California Statutes

For full text, click here. Adds/amends: 1) sections 1367.045, 1374.721 and 1374.72 of the Health and Safety Code; and 2) sections 10144.52 and 10144.5 of the Insurance Code.

The new law provides clarity and reinforces many principles under the California Mental Health Parity Act, the Federal Parity Law and the Affordable Care Act.  SB 855 requires health plans (both for group and individual coverage) and disability insurers that require hospital, medical, or surgical coverage to:

• Evidenced-Based Decision Making. Base medical necessity determinations and the utilization review criteria on current generally accepted standards of care (GASC of mental health and substance use disorder care, as laid out in the Wit versus United Class Action, which is referenced in the legislative findings along with the eight GASC detailed by the court:

1. 1. Effective treatment of underlying conditions, rather than mere amelioration of current symptoms, such as suicidality or psychosis.
   2. Treatment of co-occurring behavioral health disorders or medical conditions in a coordinated manner.
   3. Treatment at the least intensive and restrictive level of care that is safe and effective and meets the needs of the patient’s condition; a lower level or less intensive care is appropriate only if it safe and just as effective as treatment at a higher level or service intensity.
   4. Erring on the side of caution, by placing patients in higher levels of care when there is ambiguity as to the appropriate level of care, or when the recommended level of care is not available.
   5. Treatment to maintain functioning or prevent deterioration.
   6. Treatment of mental health and substance use disorders for an appropriate duration based on individual patient needs rather than on specific time limits.
   7. Accounting for the unique needs of children and adolescents when making level of care decisions.
   8. Applying multidimensional assessments of patient needs when making determinations regarding the appropriate level of care.

• Non-Profit Clinical Review Criteria: Require clinical guidelines for assessing medical necessity be based on nonprofit clinical specialty associations for the relevant clinical specialties.
• Coverage Enhancements.
  • Arrange for out-of-network coverage of MH/SUD services when not available in-network. Specifically if  medically necessary treatment of a MH/SUD is not available in-network within the geographic and timely access standards set by SB 855, covered health plans must ensure the delivery of medically necessary out-of-network services and any medically necessary follow up services at the same cost-sharing level that the enrollee would pay for in-network services.
  • Prohibit limiting MH/SUD benefits to short-term or acute treatment.
  • Prohibit rescinding prior authorization for MH/SUD services after services are rendered.

SB 855 also takes the following actions:

• Definitions. Defines several key terms related to MH/SUD coverage. Examples include clarifying what is covered health care provider, medically necessary treatment, generally accepted standards of care and utilization review (UR) criteria.
• Legal Compliance. Voids plan provisions reserving discretionary authority to determine coverage, interpret terms, or provide standards of interpretation/review that are inconsistent with California law.
• Education. Requires health plans to sponsor formal education programs by the nonprofit clinical specialty associations to staff and other stakeholders.
• Disclosure. Requires health plans to provide the clinical review criteria and any training material or resources to providers and health care service plan enrollees at no cost.
• Tracking. Mandates that health plans track, identify and analyze how the clinical review criteria are used to certify and deny care, and support the appeals process.
• Reporting. Requires interrater reliability testing and reports about how the clinical guidelines are used in conjunction with the utilization management process and parity compliance activities. The interrater reliability pass rated needs to be 90 percent or higher.
• Penalties. Authorizes Insurance Commissioner to assess administrative or civil penalties, as specified, for violation of the requirements relating to utilization review.

SB 855 does not apply to Medi-Cal coverage, self-funded employer sponsored coverage and other non-state regulated plans.

Governor Gavin Newsom signed SB 855 into law on September 25, 2020.   The new law applies to all California health plans and disability insurance policies issued, amended or renewed on or after January 1, 2021.

Notes:   The new law is not a traditional MH/SUD Parity Law, but advances the goal of mental health parity.  SB 855 is ground-breaking because it codifies the common law standard established in the Wit versus United class action lawsuit.  It functionally outlaws internal and commercial criteria that do not meet generally accepted standards of care.  It also mandates the disclosure of the utilization review criteria at any point in time (not just during a denial of care and appeal).  It promotes the use of guidelines developed by nonprofit clinical specialty associations in the MH/SUD field.

Amends the California Welfare and Institutions Code by adding s a new section to require, upon federal approval, licensed practitioners of the healing arts and certified substance use disorder counselors to be eligible for MediCal reimbursement for covered outpatient counseling services provided through Telehealth for substance use disorder patients.

Enacted through A.B. 2861

This law amends the California Welfare and Institutions Code to authorize reimbursement through Medi-Cal for a maximum of two visits to health care providers taking place on the same day at a single location if after the first visit, the patient needs additional care or has a mental health or dental care visit.
Effective Date: January 1, 2019

Enacted through S.B. 1125

Cal Health & Saf Code § 128555 and Cal Wel & Inst Code §§ 14197.1, 14197.2, 14197.4

Section 128555 of the Health and Safety Code and Sections 14197.1, 14197.2 and 14197.4 to the Welfare and Institutions Code are amended and added, respectively, to require that State Department of Health Care Services to ensure that all covered health benefits and substance use disorder benefits are provided in compliance with those revised federal regulations.

