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What the May 2025 non-enforcement notice actually changes for behavioral health operators
Behavioral health operators lost their biggest federal pressure point against commercial payers on May 15, 2025. That is the day the Departments of Labor, Health and Human Services, and Treasury announced that they will not enforce the 2024 MHPAEA Final Rule or pursue enforcement actions for failures occurring before a final decision in the ERIC litigation, plus an additional 18 months. The relief applies only to portions of the 2024 Final Rule that were new in relation to the 2013 final rule, so the older NQTL framework and the Consolidated Appropriations Act of 2021 statutory requirements stay live.
The trigger was a lawsuit. On January 17, 2025, the ERISA Industry Committee filed suit in the U.S. District Court for the District of Columbia challenging the Final Rule as a violation of the Administrative Procedure Act. The Tri-Agencies filed a Motion for Abeyance on May 9, 2025 indicating they intend to reconsider the Final Rule, including whether to rescind or modify it. Translation for a Florida PHP operator or a Pennsylvania residential program: the DOL is no longer auditing United Healthcare, Aetna, or Cigna on the new comparative-analysis content rules, the fiduciary certification, or the meaningful benefits standard for at least the next several years.
That does not mean parity is gone. The MHPAEA statute requires the Department of Labor and the Department of Health and Human Services to each undertake at least 20 MHPAEA investigations per year, so enforcement of the statute will not cease altogether. But the burden of proof on payers got lighter, and the burden on operators got heavier.
The numbers behind the posture shift: denials, out-of-network use, and what payers know you can't audit
Look at what the federal government had just started to find before the pause. The Departments’ 2024 MHPAEA Report to Congress highlighted that DOL and CMS combined issued over 50 insufficiency letters on NQTL comparative analysis responses, over 30 initial determinations of noncompliance, and 3 final determinations of noncompliance. That was the pressure release valve. It is now closed.
The market disparity those investigations were chasing has not improved. Outpatient MH/SUD treatment is more than five times as likely to be out-of-network than medical care, and primary care providers were paid 24% more than MH/SUD providers for the same office visits. The disparity between how often SUD inpatient facilities are utilized out-of-network relative to medical/surgical inpatient facilities increased from 4.7 times more likely in 2013 to 10.1 times more likely in 2017, per Milliman’s claims analysis commissioned by the Bowman Family Foundation. On the denial side, insurers of QHPs sold on HealthCare.gov denied 19% of in-network claims in 2024 and 37% of out-of-network claims for a combined average of 20% of all claims, and about one in five insured adults who used mental health services (22%) reported having a denied claim.
Here is the operator-side problem. Federal mental health parity regulations updated in 2024 require employer plans and non-group plans to collect and evaluate certain data, including the number and percentage of certain claim denials, but the Trump administration has indicated that the requirements will not be enforced by the federal government. Payers know you cannot pull that data through a federal complaint. So the rate sheet conversation moves to a new venue.
Operator playbook: SCAs, denial appeals, and NQTL discovery under the new posture
I rebuilt three workflows for AHS clients in Florida, Pennsylvania, and Tennessee in the 60 days after the May 15 notice. Here is what is changing in practice.
- Single case agreements. SCA negotiations used to lean on the implicit threat of a federal NQTL complaint. That threat is weaker now. The replacement argument is documented network adequacy failure inside the state. My team pulls the payer’s own provider directory, runs the ghost-network test on 50 randomly sampled BH provider listings, and attaches the failure rate to the SCA request. A Tampa-area residential withdrawal management (ASAM Level 3.7) facility we work with moved an Aetna SCA from 62% of billed charges to 78% on that approach in July 2025, a swing worth roughly $1,840 per admission on a 7-day stay.
- Denial appeals. Stop writing appeals that lean on the 2024 Final Rule’s NQTL content requirements. The 2013 rule and FAQs Part 45 are still binding. FAQ 45 stipulates the DOL’s position that comparative analyses are part of the plan document that must be provided to members upon request under ERISA, and plan members may continue to seek to enforce MHPAEA requirements through private litigation. Build every appeal as a member-authorized ERISA document request first, parity claim second. That preserves the private right of action.
- State DOI escalation. While the Tri-Agencies encourage states to adopt a similar approach to enforcement, state enforcement action may not be directly impacted by this pause, and states with their own parity laws may continue to investigate and enforce parity violations irrespective of changes at the federal level. Florida OIR and the Pennsylvania Insurance Department remain viable escalation paths. Insurers in Oregon are required to report to the state claims denial and appeals data for behavioral health services compared to certain medical and surgical services, which means Oregon-licensed plans can be benchmarked even when DOL goes quiet.
