The law (SB 855) requires every health plan that provides medical or surgical coverage to also cover the mental health and substance use disorders listed in the Diagnostic and Statistical Manual of Mental Disorders, a handbook used by health care professionals.
Since the law went into effect in January 2021, advocates say many health plans are ignoring the mandate to provide mental health care coverage under the same terms and conditions as physical health care. Meram Bendat, a psychotherapist and attorney who helped draft the law, said companies are “basically shrugging their shoulders and letting patients fend for themselves.”
Health providers say they are not clear about what they are supposed to do. Mary Ellen Grant, a spokeswoman for the trade group that represents health plans in California, says the law’s vague requirements impede full compliance.
“If we all act by clear rules, our health care system can be improved,” Grant said. Her group, the California Association of Health Plans, adamantly opposed the law before it was passed by the legislature and approved by the governor.
The law directs health plans to arrange care for out-of-network services when in-network providers are not available, or to maintain “network adequacy.” Benda said this has proven to be the most difficult compliance requirement for insurers to meet.
Those difficulties were on full display in
The healthcare provider last month settled with the National Union of Health Care Workers to end the strike and committed to hiring more staff.
Sarah Sorokin, a therapist who recently left Kaiser to work at Behavioral Health Services in Solano County, said Kaiser does not make out-of-network referrals when an in-network provider is not available.
“No external referral is offered in the most serious cases, so they actually have the longest waiting periods,” Sorokin said, which lasts several weeks or months.
Mark T. Brown, a spokesman for Kaiser, dismissed Sorokin’s claims. “Consistent with applicable laws, Kaiser Permanente makes external referrals as needed and appropriate,” he said in an email.
Health plans have “really done a pretty bad job” of trying to adequacy the network, Bendat said, adding that many companies don’t contract with enough providers and don’t inform patients of their rights to access that out-of-network care.
The criteria are not clear
Part of the problem lies in the offline way compliance is mapped. The law mandates non-profit professional societies to develop standards for when treatment is medically necessary and designates a California health regulator to craft rules on other parts.
The American Society for Addiction Medicine has set criteria for substance use disorders, and the World Professional Association for Transgender Health has guidelines for diagnosing gender dysphoria, for example.
Health insurers aren’t sure how to navigate the new guidance on medical necessity, which differ on the details. Some standards are explicit in explaining how often a patient should receive care or how intense the treatment should be. Grant said the other guidelines are vague.
“This creates a situation where the target shares are transferred for plans, service providers, and our registrants,” Grant said.
Before the mandate went into effect in 2021, insurers could set their own standards on medical necessity.
The industry is seeking more clarity in an upcoming draft of regulations from the Department of Managed Health Care, which aims to define how associations write standards for medical necessity. Agency spokeswoman Rachel Arezola said the agency plans to release those regulations “in the coming weeks.”
It’s unclear how far the providers are from complying with state law. There is too little data to show how equal, or unequal, a health plan’s mental health coverage is to its physical health benefits, said Sen. Scott Weiner (D), author of the bill.
“We know, anecdotally, that there are still problems and the law is not being fully followed,” he said.
Such as the clauses of patients in court who have been denied coverage for mental health services, including in the case of Wit v. United Behavioral Health, a class action involving at least 50,000 members in which a district court found that the insurance company was using too narrow guidelines to decide which services were covered.
The issue has yet to be settled: The US Court of Appeals for the Ninth Circuit overturned that decision last year, and plaintiffs petitioned for an OnBank hearing. The court indicated that it may reconsider the case.