The above referenced code provisions was amended by CA S. 171.

Section 14132.100 of the Welfare and Institutions Code is amended to authorize federal qualified health center services (FQHC) and rural health clinics (RHC) to provide Drug Medi-Cal services pursuant to the terms of a mutually agreed upon contract for reimbursement requirements for services. To the extent that federal financial participation is available, such services include specialty mental health services to Medi-Cal beneficiaries as part of a mental health plan’s provider network. The costs associated with providing Drug Medi-Cal services or specialty mental health services are prohibited from being included in the FQHC’s or RHC’s per-visit prospective payment service (PPS) rate, and requires the costs associated with providing Drug Medi-Cal services or specialty mental health services to be adjusted out of the FQHC’s or RHC’s clinic base PPS rate as a scope-of-service change if the costs associated with providing Drug Medi-Cal services or specialty mental health services are within the FQHC’s or RHC’s clinic base PPS rate.

The above referenced code provisions was amended by CA S. 323.

Cal Health & Saf Code §§ 11220, 11839.1, 11839.3, 11839.5, 11839.6 and Cal Wel & Inst Code § 14021.6

Sections 11220, 11839.1, 11839.3, 11839.5 and 11839.6 of the Health and Safety Code and Section 14021.6 of the Welfare and Institutions Code are amended add the use of medication-assisted treatment as an authorized service by narcotic treatment programs licensed by the department, and would, in that regard, make legislative findings and declarations that it is in the best interest of the health and welfare of the people to also coordinate medication-assisted treatments for substance use disorders. The specific controlled substances authorized for use by licensed narcotic treatment programs for narcotic replacement therapy and medication-assisted treatment are modified to instead allow medication approved by the federal Food and Drug Administration for the purpose of narcotic replacement treatment or medication-assisted treatment for substance use disorders, and refer to medications, rather than controlled substances. Bills for services under Drug Medi-Cal must be submitted no later than 6 months from the date of service.

The above referenced code provisions was amended by CA A. 395.

Section 10144.4 of the Insurance Code was amended to require large group, individual, and small group health insurance policies to provide all covered mental health and substance use disorder benefits in compliance with those provisions of federal law governing mental health parity.

The above referenced code provision was amended by CA S. 374.

Cal Health & Saf Code § 1374.73 and Cal Ins Code § 10144.51

Section 1374.73 of the Health and Safety Code and Section 10144.51 of the Insurance Code were amended to delete the sunset date, January 1, 2017, for the requirement that every health care service plan contract and health insurance policy provide coverage for behavioral health treatment for pervasive development disorder or autism. The deletion of the sunset date extends the operation of this provision indefinitely. Additionally, by extending the operation, violation by a health care service plan would be a crime.

The above referenced code provisions were amended by CA A. 796.

Cal Health & Saf Code § 1367.005 and Cal Ins Code § 10112.27

Section 1367.005 of the Health and Safety Code and Section 10112.27 of the Insurance Code were amended to prohibit individual or small group health care service plan contracts or individual or small group health insurance policies issued, amended, or renewed on or after January 1, 2017, from combining habilitative and rehabilitative services for essential health benefits. Essential health benefits include mental health and substance use disorder services, including behavioral health treatment. Coverage of mental health and substance use disorder services, along with any scope and duration limits imposed on the benefits, must be in compliance with MHPAEA.

The above referenced code provisions were amended by CA S. 43.

This bill requires providers of insurance plans to maintain a website that details their prescription medication formularies. While this bill is not explicitly about parity, this level of transparency makes it more difficult for insurance plans to have more restrictive medication formularies for behavioral health medications. It also requires insurers to provide a telephone number that patients and providers can call (during normal business hours) to obtain mental health benefits information.

This bill added a new section to the Health and Safety Code that requires large group plans, small group plans, and plans offered on the individual market to offer behavioral health benefits that comply with the Federal Parity Law. This bill also authorizes the Department of Managed Health Care (DMHC) to issue guidance to plans about compliance with the Federal Parity Law.

This bill indicated all funding for parity implementation within the California Department of Insurance (CDI) will be paid for by imposing fees on insurers. *Line item veto placed on this specific provision. Veto reduces state funding by $374,000.

This bill extends until January 2017 a requirement in the state parity law that insurance plans cover pervasive development disorders or Autism. This provision of the state law had been set to expire in July 2014.

This bill prohibits insurance companies from creating a separate out-of-pocket maximum for behavioral health coverage. It also prohibits insurance companies from denying coverage due to prior existing behavioral health conditions.

This bill mandates that individual and small group plans comply with the Federal Parity Law and defines the essential benefits that these plans must offer, which includes coverage for behavioral health services. AB 1453 amended the Health and Safety Code while SB 951 amended the Insurance Code.

This bill amended state parity law to require plans to cover services for pervasive development disorder and autism spectrum disorder to the Mental Health Parity Laws. This also created the Autism Advisory Task Force to develop recommendations regarding behavioral health treatment that is medically necessary for individuals with autism or pervasive developmental disorder. This law was originally set to expire in July 2014.