the Commissioner of Insurance and Safety Fire, Commissioner King Issues Nearly $25 Million in Fines for Mental Health Parity Violations (Jan. 12, 2026)
- Arnall Golden Gregory LLP, 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, 24 hours of chaos as mental health grants are slashed then restored (Jan. 15, 2026)
- Behavioral Health Business, SAMHSA Reverses $2B in Grant Cuts, But Funding Fears Remain
- 11Alive, Georgia insurance commissioner announces almost $25 million in fines for health insurance companies