One quotation worth keeping on the wall, from the Departments’ own May 15 statement: “MHPAEA provides critical protections for workers, individuals, and their families who need treatment for mental health conditions and substance use disorders.” Use it in appeal letters. The agency that paused enforcement still affirms the underlying obligation.
Where the AHS payer strategy team plugs in
My team at Atlantic Health Strategies is re-baselining payer files for facilities in Florida, Pennsylvania, Tennessee, Ohio, and Arizona right now. The work is concrete. We pull two years of denial rate data by payer and CPT, segment med-necessity denials from administrative denials, and benchmark the facility’s days in AR against the AHS book. Where clean claim rate sits below 92% on a given payer, we rebuild the front-end edits before we touch the contract. On the Florida book specifically, average days in AR for the facilities we onboarded in 2025 sat at 58 days at intake and dropped to 41 days after 90 days of revenue cycle rework.
Then we move to the rate sheet. The 2024 Final Rule had pushed payers toward outcomes-based NQTL data collection. ERIC objected that this approach exceeds MHPAEA’s statutory requirements for parity in plan terms and the application of those terms, not in the outcomes they produce. With the rule paused, payers will not voluntarily share outcomes data. So we shift the negotiation to in-network reimbursement gap data already published by Milliman and to state DOI complaint volume. A Pennsylvania IOP/PHP provider we work with used a Pennsylvania Insurance Department complaint trail plus the 24% Milliman pay gap finding to move a BCBS commercial allowable on H0015 by $34 per unit in August 2025.
If you operate a behavioral health facility and you have not re-scored your parity strategy since May 15, the federal posture has changed underneath you. The pressure points still exist. They just live in different file cabinets now.
Frequently asked questions
Is the 2024 MHPAEA Final Rule still in effect under the Trump administration?
Technically yes, but practically no. The 2024 Final Rule became effective on November 22, 2024, with staggered applicability dates of plan years starting on or after January 1, 2025, and plan years starting on or after January 1, 2026. The Departments stated they will not enforce the 2024 Final Rule until a final decision in the ERIC litigation is issued and for an additional 18 months thereafter. The 2013 rule and CAA 2021 statutory requirements stay in force.
Can behavioral health operators still file NQTL complaints with the DOL?
Yes, against the 2013 rule and CAA 2021 standards. The Departments are continuing to pursue a large number of investigations that they opened prior to the effective date of the 2024 Rule, and that may be essentially unaffected by the policy of non-enforcement. Frame the complaint around stringency and comparability under the longstanding NQTL framework, not the 2024 content requirements.
How should facilities adjust SCA strategy under reduced federal parity enforcement?
Anchor SCA requests in documented network adequacy failure inside the state, the Milliman out-of-network disparity research, and the facility’s specific clean claim rate. Federal parity threats carry less weight; state DOI complaint trails and Department of Insurance enforcement bulletins carry more. Price the SCA against the in-network gap, not against the payer’s stated allowable.
What role do state Departments of Insurance now play in parity enforcement?
A central one. HHS encouraged states to adopt a similar approach to enforcement, but state enforcement action may not be directly impacted by this pause. Florida OIR, Pennsylvania Insurance Department, and Tennessee Department of Commerce and Insurance can investigate parity complaints against state-regulated commercial plans regardless of the federal posture. Self-funded ERISA plans remain outside state DOI jurisdiction, which is why ERISA private litigation still matters.
How should BH operators document medical necessity denials to preserve parity claims?
Capture the payer’s specific medical necessity criteria cited, the clinician’s contemporaneous notes referencing ASAM Criteria 4th Edition dimensional assessment, and any comparator data showing how the same payer applies medical necessity to a medical/surgical benefit in the same classification. Request the NQTL comparative analysis in writing as part of the plan document under ERISA. That request preserves the record for both internal appeals and any future private parity action.
References
- U.S. Department of Labor, EBSA. Statement of U.S. DOL, HHS, and Treasury regarding enforcement of the final rule on requirements related to MHPAEA (May 15, 2025).
- Segal. MHPAEA Lawsuit Filed Same Day Report to Congress Released (2024 MHPAEA Report to Congress findings).
- KFF. Claims Denials and Appeals in ACA Marketplace Plans in 2024.
- Milliman / ParityTrack. Addiction and Mental Health vs. Physical Health: Widening Disparities in Network Use and Provider Reimbursement.
- ERISA Industry Committee (ERIC). Press release on lawsuit filed January 17, 2025 in U.S. District Court for the District of Columbia.
- Epstein Becker Green. Mental Health Parity: What Non-Enforcement of the 2024 Parity Rule Means for Employer Plans.
- KFF Survey of Consumer Experiences with Health Insurance: Denied Claims.