California providers cannot comply with the Mental Health Parity Act

California health insurers are having trouble complying with a new state law designed to protect people from paying high out-of-pocket costs for psychological or addiction care.

The law (SB 855) requires any health plan that provides hospital, medical or surgical coverage to also cover the mental and substance use disorders listed in the Diagnostic and Statistical Manual of Mental Disorders, a handbook used by health care professionals.

Since the law took effect in January 2021, advocates say many health plans have been skirting the mandate to provide coverage for mental health care on the same terms as for physical health. Companies are “basically shrugging their shoulders and letting patients fend for themselves,” said Meiram Bendat, a psychotherapist and attorney who helped write the law.

Health care providers say they are at a loss for what to do. Mary Ellen Grant, spokeswoman for the trade group representing California health plans, says the statute’s ambiguous requirements prevent full compliance.

“If we all work according to clear rules, our health system can be improved,” Grant said. Her group, the California Association of Health Plans, vigorously opposed the law before the Legislature and the governor passed it. Gavin Newsom (D) signed it.

Network problems

The law directs health plans to arrange out-of-network care when in-network providers are not available, or to maintain “network adequacy.” This has proven to be the most stringent compliance requirement that insurers must meet, Bendat said.

These difficulties were fully displayed at Kaiser Permanentewhich is one of the nation’s largest nonprofit HMOs and holds the largest share of the health care market in California, where long delays in behavioral health treatment prompted a 10-week therapist strike.

The health care provider last month reached an agreement with the National Union of Health Care Workers to end the strike and committed to hiring more staff.

Sara Soroken, a therapist who recently left Kaiser to work for Solano County Behavioral Health Services, said Kaiser did not make out-of-network referrals when there was no in-network provider available.

“For the more serious conditions, no outside referral is provided, so they actually have the longest wait times,” lasting several weeks or months, Soroken said.

Mark T. Brown, a Kaiser spokesman, denied Soroken’s claims. “In accordance with applicable law, Kaiser Permanente makes outside referrals as necessary and appropriate,” he said in an email.

Bendat said health plans have “really done a terrible job” of trying to meet network adequacy, adding that many companies don’t contract with enough providers or inform patients of their rights to access that out-of-network care.

Unclear criteria

Part of the problem is the disjointed way in which compliance is mapped. The law tasks nonprofit professional associations with developing the criteria for when treatment is medically necessary, and tasks California’s health regulator with developing rules for the remaining parts.

The American Society of Addiction Medicine defines criteria for substance use disorders, and the World Professional Association for Transgender Health has, for example, guidelines for the diagnosis of gender dysphoria.

Health insurance companies are unsure how to transition to the new medical necessity guidelines, which differ in detail. Some of the criteria are explicit in explaining how often the patient should receive care or how intensive the treatment should be. Other guidelines are unclear, Grant said.

“This creates a situation of shifting goalposts for plans, providers and our participants,” Grant said.

Before the mandate went into effect in 2021, insurers could come up with their own criteria for medical necessity.

The industry is pushing for more clarity in upcoming draft regulations from the Department of Managed Health Care that aim to clarify how associations should write medical necessity criteria. The agency plans to publish those regulations “in the coming weeks,” spokeswoman Rachel Arrezola said.

It’s unclear how far providers are from complying with state law. There is little data to show how equal or uneven health plan mental health coverage is compared to physical health benefits, said state Sen. Scott Wiener (D), the bill’s author.

“We know anecdotally that there are still problems and the law is not being fully followed,” he said.

Bendat represented patients in court who were denied covered mental health services, including the seminal case Wit v. United Behavioral Health, a class action with at least 50,000 members in which a district court found that the insurer used too narrow guidelines to make decisions about covered services.

The issue is still pending: The U.S. Court of Appeals for the Ninth Circuit overturned that decision last year, and the plaintiffs petitioned for an en banc hearing. The court indicated that it may reconsider the case.

Leave a Comment

Your email address will not be published. Required fields are marked *