By – Under a newly revised bill from the California state legislature, California health plans will have to cover mental health conditions to the same extent they do medical services in an effort to achieve mental healthcare parity.
The California Mental Health Parity Act—passed in 1999—already required health plans and disability insurers that offer hospital, medical, or surgical coverage to also cover serious mental illness diagnosis and treatment, including prescription drugs.
The reformed bill’s coverage extends well beyond what the 1999 bill offered.
“The bill would prohibit a health care service plan or disability insurer from limiting benefits or coverage for mental health and substance use disorders to short-term or acute treatment,” the bill summary explained. “The bill would revise the covered benefits to include basic health care services, as defined, intermediate services, and prescription drugs.”
Starting on January 1, 2021, payers will have to cover both mental health and substance use disorder conditions under the same standards as clinical conditions, not just in their most severe stages or for short term, but rather in full.
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The bill points to certain accepted standards for mental health and substance use disorder treatment which plans will use to guide their coverage determinations. The bill also requires plans to use clinical guidelines in order to assess their utilization review. Plans would not be allowed to employ their own criteria for the utilization review, for which the bill assigns a penalty.
“Because a willful violation of these requirements with respect to health care service plans would be a crime, this bill would impose a state-mandated local program,” the summary explains.
The original bill only required coverage of nine listed severe mental health conditions plus diagnosis and treatment for any child’s “serious emotional disturbances.” But the legislature found the list to fall short in scope and its datedness.
The bill was not the only law in place to regulate mental healthcare in California. Federal mandates, including those in the Affordable Care Act, imposed other coverage responsibilities on payers, though these have not resolved Americans’ out-of-pocket healthcare spending for behavioral healthcare.
However, those regulations do not go far enough, the California Mental Health Parity Act revision states.
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“The federal Affordable Care Act (ACA) includes mental health and addiction coverage as one of the ten essential health benefits, but it does not contain a definition for medical necessity, and despite the ACA, needed mental health and addiction coverage can be denied through overly restrictive medical necessity determinations,” the bill points out.
Essentially, the revised bill looks to ensure that mental and behavioral healthcare diagnosis and treatment are primarily on the basis of the patient’s needs and level of care, not primarily rooted in expediency or cost.
A court case settled in 2019—Wit versus United Behavioral Health—identified eight standards of mental health and substance abuse care, which the revised California law upholds.
Mental healthcare and substance abuse care must address underlying conditions. It must treat all of the behavioral healthcare and medical conditions present at once through care coordination.
Providers should treat patients at the lowest intensity care facility that is safe for the patient’s condition. But if there is uncertainty around a patient’s care, the provider should default to putting the patient in higher levels of care.
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The goal of treatment should be maintaining a patient’s ability to function and slow the progression of the disease. The timeline for care regimens should also be personalized to take into account the individual’s needs and treatment should account for age-related factors in the young. Lastly, multidimensional assessments are critical to determining level of care.
Additionally, payers cannot retroactively deny coverage for a service. At minimum, plans must cover basic healthcare services, intermediate services, prescription drugs if they are in the contract and the terms of the bill apply to annual and lifetime benefits, copayments and coinsurance, individual and group deductibles, and out-of-pocket healthcare spending caps.
Experts have been calling on payers to be more transparent about their behavioral and mental healthcare parity.
Specifically, experts from The Bowman Family Foundation have asked payers to share their percentage of out-of-network claims in these areas, in-network reimbursement rates for mental and behavioral healthcare versus clinical care, denial rates for these services, and mental and behavioral healthcare provider network directory accuracy.
Payers can also partner with employers through programs like the Path Forward initiative to achieve evidence-based, cost-effective solutions to behavioral and mental healthcare parity.